A Division Bench of the Kerala High Court has held that oil companies could transfer the existing consumers of a distributor to a newly appointed distributor in the area.
The court made the observation while dismissing an appeal filed by an LPG distributor of the Indian Oil Corporation in Kollam challenging a single judge’s order upholding the transfer of existing consumers of the appellant to the newly appointed distributor. The distributor argued that the oil companies had no power to take away the consumers of an existing distributor since the consumers had been subscribed through the efforts of the distributor.
The Bench observed that if the oil companies felt that the LPG supply service would not be effective because of the increase in subscribers, they were entitled to appoint new distributors to cater to the subscribers in a given area by bifurcating the already allotted area between the existing and the newly appointed distributor.
