SHANTA SHARMA Vs. UNION OF INDIA

JUDGEMENT

(1.) There is a spurt of litigation in respect of Petroleum and Petroleum products which apparently shows that it is a lucrative business. The instant appeal under Clause 12 of the Letters Patent has been preferred by M/S Shanta Sharma and sons which is a dealer of Indian Oil Corporation. The primary grievance echoed in the writ petition was that its area of operation has been arbitrarily and unfairly curtailed and restricted. A declaration was sought that the petitioner's firm was entitled to supply of Superior Kerosene Oil to the areas of Rajouri, Poonch Districts, Akhnoor Tehsil of Jammu District as also Jammu City. They have invoked the provisions of policy dated 05.08.1986 floated by respondent-Indian Oil Corporation (for brevity to be referred as 'the Corporation').

(2.) It would be appropriate to mention at the out set that initially the dealership was given vide order dated 21.12.1974 to one Ram Lubhaya, who was nominee of Director General of Resettlement because of his Army background. His area of operation in the communication dated 21.12.1974 was shown as Rajouri with Poonch, Akhnoor, Kalakote, Sunderbani, Chamb, Mendhar, Nowshera, Mandi and Surankote. There was an agreement between Ram Lubhaya and the Corporation. After his death Mrs. Shanta Sharma widow of Ram Lubhaya stepped in his shoes. Obviously the agreement between Ram Lubhaya and the Corporation came to an end on the death of Ram Lubhaya. Accordingly, a new bipartite agreement was executed between the widow Mrs. Shanta Sharma and the Corporation on 28.06.1983 where the area of operation was shown as Rajouri District, Poonch District and Municipal limits of Jammu City. It has come on record that Mrs. Shanta Sharma expired on 10.02.1992. On facts there is no dispute that Mrs. Shanta Sharma was the sole proprietor and a new agreement has been executed between Ashesh Sharma and the Corporation on 04.11.2011, during the pendancy of the writ petition.

(3.) Before the learned Single Judge the parties reached a consensus that Arbitration clause in the dealership agreement, which is reflected in para 28 of that agreement, was not to be invoked because the writ petition was formally admitted to hearing and was pending since 2006. On merits the learned Single Judge rejected the claim made by the appellant-writ petitioner that the Corporation lacked power and authority to curtail or restrict or enlarge the area of its operation or the volume of superior kerosene oil of such dealer. The reason for rejecting the claim was that on account of increase of population, life style, connectivity, consumer preference and other factors, consumption of essential commodity has also increased many fold which could not be static. As the population of Rajouri, Poonch and Akhnoor Tehsil of Jammu City had increased many fold since the year 1974 it was not considered possible for one dealer to cover such a vast area for supply of Superior Kerosene Oil and Low Diesel Oil. Moreover the Corporation had reserved to itself the right to curtail the area of operation and to appoint one or more dealers for the said area under the dealership agreement executed with Mrs. Shanta Sharma wd/o Late Ram Lubhaya. Para 1-c of the dealership agreement clearly stipulates the aforesaid position. The learned Single Judge also held that even otherwise the dealership was not inheritable as such and Shri Ashesh Sharma, her son, was required to work out some new arrangement with the Corporation to ensure that he is acknowledged as a dealer in his own right. Eventually a dealership agreement during the pendancy of the proceedings before the Writ Court has been executed on 04.11.2011 between him and the Corporation. Even in that agreement clause 1-c has been incorporated which entitles the Corporation to curtail or restrict the petitioner's area of operation and appointment of one or more dealers for the said area.