SRI GRAHA AGENCIES Vs. DEPUTY GENERAL MANAGER

JUDGEMENT

(1.) THE challenge in the writ petition is the order of the first respondent dated 16. 11. 2007 under which the first respondent has suspended the distributorship given to the petitioner for the sale of the Indian Oil Corporation Liquified Petroleum Gas (LPG)known as Indane in cylinders for house-hold customers. Admittedly, as per the agreement dated 07. 02. 2002 entered between the petitioner and the IOC, the respondent herein, the distributorship has been given to the petitioner. Clause 37 of the agreement contemplates the disputes to be referred to the arbitrator. The said clause states as follows:

(2.) THE case of the petitioner is that on the basis of certain complaints a show-cause notice was issued to the petitioner by the respondent Corporation on 9. 10. 2007, directing the petitioner to give explanation for nearly 11 charges which are stated to be breach of contract of terms of agreement and also the misconduct on the part of the petitioner. The petitioner has given its explanation on 5. 11. 2007 and thereafter, the impugned order came to be passed finding that all the charges levelled against the petitioner as distributor have been proved. A reference to the impugned order shows that the petitioner who was given distributorship only in respect of house-hold customers has been diverting the same for commercial purpose also and on inspection, it was found that by diversion of Indane Cylinders which are to be supplied for residential purpose to commercial purpose, the respondent Corporation has incurred a loss to the extent of 67 lakhs. It is the case of the respondents as seen in the counter affidavit, that the petitioner got distributorship as a proprietary concern and whereas on enquiry it came to light that the petitioner in fact has entered a partnership with his brother and the partnership deed was registered as early as 1988 and the petitioner has suppressed the material fact and obtained the distributorship in his name as if he is the sole proprietor. It is the further case of the respondent that the distributorship has been transferred to one Pattammal Agencies as an interim measure, after cancelling the petitioner's distributorship.

(3.) MR. R. C. PAUL Kanagaraj, learned counsel appearing for the petitioner would submit that to the show-cause notice issued by the respondent Corporation, the petitioner has given a detailed explanation. However, while passing the impugned order, the explanation has not been taken into consideration, and on the other hand, it is due to the personal vendetta of the third respondent, the impugned order has been passed suspending the distributorship of the petitioner.