Karnataka High Court
Indian Oil Corporation Ltd vs Sri. N Lingaradhya on 8 October, 2025
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NC: 2025:KHC:39470-DB
WA No. 211 of 2024
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF OCTOBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT APPEAL NO. 211 OF 2024 (GM-RES)
BETWEEN:
1. INDIAN OIL CORPORATION LTD
REGISTERED OFFICE AT
No.6, ALI YAVAR JUNG MARK
BANDRA EAST, MUMBAI - 400 051
2. INDIAN OIL CORPORATION LTD
MYSURU DIVISION OFFICE
No. L 36/A, 1ST FLOOR
B.N. ROAD MYSURU TRADE CENTER
OPP. KSRTC BUS STAND
Digitally MYSURU - 570 001
signed by REP. BY DIVISIONAL RETAIL HEAD
AMBIKA H B MYSURU - 570 001
...APPELLANTS
Location: (BY SRI AMBRISH, ADVOCATE FOR
High Court
SRI NAGARALE SANTOSH SUBHASHCHANDRA, ADVOCATE)
of Karnataka
AND:
1. SRI N. LINGARADHYA
SON OF K NAGARAJU
AGED ABOUT 30 YEARS
R/AT NO. KALLESHWARA NILAYA
13TH CROSS, SRINAGAR
DEVARAYAPATNA POST
TUMKUR - 572 104
...RESPONDENT
(BY SRI GANAPATHI BHAT VAJRALLI, ADVOCATE)
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NC: 2025:KHC:39470-DB
WA No. 211 of 2024
HC-KAR
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE FINAL
JUDGMENT DATED 31.07.2023 PASSED BY THE LEARNED SINGLE
JUDGE IN WRIT PETITION No.9660/2020 AND CONSEQUENTLY
DISMISS THE PETITION & ETC.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. Issue notice. Mr.Ganapati Bhat Vajralli, learned counsel accepts notice for the sole respondent.
2. For the reasons stated in IA No.1/2024, the same is allowed and the delay in filing the present appeal is condoned.
3. With the consent of the learned counsel for the parties, the present appeal has been finally heard.
4. The appellant [hereafter 'IOCL'] has filed the present appeal impugning an order dated 31.07.2023 passed by the learned Single Judge in Writ Petition No.9660/2020, captioned 'Sri N. Lingaradya v. Indian Oil Corporation Limited and Another'. -3-
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5. The respondent [writ petitioner] had filed the said writ petition, inter alia, praying as under:
"Issue Writ of Mandamus or any appropriate order directing the respondents to take appropriate steps for issuance of drawing and supply of required equipments for establishment and commissioning of Retail Outlet Dealership/Petrol Bunk in furtherance of Letter of Intent (LOI) dated 24.12.2019, issued by the 2nd respondent, as per Annexure-G, with specified time in the interest of justice and equity.
Grant such other relief's as this Hon'ble Court deems fit to grant on the facts and circumstances of the case, in the interest of justice and equity."
6. The writ petitioner held leasehold rights in lands comprised in Survey Nos.24/1 and 24/14 located at Kowthamaranahalli Village, Gulur Hobli, Tumakuru Taluk and District [ hereafter 'the subject land'].
7. IOCL had issued Notification dated 24.11.2018 inviting applications from eligible candidates for appointment as dealers to operate rural outlets in Kowthamaranhalli Village, Tumakuru District and, particularly on the road from Kesarmadu to Honnudike. The subject land was located on the road in question. The writ petitioner being desirous of utilizing the subject land for operating a -4- NC: 2025:KHC:39470-DB WA No. 211 of 2024 HC-KAR retail petroleum outlet for petroleum products submitted his application pursuant to IOCL's notification dated 24.11.2018. Thereafter, the subject land was inspected by the officials of IOCL for examining whether it was suitable for establishment of a petroleum outlet.
8. Undisputedly, the officials reported that the subject land was suitable for the said purpose. Thereafter, IOCL issued a Letter of Intent [LoI] dated 24.12.2019 for establishment of the retail outlet. However, thereafter IOCL did not take any further steps, including issuance of building drawings for construction of a petrol bunk. The facts on record indicate that IOCL had abandoned the proposal for establishment of a petroleum outlet on the road in question [Kesarmadu to Honnudike road in Tumakuru District] for the reason that the said road was a part of the State Highway and according to the guidelines issued by IOCL, a rural outlet was not required to be located on a State Highway.
9. In view of IOCL's refusal to proceed further in terms of the LoI, the writ petitioner filed the aforementioned writ petition. -5-
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10. The learned Single Judge allowed the said writ petition on the ground that the LoI in effect, was an acceptance of the writ petitioner's offer. Therefore, it was not open for IOCL to renege from its commitment. The learned Single Judge held that IOCL was required to be compelled to "stick to its promise made to the petitioner in terms of the letter of intent". The learned Single Judge also observed that it was for IOCL to comply with its guidelines and since it had given a go by to the said guidelines by proposing to establish a rural outlet on the road in question, the writ petitioner could not be held liable for the same.
11. As is apparent from a plain reading of the impugned order, the decision rests on the premise that the LoI had resulted in a binding contract between the parties and, therefore, IOCL was required to adhere to the same.
12. A plain reading of the LoI indicates that it did not amount to acceptance of an offer as construed by the learned Single Judge. We consider it apposite to set out the opening sentence of the LoI which reads as under:
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NC: 2025:KHC:39470-DB WA No. 211 of 2024 HC-KAR "Please be informed that by this Letter of Intent, we propose to offer you a Kisan Seva Kendra dealership of Indian Oil Corporation Ltd. ..."
[ emphasis added] The said sentence clearly indicates that the LoI was only an information of IOCLs proposal and did not amount to acceptance of any offer. Paragraph 20 of the LoI is also significant and in our view dispositive of the question regarding the nature of the LoI.
The said paragraph is set out below:
"This letter is merely a letter of intent and is not to be construed as a 'firm offer' of dealership to you. The dealership will be allotted to you on your complying with the terms and conditions spelt out herein above by issuance of appointment letter along with signing of our standard dealership agreement between you and us."
13. The learned Single Judge has erred in proceeding on the basis that a firm contract for establishing a petroleum dealership came into existence between the parties by the issuance of the LoI.
14. The learned counsel for the appellants has referred to a decision of the Supreme Court in Rajasthan Co-operative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. and Ors.: (1996) 10 SCC 405. In the said case, the Supreme Court had observed as under:
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NC: 2025:KHC:39470-DB WA No. 211 of 2024 HC-KAR "... The Letter of Intent merely expressed an intention to enter into a contract. If the conditions stipulated in the Letter of Intent were not fulfilled by respondent No.1 and if the conduct of respondent No.1 was otherwise not such as would generate confidence, the appellant was entitled to withdraw the Letter of Intent. There was no binding legal relationship between the appellant and respondent No.1 at this stage and the appellant was entitled to look at the totality of circumstance in deciding whether to enter into a binding contact with respondent No.1 or not. "
15. It is the IOCL's case that the final letter of appointment was not issued as the subject land was located on the State Highway. Although the notice inviting applications had mentioned the road in question and the inspection had also proceeded on the basis that the site was a rural site, the LoI did not constitute a firm offer or acceptance of the writ petitioner's offer. Clearly, no right vested with the writ petitioner for being appointed as a dealer. Once IOCL had discovered that the subject land was on a State Highway and establishment of a rural outlet was not permissible according to its guidelines, there was no impediment for IOCL to decline to proceed further pursuant to the LoI.
16. We are also unable to accept that the decision of IOCL is arbitrary, capricious or unreasonable and fall foul of Article 14 of -8- NC: 2025:KHC:39470-DB WA No. 211 of 2024 HC-KAR the Constitution of India or any of the constitutional guarantees. The decision not to establish a rural outlet on a State Highway is for reason as noted above and does not warrant any interference in the proceedings under Article 226 of the Constitution.
17. In view of the above, we are unable to accept that any of the legal or constitutional right of the writ petitioner has been violated by IOCL by not proceeding further with the LoI. The impugned order is clearly erroneous and is, thus, set aside.
18. The appeal is allowed in the aforesaid terms.
19. The pending application stands disposed of.
Sd/-
(VIBHU BAKHRU) CHIEF JUSTICE Sd/-
(C.M. POONACHA) JUDGE AHB List No.: 1 Sl No.: 13