Thirty-seven years after Indian Oil Corporation ltd terminated the contract of an lPG gas agency citing violations in the agreement deed, the Supreme Court set aside the decision on learning that the original agreement document had yet to be dispatched to the agency despite several promises made by the public sector undertaking in the past.
Interestingly, the distributorship of the agency was jointly held by an IPS officer AS Siddiqui and a four-time Member of Parliament Jai Narayan Nishad who dragged Indian Oil Corporation limited (IOCl) to Court in the year 1978 soon after they were served with a termination notice on January 16, 1978. The agency titled M/s Happy Homes was the sole distributor of lPG gas cylinders in Bihar’s Muzaffarpur since October 21, 1971, the date of allotment by IOCl. It was allotted to them under the ex-servicemen quota as both individuals had retired as Captain in the Army.
The IOC terminated the agreement on coming to know that Siddiqui transferred the shares of the agency in the name of his wife Niloufer soon after he joined the Bihar Government as Deputy Superintendent of Police.
Dealing with this letter of termination, the apex bench of Justices V Gopala Gowda and Amitava Roy discovered to its surprise that despite reminders issued by the distributors from time to time, the IOCl failed to supply them a copy of the agreement and asked them to continue on the basis of the letter of allotment.
Senior advocate Kapil Sibal who represented the gas agency said that it was the IOCl which was in breach as it had failed to supply the agreement document till date. Thus the agreement containing the termination clause was not held binding on the agency and the decision was set aside. The bench even restored the distributorship to the agency warning the IOCl to be “cautious” and “careful” while terminating distributorship of this nature. Considering the fact that the agency had suffered 37 years of litigation, the Court even awarded it a cost of `1 lakh to be paid by IOCl.