Case: Hindustan Petroleum Corp Ltd Vs. M.I Mallick Andors

Under the West Bengal Kerosene Control Order of 1968, there are specific provisions which govern the purchase and sale of kerosene. The Order provides for the grant of various kinds of licences. Among them, paragraph 5 provides for the grant of a licence to an agent; and paragraph 6 provides for the grant of a licence to a dealer. In paragraph 3 an "agent" is defined as follows: "3(a). `agent means a person who has been appointed as an agent of an Oil Distributing Company by such company and has been granted a licence under paragraph 5 of this Order." While a "dealer" is defined as follows : "3(c). `dealer means a person who has been granted a licence under paragraph 6 of this Order authorising him to carry on trade in Kerosene oil;" An "oil distributing company" is defined in paragraph 3(h) to mean "a company specified in Schedule II of this Order." The appellant is one of the oil distributing companies so included in Schedule II. Under paragraph 4, there is a ban on trading in kerosene without a licence. It provides that no person other than an oil distributing company shall carry on trade in kerosene unless he is in possession of a valid licence issued under this order. Paragraph 5 provides for the grant of a licence to an agent. The Director of Consumer Goods is authorised to grant a licence to any agent in West Bengal authorising him to carry on trading in kerosene as such agent. Under sub-paragraph (2) of paragraph 5 a licence granted under sub-paragraph (1) shall be in Form A and shall be subject to such conditions as are specified therein. Sub-paragraph (3) of paragraph 5 is as follows ; "5(3). No agent shall, supply or transfer kerosene to any person other that a dealer duly licensed under paragraph 6 of this Order, or a holder of a permit or delivery order issued under paragraph II of this Order." Therefore, an agent who is appointed as an agent by an oil distributing company requires a licence in Form A. Condition 1 of the licence in Form A, prescribes that a licensee may sell kerosene to any licensed dealer or hawker or to the holder of any permit or delivery order issued by the Director [vide paragraph 5(3)]. Under Condition 2, the licensee shall submit to the Director or the District Magistrate, as the case may be, a monthly statement showing the amount of kerosene released monthly by the Oil Distributing Companies for sale in each of the areas mentioned on this licence, and shall be bound to report at once to the office any change in these quantities which he may have to make by order of the Oil Distributing Companies. An agent thus gets his supply of kerosene from the Oil Distributing Company and he, in turn, can supply kerosene only to a dealer, a hawker or a holder of a permit or delivery order. 6. Paragraph 6 deals with the grant of a licence to a dealer. This licence has to be in Form B. Under the terms and conditions of a licence granted to a dealer in Form B, Condition 1 states that a licensee may purchase kerosene from any agent, or subject to the approval of the licensing authority, from any other dealer holding a licence under the provisions of this Order. A dealer, therefore, gets his supply of kerosene either from an agent or from another licensed dealer. Under Condition 2 he, in turn, is entitled to sell kerosene to a consumer or, subject to the approval of the licensing authority, to another dealer duly licensed and shall not sell it to any agent. The two licences, that is, the licence to an agent and the licence to a dealer, are different in character. An agent has to be appointed by the Oil Distributing Company as its agent. Thereafter the agent is required to obtain a licence under paragraph 5. A dealer, however, does not have any connection with the Oil Distributing Company. He can get a dealers licence under paragraph 6 which entitles him to purchase kerosene from and agent or another dealer as specified in paragraph 6; and he, in turn, is entitled to sell kerosene to a consumer or to another dealer subject to the conditions specified in the said paragraph and the terms and conditions of his licence. 7. In the present case, respondent No. 5 is an agent of the appellant Oil Distributing Company and he holds an agents licence in Form A. This licence, inter alia, is for the area of Bagnan. If respondent No. 1 wants this licence to be transferred to his name, he must first of all be appointed as an agent by the appellant company. Only thereafter will he be entitled to obtain an agents licence. The Director of Consumer Goods had, therefore, rightly rejected respondent No. 1s application by his order dated 12.6.1996 since respondent No. 1 had not been appointed its agent by the appellant company for kerosene dealership in the area of Begnan. The High Court while granting the interim order of 10.10.1996 has wrongly come to a conclusion that the grant of a licence to an agent does not depend upon the party being appointed an agent, and that the Director of Consumer Goods can rant a licence under paragraph 5 in From A to a person before he is appointed as an agent by an Oil Distributing Company. Possibly there was a misreading of paragraphs 5 and 6. Therefore, the order dated 24.1.1997 of the Director of Consumer Goods to give a licence to respondent No.1 as an agent without the respondent No. 1 having been appointed as an agent by the appellant, as also interim direction of the High Court of 16.5.1997 directing the appellant to supply kerosene to respondent No. 1 for distribution in Bagnan, are based on a misconception of the West Bengal Kerosene Control Order of 1968.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Therefore, an agent who is appointed as an agent by an oil distributing company requires a licence in Form A. Condition 1 of the licence in Form A, prescribes that a licensee may sell kerosene to any licensed dealer or hawker or to the holder of any permit or delivery order issued by the Director [vide paragraph 5(3)]. Under Condition 2, the licensee shall submit to the Director or the District Magistrate, as the case may be, a monthly statement showing the amount of kerosene released monthly by the Oil Distributing Companies for sale in each of the areas mentioned on this licence, and shall be bound to report at once to the office any change in these quantities which he may have to make by order of the Oil Distributing Companies. An agent thus gets his supply of kerosene from the Oil Distributing Company and he, in turn, can supply kerosene only to a dealer, a hawker or a holder of a permit or delivery order.Paragraph 6 deals with the grant of a licence to a dealer. This licence has to be in Form B. Under the terms and conditions of a licence granted to a dealer in Form B, Condition 1 states that a licensee may purchase kerosene from any agent, or subject to the approval of the licensing authority, from any other dealer holding a licence under the provisions of this Order. A dealer, therefore, gets his supply of kerosene either from an agent or from another licensed dealer. Under Condition 2 he, in turn, is entitled to sell kerosene to a consumer or, subject to the approval of the licensing authority, to another dealer duly licensed and shall not sell it to any agent. The two licences, that is, the licence to an agent and the licence to a dealer, are different in character. An agent has to be appointed by the Oil Distributing Company as its agent. Thereafter the agent is required to obtain a licence under paragraph 5. A dealer, however, does not have any connection with the Oil Distributing Company. He can get a dealers licence under paragraph 6 which entitles him to purchase kerosene from and agent or another dealer as specified in paragraph 6; and he, in turn, is entitled to sell kerosene to a consumer or to another dealer subject to the conditions specified in the said paragraph and the terms and conditions of his licence.In the present case, respondent No. 5 is an agent of the appellant Oil Distributing Company and he holds an agents licence in Form A. This licence, inter alia, is for the area of Bagnan. If respondent No. 1 wants this licence to be transferred to his name, he must first of all be appointed as an agent by the appellant company. Only thereafter will he be entitled to obtain an agents licence. The Director of Consumer Goods had, therefore, rightly rejected respondent No. 1s application by his order dated 12.6.1996 since respondent No. 1 had not been appointed its agent by the appellant company for kerosene dealership in the area of Begnan. The High Court while granting the interim order of 10.10.1996 has wrongly come to a conclusion that the grant of a licence to an agent does not depend upon the party being appointed an agent, and that the Director of Consumer Goods can rant a licence under paragraph 5 in From A to a person before he is appointed as an agent by an Oil Distributing Company. Possibly there was a misreading of paragraphs 5 and 6. Therefore, the order dated 24.1.1997 of the Director of Consumer Goods to give a licence to respondent No.1 as an agent without the respondent No. 1 having been appointed as an agent by the appellant, as also interim direction of the High Court of 16.5.1997 directing the appellant to supply kerosene to respondent No. 1 for distribution in Bagnan, are based on a misconception of the West Bengal Kerosene Control Order of 1968.