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SCA/25078/2007 6/ 6 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 25078 of 2007
=========================================================
ASHIMIT
GAS AGENCY - Petitioner(s)
Versus
I
O C LTD - Respondent(s)
=========================================================
Appearance
:
MR
UDAYAN P VYAS for
Petitioner(s) : 1,
MR MANISH R BHATT for Respondent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE A.S.DAVE
Date
: 05/10/2007
ORAL
ORDER
The
petitioner has filed the present writ petition under Article 226 of
the Constitution of India challenging the notice of termination
dated 10.7.2007 issued by the respondent whereby distributorship of
the petitioner of petroleum products came to be terminated. The
petitioner was also directed to hand over all equipments and
documents pertaining to distributorship to the representative of
the respondent immediately.
The
challenge in this petition is basically a dispute arising out of
violation of clause 23(b) and (c-i) of the distributorship agreement
dated 1.8.1997. It is also to be noted that before terminating the
distributorship, show cause notice dated 1.11.2006 was issued and
petitioner herein filed reply on 4.12.2006 denying the allegations
and thereafter, the impugned notice of termination came to be
passed.
In
the impugned show cause notice dated 10.7.2007, three charges are
levelled; (i) the petitioner allowed control of the Distributorship
by Shri Ashish Patel who is an unauthorized person; (ii) the
petitioner has executed a partnership deed dated 25.12.1996 with
Shri Ashish Patel without the knowledge and approval of IOC; and
(iii) the petitioner has issued General Power of Attorney dated
25.12.1996 in favour of Shri Ashish Patel without the knowledge and
approval of IOC. So far as the petitioner is concerned, necessary
documents from IOC were sought for since the above show cause notice
was based on the findings of the Inquiry Report, which form the
basis of notice of termination. In the reply dated 4.12.2006 the
petitioner denied the allegations and submitted that no irregularity
was committed by him and show cause notice requires to be withdrawn.
Not only that the performance of the petitioner’s distributorship
was by and large satisfactory and it was awarded star status.
Mr.Vyas,
learned counsel for the petitioner submits that the impugned
termination notice is ex facie illegal and violative of
principles of natural justice since the Inquiry Report though relied
on by the Authority was not supplied to the petitioner, in spite of
the fact that a specific demand was made by the petitioner.
Mr.Vyas, for the petitioner, further submits that the impugned
notice of termination resulted into violation of principles of
natural justice and closure of his business, which is a fundamental
right therefore, the impugned notice of termination is devoid of any
reason and violative of principles of natural justice and is
required to be quashed and set aside. Mr.Vyas, learned counsel for
the petitioner further submits that even the petitioner has availed
of the remedy of arbitration, as prescribed under Clause 37 of the
dealership agreement, but the same is not alternative and
efficacious since the Arbitrator has no power to restore the
distributorship even if the petitioner succeeds before the
arbitrator. Mr.Vyas, learned counsel for the petitioner, further
submits that considering the overall performance of the petitioner,
the respondent has awarded star status to the petitioner agency and
even on similar ground, no action was taken by the respondent and
the distributorship came to be restored on earlier occasion.
Therefore, at this juncture, no case exists for terminating the
distributorship of the petitioner agency. Mr.Vyas, learned counsel
for the petitioner, lastly submits that, as per the rules, the
respondent can impose a lesser penalty by way of fine etc. and the
punishment proposed by the respondent-IOC is disproportionate to the
charges levelled against the petitioner.
Mr.M.R.Bhatt,
learned counsel appearing on caveat for the respondent-IOC drawn my
attention to the notice of termination and findings of the
Authority, which clearly reveal that partnership deed dated
25.12.1996 was executed just after one month and after the letter of
intent dated 23.11.1996 issued to the petitioner by the respondent.
So far as power of attorney is concerned, no further proof is
required since the petitioner himself has published a public notice
in `Divya Bhaskar’ dated 1.5.2004 cancelling the said power of
attorney. However, Mr.Bhatt, learned counsel for the respondent-IOC
has submitted that there is no violation of principles of natural
justice since the report of the Committee was a fact finding
committee for which the petitioner has nothing to do and it was a
kind of preliminary inquiry and findings of such inquiry committee
are not required to be supplied to the petitioner. What was alleged
in the show cause notice, was already existed in the termination
notice dated 10.7.2007 and the petitioner was made aware about the
same. Mr.Bhatt, learned counsel for the respondent-IOC further
submits that upon receipt of reply, considering the violation of
clause 23(b) and (c-i) of agreement and other deviations, the
impugned notice of termination is passed. Mr.Bhatt, lastly submits
that what is challenged in this petition is termination of contract
between the petitioner and the respondent and writ petition under
Article 226 of the Constitution of India is not a remedy. Even
otherwise also, according to Mr.Bhatt, there are disputed questions
of facts about false signature of the petitioner and distributorship
agreement which is referred to hand-writing expert and preliminary
opinion reflects that the same are forged. All such issues cannot
be looked into in a writ petition under Article 226 of the
Constitution of India and appropriate remedy is to file civil suit
for claiming damages. So far as agreement of distributorship is
concerned, it also provides for arbitration and the same is availed
of by the petitioner therefore, powers under Article 226 of the
Constitution of India cannot be exercised in this petition.
Having
heard learned counsel for the parties and perusing the record of the
case, I am of the considered opinion that no power under Article 226
of the Constitution of India can be exercised when there is
violation of clause of agreement and dispute arises out of agreement
entered into between the parties. Not only that but in the present
case, remedy of arbitration is availed of and only because the
Arbitrator is unable to restore the distributorship, the same cannot
be a ground for invoking jurisdiction under Article 226 of the
Constitution of India. This relief can be claimed by filing a suit
before the court having jurisdiction. Even otherwise also, there
are number of disputed questions of facts, viz. Execution of deed
dated 25.12.1996 after one month of letter of intent, allegation of
forgery, whether actual control of distributorship is with Shri
Ashish Patel or not etc., which require material to be scrutinized
in the form of evidence and for which this court is not competent
enough. So far as the merit of the case is concerned, the
petitioner was given sufficient opportunity by issuing show case
notice. It is clear from the notice of termination of
distributorship that the petitioner has violated clause 23(b)(c-i)
of the distributorship agreement and that the petitioner has issued
power of attorney to one Shri Ashish Patel and the petitioner
himself has published a public notice in `Divya Bhaskar’ dated
1.5.2004 cancelling the said power of attorney to which no further
proof is required.
Considering
the overall aspects of the matter, no case is made out to exercise
extra-ordinary writ jurisdiction under Article 226 of the
Constitution of India.
In
view of the above discussion, this petition fails and is hereby
dismissed.
(ANANT
S. DAVE, J.)
*pvv
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