LexINDIAN OIL CORPORATION LIMITED & ORS. versus M/S SHREE NIWAS RAMGOPAL & ORS.
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[2025] 8 S.C.R. 1 : 2025 INSC 832 Indian Oil Corporation Limited & Ors. v. M/s Shree Niwas Ramgopal & Ors. (Special Leave Petition (Civil) No. 1381 of 2025) 14 July 2025 [Pankaj Mithal* and Ahsanuddin Amanullah, JJ.] Issue for Consideration Whether the Division Bench of the High Court rightly upheld the mandamus issued by the Single Judge directing the IOCL to maintain the supply of kerosene to the respondent No.1-partnership firm till it is reconstituted or its dealership agreement is terminated. Headnotes† Partnership Act, 1932 – s.42 – Kerosene dealership agreement entered into between IOCL and respondent No.1-partnership firm having three partners – However, on the death of one of the partners of the partnership firm, IOCL discontinued the supply of kerosene to the existing firm without terminating its dealership – Writ Petition filed by the firm and its partners – Allowed, IOCL was directed to continue the supply of kerosene to the existing partnership firm till it is reconstituted subject to the condition stated – Correctness: Held: No error or illegality in the order of the High Court – The partnership consisted of three partners and the deed of partnership itself, in unequivocal terms, provided that the death of a partner shall not cause discontinuance of partnership and the surviving partners may continue with the business – Therefore, the principle laid down in s.42 is not applicable and the partnership would continue despite the death of one of the partners – Furthermore, the firm was reconstituted as per the proposal submitted having the surviving partners and one of the heirs and legal representatives of the deceased, as the third partner – However, the said reconstituted firm was not recognised by the IOCL as all the heirs and legal representatives of the deceased persons did not join or did not express their unwillingness to join the partnership firm – The insistence of the respondent that all the legal heirs of the deceased partner should join the reconstituted firm or give * Author 2 [2025] 8 S.C.R. Supreme Court Reports ‘No Objection Certificate’ to the reconstituted firm is contrary to the spirit of the original deed of partnership – Respondent has no role to play in determining as to who is the competent heir of the deceased partner – It should be left on the wisdom of the existing partners – IOCL misconstrued its own guidelines in not recognising the reconstitution of the partnership firm – Approach of IOCL arbitrary, creating hinderance in the running business – Deprecated – Impugned order not interfered with. [Paras 18, 22, 25-27, 28, 30] Case Law Cited M/s Wazid Ali Abid Ali v. Commissioner of Income Tax, Lucknow [1987] SCR 3 1049 : (1988) Supp. SCC 193 – relied on. Sandersons & Morgans v. ITO (1973) 87 ITR 270; Noor Mohammad and Co. v. Commissioner of Income-Tax (1991) 191 ITR 550; Indian Oil Corporation v. Roy and Company, 2018 (1) CHN (Cal) 199 – referred to. List of Acts Partnership Act, 1932. List of Keywords Kerosene dealership agreement; Indian Oil Corporation Limited (IOCL); Death of one of the partners; No discontinuance of the partnership business; Surviving partners to continue the business; Partnership to continue despite the death of one of the partners; Supply of kerosene discontinued; Reconstitution of the partnership firm; Firm reconstituted; Reconstituted firm; Existing partnership firm; Partnership deed; Partnership firm; Proprietorship firm; Agency/ distributor of kerosene oil; Deceased partner; Legal representatives/ heirs of the deceased partner; Heirs and legal representatives; Mandamus; State instrumentality; Arbitrary powers; Statutory corporation; No fairness; Exercising arbitrary powers; Matter of commercial interest; Partnership business. Case Arising From EXTRAORDINARY APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 1381 of 2025 From the Judgment and Order dated 04.07.2018 of the High Court at Calcutta in APO No. 42 of 2014 [2025] 8 S.C.R. 3 Indian Oil Corporation Limited & Ors. v. M/s Shree Niwas Ramgopal & Ors. Appearances for Parties Advs. for the Petitioners: Ms. Madhavi Goradia Divan, Sr. Adv., Ms. Mala Narayan, Shashwat Goel, Ms. Isha Ray. Advs. for the Respondents: Yashraj Singh Deora, Sr. Adv., Ramanand Aggarwal, Anindo Mukherjee, Rameshwar Prasad Goyal, Ms. Pallavi Pratap, Ashag Gutgutia, Amjid Maqbooc, Ms. Yashvi Aswani. Judgment / Order of the Supreme Court Judgment Pankaj Mithal, J.
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