IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.2147 of 2007 SMT.RINA MADHUKAR, wife of Shekhar Kumar Madhukar, resident of Mithanpur, Jagdishpuri, Road No.4, P.O. – Ramna, P.S. Mithanpura, District – Muzaffarpur. Versus 1. THE UNION OF INDIA through the Senior Manager (R.S.), Indian Oil Corporation Ltd., Begusarai Sales Office, B-70 Barauni Refinery Township, Begusarai. 2. Dy. General Manager cum State Level Co-ordinator, Indian Oil Corporation Ltd. (MD), 5th Floor, Lok Nayak Jai Prakash Bhawan, Dak Bunglow Crossing, Patna. 3. The State of Bihar through the District Magistrate, Madhubani. 4. Sub Divisional Officer, Benipatti (Madhubani). ----------- For the petitioner : M/s. Manan Kumar Mishra, Sr. Advocate and Shivpujan Sahay. For the respondent Corporation: M/s. Kali Das Chatterji & /Amlesh Kumar Verma. ------- 03. 23.04.2010 Petitioner was one of the applicants for appointment of a retail outlet pursuant to an advertisement made in the newspaper ‘Hindustan’ on 22.2.2004. Petitioner came to be selected and even a letter of intent was issued in her favour but subsequently respondent Indian Oil Corporation decided to cancel / withdraw the letter of intent issued in favour of the petitioner, which is dated 9.4.2007. The withdrawal of the letter of intent is the subject matter of challenge in the present writ application. The said order has been brought on record in I.A. No.4819 of 2007. There is a small history behind the present litigation. There is already a dealership operating in the name of Chanda Automobiles Service Station located at Muzaffarpur in which petitioner was one of the partners. The dealership came into existence in the year 1997. A memorandum of agreement was 2 entered into between respondent Corporation, the present petitioner and two other partners. The agreement has been annexed as Annexure-A to the counter affidavit filed on behalf of the Corporation. There is no dispute to this aspect of the matter. Subsequently the present petitioner in her wisdom decided to walk out of the dealership including the partnership and a reconstitution was carried out. After the reconstitution, information had been given to all concerned including the authorities of the Indian Oil Corporation. That was in the year 2002. It is the stand of the petitioner that she severed all ties with the erstwhile company and the partnership. She continued in that status till she decided to apply in response to the advertisement issued by the Corporation in the year 2004. She was selected and a letter of intent came to be issued in her favour. The petitioner was shocked and horrified to receive yet another communication stating that the same stands cancelled or withdrawn with certain reasons having been assigned therein. One of the reasons in the said communication is that the petitioner had committed breach of Clause 47(iii) by going for unilateral reconstitution of the firm. The so-called agreement dated 12.10.2002 executed amongst the partners of M/S. Chanda Automobiles Service Station is not valid because the reconstitution was done without any written consent from the Corporation and there was misinformation in this regard. Petitioner cannot be permitted to own more than one outlet of the Corporation. 3 Learned senior counsel representing the petitioner submits that there was no fault or wrong doing on the part of the present petitioner. She has brought a series of communications on record to show that information had been given to the respondent Corporation on many occasions in the year 2002 after the reconstitution and severing of ties with earlier partnership. Once she had severed all ties no relationship subsists either with the Corporation or with the said erstwhile Chanda Automobiles Service Station. Since the respondent authorities had not taken cognizance of the said fact they cannot be permitted to take advantage of their own wrong on such an issue. The reason for withdrawal of letter of intent therefore has been termed as arbitrary, irrational and fit for interference. Learned counsel representing the Indian Oil Corporation draws the attention of the Court to Clause 47 (iii) which is reproduced hereinbelow for ready reference: “47. Except with the previous written consent of the Corporation: (iii) The Dealer (if it be a firm or a co- operative society) shall not effect any change in its constitution whether in the identity of its partners/members or in the share/shares holding of any of them, or in the terms of the Deed of Partnership or of the Bye-laws as the case may be. In the event of the death of any 4 partner / member of a firm / co-operative society which has been appointed as a Dealer hereunder the surviving partners/members hereby agree to indemnify and keep indemnified the Corporation against any claims or demands which may be made by the heirs of the deceased partner/member.” According to him, once a person including the petitioner entered into an agreement with the respondent Corporation it is binding on both the parties. The law requires the parties to the contract to honour and not commit breach thereof. Another significant fact which emerges from the pleadings is that the essence of the said clause of agreement also stands incorporated in the original partnership deed entered between the parties. All the partners had agreed that no reconstitution would be carried out by the firm without prior written consent of the Corporation. In other words, the requirement of prior written permission of the Corporation before reconstitution is sine qua non in this regard. Counsel for the Corporation has also categorically stated in para - 10 of the counter affidavit that they have no prior information or request for reconstitution. The Corporation has been confronted with these communications or correspondences which are not reflected in the official records of the Corporation. It is a ploy of the petitioner to cover up the 5 breach which has already been committed by her, if at all the reconstitution is accepted as a fact. The Writ Court while examining a decision or the decision-making process has to look into the rationality of the same. If the conduct of the respondent is in breach of any law then the question of interference with the same will arise. It may also include any decision which is arbitrary or irrational and in violation of Article 14 of the Constitution. In the opinion of this Court this is not the case in the present writ application. The reason for withdrawing the letter of intent categorically states that there was a breach committed by the petitioner of the original agreement and unilateral reconstitution of the firm without written consent of the Corporation is no reconstitution in the eye of law. The status of the petitioner before the Corporation continues to be that of a partner of the earlier firm which already holds a dealership in its name. The Court does not find anything illegal or irrational with the reasoning for withdrawal of letter of intent. The Court would further like to record its opinion that no proper permission was taken from the Corporation or information given well in time in this regard. The facts being what they are, no case of interference is made out in the writ application. It is dismissed. rkp ( Ajay Kumar Tripathi, J )