VidhiSangh

Supreme Court of India · 14/07/2025

INDIAN OIL CORPORATION LIMITED & ORS. versus M/S SHREE NIWAS RAMGOPAL & ORS.

[2025] 8 S.C.R. 1 · 2025 INSC 832

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Summary

IOCL stopped kerosene supplies to a three-partner dealer firm after the death of the majority partner because not all of his heirs had joined or declined to join the reconstituted firm. The Supreme Court declined to interfere with the High Court's mandamus directing continued supply, holding that under the partnership deed and the dealership agreement the firm survived the death, Section 42 of the Partnership Act does not dissolve a firm of more than two partners whose deed provides otherwise, and IOCL's own guidelines do not require every heir to join the reconstituted firm.

Issues

  1. Whether the partnership firm stood dissolved on the death of one of its three partners, so that IOCL could discontinue kerosene supplies without terminating the dealership agreement.
  2. Whether Clause 1.5 of IOCL's policy guidelines dated 01.12.2008 requires all legal heirs of a deceased partner to join the reconstituted firm or give a no-objection before IOCL recognises the reconstitution.
  3. Whether the High Court erred in issuing a mandamus directing IOCL to continue supplies to the existing firm until it is properly reconstituted.

Provisions considered

Held

Result

Special Leave Petition dismissed as devoid of merit; High Court's mandamus directing IOCL to continue kerosene supply to the firm till it is reconstituted or the dealership is terminated left undisturbed; IOCL observed to avoid such litigation by interfering with running businesses on a narrow approach.

Judgment PDF: Supreme Court of India, [2025] 8 S.C.R. 1.