And justice for ex-servicemen after 37 years

Hyderabad: A recent Supreme Court ruling proved that justice delayed is not always justice denied. Justice was done to ex-servicemen, who have been fighting against Indian Oil Corporation Limited (IOCL) for illegal termination of agency contract, after a long wait of 37 years. They have filed a case in 1978 and a prolonged legal battle ensued since.

The judgment delivered by the Apex Court on December 01 in Civil Appeal No.7266 of 2009 (Indian Oil Corporation Vs Niloufer Siddiqui) observed that the distributorship of two ex-servicemen was terminated arbitrarily and unfairly. “This conduct on the part of IOCL defeats the laudable object of the scheme of the Government of India by which distributorship was allotted in favour of the ex-defence personnel, war-widows and dependants,” the judgment read.

Writing for the bench comprising himself and Justice Amitava Roy, Justice V Gopala Gowda said that in the year 1971 the IOCL invited applications from eligible persons under the scheme for awarding the distributorship of Indane Gas in Muzaffarpur, Bihar. The said distributorship was reserved for ex-defence personnel, war-widows and dependants.

In response to this, ex-Captains A.S Siddiqui and Jai Narain Prasad Nishad applied for the said distributorship and was offered the same on 15-10-1971 with a stipulation that they should agree to form a partnership with a third person. This was done with a view to rehabilitate more ex-servicemen in the country. However, the third person refused to form partnership.

On 21-10-1971, the IOCL issued the letter of allotment which contained certain conditions. One of the conditions was that the appointment as distributor was subject to the conditions contained in its standard agreement which would be sent in due course to the distributor for signing and thereafter returning the same to the IOCL. Despite the distributor asking for the standard agreement through letters twice, the IOCL did not provide the standard agreement.

Instead it informed, “… This agreement will be given to you in due course. There is absolutely no secrecy maintained about anything and the agreement as and when ready, would be sent to you…” Thereafter, from 23-03-1972 the partnership firm- M/s Happy Homes started the business of distribution of Indane Gas. The said standard agreement was never given to the firm. Subsequently, Capt.

Siddiqui wanted to transfer his share to his wife Niloufer Siddiqui to which the IOCL did not agree citing irregularities in the dealings. Meanwhile, Capt. Siddiqui joined the Bihar Government service as a Deputy Superintendent of Police. The IOCL informed him to choose to keep his job or remain as its distributor.

Thereafter, Capt. Siddiqui transferred his share in the name of his wife Niloufer Siddiqui on 23-01-1978. In turn, the IOCL terminated the distributorship saying that this act of transferring his share to his wife was nothing but the breach and violation of the agreement.

Aggrieved by the termination of distributorship, Niloufer Siddiqui approached the court of Executive Munsif, Muzaffarpur seeking declaration that termination of the distributorship by IOCL was illegal, arbitrary and unjustified. However, by its judgment dated 11-04-1985 the court dismissed the said suit holding, inter alia, that Capt. Siddiqui had no right to transfer his share in the name of his wife.

Aggrieved by the decision of the trial court, Niloufer Siddiqui preferred Title Appeal in the court of Additional District Judge, Muzaffarpur.

This first appellate court vide its judgment and order dated 13-06-1988 dismissed the appeal and upheld the decision of the trial court. Thereafter, she preferred the Second Appeal in the High Court at Patna. This appeal was allowed. Therefore, IOCL, the aggrieved party had preferred this appeal in the year 2009.

After hearing the arguments of Pinky Anand, Additional Solicitor General of India representing the IOCL and Kapil Sibal, senior advocate representing Niloufer Siddiqui and others, the apex court declared that since no copy of the standard agreement was provided to the partners, there is no question of acceptance of terms and conditions contained therein.

Further, the IOCL itself had stipulated the notice period of 30 days in one of its conditions. The distributorship was terminated without giving such notice, it observed while declaring the termination as illegal and arbitrary.

Relying on its earlier judgment in Mahabir Auto Stores Vs IOC & others the court observed that IOCL being a government of India undertaking is bound to act fairly, reasonably and its conduct is subject to scrutiny on the touchstone of Article 14 of the Constitution of India.

It also termed the termination clause as one giving unfettered right to IOCL and besides restoring the distributorship to Niloufer Siddiqui and others, it also awarded the cost of RS 1 lakh to two respondents considering the fact that they have been litigating for a period of around 37 years, spending precious time in courts of law seeking justice for themselves.