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The Indian Partnership Act, 1932

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Calcutta High Court
M/S. Roy And Company & Ors vs The State Of West Bengal & Ors on 1 September, 2011
Author: Tapen Sen

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IN THE HIGH COURT AT CALCUTTA

(CONSTITUTIONAL WRIT JURISDICTION)

ORIGINAL SIDE

W.P. No. 1240 of 2010

M/s. Roy and Company & Ors.

Vs.

The State of West Bengal & Ors.

CORAM : The Hon'ble Mr. Justice Tapen Sen

For the Petitioners : Mr. L.C. Bihani, Sr. Advocate Ms. Nibedita Pal, Advocate

Mr. Ramesh Dhara, Advocate

For the Respondent No.6 : Mr. Amal Sen, Advocate

Mr. A. K. Lala, Advocate

For the I.O.C : Mr. M. S. Yadav, Advocate For the State : Mr. Kishore Datta, Advocate Mr. Bilwodal Bhattacharyya, Advocate

Heard On : 28.04.11, 10.5.11, 09.6.11, 13.6.11, 22.6.11, 13.7.11, 21.7.11 and 29.7.11.

C.A.V. on : 29.07.2011

Judgment Delivered on : 1st September, 2011

Tapen Sen, J.: The Petitioners pray for an Order declaring Clause 1.5 of the Revised Policy Guidelines of the Indian Oil Corporation Ltd. dated 2

01.12.2008, to be null and void as, according to them, it is contrary to the provisions of the Indian Partnership Act, 1932.

The Petitioners also pray for the issuance of a Writ of mandamus, commanding upon the Respondents/State Respondents to either renew the license or extend the validity of the Token under the West Bengal Kerosene Control Order, 1968.

They have further prayed for the issuance of Writ of mandamus, commanding upon M/s. Indian Oil Corporation Limited to allow the reconstitution of the Petitioner No. 1 Firm in terms of the Partnership Deed dated 24.07.2009. Other consequential prayers have been made including of prayer that the Respondents should allow the Petitioners to continue with their Kerosene Dealership Agency, reconstruction of the Firm and an interim Order be passed restraining the State Respondents from refusing to extend the validity of the Token since issued in lieu of the Petitioners license under the West Bengal Kerosene Control Order, 1968 till renewal.

2. The facts of this case, as pleaded, are that the Petitioner No.1 (M/s. Roy & Company) is a partnership Firm which carries on business of Kerosene and the Petitioner Nos. 2 and 3 (Binoy Kumar Roy and his wife Nisha Roy) are Partners of the said Firm.

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It is stated that initially Smt. Siya Roy, was carrying on business under a Dealership Agreement with M/s. Indian Oil Corporation Limited (hereinafter referred to the IOC) as proprietress of the said Dealership and had obtained necessary permissions including the Kerosene Agents License under the West Bengal Kerosene Control Order, 1968 (hereinafter referred to as 1968 Order).

3. It is stated that Smt. Siya Roy, due to old age and sickness, was unable to carry on the day-to-day affairs of the business and therefore, she inducted her eldest son (Petitioner No. 2, Binoy Kumar Roy) as a partner in the said business. She made an Application before the IOC seeking approval for reconstitution of the Firm. Thereafter, on 27.9.2001, the Petitioner No. 2 along with his mother (Siya Roy) entered into an Agreement in the capacity as Partners of the Petitioner No. 1 Firm with IOC to carry on the said business in partnership and upon such reconstitution, a fresh Agency License under the 1968 Order was issued by the Licensing Authority in the name of the Firm and it was numbered as AGT/Ramp/2588 dated 28.4.2003.

Thereafter, in April 2006, Siya Roy made an Affidavit declaring the names of her legal heirs. This Affidavit is Annexure-P/1 and from which it appears that Siya Roy had three sons being Binoy Kumar Roy (Petitioner No. 2); Sanjoy Kumar Roy and Ranjoy Kumar Roy. She also had two married daughters namely Sushila Roy (Respondent No. 6) and Chanda Roy. 4

4. Since Siya Roy was unable to participate in the day-to- day affairs of the business and since the Petitioner No. 2 was unable to manage the business alone, both the Partners therefore decided to induct Smt. Nisha Roy (wife of the Petitioner No. 2) as a partner and prepared a Deed of Partnership and also applied for approval from the IOC. After IOC approved the same, these three executed a Partnership Deed between themselves on 24.7.2009 and thereafter, they also entered into an Agreement with IOC on 29.7.2009. The Partnership Deed dated 24.7.2009 and the Agreement with IOC dated 29.7.2009 are Annexures-P/2 and P/3 to the Writ Petition.

5. It is the further case of the Petitioners that upon reconstitution of the Petitioner No. 1 Firm with the prior approval of the IOC, the Licencing authority issued fresh licence being AGT/Ramp/22 dated 14.9.2009 in the name of the Firm and recorded the names of all the three Partners making it valid till 31.12.2009. The said licence is Annexure-P/4.

6. On 30th September 2009, Siya Roy died and an information to that effect was sent to the IOC by the surviving Partners(Petitioner Nos. 2 and 3) by their letter dated 6.10.2009 (Annexure-P/5).

7. It is further pleaded that in the Partnership Deed dated 24.7.2009 (Annexure-P/2), the Partners had agreed that in case of death of any 5

of the Partners, the other Partners would be permitted to continue with the Firm and to enjoy all benefits arising therefrom subject to their meeting the entire liabilities of the Firm. They have stated that subsequently, on 11.11.2009, the surviving Partners submitted a proposal to the IOC for reconstitution of the Firm amongst themselves as Partners and also submitted three "No Objection" Certificates dated 9.11.2009 from all the other legal heirs except one married daughter namely Sushila Roy (Respondent No. 6) who refused to give her "No Objection".

8. Upon receipt of the said letter/proposal dated 11.11.2009, M/s. IOC replied on 16.11.2009 (Annexure-P/7) as well as on 5.2.2010 (Annexure-P/8) wherein they firstly stated that the Application was not in the prescribed form as specified in the Policy Guidelines for reconstitution issued on 1.12.2008 (Annexure-P/15) and secondly, that the Application should be made in the prescribed form. The IOC also pointed out that only photocopies of the Affidavits of No Objection had been filed and therefore, they asked the Petitioners to file the original Affidavits of No Objection. M/s. IOC also pointed out that the Petitioners have not submitted the "family tree" of late Siya Roy and because of non-submission of the aforementioned documents, there was inordinate delay and accordingly, the application was being returned for resubmission.

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9. It has been stated in Paragraph-15 that the Petitioners submitted the license with the Licensing Authority for renewal as it was to expire on 31.12.l2.2009 and a Token was issued on 24.12.2009 making it valid till 31.03.2010 thereby allowing the Petitioners to continue with the business pending renewal of the Licence which, according to the Petitioners, has not yet been renewed although the validity of the Token was extended only till 30.09.2010.

10. In the meantime on 19.07.2010 the I.O.C. again directed the Petitioners to submit their proposal within 15 days vide Annexure-P/10. They pointed out that the earlier application/proposal of reconstitution had been returned for resubmission due to infirmities and therefore, they made a request that a fresh proposal be submitted complete in all respects within 15 days failing which, the corporation would be constrained to take action as per policy. This letter dated 19.07.2010 is Annexure-P/10.

11. In reply to the said letter, the Petitioners sent a letter dated 04.10.2010 vide Annexure-P/11, wherein they stated that from the Checklist of documents desired by IOC, the same consisted, amongst others, (i) a Succession Certificate from a Court of Law; (ii) Deed of Relinquishment from the legal heirs who did not propose to join the Dealership; and (iii) three Deed of Dissolution of the existing Partnership.

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12. The Petitioners drew the attention of the I.O.C. to Clause-22 of the Deed of Partnership dated 24.07.2009 and pointed out that as per the said Clause, it was already agreed that upon the death of any Partner, the other Partners will be permitted to continue with the Firm and the existing Partners will have to meet the entire liabilities so as to enjoy the business. They pointed out that this Partnership Deed was acted upon and accepted and it was only thereafter, that an Agreement was entered upon by and between IOC and the Partners on 29.07.2009 and therefore, there was no scope for interference by any of the other legal heirs of the deceased Partner and therefore, a Succession Certificate and/or a Deed of Relinquishment from the said legal heirs could not be insisted upon by the IOC.

Clause-22 of the Deed of Partnership dated 24.07.2009 reads as follows:

"That if any one of the parties to this indenture is died or is become insolvent, the other party is permitted to continue the firm after fulfillment of the necessary requirements and only in that case the existing party will be entitle to continue and run the firm smoothly but in that case the existing party shall have every duty to meet up the entire liabilities of the firm and after that the existing party will be eligible to enjoy all type of benefits of the firm."

(Quoted)

The reply of the Petitioner stated above is quoted

below:

"From the check list, it appears that the following documents amongst other documents have been directed to be submitted with the 8

reconstitution proposal, that is, (1) Succession Certificate from the Court of Law, (2) Deed of Relinquishment from the legal heirs not proposing to join the dealership and (3) Deed of Dissolution of existing partnership. In this regard, we shall like to draw your kind attention towards Clause 22 of our Partnership Deed dated 24th July, 2009, whereby it has inter alia been agreed upon by the Partners that upon death of any partner, the other Partners will be permitted to continue with the firm and the existing Partners will have to meet up the entire liabilities of the firm to enjoy the benefits of the firm.

Upon accepting the said Partnership Deed dated July 24, 2009, an agreement was entered into between IOC and all the Partners of the firm on 29th July, 2009.

In view of the nature of the Deed of Partnership, here is no scope for interference of any legal heirs of the deceased partner in the business of the partnership firm, in any manner whatsoever and accordingly, the succession certificate from the Court of Law and/or the Deed of Relinquishment from the legal heirs not proposing to join the dealership are not required to be submitted with the reconstitution proposal.

So far as the Deed of Dissolution of the existing

partnership is concerned, it is stated that after the death of one of the partners, the existing two Partners will continue to operate the partnership firm and accordingly, the draft Deed of proposed Partnership along with other documents mentioned in the check list will be forwarded with the reconstitution proposal because the Deed of Dissolution of the existing partnership, as sought for, is redundant.

Please take necessary steps for reconstitution of the firm by deleting the name of the deceased partner in the records and oblige." (Quoted)

13. On 22.08.2010 (Annexure-P/12) the surviving Partners (Petitioner Nos. 2 and 3) again submitted their Application along with necessary documents which, according to them, were appropriate vide their letter dated 06.09.2010 (Annexure-P/13) M/s. IOC, on the other hand, stated that the proposal of the Petitioners for reconstitution was incomplete since they had not submitted all documents as pointed out in their earlier letter dated 19.07.2010 (Annexure-P/10) and therefore, the proposal was being returned for resubmission within the next seven days. The Petitioners have stated that since the validity of Token was coming to an end on 30.09.2010, they sent a representation on 10.09.2010 (Annexure-P/14) praying for extension of the 9

validity of Token. On 15.09.2010, the Petitioner No.-2 went to the Licensing Authority to collect the Token upon extension of validity, but he was informed that the neither the license will be renewed nor the validity of the Token will be extended until reconstitution of the Firm was allowed by IOC.

14. It is in the background of the aforementioned facts and circumstances that the Writ Petition has been filed and the referred Policy Guideline dated 01.12.2008 has been brought on record vide Annexure-P/15.

15. An Affidavit-in-opposition has been filed by the Respondent Nos. 4 and 5 (M/s. Indian Oil Corporation Limited and its Manager, Retail Sales). In the said Affidavit, they have stated that the Writ Petition is not maintainable. Admittedly, one of the Petitioners of the Firm has died and admittedly also that the business is pursuant to the Dealership Agreement dated 29.07.2009 (Annexure P/3 of the Writ Petition) which was executed between the 3 (three) Partners (viz. Siya Roy, Binoy Kumar Roy and Nisha Roy) and which was known as the Kerosene/Light Diesel Oil Dealership Agreement. These Respondents have submitted that under the provisions of Clause 45 (b)(ii) read with Clause 46 of the said Dealership Agreement, it is at the discretion of the corporation either to continue with the Dealership or to have a fresh Agreement with any reconstituted Firm or to terminate the Dealership. Clause 45 and 46 of the said Dealership Agreement read as follows:

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"45. Notwithstanding anything to the contrary herein contained, the Corporation shall be at liberty at its entire discretion to terminate this Agreement forthwith upon or at any time after the happening of any of the following events namely:-

a) If the Dealer shall commit a breach or default of any of the terms, conditions, covenant and stipulations contained in this Agreement.

b) Upon

i) the adjudication as insolvent of the Dealer, if he be an individual.

ii) The dissolution of the partnership of the Dealer's firm or the death or adjudication as insolvent of any partner of the firm, if the Dealer be a firm;

iii) The liquidation, whether voluntary or otherwise or the passing of an effective resolution for winding up if the Dealer be a Company or a Co-operative Society;

c) If any attachment is levied and continues to be levied for a period of seven days upon the effects of the Dealer or any individual partner for the time being of the Dealer's firm or any member of the Dealer's Co-operative Society.

d) If the dealer or any partner in the Dealer's firm or any member of Co-operative Society appointed as Dealer hereunder shall be convicted of a criminal offence;

e) If a Receiver shall be appointed of any property or assets of the Dealer or of any partner in the Dealer's firm or of any member of the Dealer's Co-operative Society and shall not be discharged within seven days of the date of such appointment;

f) If the licence issued by the relevant authorities for the storage of petroleum product supplied by the Corporation is cancelled or modified or suspended or revoked or is not renewed before the date of expiry by such authority;

g) If any licence or permit issued to the Dealer by any authority for the carrying on of the business by the Dealer as contemplated under this Agreement is cancelled or revoked or suspended or modified by any such authority or is not renewed before the date of expiry by such authority;

h) If the Dealer shall for any reason make default in payment to the Corporation in full of his outstandings as appearing in the Corporation's books of account beyond 4 days of demand by the Corporation;

i) If any information given by the Dealer in his application for appointment as a dealer or in any document supplied therewith or filled in support thereof shall be found to be untrue or incorrect; j) If the Dealer has concealed any information which if disclosed would in the opinion of the General Manager of the Corporation for the time being at KOLKATA whose decision shall be final have disentitled him to be appointed as a Dealer;

k) If the Dealer does not adhere to the instructions/guidelines issued from time to time by the Corporation in connection with Marketing Discipline and/or safe practices to be followed by him in the sale or supply and storage of the Corporation's products or otherwise;

l) If the Dealer shall contaminate/adulterate or tamper with the quality of any of the products supplied by the Corporation; 11

m) If the Dealer sells any of the products supplied by the Corporation at prices higher than those fixed by the Corporation/statutory authority;

n) If the Dealer allows the Dealership to be operated as 'Benami' or causes the same to be operated through any Power of Attorney or otherwise by any outside third party;

o) If the Dealer shall either by himself or by his servants or agents commit or suffer to be committed any act which in the opinion of the General Manager of the Corporation for the time being at KOLKATA whose decision in that behalf shall be final, is prejudicial to the interest or good name of the Corporation or its products, the General Manager shall not be bound to give reason for such decision;

p) The Corporation's right to terminate this Agreement under the terms of this clause shall be without prejudice to and without affecting any of its other rights and remedies against the Dealer.

46. Notwithstanding anything to the contrary herein contained, in the event of the Dealer being a partnership firm, the Agreement shall automatically come to an end and stand terminated upon any change in the constitution of the firm, whether by retirement or death of any partner(s) introduction of new partner (s) or otherwise howsoever unless after receipt of a written notice from the original surviving partner(s) of the Dealer firm of such death or retirement or induction, the Corporation shall have expressly agreed in writing to continue the Dealership with the surviving partner(s) or with the re-constituted firm. Any supplies of the products made by the Corporation, subsequent to the death or retirement or a partner or the induction of new partner(s), with or without the knowledge of the death or retirement or induction, or any other action on the part of the Corporation under or in pursuance of this agreement subsequent to such death or retirement or induction in favour of or in relation to the surviving partner(s) and/or the reconstituted firm shall not and shall not be deemed to confer any dealership or other rights in favour of the surviving partner(s) and/or the reconstituted firm unless and until the Corporation conveys in writing its specific approval or assents to confer any dealership or other rights upon the surviving partner(s) and/or the reconstituted firm as the case may be and the Corporation shall always be at liberty without any previous notice to discontinue, withhold or stop any such supplied or perform any such act as it deems fit at its discretion."

(Quoted)

16. According to these Respondents, the Writ Petitioners had accepted the Dealership Agreement and had also carried on their Dealership business in accordance with the terms and conditions set out therein and having derived full benefits arising therefrom, it is impermissible to now contend anything contrary to the provisions of the said Dealership Agreement. It is their 12

further contention that the Revised Policy Guideline (Annexure P/15 of the Writ Petition) deals with reconstitution of Dealership and Distributorship and the said Policy Guideline expressly provides that in case of death of any Partner, the Partnership shall be reconstituted with the legal heirs of the deceased Partners and the surviving Partners and if there is no legal heir(s) or if the legal heir(s) has/have expressed unwillingness to join, then and only then, the Distributorship/Dealership shall be reconstituted with the surviving Partners. The relevant portions of the Guidelines dated 01.12.2008 are quoted below: "1st December, 2008

Sub: Revised Policy guidelines for Reconstitution RO Dealerships/LPG Distributorships/SKO-LDO dealerships

MOP & NG vide their letter No. P-19011/5/2005-IOC dated 16.10.2008 advised the broad guidelines on reconstitution of RO Dealerships/LPG Distributorships/SKO-LDO dealerships.

These guidelines are in supercession of all earlier guidelines on Reconstitution. Based on the same, the following Policy guidelines are issued for implementation w.e.f. 1.12.2008.

1. Reconstitution of commissioned dealerships/distributorships

1.1 Re-constitution will be permitted for induction of minority partner(s) only after five years of commissioning of dealership/distributorship.

1.2 Subsequent re-constitution shall be considered only after five years from the date of the last re-constitution. 1.3 Partner(s) can resign from the dealership/distributorship after 10 years of holding dealership/distributorship. In the event of resignation by a partner(s), the remaining partner(s) put together shall hold the controlling stake i.e. at least 51% shares in the dealership/distributorship.

1.4 In cases of death of the sole dealer/distributor, reconstitution may be made in favour of the legal heir. However, if there is no legal heir(s) or legal heir(s) has expressed unwillingness, the dealership/distributorship shall be terminated.

1.5 In cases of death of one of the partner(s), the partnership shall be constituted with the legal heir(s) of the deceased partner(s) and surviving partner(s). However, if there is no legal heir(s) or legal heir(s) has expressed unwillingness, the dealership/distributorship shall be reconstituted with the surviving partner(s).

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1.6 In case of incapacitation due to serious illness/accident of the dealer/distributor, whether sole or partner, resulting in total and permanent disability, which will disable him/her to work or follow any occupation or profession, a minority partner may be inducted. 1.7 The restriction of time period of 5 years as mentioned in 3.1 above will not be applicable in the following cases: (i) Need for re-constitution on account of death/incapacitation of the Proprietor/partner.

(ii) In Sole proprietorships if the proprietor is above the age of 60 years or is a widow of defence personnel.

1.8 The disposal of request for reconstitution of commissioned dealership/distributorship will be handled as per procedure/guidelines given in para-6."

(Quoted)

17. These Respondents have further submitted that the aforementioned Policy Guidelines are binding on the Writ Petitioners. According to them, the Indian Partnership Act, 1932 has no application and any reference thereto is misconceived because the Partnership Act of 1932 governs the rights of obligation of Partners and the heirs of deceased Partners inter-se, but it has no application nor can have any application upon the Corporation (IOC).

18. On the basis of the aforementioned principle points, the IOC has prayed for Dismissal of the Writ Petition.

19. Sushila Roy (Respondent No. 6) has also filed an Affidavit-in-opposition. She has submitted that the predecessor-in-interest of the legal heirs of Siya Roy was one Sheonarayan Rai who died leaving behind his widow (Siya Roy) as his first wife and daughter Smt. Sushila Roy (alias Sushila Devi Singh). He also left behind Lalita Roy (his second wife) who had three sons namely Binoy Kumar Roy, Sanjoy Kumar Roy, Ranjoy Kumar Roy alias Singh and 14

Chanda Roy. She has annexed a Certificate of the Circle Officer of Parauda in the District of Siwan (Bihar) to show that on the basis of an enquiry report conducted by the Halka Karamchari and the Circle Inspector, it was certified that Sanjoy Kumar Roy, Binoy Kumar Roy, Ranjoy Kumar Roy were the sons of late Shenarayan Rai and they were residents of P.O. and Village Parauda and from his first wife, Sushila Devi was born and the other three sons and other the daughter were born out of the second wife, being Lalita Rai.

20. She has also submitted that Miss Siya Roy alias Siya Rai, by virtue of the Dealership Agreement executed with the IOC had obtained the License to that effect and was accordingly, running a Proprietorship License under the name and style of "Roy & Company" but subsequently, considering the financial condition of the step-sons and daughter the said Proprietorship, the licence was converted into a Partnership Firm by changing the constitution of the Proprietorship into Partnership by inducting her elder step-son, Binoy Kumar Roy, as one of the Partners with 49% shareholding with the motive to distribute his share of profit to all the step-sons and step-daughters keeping the rest 51% to herself (Siya Roy) her own survival and for the benefit of her only daughter, the Respondent No. 6. She has stated that upon reconstitution of the Firm, a license was obtained from the IOC and it functioned smoothly, diligently, without any complaints or disturbance from any quarter.

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21. The Respondent No.6 has further stated that how no share of the profits either of 51% belonging to Siya Roy or of 49% belonging to Binoy Kumar Roy was ever distributed and the motive was to forfeit the fruits of the entire business for the own family members of Binoy Kumar Roy who was looking after the business and used to maintain the Books of Accounts.

22. A complaint was lodged by the other step-sons and step- daughters as well as by the Respondent No. 6 before Smt. Siya Roy on several occasions but in spite of requests and reminders to her, no steps were taken. She has further stated that Siya Roy was illiterate and could sign her name in Hindi only and therefore, taking advantage of her illiteracy as well as taking advantage of her sickness and old age, the Writ Petitioner No. 2 (Binoy Kumar Roy) surreptitiously and without the knowledge of the others, prepared many documents with the motive to grab the entire business and accordingly, submitted papers and documents to IOC and also prepared documents to transfer the share of Siya Roy in a fraudulent manner and in connivance with Officers of IOC and as a result thereof, was able to get his wife inducted as a Partner by allotting 21% share out of 51% held by Siya Roy to her. She has further stated that upon the death of Siya Roy on 30.09.2009, she, being her only daughter and entitled to the 51% share in the business which belonged to Siya Roy, including the 30% share for giving the No Objection. She has stated that as soon as the news of the death of Siya Roy reached the IOC, she could come to know that 21% out of 51% share of her mother Siya Roy had been 16

transferred in favour of Nisha Roy in a fraudulent manner and that no share of profit has been distributed amongst the rest of the step-brothers and step-sisters by the Petitioner Nos. 2 and 3. Disputes arose and the Respondent No. 6 refused to sign any document in favour of Binoy Kumar Roy or Nisha Roy. She has further stated that however, on 9.3.2010 a Settlement was reached between her and the Petitioner Nos. 2 and 3 that a "paper" would be prepared and would be handed over to the Petitioner No. 2 by the Respondent No. 6 to only run the business as her Agent without changing the Terms and Conditions of the Partnership for the time being and until, the Firm was reconstituted by inducting her in place of Siya Roy with the authority of 51% share in business. She has stated that accordingly, a registered Power of Attorney was prepared and handed over to the Petitioner No. 2. She has stated that the Petitioner Nos. 2 and 3 have of all along acted fraudulently and that the IOC has rightly refused to grant the licence upon renewal of the previous one.

23. Having considered the aforementioned rival submissions of the parties, this Court, at the very outset, would like to state that so far as Sushila Roy is concerned, she has made a grievance with regard to non- separation/non-partition of the immovable/movable properties of her predecessor-in-interest but that cannot be a subject matter of this Writ Petition. She can at best, take recourse to appropriate litigation before competent Courts of Law to get her Right, Interest and Title perfected, but so far as this Writ Petition is considered, it is clear that the Deed of Partnership was only between 17

Siya Roy, Binoy Kumar Roy and Nisha Roy. Clause 22 of the said Deed of Partnership made it clear that if any of the Parties to that particular Deed of Partnership dies or becomes insolvent, then the others would be entitled to continue. In this case, admittedly Siya Roy has expired and therefore the only other two Partners who are signatories to that Deed of Partnership are the Petitioner Nos. 2 and 3. Therefore, at this stage, the Respondent No. 6 cannot be said to have any right to frustrate that Deed of Partnership by taking a plea that she is the only daughter of Siya Roy etc. There is no explanation as to what prevented her from objecting to the Partnership during the lifetime of Siya Roy. After her death, her statements can, at best, be considered before an appropriate Forum dealing with facts but certainly not, before this Court at this stage. Therefore, she is at liberty to get her Rights and Title perfected through such an appropriate forum.

24. Now coming that to the facts once again, it is seen that the Partnership was between Siya Roy, Binoy Kumar Roy and Nisha Roy. Under such circumstances, the contention of the Respondent No. 6 at present, and in the context of the Deed of Partnership, can only be considered to be submissions without material evidence in proof of such statements and therefore, are submissions coming from a stranger to the Partnership Deed and therefore, they cannot be accepted. So far as IOC is concerned, their contention with reference to Clause 45 of the Dealership Agreement to the effect that the Corporation can either continue with the Dealership or be at liberty to terminate the Agreement in 18

the event of death of any Partner of the Firm, cannot mean that the Corporation can act whimsically by taking recourse to termination of the Dealership only because one of the Partners has died. It is now well known that when the State or an instrumentality of the State grants largess, their acts must be reasonable. Reference may be made to the case of M/s. Kasturi Lal Lakshmi Reddy, etc. Vs. The State of Jammu & Kashmir and another reported in AIR 1980 Supreme Court 1992 and Ramana Dayaram Shetty Vs. The International Airport Authority of India and Others reported in AIR 1979 SC 1628. The corporation cannot ignore the provisions of Clause 22 of the Deed of Partnership because it forms the basis and the foundation upon which, the Dealership Agreement was constituted and which received the seal of approval by the IOC when it proceeded to grant the license and/or entered into the Dealership Agreement with Siya Roy and the other two. In such circumstances, merely because a Policy Guideline says that in the case of death of one of the Partners, the Partnership shall be reconstituted with the legal heirs and the surviving Partners, the same cannot mean that it has to be interpreted in such a manner that even persons who are strangers to the Deed/Agreement and who are not parties to the Dealership Agreement or the Deed of Partnership must firstly be satisfied for the reconstitution of the Dealership Agreement. If other legal heirs now want to be inducted, then they must first get their Title perfected through a properly constituted Civil Suit before an appropriate Court of Civil jurisdiction but the Corporation cannot, at this stage, insist that stranger to the Partnership Deed must also be a part of a reconstituted Partnership. 19

25. Under such circumstances, this Court holds that the IOC cannot refuse to renew the license of the Petitioner No. 1 under the 1968 Control Order nor can they refuse to allow the reconstitution of the Partnership Firm of the Petitioner No. 1 at this stage. Under such circumstances, this Writ Petition is allowed directing the IOC to allow reconstitution of the Partnership Firm of the Petitioner No. 1 without insisting on the induction of the Respondent No. 6, at this stage.

26. At the same time, the Respondent No. 6 is given full liberty to get her rights declared and title perfected in a duly constituted Civil Suit and if she succeeds then, and only then, she would be entitled to claim induction including reconstitution the Firm in accordance with law but till her rights are not so declared and till her title is not so perfected by a Decree in which, all heirs of Siya Roy and Sheonarayan Rai are Parties, this Partnership/ the subject matter of this Writ Petition cannot be allowed to become defunct. The Writ Petition is accordingly disposed of with the aforesaid Observations and Directions.

No order as to costs.

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Upon appropriate Application(s) being made, urgent

Photostat Certified copy of this Judgment, may be given/issued expeditiously subject to usual terms and conditions.

(Tapen Sen, J.)

.............September, 2011

S.B.

A.F.R./N.A.F.R.

LATER

After the aforementioned Judgment was delivered in

Court, prayer was made on behalf of the Respondent No.6 for stay. Having considered the facts and circumstances, this Court refuses to grant any stay of operation of the Judgment.

(Tapen Sen, J.)