Soumitra Pal, J.:— The petitioner was appointed as a dealer by the Indian Oil Corporation (for short “the IOC”), the respondent No. 1, for the sale of liquefied petroleum gas during the year 1996. The said dealership was terminated by the IOC by an order of suspension dated 8.3.2004, being Annexure P-18 to the writ petition. Being aggrieved by the said order of suspension, the petitioner has preferred the instant writ application. The prayers which are relevant are as follows:

“(b) A writ of and/or in the nature of Mandamus commanding the respondents and/or their men, agents or subordinates to show cause as to why the impugned alleged decision of competent authority of the Corporation to suspend the functioning of the petitioner's distributorship with immediate effect as communicated vide letter bearing reference No. WB/LPG/208/40 dated 8th March, 2004 signed by the respondent No. 4 being Annexure ‘P-19’ to this writ petition should not be cancelled, quashed and/or withdrawn;

(c) A writ of and/or in the nature of Mandamus commanding the respondents and/or their men, agents or subordinates to show cause as to why the writ petitioner should not be allowed to carry on his business of Liquefied Petroleum Gas distributorship in the name and style of Atreyee Gas Service without any disturbance.”

2. It is contended by the writ petitioner, that the IOC while issuing the order of suspension has acted upon a complaint regarding an alleged agreement between the writ petitioner and respondent No. 6 entered into before being appointed a dealer without the consent of the IOC, but neither any date of such agreement nor any other particulars of such agreement have been disclosed to the petitioner. The said order under challenge has been served without supplying the document sought to be relied upon by the authorities and without giving any opportunity to the petitioner to contradict the allegations of the respondent No. 6. The said action is violative of Articles 14 and 19(1)(g) of the Constitution of India as it affects the fundamental rights of the petitioner to carry on trade and business. Allegations are that the respondent No. 6 who was removed from the administration of the petitioner's business sometime during August, 2003, having a personal grudge, is trying to harass the petitioner. The said respondent No. 6 filed two writ petitions, but was unsuccessful.

3. Mr. Rabilal Moitra, learned senior counsel appearing for the writ petitioner, reiterating the statements made in the petition submitted that the Deputy Superintendent of Police, Balurghat in his findings appearing at pages 42 and 43 of the affidavit-in-opposition (for short “the opposition”) filed by the IOC, came to a finding that the petitioner may continue the business maintaining formalities. Submission was made that in the agreement between the petitioner and the IOC, though there is no provision for suspension, the IOC has sought to cover up their position by an averment in paragraph 18 of the opposition that wider power of termination includes a lesser power of temporary termination by way of suspension. Referring to the agreement dated 16.9.96 between the I.O.C and the petitioner, it was submitted that clause 27 of the agreement gives power to terminate the agreement forthwith, if the distributor commits any breach of the agreement and fails to rectify such breach within four days of the receipt of a written notice in that regard. Clause 28 of the agreement gives power to terminate the agreement after giving 30 days notice to the other party without assigning any reason for such termination. Submission was made that in case of failure of adhering to the principles of natural justice, a writ can be filed for enforcement of fundamental rights though the agreement provides for an arbitration clause. In support of such contentions, Mr. Moitra referred to the decisions of the judgement of the Supreme Court in the matter of Harbanslal Sahania v. Indian Oil Corporation Ltd., reported in 2003 (2) SCC 107, wherein it has been held that the High Court can exercise its jurisdiction where writ petition seeks enforcement of any of the fundamental rights. Reference was made to the judgement of the Supreme Court in Modern Steel Industries v. State of U.P, reported in 2001 (10) SCC 491, in support of his contentions. Reliance was also placed on the judgement of the Supreme Court in Tata Cellular v. Union Of India., reported in 1994 (6) SCC 651. Submission was made that there is no notice of show cause prior to the issue of the order of suspension. Mr. Moitra submitted though the reasons for suspension appear from the averments from paragraphs 13, 14 and 15 of the opposition, there is no mention of any date as to when during October, 2003, IOC received the complaint, who were the members of the committee to investigate and how the investigation was carried on, since the petitioner was not called during such investigation. Such complaint or carrying on the investigation which form the basis for issuing the suspension order do not appear from the records. Mr. Moitra denied that any deed of partnership, being Annexure R-2 of the opposition, was entered into by the writ petitioner and the respondent No. 6 on which reliance has been made by the IOC while issuing the order of suspension. Moreover, deed of partnership is not genuine as it does not appear from the said annexure, as when the stamp was purchased and by whom. It was submitted that though the order of suspension was passed, the same is not based on records since paragraphs 13, 14, 15 and its sub-paragraphs of the opposition have been affirmed as true of knowledge. In short, it was submitted that as nothing is on record to show that an agreement was entered into by the writ petitioner with the respondent No. 6, entire action taken by the IOC in suspending the distributorship of the petitioner is illegal and thus, should be set aside and quashed.

4. Ms. Vineeta Meharia, learned counsel appearing for the IOC, submitted that the writ petition is not maintainable as under clause 37a of the agreement, the dispute should be adjudicated under arbitration proceedings. The Corporation could have terminated the agreement by invoking clauses 27 or 28 of the agreement, but in the instant case, as there was breach of the agreement, notice of suspension has been issued. Pursuant to a complaint, the IOC has investigated and prima facie found breach has been committed by the petitioner. Investigation is going on at present and show cause notice has been issued on 9.6.2004 The petitioner should reply to the said show cause notice. Submission was made that as the dispute is regarding contractual obligations and disputed questions of fact are involved, writ petition is not maintainable. Ms. Meharia in support of his submissions relied on the judgements of the Supreme Court in Life Insurance Corporation of India v. Asha Goel, reported in 2001 (2) SCC 160, State of U.P v. Bridge & Roof Company (India) Ltd., reported in 1996 (6) SCC 22, ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., reported in 2004 (3) SCC 553 and the judgement of the Division Bench of this Court in the matter of Engineers India Limited v. D. Wren International Ltd., reported in 1997 (II) CHN 1. Ms. Meharia distinguished the judgement of the Supreme Court reported in Modern Steel Industries (supra) by submitting no challenge was thrown to the arbitration agreement and in the instant case show cause notice has been issued. As show cause notice has been issued, there is no failure of natural justice and hence, the principles laid down in Harbanslal Sahania (supra) are not applicable. Referring to paragraph 18 of the opposition and relying upon the judgement of Hindusthan Petroleum Corporation Ltd. & Ors. v. Shyam Sundar Ganeriwala, reported in 91 CWN 217, it was submitted that power to terminate entails a lesser power of suspension which is not equal to termination. After receiving the complaint and being prima facie satisfied, since there was a fundamental breach, suspension order was issued relying on the judgement of Life Insurance Corporation of India v. Asha Goel, reported in 2001 (2) SCC 160 and General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur, U.P v. Satrughan Nishad, reported in 2003 (8) SCC 639, it was submitted that a writ petition is not maintainable in enforcement of contractual rights more so if disputed questions of fact are involved. Ms. Meharia submitted that writ petition should be dismissed and the petitioner should reply to the show cause notice.

5. Appearing for the respondent No. 6, Mr. Tapan Kumar Mukherjee submitted, that the enquiry proceedings should be allowed to continue. Suspension pending enquiry is always allowed and issues cannot be prejudged. Mr. Mukherjee relied on the judgement of the Supreme Court in Har Shankar & Ors. v. Deputy Excise and Taxation Commissioner, reported in AIR 1975 SC 1121, Radhakrishna Agarwal v. State of Bihar, reported in AIR 1977 SC 1496, Divisional Forest Officer v. Bishwanath Tea Co. Ltd., reported in AIR 1981 SC 1368, C.K Achutan v. State of Kerala, reported in AIR 1959 SC 490, Kerala State Electricity Board v. Kurien E. Kalathil, reported in 2000 (6) SCC 293, Bhavnagar University v. Palitana Sugar Mill (P) Ltd., reported in 2003 (2) SCC 111 and Ashwani Kumar Singh v. U.P Public Service Commission, reported in 2003 (11) SCC 584 and the judgements relied on by the IOC in support of his contentions.

6. Mr. Rabilal Moitra, in reply, submitted that the entire action is an afterthought, since the decision making process leading to the suspension is not available from the records. There were no proceedings. Further such deed of partnership has not been disclosed in the affidavit in opposition of the respondent No. 6. There is no document of partnership in the records of IOC. Collusion is evident from the action of the IOC and the respondent No. 6 in suspending the dealership of the petitioner.

7. Heard learned Advocates for the parties. Affidavit-in-opposition and the affidavit-in-reply have been filed and the same are on record.

8. I find that the entire dispute arises out of the suspension of the distributorship of the petitioner by the IOC by order dated 8.3.2004, on the allegation that the petitioner had entered into an agreement with the respondent No. 6 without the written consent in violation of clause 23(c)(i) of the agreement. The events leading to the suspension of dealership have been set out in paragraphs 13, 14 and 15 of the opposition filed by the IOC. The said paragraphs of the opposition are extracted hereunder:

“13. In or about October, 2003, the respondent IOC received a complaint alleging that the writ petitioner's distributorship was being benami operated by one Sri Santosh Chowdhury, being the respondent No. 6 herein.

14. On receiving the said complaint the respondent IOC formed a committee to investigate into the matter. During investigation the said committee made enquiries from, inter alia, Sri Harendra Nath Rabidas and the private respondent No. 6.

15. The investigation conducted by the said committee revealed the following facts:

(a) On the 31st of August, 1996, Sri Harendra Nath Rabidas entered into a partnership agreement with the private respondent No. 6 for running the said distributorship jointly as partners. A copy of the deed of partnership dated 31 of August, 1996 is annexed hereto and is marked with the letter ‘R-2’.

(b) Thereafter the said distributorship was being operated and controlled by the respondent No. 6.

(c) On the 23rd of June, 2003, Sri Harendra Nath Rabidas wrote a letter to respondent No. 6 discontinuing the running of the distributorship agreement with respondent No. 6 with the intention of running the same with a third party. Copies of letters dated 23 of June, 2003, 9 of July, 2003 and 16 of August, 2003 written in this regard by Harendra Nath Rabidas to respondent No. 6 are annexed hereto and are collectively marked with the letter “R-3”.

(d) An investigation was also made by the Superintendent of Police, Dakshin Dinajpur, Balurghat into the running of the said distributorship. The said investigation also revealed that right from its inception the said distributorship was being operated by the respondent No. 6. A copy of the police report dated 25 of November, 2003 is annexed hereto and is marked with the letter ‘R-4’.

The manner in which the opposition has been affirmed is as under:

“That the statements contained in paragraphs 1 to 15, 18 to 32 of the foregoing petition are true to my knowledge and those contained in paragraphs 16, 17 and 33 thereof are my respectful submissions before this Hon'ble Court.’”

9. I find paragraphs 13, 14 and 15 of the opposition have been affirmed as true to knowledge. Thus, the entire action of the IOC leading to the suspension of the distributorship of the petitioner is based on information and not on records. It assumes significance as the petitioner in the writ petition and in the affidavit in-reply has submitted that no investigation was carried out and the deed of partnership dated 31.8.1996 which forms the basis of issuing the order of suspension is not genuine, since there was no partnership. Any authority under the State issuing an order of suspension in such circumstances should disclose its basis in its affidavit-in-opposition in relation to the records it possesses, since suspension vitally affects the fundamental rights of a citizen to carry on trade or profession under Article 19(1)(g) of the Constitution of India. In the instant case, I find the basis and manner of information derived have not been disclosed in the opposition by the IOC. It cannot be on the basis of information of the deponent. Such information should be on substance - records. Disclosure of information based on records is sine qua non in such matters affecting fundamental rights of a citizen. In the absence of such disclosure based on records, as in the instant case, the IOC cannot justify its stand.

10. In course of hearing, it was submitted by Ms. Meharia that the instant writ petition is not maintainable as there is an arbitration clause in the agreement and the point of maintainability has been kept open. I am of the view, that if the action of the State cannot be justified and affects fundamental rights, a citizen has every right to invoke writ jurisdiction. The Supreme Court in the case of Harbanslal Sahania (supra) held as follows:

“So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and, therefore, the writ petition was filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights: (ii) where there is failure of principles of natural justice or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corporation v. Registrar of Trade Marks). The present case attracts applicability of the first two contingencies. Moreover, as noted, the petitioners' dealership which is the bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings.”

11. Thus, in the case of Harbanslal Sahania the Supreme Court, while dealing with the case of termination of dealership, laid down three contingencies where the High Court may still exercise its writ jurisdiction even if there is an arbitration clause. One such contingency is the enforcement of any of the fundamental rights.

12. In the instant case, as I find that there is nothing on record to show that petitioner entered into an agreement with the respondent No. 6, the petitioner has quite justifiably sought for the enforcement of fundamental rights under Article 19(1)(g) of the Constitution of India since his livelihood has been affected due to the suspension.

13. Therefore, for the reasons in the preceding paragraphs, the writ petition is maintainable.

14. Thus, the writ petition is allowed. The order of suspension dated 8.3.2004 at pages 64 and 65 of the writ petition is set aside and quashed.

15. No order as to costs.

16. Urgent xerox certified copy of this judgement and order be given to the appearing parties, if applied for, on priority basis.

Leter:

31.8.2004

17. After the judgement is pronounced, Mr. Das Gupta, the learned Advocate appearing for the Indian Oil Corporation prays for stay of the operation of the order for a period of four weeks.

18. Let there be stay of operation of the order till 20.9.2004

Writ petition allowed.

A.D