Judgment:
WP No.30 of 2013 In the High Court at Calcutta Constitutional Writ Jurisdiction Original Side Bimal Kumar Agarwal versus State of West Bengal & ORS.Before : Tahe Hon’bale Justice Dr.
Sambuddha Chakrabarti Date : February 11, 2014.
For the Petitioner : Mr.L.C.
Bihani, Sr.Advocate Mr.Ramesh Dhara, Advocate The Court : None appears on behalf of the respondents.
In spite of direction no Affidavit-in-opposition has been filed in Court, although Mr.L.C.
Behani, Senior learned counsel for the petitioner informs that a copy of the Affidavit-in-opposition has been served upon them.
The crux of the problem may be summed up briefly.
The petitioner carries on the dealership of kerosene.
This is a proprietorship business.
For various problems he had been facing he wanted to convert the proprietorship business to a partnership one and wanted to induct one Vikash Kumar Shaw as a partner in the smooth running of the said busines.
A partnership deed was executed between the petitioner and the said Vikash Kumar Shaw on April 5, 2011.
Thereafter, the petitioner made an application to the respondent No.2 for inducting a new man as a partner in his business.
By a letter dated January 4, 2012 the Assistant Director of Consumer goods, Food & Supplies Department, Government of West Bengal, i.e.respondent No.4 herein requested the petitioner to inform the office about his relationship of the proposed partner.
The reason for this request was a guideline of the Directorate which said that a proposed partner to be inducted must be selected from amongst the wife/husband, dependant son, dependant unmarried daughter of the dealer and must be living in the same mess of the dealer and since from the application submitted by the petitioner it was not clear whether the proposed partner satisfied any of the relationship the respondent No.4 wanted a clarification from the petitioner.
This has been assailed by the petitioner saying that this is clearly beyond the scope of the Partnership Act and the respondents had no authority to restrict the would-be partners to certain relatives of the petitioner or of a dealer.
Mr.Behani, the learned Senior counsel appearing for the petitioner has taken an exception to the intimation given to the petitioner that in case the relation is not as per the guideline the prayer would not be considered.
According to him this is a veiled threat of rejection of the prayer and is entirely against the provisions of law.
In support of his case Mr.Bihani has referred an unreported judgment of this Court in the case of Smt.
Bej & ORS.versus State & ORS.(WP No.22770 (w) of 2007) whereby a ld.
Single Judge of this Court by an order dated August 10, 2010 had held that since there was no provision in the relevant Control Order, a dealership run on proprietorship could be converted into a partnership This judgment, however, does not really touch on the main controveRs.involved in the writ petition inasmuch as the respondent no.4 had not turned down the petitioner’s application on the ground of impermissibility of converting a proprietorship business to a partnership.
On the other hand the permissibility of such conversion has been impliedly accepted by the respondent authorities; only the categories of persons who may be inducted have been delineated with reference to a departmental guideline.
The West Bengal Kerosene Control Order, 1968 was issued in exercise of power conferred under Section 3(i) of the Essential Commodities Act.
It no where restricts the categories of persons who may be inducted in a partnership business for the purpose of running the dealership.
In fact it is silent about the nature of the business of a dealer.
Paragraph 6 of the said Order provides that the Director or District Magistrate having jurisdiction may grant a license to any person authorising him to carry on trade in kerosene as a dealer and it further provides that license shall be granted in Form B and also subject to such condition as may be specified therein.
Form B appended to the said Order mentions several conditions which have been reproduced in the license granted to the petitioner.
From the said license which has been annexed to the writ petition as Annexure P-1, it does not appear that the authority while granting license had put any embargo upon the dealer with regard to any category of relations who must be inducted as a partner.
So, the stand taken by the respondents on the basis of a guideline has no statutory force.
Mr.Bihani raised an important issue that since under the general law there is no such prohibition the departmental guideline, even if there be any , must not be allowed to overreach the general law and provide for something which is an anathema to the common legal principles.
I find sufficient merit in the submission of Mr.Bihani inasmuch as a partnership firm is not a wholly unknown entity or conept to the Essential Commodities Act itself.
Reference may be made to Section 10 of the Act which deals with the offences of the Company and in the explanation appended to the said section it has been clarified that a Director in relation to a firm means a partner in the firm.
The Act thus recognises the existence of a partnership firm and there is no restriction in the Act either for the formation of any such firm which is recognised under the Act.
The Partnership Act, 1932 in its turn also does not make any such distinction between the categories of persons to be inducted as partneRs.Neither does it put any restriction on any person beyond a certain proximity of relationship to be inducted as a partner in a firm.
Under the general law for constituting a partnership firm there should be primarily three elements viz., (1) there should be an agreement between the parties, (2) the agreement must be shared the profits of the business carried on by or any of them acting for and (3) an agency between the concerned persons inter-se .
The law does not recognise the disqualification to an individual from being a partner on the ground of the degree of relationship with another partner.
The partnership, as is well settled, is a relationship which is created by a contract and an agreement for the same is an essential pre-condition for the formation of the firm.
Mr.Bihani further argued that a departmental guideline if opposed to the general law must be held to be inoperative.
In support of his contention he has referred the case of Narendra Kumar Maheshwari versus Union of India & ORS.reported in 1990 (Supp.) SCC440 In that case the Supreme Court while deciding an issue arising out of Capital Issues (Control Act).1947 had occasioned to observe on subordinate legislation and the legal status of a non-statutory guideline framed by a statutory authority or Government.
The Supreme Court had held that non-statutory guidelines are generally not enforceable.
A policy is not law.
A statement of policy is not a prescription of binding criteria.
The Supreme Court very specifically held that the guidelines concerned being non-statutory in character were not enforceable.
The Supreme Court further held that these guidelines operated in a different field and the guidelines by their very nature did not fall into category of legislation – subordinate or ancillary.
They have only an advisory role to play and non-adherence to or deviation from them is necessarily and implicitly permissible if the circumstances of any particular fact or law warrants the same.
In such view of it there cannot be any doubt that the departmental guideline if against any law cannot be enforced to curtail a man’s legal right.
The petitioner has a right to convert the nature of business according to his own convenience, subject, of course, to the statutory restrictions.
Any guideline against law cannot be held to be a valid or sustainable one.
In such view of it I find sufficient merit in the writ petition.
aside.
The impugned memo.
dated January 5, 2012 is hereby set The matter is sent back to respondent No.2 for passing a necessary order upon the application of the petitioner in view of the observations made herein above within a period of eight weeks from the date of communication of the order.
The writ petition is allowed.
There shall however, be no order as to costs.
Urgent Photostat certified copy of this order be made available to the parties, if applied for, upon compliance of requisite formalities.
(Dr.
Sambuddha Chakrabarti, J.msen/ANC.