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CASE NO.: Appeal (civil)  472 of 1998

PETITIONER: B.R. Chowdhury                                           

RESPONDENT: Indian Oil Corpn. Ltd. & Ors.                    

DATE OF JUDGMENT: 15/01/2004

BENCH: SHIVARAJ V. PATIL & D.M. DHARMADHIKARI.

JUDGMENT: J U D G M E N T

SHIVARAJ V. PATIL J.

       The order dated 17.3.1997 passed by the Division  Bench of the High Court affirming the order dated  10.2.1997 passed by a Single Judge of the High Court in  C.O. No. 17843 (W) of 1996 is under challenge in this  appeal.   

       Indian Oil Corporation (for short ‘the  Corporation’) invited applications for appointment of a  dealer relating to a retail outlet, on 22nd June,  1987.  It was open to all but preference was to be  given to the unemployed youth.  The appellant was given  the dealership as an unemployed youth.  The appellant  was engaged as a Trainee Professional Sales  Representative with M/s. Denis Chem Lab Limited from  23.2.1987 to 3.4.1989.  He wrote ‘NIL’ against the  relevant column relating to employment.  The respondent  No. 5 who had also applied for dealership filed  objections before the Oil Selection Board stating that  the appellant was an employee and as such he was not  entitled to the benefit of preferential treatment. The  Oil Selection Board prepared a panel of three  candidates consisting of the appellant, respondent No.  5 and one another placing the appellant at Sr. No. 1  and the respondent No. 5 at Sr. No. 2.  The respondent  No. 5 filed writ application No. 19758(W) of 1995  challenging the selection of the appellant.  An order  was passed on 12.12.1995 in that writ petition  directing the authorities of the Corporation to make a  fresh consideration.  Pursuant to the same, the Deputy  General Manager of the Corporation, keeping in mind the  finding of the Oil Selection Board, rejected the  objection raised by respondent No. 5.  The respondent  No. 5 filed second Writ Application No.3262 of 1996.   By the order dated 27.2.1996, in the said writ  application direction was given to consider a  certificate produced by the respondent no. 5 showing  that the appellant was employed with M/s. Denis Chem  Lab Limited.  The relevant portion of the said order  dated 27.2.1996 reads:

"Be that as it may, the spirit of the  order passed by me is quite clear and  only on the ground that the said  certificate had not been mentioned in my  order, the authorities ought not to have

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brushed aside the same while considering  the matter.  Accordingly, I dispose of  this writ application with a direction  upon the said officer and/or any other  officer to be appointed by the Indian  Oil Corporation and its authorities to  reconsider the matter in the light of  the certificate dated 30th October,  1995 and thereafter to pass final orders  after giving the parties hearing.  It is  made clear that running of the retail  outlet shall abide by the result of the  decision of the said authorities."

       Following the said order, the Corporation  considered the matter afresh and passed the order dated  11.10.1996 cancelling the dealership given to the  appellant.  The appellant filed the Writ Petition  C.O.No. 17843 (W) of 1996 challenging the validity and  correctness of the aforementioned order dated  11.10.1996 passed by the Corporation contending that  the said order was perverse as the previous decision of  the Corporation as well as the decision of the Oil  Selection Board had not been considered; in any event,  the respondent No. 5 could not have been appointed as a  retail outlet dealer in his place; the appellant did  not suppress any fact and even otherwise the alleged  suppression could not have made any difference to the  decision of the Oil Selection Board as he as a trainee  was not an employee.  A learned Single Judge, by the  order dated 10.2.1997 after considering the rival  contentions, concluded that the panel prepared by the  Oil Selection Board was no more valid and in the result  while upholding the cancellation of the dealership of  the appellant, set aside the dealership given to the  respondent No. 5.  Further the Corporation was directed  to take appropriate action in the matter as permissible  in law.  Aggrieved by this order of the learned Single  Judge, the appellant, the respondent No. 5 and the  Corporation filed three appeals being Appeal Nos. 445,  508 and 511 of 1997 before the Division Bench of the  High Court.  The Division Bench of the High Court, by a  detailed and considered order dated 17.3.1997 did not  find any good reason to interfere with the judgment of  the learned Single Judge and dismissed all the three  appeals.  The appellant who was appellant in M.A.T. 445  of 1997 before Division Bench of the High Court is in  appeal before this Court in this appeal.

       Learned Senior Counsel for the appellant urged  that the cancellation of dealership awarded to the  appellant was mechanically cancelled by the Corporation  merely on the basis of the report of enquiry made by  its officer without application of mind; assuming that  there was any irregularity in considering the  application of the appellant for grant of dealership,  it could not be said to be void.  According to him, the  appellant during the relevant period was working as a  trainee and not as an employee and as such the  termination of his dealership on the ground that he  gave false information was not at all justified; the  Corporation has not shown how cancellation of  dealership of the appellant was justified particularly  when the appellant had secured more marks in the

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interview conducted by the Board.

       The learned counsel for the Corporation made  submissions supporting the impugned order.   

       The leaned counsel for the respondent no. 5 made  submissions supporting the cancellation of dealership  of the appellant and added that the reasons recorded by  the learned Single Judge as well as the Division Bench  of the High Court in upholding the cancellation and  dealership of the appellant were fully justified.

       We have examined and considered the rival  contentions urged on behalf of the parties having due  regard to the material placed on record.  The leaned  Single Judge not only upheld the cancellation of the  dealership given to the appellant but also set aside  the dealership given to the respondent no. 5.     Respondent no. 5 came up to this Court in S.L.P.(C) No.  8902/97 questioning the validity of the impugned  judgment to the extent he was aggrieved by the  dismissal of his appeal MAT No. 508 of 1997. The SLP  was dismissed by this Court on 30.4.1997.  Before us,  the only appeal filed by the appellant is for  consideration.  In this view, we are not called upon to  examine the correctness of the cancellation of  dealership given to the respondent no. 5 after the  termination of the dealership given to the appellant  earlier.  In other words, we have to focus our  attention and consider only the question as to whether  the order of termination of the dealership given to the  appellant is right in law and justified.

       The facts that are not in dispute are that the  Corporation invited application for appointment of a  dealer in respect of one of its retail petrol pump on  22.6.1987. In response to the same, several  applications were received.  Eligible candidates were  interviewed.  Based on the selection made by the Oil  Selection Board, the Corporation issued a letter of  intent in favour of the appellant on 9.8.1995.   Respondent No. 5 made complaint alleging that the  appellant did not fulfill the eligibility criteria.   The Oil Selection Board found allegations of the  respondent No. 5 incorrect and advised the Corporation  not to take notice of his complaint.  The respondent  no. 5 filed Writ Petition No. 17958 of 1995 challenging  the recommendation made in favour of the appellant for  appointment as a dealer in respect of retail outlet in  the town of Durgapur.  The writ petition was disposed  of on 12.12.1995 directing the Corporation to consider  and dispose of the objection raised by the respondent  No. 5 with regard to the grant of dealership to the  appellant on the ground indicated not only in his  representation dated 12th September, 1995 but also on  the grounds raised in the Writ Petition.  The  Corporation nominated one of its Officers Mr. B.D.  Ghosh to consider the matter pursuant to the order made  in the aforementioned writ petition.  Before the said  officer, the respondent No. 5 urged that the appellant  was employed with M/s. Denis Chem Lab Limited.  Mr.  Ghosh did not decide this new contention understanding  that the direction given in the writ petition was  restricted only to the representation dated 12th  September, 1995 given by the respondent No. 5 and

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rejected the objections raised by the respondent No. 5  holding that the selection of the appellant was not bad  in law.  Thereafter on 23rd January, 1996, the  Corporation appointed the appellant as the dealer for  the retail outlet.  Respondent No. 5 filed the second  Writ Petition No. 3262 of 1996 challenging the order  appointing the appellant as the dealer.  The said writ  petition was disposed of by a learned Single Judge on  27.2.1996 directing the Corporation to reconsider the  matter in the light of the Certificate dated 30th  October, 1995 issued by M/s. Denis Chem Lab Limited on  which reliance was placed by the respondent no. 5.  In  the said certificate, it was stated that appellant had  worked with M/s. Denis Chem Lab Limited as a Trainee  Sales Professional Representative from 23.2.1987 to  3.4.1989 at Gujarat.  The Corporation this time  nominated one Mr. N.K. Gupta, the Chief Consumer  Manager of the Corporation.  Mr. Gupta instructed his  office to send a letter to M/s. Denis Chem Lab Limited  to enquire about the employment of the appellant.  M/s.  Denis Chem Lab Limited by their reply dated 21.5.1996  confirmed that the appellant had been working in their  organization from 23.2.1987 as a Trainee Sales  Professional Representative, that his services were  confirmed, his provident fund was deducted from the  period 1.3.1988 and thereafter on 17.2.1989 he tendered  his resignation, which was accepted.  On these facts,  Mr. Gupta concluded that on the date the appellant  applied for the dealership, he was employed at least as  a trainee.  He also referred to the application of the  appellant and particularly column No. 9 relating to the  status of present occupation in which it was shown as  ‘Nil’.   Hence, Mr. Gupta held that the appellant was  disqualified and the Corporation should take suitable  action accordingly. On 11.10.1996, the Corporation  terminated the dealership of the appellant pursuant to  the report of Mr. Gupta.  The appellant challenged the  order of termination of his dealership by filing Writ  Petition No. 17843 of 1996, which was disposed of by  the learned Single Judge upholding the termination of  dealership of the appellant.  The same was affirmed by  the impugned order by the Division Bench of the High  Court in the appeal.

       The appellant gave an affidavit for securing the  dealership.  In paragraph 10 of the affidavit, which is  reproduced in the impugned order, it is clearly stated  that if any information given by the appellant in any  application or in any document submitted by him in  support of his application for the award of dealership  is found to be untrue or incorrect or false, the  Corporation would be within its rights to withdraw the  letter of intent, terminate the dealership/  distributorship (if already awarded) and that he would  have no claim whatsoever against Indian Oil Corporation  Ltd. for such withdrawal/termination.  Further  paragraph 56 of the Memorandum of Agreement, as  indicated in the impugned order, gave liberty to the  Corporation to terminate the agreement on finding that  any information given by the dealer in his application  for appointment was found to be untrue or incorrect in  any material respect.

       The offer of appointment dated 8.2.1987 given by  M/s. Denis Chem Lab Limited to the appellant reads:

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"Mr. Biswadeep Roy Chowdhury CD/64/2, V.K. Nagar Durgapur \026 713 210 (W.B.)

Dear Mr. Chowdhury,

       Sub: Appointment Offer

We refer to your application for the job  of Professional Sales Representative and  subsequent interview with us.   Management is pleased to inform you that  you have been selected for a post. You  shall be paid Rs.650/- per month as  starting stipend. Stipend shall be  increased to Rs. 700/- at the end of six  months from the date of joining and Rs.  750/- on completion of one year service.   Besides this, you shall be paid Rs.  100/- per month as vehicle maintenance  allowance if you are using a two wheeler  scooter or motor cycle for your daily  field work at Head Quarter.  Proof of  ownership of vehicle for regular use has  to be submitted to this office for our  record.  Besides this, you shall be paid  following working allowance:-

Head Quarter per working day : Rs.22/-

Ex-town / transit per day         : Rs.28/-

Outstation                                : Rs.40/-

You shall be entitled for bus fair for  travel within 50 K.M. from the H.Q.  For  longer distance, you shall be allowed  1st Class Railway Fare.  You are  required to join training class at  Ahmedabad from 23rd February, 1987 for  the period of three weeks.  You are  required to reach Ahmedabad on  22.2.1987.  Your stay arrangements have  been fixed at Gandhi Ashram Guest House,  Opp. Gandhi Ashram, Ashram Road,  Sabarmati, Ahmedabad.

Your Headquarter of posting shall be  decided at the end of training.  Your  regular appointment letter shall be  issued on successful completion of  training.  Please sign duplicate copy of  this letter in token of your acceptance  and return for our record.

Dress for sales training class shall be  suite or shirt with necktie and  trousers.

We confirm having sent a telegram to you  reading as under:-

YOUR APPOINTMENT OFFER POSTED (.)   CONFIRMED TELEGRAPHICALLY ACCEPTANCE AND

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JOINING FOR TRAINING STRARTING 23RD  FEBRUARY.

In case we do not receive your  confirmation by 14th February, we  shall extend our offer to next candidate  on your selection list.

Thanking you,

Yours faithfully, For DENIS CHEM LAB LTD."

       The reply dated 21.5.1996 given by M/s. Denis Chem  Lab Limited to the letter dated 4.4.1996 written by the  Corporation confirms that the appellant was working in  their organization from 23.2.1987.  He was working as a  Trainee Sales Profession Representative; his services  were confirmed and his provident fund number was  GJ/15771/137, certain amount was also collected towards  provident fund and he resigned from services on  17.2.1989, which was accepted on 5.4.1989. A combined  reading of the offer of appointment and the  aforementioned reply of the M/s. Denis Chem Lab Limited  clearly shows that the appellant was an employee on the  relevant date.  Mere use of word trainee cannot be  taken to say that he was not an employee particularly  so when his services were confirmed later.  In the  application filed by the appellant for securing  dealership, as against column No. 8(c) whether he was  temporarily employed, he has filled as ‘No’.  In column  No. 9, as against the present occupation, he has shown  as ‘Nil’.  These statements made by the appellant in  column No. 8(c) and column No. 9 amount to suppression  of material fact. This apart, nothing prevented the  appellant from mentioning in column no. 9 of the  application as against the status of employment at  least as a trainee.  But on the other hand, in column 9  he has shown the status of occupation as ‘Nil’.  The  contention advanced on behalf of the appellant that the  status of occupation as shown was bona fide cannot be  accepted.  In view of para 10 of the affidavit filed by  him coupled with the para 56 of the Memorandum, the  Corporation was well within its right to terminate the  dealership of the appellant.  There is no substance in  the argument advanced on behalf of the appellant that  the Corporation passed the order of termination of the  dealership of the appellant mechanically and without  application of mind.  On the facts found and in view of  the findings recorded by Mr. Gupta, it cannot be said  that the order passed by the Corporation terminating  the dealership of the appellant was mechanical or  without application of mind.  This Court in Kendriya  Vidyalaya Sangathan & Ors. vs. Ram Ratan Yadav [(2003)  3 SCC 437] while dealing with the effect of suppression  of material information took a view that the purpose of  seeking information cannot be defeated which has  bearing on the selection.  Added to this, if only the  appellant had given correct information about status of  his occupation as on the relevant date as rightly held  by the learned Single Judge which view was affirmed by  the Division Bench of the High Court, possibly the  position would have been different.  At any rate, the  appellant is bound by his own affidavit and the

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Memorandum of Agreement mentioned above.

       Thus, having regard to all aspects, in our view,  the impugned judgment does not call for any  interference.  Hence, the appeal is dismissed.  No  costs.