Bombay High Court
Rahul S/O. Late Suryalalji Jaiswal vs Union Of India, Through Secretary, ... on 9 October, 2024
Author: M.S. Jawalkar
Bench: Vinay Joshi, M.S. Jawalkar
2024:BHC-NAG:11271-DB
Judgment 1 8wp3139.21+1.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 3139/2021
AND
WRIT PETITION NO. 265/2023
WRIT PETITION NO. 3139/2021
Shri Rahul S/o Late Suryalalji Jaiswal,
Aged about 46 years, Occ. Business,
R/o. "Shree Ganesh", Plot No. 8, South
Ambazari Road, Laxmi Nagar, Nagpur 440022
.... PETITIONER(S)
// VERSUS //
(1) Union of India,
Through Secretary, Ministry of Petroleum
and Natural Gas, Office at Shastri Bhavan,
New Delhi 110001
(2) Indian Oil Corporation Limited,
Nagpur, Circle Officer, Through
Deputy General Manager (Retail Sales),
"Akarshan Busiplex" 26, Central Bazar Road,
Ramdaspeth, Nagpur 440010
(3) Ravi S/o Suryalalji Jaiswal,
Aged about Adult, Occ. Business,
R/o Shri Ganesh, Plot No. 8, South
Ambazari Road, Laxmi Nagar, Nagpur
Amendment carried out as per Court's
order dated 24/04/2023
.... RESPONDENT(S)
..ANSARI../ R.S. Sahare
Judgment 2 8wp3139.21+1.odt
∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
Mr. J.M. Gandhi, Advocate for the Petitioner
Mr. N.S. Deshpande, DSGI for the Respondent No. 1
Mr. A. Khare, Advocate for the Respondent No. 2
Mr. S.S. Joshi, Advocate for the Respondent No.3
∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
AND
WRIT PETITION NO. 265/2023
Ravi Suryalalji Jaiswal,
Aged about 53 years, Occ. Business,
R/o. "Shree Ganesh", Plot No. 8,
South Ambazari Road, Laxmi Nagar,
Nagpur
.... PETITIONER(S)
// VERSUS //
(1) Union of India,
Through Secretary,
Ministry of Petroleum and Natural Gas,
Office at Shastri Bhavan, New Delhi 110001
(2) Indian Oil Corporation Ltd,
Through Divisional Manager,
(Retail), Nagpur Divisional Office,
"Akarshan Busiplex", 26, Central
Bazar Road, Ramdaspeth, Nagpur 440010
(3) Rahul Suryalal Jaiswal,
Aged about 46 years, Occ. Business,
R/o. "Shree Ganesh", Plot No. 8,
South Ambazari Road, Laxmi Nagar,
Nagpur
.... RESPONDENT(S)
..ANSARI../ R.S. Sahare
Judgment 3 8wp3139.21+1.odt
∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
Mr.S.S. Joshi , Advocate for the Petitioner
Mr. N.S. Deshpande, DSGI for the Respondent No. 1
Mr. A. Khare, Advocate for the Respondent No. 2
Mr. J.M. Gandhi, Advocate for the Respondent No.3
∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
CORAM : VINAY JOSHI & SMT. M.S. JAWALKAR, JJ.
CLOSED FOR JUDGMENT ON :- 03/07/2024
JUDGMENT PRONOUNCED ON :- 09/10/2024
JUDGMENT :
- (PER: SMT. M.S. JAWALKAR, J.)
(1) RULE. Rule made returnable forthwith. Heard finally by
consent of learned Counsel for the respective parties.
(2) Writ Petition No. 3139/2021 is filed by Rahul Suryalalji Jaiswal
whilst Writ Petition No. 265/2023 is filed by Ravi Suryalalji Jaiswal.
Both the Petitioners are real brothers. Since Writ Petition No.
3139/2021 is taken as lead Petition, the facts and contentions of the
said Writ Petition are referred herein below for deciding the issue
involved in both the Writ Petitions.
(3) Father of the Petitioner i.e. Shri Suryalal M. Jaiswal was allotted
with a Petroleum Products Retail Outlet Dealership (hereinafter
referred to as "RO") by the Respondent No. 1 - Company. Father of
..ANSARI../ R.S. Sahare
Judgment 4 8wp3139.21+1.odt
the Petitioner used to run the dealership under the name and style as
"M/s. Indian Services", which is situated at Gram Panchayat Khairi,
Tahsil Kamptee, District Nagpur. Father of the Petitioner died on
19/02/2019. According to the Petitioner, his father executed a
registered Will deed and all the rights and ownership of the said
petrol pump were bequeathed upon the Petitioner. According to the
Petitioner, his father had also submitted an Application in his life
time for reconstitution/renewal of the RO Dealership and had
appointed the petitioner as Nominee for the said petrol pump at
Khairi (Annexure-F). The Petitioner intimated the fact of demise of his
father to the Respondents. The Petitioner, vide Representations dated
26/02/2019, 14/03/2019 and 17/09/2019, requested the Respondent
No. 2 to permit him to continue to operate the said petrol pump and to
continue to run RO till the procedure for reconstitution of dealership
is completed.
(4) On the other hand, on 10/03/2019, the Respondent No. 3 had
submitted a letter to the Divisional Manager, Nagpur of the
Respondent No. 2 intimating that he had succeeded to the subject
dealership of his father and a request was also made to permit him to
run the subject RO on ad-hoc basis, till reconstitution of the dealership
..ANSARI../ R.S. Sahare
Judgment 5 8wp3139.21+1.odt
is done. On 14/03/2019, the Respondent No. 2 granted six months'
period for submitting proposal for reconstitution/renewal of
dealership and till then, permitted the petitioner to continue the RO in
the name of the late father of the Petitioner. On 29/03/2019, the
Petitioner filed Succession Application vide Succession Case No.
94/2019 and Probate Application vide Probate Case No. 02/2019
before the Civil Court, Nagpur, which said fact, he intimated to the
Respondent No. 2. On 19/03/2019, the Respondent No. 3 brother of
the petitioner submitted a proposal to the Respondent No. 2 for
reconstitution of the subject RO Dealership. On 25/04/2019, a letter
was sent by the Respondent No. 2 to the Respondent No. 3 intimating
that there are certain shortfalls in the reconstitution proposal, which
should be cured. On 17/09/2019, the Respondent No. 2 informed to
the Respondent No. 3 that the approval for temporary operations of
the RO was given to the Petitioner for a period of six months from the
date of approval and the Petitioner was advised to submit a
reconstitution proposal, within time frame of six months, with
complete documents. On 07/02/2020, the Respondent No. 3
submitted a letter to the Respondent No. 2 for deciding the eligibility
issue of the Petitioner. On 04/03/2020, the Respondent No. 3 issued
..ANSARI../ R.S. Sahare
Judgment 6 8wp3139.21+1.odt
legal notice to the Respondent No. 2. On 14/08/2020, being aggrieved
by the inaction of the Respondent No. 2 to decide and rule on the
eligibility issue of the Petitioner to hold the subject RO Dealership and
grant of temporary dealership to the Respondent No. 3, the
Respondent No. 3 had filed a Writ Petition bearing No. 4037/2020
(LD-VC-CW No. 917/2020). This Court disposed of the said Writ
Petition on 20/08/2020 by directing the Respondent No. 2 to decide
the eligibility of the Petitioner. The Respondent No. 2 has intimated
the Respondent No. 3 that the issue of eligibility and reconstitution
cannot be decided and is kept pending till the decision in Probate
Proceedings filed by the Petitioner. The Respondent No. 2, by letter
dated 01/06/2021, intimated the Petitioner that the proposal of the
Petitioner for reconstitutional/renewal of dealership is still pending,
because of non-submission of Succession Certificate and he instructed
to submit the same, otherwise, the Respondent No. 2 would stop sales
and supplies of the RO. By letter dated 15/05/2023, the Respondent
No. 2 asked the Petitioner to handover the possession of the RO and
on 23/05/2023, the Respondent No. 2 took over the possession of the
RO. Being aggrieved by the said inaction on the part of the
Respondents, the Petitioner has approached this Court praying for
..ANSARI../ R.S. Sahare
Judgment 7 8wp3139.21+1.odt
directions to the Respondents to reconstitute/renew the Retail Outlet
and continue to supply of the petrol and diesel to the petrol pump. On
the other hand, the Respondent No. 3 preferred Writ Petition No.
265/2023 praying for directions to the Respondent No. 2 to decide the
eligibility of the Petitioner to manage the subject RO and for deciding
the proposal of the Respondent No. 3 dated 19/03/2019 for
reconstitution of the RO.
(5) Learned Counsel for petitioner advanced his submission as
per his pleadings in the petition.
(6) In support of his contentions, Mr. Gandhi, learned Counsel for
the Petitioner, relied on the following judgments:-
"(a) Civil Appeal No. 1350/1190 (Mahabir Auto Stores &
others vs. Indian Oil Corporation & others);
(b) Allied Motors Limited vs. Bharat Petroleum
Corporation Limited reported in (2012) 2 SCC 1;
(c) Hindustan Petroleum Corporation Limited & others vs.
Super Highway Services & another reported in (2010) 3 SCC
321;
..ANSARI../ R.S. Sahare
Judgment 8 8wp3139.21+1.odt
(d) Hindustan Petroleum Corporation Limited, Nagpur vs.
Taj Petroleum, Bhadara reported in [2018(3) Mh.L.J. 784]"
(7) Learned Counsel for the Respondent No. 2 supported the
action on the part of Company and contended that petitioner's
entitlement is hit by multiple dealership norms.
(8) In support of his contentions, Mr. Joshi, learned Counsel for
the Respondent No. 3, relied on the following judgment:-
"(a) Ravi Kumar vs. Union of India, Through the Principal
Secretary, Ministry of Petroleum, New Delhi & others
reported in 2014 SCC OnLine All 15833"
(9) The Respondent No. 2 - Indian Oil Corporation has filed
additional affidavit to the amended Petition. In the said affidavit, it is
stated that the said RO is an 'A' site RO which means the land is
leased to Respondent No. 2 and the Respondent No. 2 invested huge
amount of money for RO development as well as its facilities. The RO
is developed by Respondent No. 2 and all infrastructures are made by
it. The Petitioner's father was only holding dealership of the said RO
..ANSARI../ R.S. Sahare
Judgment 9 8wp3139.21+1.odt
and thus was permitted to run the same. His possession over the RO
was on behalf of the Respondent No. 2 and not in any independent
capacity. Hence, it was communicated to the Petitioner to handover
the control of the said RO. It is stated in the said affidavit that the fact
of nomination of the Petitioner as nominee of 100% share for
reconstitution of the dealership is true. It is stated that the father of the
Petitioner had only the right to run the RO which is on the land leased
to the Respondent No. 2 and the Petitioner never had the control over
the RO. It is stated that the Petitioner was granted temporary approval
to run the RO for six months. Thereafter, the Petitioner was asked to
handover the possession of the RO. The control of the said RO was
handed over to a third party independent operator on 25/05/2023
against which relevant documents viz. payment received from third
party dealer for tanker load from the Respondent No. 2, tanker and
lube invoice bill to M/s Laksh Petroleum, are filed on record by the
Respondent No. 2.
(10) It is stated that the claim of the Petitioner for reconstitution of
the dealership is not supported by multiple dealership norms as the
Petitioner is already holding a dealership of 'B' site RO. As such, the
Respondent No. 2 has followed all the norms, guidelines, legal
..ANSARI../ R.S. Sahare
Judgment 10 8wp3139.21+1.odt
procedure and hence, the letter dated 15/05/2023 issued by the
Respondent No. 2 to the Petitioner to handover the possession of the
RO and the action of the Respondent No. 2 to take control over the
possession of RO on 23/05/2023 are just and legal.
(11) The Respondent No. 3 filed his reply dated 28/04/2023. It is
stated that as per Rule/Guideline No. G(4) of the Policy Guidelines for
Re-Constitution of Retail Outlet/SKO-LDO Dealership, a family
member or a legal heir of a proprietor is entitle to succeed to the
dealership/retail outlet. It is stated that the Petitioner is already a
dealer of Petroleum Products RO of the Respondent No. 2 which he
runs in the name of 'Indo Servo Fuel Station' at Hudkeshwar, Nagpur.
It is submitted that the policy of the Government does not allot RO
dealership to a person whose family unit already holds a petroleum
products RO Dealership. It is stated that despite knowing the fact that
the Petitioner is not entitled to run the subject RO, permission was
granted to the Petitioner to run the said RO. As such, he prayed for
dismissal of the Writ Petition and to decide his proposal dated
19/03/2019 for reconstitution of the RO.
..ANSARI../ R.S. Sahare
Judgment 11 8wp3139.21+1.odt
(12) Heard all learned Counsel for respective parties, perused
documents placed on record. It is admitted fact that father of
petitioner Shri Suryalal M. Jaiswal was operating dealership of the
Petrol Pump as a Proprietor under the name and style of M/s Indian
Services at Mauza Khairi, District Nagpur. Father of petitioner expired
on 19/02/2019. By a registered will dated 11/08/2015, father of the
petitioner bequeathed the entitlement of the said dealership in favour
of petitioner. Immediately, after the death of his father, the petitioner
preferred a representation on 26/02/2019 to continue to operate the
said Petrol Pump and continue to run the Retail Outlet (RO) till the
legal procedure for reconstitution/renewal of dealership in his name
is completed. The petitioner made second representation on
14/03/2019 along with copy of the affidavit executed by his late father
appointing the petitioner as nominee.
(13) The respondent No.2, by letter dated 14/03/ 2019 granted six
months' time for submitting the proposal for reconstitution/renewal
of dealership and till then petitioner was permitted to continue to
operate the RO in the name of his father. In the meanwhile, petitioner
also filed probate application and has also filed Succession
Application. Annexure-F is an application by the deceased Suryalal
..ANSARI../ R.S. Sahare
Judgment 12 8wp3139.21+1.odt
Mahavirprasad Jaiswal, dated 20/12/2018 to IOCL informing that he
has nominated his son Rahul Suryalalji Jaiswal for reconstitution and
100% shares, he desire to transfer in petitioner's name. He also
mentioned about the execution of affidavit/indemnity bond for
appointment of nominee by proprietor of commissioned dealership.
This affidavit was executed on 19/12/2018. This fact of execution of
nomination was duly brought to the notice of IOCL vide letters dated
14/03/2019 as well as 25/04/2019 and respondent No.2 admitted this
fact. In spite of this fact, the respondent vide letter dated 17/09/2019,
without considering the fact of nomination, supplies of the RO have
been stopped with effect from 14/09/2019 on the ground that
approval to continue operation of RO M/s Indian Services Khairi, was
temporary for six months due to demise of the proprietor of the RO.
He was advised to submit the reconstitution proposal within time
frame of six months with complete documents like Succession
Certificate/Legal Hairs Certificate/Probated Will/ No Objection
Certificate from the other legal heirs, etc. However as the company
has not received Succession Certificate/ Legal Heirs
Certificate/Probated Will from petitioner side, the company was
unable to process the proposal further and in view of the above facts,
..ANSARI../ R.S. Sahare
Judgment 13 8wp3139.21+1.odt
RO have been stopped with effect from 14/09/2019. The petitioner
again made a representation on 17/09/2019 intimating that petitioner
applied for succession certificate. The company, again vide letter
dated 01/06/2021, directed to submit Succession Certificate and
informed that failure to which, the company left with no alternative,
but to stop sales and supplies of petitioner's RO.
(14) There is no dispute that late Shri Suryalal Jaiswal was sole
dealer of IOCL, the RO Indian Services Khairi was commissioned in
1983 as per petitioner. The petitioner brought to the notice of
respondent Company vide letter dated 07/06/2021, all the details and
also reiterated that though the Probate Certificate is not essentially
required and as late Shri Suryalalji Jaiswal in his lifetime itself
requested for the reconstitution of the dealership nominating
petitioner, nobody else can claim right over the said RO lawfully and
requested to reconsider the representation. This letter is duly received
by respondent Company. It is also brought to the notice of respondent
Company as per law, as Will is executed and registered at Nagpur, it
is not at all necessary to obtain probate.
..ANSARI../ R.S. Sahare
Judgment 14 8wp3139.21+1.odt
(15) The respondent Company further without granting
opportunity, by communication dated 15/05/2023, informed to the
petitioner as per prevalent policy guidelines in vogue with respect to
multiple dealership norms (MDN), petitioner is not eligible for
appointment as a dealer of companies 'A' site RO M/s Indian Service,
Khairi, as petitioner is already holding a dealership of 'B' site RO
running in the name and style of M/s Indian Servo Fuel Point,
Nagpur. Thus application of the petitioner is hit by Multiple
Dealership Norms (MDN) and was informed that it cannot be
considered on account of petitioner's ineligibility and directed the
petitioner to handover possession of 'A' site RO M/s Indian Services,
Khairi.
(16) Learned Counsel Shri S.S. Joshi for respondent Company relied
on Ravi Kumar (supra) in support of his contention that the object and
purpose of policy are consistent with the directive principle of the said
policy, an effort is made to ensure dispersal of ownership so that to
grant equal opportunity to all members of society. The Hon'ble Apex
Court in Ravi Kumar (supra) while explaining the expression family
unit held as under:
..ANSARI../ R.S. Sahare
Judgment 15 8wp3139.21+1.odt
"5. The object and purpose of the
disqualification is to ensure that there should not be a
concentration of retail outlets, dealerships and
distributorship of an Oil Company in one family. These
dealerships or, as the case may be, retail outlets and
distributorships, are allotted by state owned oil
companies. Consistent with the Directive Principles the
State Policy, an effort is made to ensure dispersal of
ownership so that a fair and equal opportunity is
granted to all members of society to apply for the
allotment of such dealerships, distributorships and
retail outlets. There can be no gainsaying the fact that
these allotments by the state owned oil companies are
highly sought after, providing as they do an important
source of income to the allottee. Hence the norm that
there should be a dispersal of ownership cannot be
faulted since it is based on a criterion which is rational.
How a family should be defined for the purposes of the
allotment of a retail outlet, distributorship or
dealership, is a matter of policy so long as the criterion
which is adopted, is based on logic and reason. The
definition of the expression,"family unit", in the
present case, postulates that where an applicant is
married, his or her family should be read to consist of
the spouse and unmarried children. Where, however, a
person is not married, the parents and siblings are
included as members of the family."
(17) It is now necessary to consider the relevant Clauses of
Guidelines for Reconstitution of Retail Outlets SKO-LDO dealership.
The some relevant Clauses are extracted as under:
..ANSARI../ R.S. Sahare
Judgment 16 8wp3139.21+1.odt
"GUIDELINES ON SELECTION OF DEALERS FOR REGULAR &
RURAL RETAIL OUTLETS THROUGH DRAW OF LOTS/BIDDING
PROCESS
INTRODUCTION
The salient features of the selection guidelines are:
(i) All applicants meeting the eligibility criteria will qualify for further
selection process.
(ii) Transparent on-line process for application and draw of lots/bid
opening.
(iii) Different selection process for Corporation Owned Dealer
Operated outlets, Dealer Owned Dealer Operated outlets and
Corporation Owned outlets under Corpus Fund Scheme.
(iv) Multiple Dealership Norm (MDN) has been relaxed for "B/DC"
site ROs.
(v) Existing unviable SKO dealers of OMCs will be eligible to apply.
3. Type Of Retail Outlet Sites
The type of sites will be decided by the Oil Companies and the same would
be:-
S.N. Type of Site Status of Land & Facilities
i. Locations under The offered land would be taken on lease/
Corpus Fund purchased and fully developed as
Scheme (CFS sites) Corporation owned site.
ii. Other Corporation The offered land would be taken on lease/
Owned Sites ("A"/ purchased and fully developed as
"CC" sites) Corporation owned site.
..ANSARI../ R.S. Sahare
Judgment 17 8wp3139.21+1.odt
iii. Dealer Owned The offered land and the super structure
sites ("DC"/ "B" will be developed by the dealer. Pump,
sites) tank, automation, signages, etc. will be
provided by the Corporation.
Note: Offered land can either be taken from the applicant or the owner of
the land directly.
DETAILED GUIDELINES FOR RECONSTITTION OF RETAIL OUTLET/SKO-
LDO DEALERSHIPS
A. ...
B. RECONSTITUTION AT LETTER OF INTENT (LOI) STAGE
1. Reconstitution of Retail Outlet dealerships will be permitted only
once, except in case of death and incapacitation, at LOI stage.
2...
3. ...
9. ...
10. Facility for Nomination : Notwithstanding the above, LOI
holder(s) may submit a Nomination Form containing name(s) of
person(s) (from among his/her/their legal heir(s)/family member(s), as
per the personal Law applicable) that he/she desires to transfer his/her
share in the event of death or incapacitation resulting in total and
permanent disability which will disable him/her to work or follow any
occupation or profession. The nomination form (Annexure-E1) duly
sworn before a First Class Magistrate / Executive Magistrate / any
other equivalent competent authority in the concerned state may be
submitted upon issuance of the LOI. The LOI Holder(s) will also have
the option to change his/her nomination at any time during the LOI
stage. In case of partnership, partners may submit nomination
..ANSARI../ R.S. Sahare
Judgment 18 8wp3139.21+1.odt
separately but such nomination will have to be witnessed by other
partner(s).
On demise or total incapacitation of the LOI holder(s), fresh LOI will
be issued to the person(s) as per the last nomination. In case of more
than one nominee, the shareholding of the deceased will be distributed
among the nominated persons in the ratio the deceased LOI holder has
mentioned in the last nomination or equally in case no share out is
mentioned.
The OMC can allow for induction of such nominee(s) as
proprietor/partner(s) provided he/she/they meet the eligibility criteria
for reconstitution, as applicable without seeking consent from other
legal heirs upon demise of the LOI holder(s).
However, if the person(s) nominated express unwillingness to be
inducted as LOI holder(s) or they are found ineligible, as per norms
applicable for Dealership Selection other than age and education {viz.
debarred from dealership under disqualification criteria as per the
Dealer Selection Guidelines in vogue}, at that juncture, the LOI can
be reconstituted with the other willing legal heir(s) or family
member(s) of the deceased LOI holder(s) with the consent of the other
legal heir(s).
C. GENERAL CONDITIONS FOR RECONSTITUTION AT LETTER OF
INTENT (LOI) STAGE
1. ...
However, in case of death/incapacitation of LOI holder(s), LOI may be
transferred to the legal heir(s)/family member(s) as per the nomination
submitted by the LOI holder, or in absence of the same with the
..ANSARI../ R.S. Sahare
Judgment 19 8wp3139.21+1.odt
consent of legal heir(s) of the deceased or incapacitated LOI holder.
The legal heir(s)/family member(s), who is/are to be inducted will have
to fulfill the following conditions:-
a) Multiple dealership norms and other eligibility criteria, as
applicable under Dealer Selection guidelines for the relevant category
prevailing at the time of reconstitution, except age and educational
qualification.
b) ...
c) Should not come under the purview of disqualification criteria as
per the Dealer Selection Guidelines in vogue.
d) ...
e) ...
f) ...
g) The new LOI holder(s) would be required to comply with all the
conditions as mentioned in the earlier LOI issued to the
deceased/incapacitated proprietor/partner(s).
2. ....
3. Multiple Dealership Norm: Multiple Dealership Norm as per
Dealer Selection Guidelines in vogue would be applicable in all cases
of reconstitution except in the following cases:
a) Where selection of the concerned dealership/distributorship was
made prior to multiple Dealership norms came into existence. This
relaxation shall be available only to spouse/children/grandchildren of
the dealer.
b) For dealerships which were commissioned after multiple dealership
norm came into existence and where two or more
dealership/distributorship have been awarded to family member(s)
..ANSARI../ R.S. Sahare
Judgment 20 8wp3139.21+1.odt
comprising of spouse, father/mother, children/grandchildren (both
married and unmarried). Relaxation would be given in cases of
reconstitutions arising out of death/incapacitation in favour of other
family member already holding a dealership subject to there being no
other eligible / willing legal heir(s) / member of family unit (having no
dealer/distributorship) for transfer of dealership.
4. ...
5. ...
6. ...
7. In cases where Nominee(s) / Legal Heir(s) not responding: In
cases where one or more of the Nominee(s) / Legal heir(s) of deceased
proprietor / partner(s) have not given their consent within specified
period of 30 days, another time period of 30 days (as reminder) shall be
given to the nominee(s)/legal heir(s) for expressing their willingness to
join the dealership failing which, it will be treated that they {non
responding nominee(s)/legal heir(s) of deceased proprietor/partner(s)}
are unwilling to be inducted in the Dealership and the OMC can
approve reconstitution of the Dealership with the willing
nominee(s)/legal heir(s). However, the surviving / incoming
proprietor/partner(s) of the reconstituted Dealership will have to
indemnify the OMC against (Annexure-I2) any claims or demands
which may be made in future.
8. ...
9. In cases where there is no NOCs from Nominee(s) / Legal
Heir(s) who are not eligible to become Dealer: In case of death,
where one or more Nominee(s) / Legal heir(s) are not willing to give
relinquishment or NOC in favour of incoming/surviving
..ANSARI../ R.S. Sahare
Judgment 21 8wp3139.21+1.odt
Proprietor/Partner (s) despite the fact that these Nominee(s) / Legal
heir(s) may not be eligible to become dealer as per Disqualification
norm of Dealer Selection guidelines, in such cases obtaining
NOC/Relinquishment from such Nominee(s)/Legal heir(s) will not be
mandatory. However, the onus would be on the surviving/incoming
Proprietor/Partner (s) of the dealership to provide conclusive
documentary evidence with regard to disqualification of such
Nominee(s)/Legal heir(s) and OMC would also independently verify
the authenticity of the same. In such cases, OMCs may issue a
communication to the concerned Nominee(s) / Legal heir(s) to submit
documentary proof with regard to their eligibility within 30 days from
the date of the letter. In case no response is received, the OMC can
approve reconstitution of the dealership excluding such Nominee(s) /
Legal heir(s). However, the surviving/incoming Proprietor/Partner (s)
of the dealership will have to indemnify the OMC against (Annexure-
J2) any claims or demands which may be made in future
I. PROCESS OF RECONSTITUTION OF COMMISSIONED
DEALERSHIPS :
1. ...
2. ...
3. ...
4. In case of death / incapacitation {incapacitation as defined under
para G (8)} of proprietor/partner(s), on receipt of information
regarding death/such incapacitation, a letter giving opportunity to
reconstitute the dealership to nominee(s)/legal heir(s)/family
member(s) will be issued, within 10 (ten) days of receipt of such
..ANSARI../ R.S. Sahare
Judgment 22 8wp3139.21+1.odt
information. Along with this letter, copy of application form for
reconstitution of dealership and list / format of other documents and
other relevant information to be submitted by the applicant, shall be
sent. 30 (thirty) days' time will be given for submitting the
application.
In case of formal request for extending the time, the time can be
further extended by another 30 days. In case the
deceased/incapacitated {incapacitation as defined under para G
(8)} Proprietor / Partner(s) had earlier appointed nominee(s),
letter/information as mentioned above shall be first sent only
to the concerned nominee(s). If the nominee(s) fails to respond
within the stipulated period, subsequent letter/information
shall be sent to the legal heir(s)/family member(s) of the
deceased/incapacitated Proprietor / Partner(s).
GUIDELINES ON SELECTION OF DEALERS FOR REGULAR & RURAL
RETAIL OUTLETS
10. DISQUALIFICATION
A. Individual Applicants : The persons while meeting the above
mentioned eligibility criteria if do not satisfy any of the following
requirements will be considered as ineligible for applying for the
dealership:-
(i) Fulfil Multiple dealership norms : Multiple Dealership norms as
mentioned below will be applicable for existing and future "A"/"CC"
site RO dealerships.
Multiple Dealership norms means that the applicant or any other
member of 'family unit' should not hold a Corporation owned
..ANSARI../ R.S. Sahare
Judgment 23 8wp3139.21+1.odt
"A"/"CC" site RO/SKO-LDO dealership or RO/SKO-LDO
dealership / LPG distributorship developed under Corpus Fund
Scheme and other Special category (DQ/Operation Vijay/Parliament
attack beneficiary, etc.), or Letter of intent (LOI) for the same of any
Oil Company.
Note:
a) Existing "B"/"DC" site RO/SKO-LDO dealers/LPG distributors
{other than those distributorships developed under Corpus Fund
Scheme and other Special category (DQ/Operation Vijay/Parliament
attack beneficiary, etc)}. And LOI holders including members of
his/her 'family unit' may apply for "B"/"DC" site RO dealerships.
b) Existing unviable SKO dealers of OMCs (individual and
partnership firms only) can also apply for RO dealerships (for both
"A"/"CC" site & "B" /"DC" site ROs) as per Clause 4 (viii)."
(18) After going through these Rules referred above, it is clear that
there is facility of nomination by LOI holders to nominate his legal
heirs, family members, if he desired to transfer his share in the event
of death or incapacitation resulting in total and permanent disability.
The procedure for submission of nomination is given under Clause 10
under the caption "B" in Reconstitution at Letter of Intent(LOI). Late
Suriyalalji Jaiswal availed this facility vide letter dated 20/12/2018,
which was duly received by the respondent Company on 20/12/2018.
Along with this request letter, the father of the petitioner also
..ANSARI../ R.S. Sahare
Judgment 24 8wp3139.21+1.odt
executed affidavit/Indemnity Bond as per requirement. As per these
Guidelines, the OMCs can allow for induction of such nominee
provided, he meets the eligibility criteria for reconstitution, as
applicable without seeking consent from other legal hairs upon
demise of the LOI holders. While adopting process of reconstitution of
commissioned dealership, it is made clear that on receipt of
information regarding death or incapacitation, a letter giving
opportunity to reconstitution of the dealership to nominee/ legal
heirs/family members will be issued within 10 days from receipt of
such information. However, it is further made clear that in case, the
deceased had earlier appointed nominee, letter/information as
mentioned above shall be first only to be issued to the concerned
nominee. If nominee fails to respond within the stipulated period,
consequent letter/information shall be sent to the legal heirs/family
members of the deceased. However this procedure is not followed by
respondent Company.
(19) Record shows that initially Company was insisting for probate
and succession certificate, which is not at all required in case of
nomination. It was duly communicated by the petitioner that the
proceedings for succession certificate are taken up and there is no
..ANSARI../ R.S. Sahare
Judgment 25 8wp3139.21+1.odt
provision requiring issuance of probate, if will is executed at Nagpur.
Considering this fact, respondent Company ought to have waited for
the decision of the Court. In fact, it is not open to the Company to ask
for succession certificate, specifically when, there was nomination
executed by the deceased- original LOI holder who was operating the
said RO since more than thirty years. Suddenly vide communication
dated 25/05/2023, respondent Company directed to the petitioner to
handover the possession of the Outlet on or before 23/03/2015, on the
ground that his nomination hit by multiple dealership Clause. It is
alleged by respondent Company that the possession of the subject
outlet was taken over on 29/05/2023 and handed over to one Laksha
Petroleum Company. This decision is taken without granting any
opportunity to the petitioner to defend his claim. As per Clause 3 of
Reconstitution of LOI, Multiple Dealership Norms- as per Dealer
Selection Guidelines in vogue would be applicable in all cases of
reconstitution except in the following cases:
a) Where selection of the concerned dealership/distributorship
was made prior to multiple Dealership norms came into
existence. This relaxation shall be available only to
spouse/children/grandchildren of the dealer.
..ANSARI../ R.S. Sahare
Judgment 26 8wp3139.21+1.odt
b) For dealerships which were commissioned after multiple
dealership norm came into existence and where two or more
dealership/distributorship have been awarded to family
member(s) comprising of spouse, father/mother,
children/grandchildren (both married and unmarried).
Relaxation would be given in cases of reconstitutions arising out
of death/incapacitation in favour of other family member
already holding a dealership subject to there being no other
eligible / willing legal heir(s) / member of family unit (having
no dealer/distributorship) for transfer of dealership.
(20) In Clause 10 under Caption Disqualification: as per this
Clause, Multiple Dealership norms means that the applicant or any
other member of 'family unit' should not hold a Corporation owned
"A"/"CC" site RO/SKO-LDO dealership or RO/SKO-LDO dealership
/ LPG distributorship developed under Corpus Fund Scheme and
other Special category (DQ/Operation Vijay/Parliament attack
beneficiary, etc.), or Letter of intent (LOI) for the same of any Oil
Company.
..ANSARI../ R.S. Sahare
Judgment 27 8wp3139.21+1.odt
(21) If these Guidelines on Selection of Dealers for Regular and
Rural Retail Outlets is perused, as per Clause (iv) Multiple Dealership
Norm (MDN) has been relaxed for "B/DC" site ROs.
(22) In view of this provision, the respondent Company ought to
have granted opportunity of hearing to the petitioner to satisfy the
Company that these Clauses are not applicable in his case. The said
decision for the first time was communicated to the petitioner vide
letter dated 15/05/2023 and directed to hand over possession. No
opportunity was granted to put up before the Company what would
be the loss. The petitioner was thus deprived of his right to run RO of
his father though there is a nomination and even registered will deed.
He even has obtained succession certificate.
(23) Learned Counsel Shri J.M. Gandhi relied on Mahabir Auto
Stores and others (supra), wherein it is held that,
"The State act in its executive power under Art. 298 of the
Constitution in entering or not entering in contracts with
individual parties. Article 14 of the Constitution would be
applicable to those exercise of power. Therefore, the action of
State organ can be checked under Art.14. Every action of the
State executive authority must be subject to rule of law and
must be informed by reason. So, whatever be the activity of
..ANSARI../ R.S. Sahare
Judgment 28 8wp3139.21+1.odt
the public authority, it should meet the test of Art. l4 of the
Constitution. If a Governmental action even in the matters of
entering or not entering into contracts, fails to satisfy the test
of reasonableness, the same would be unreasonable. Rule of
reason and rule against arbitrariness and discrimination,
rules of fair play and natural justice are part of the rule of law
applicable in situation or action by State instrumentality in
dealing with citizens. Even though the rights of the citizens
are in the nature of contractual rights, the manner, the
method and motive of a decision of entering or not entering
into a contract, are subject to judicial review on the
touchstone of relevance and reasonableness, fair play, natural
justice, equality and non-discrimination. It is well settled that
there can be "malice in law". Existence of such "malice in
law" is part of the critical apparatus of a particular action in
administrative law. Indeed " malice in law " is part of the
dimension of the rule of relevance and reason as well as the
rule of fair play in action".
(24) Learned Counsel Shri J.M. Gandhi relied on Allied Motors
Limited (supra) wherein it is held that,
"The haste, with which a 30 years' old dealership was
terminated even without giving show cause notice and/or
giving an opportunity of hearing clearly indicates that the
entire exercise was carried out by the respondent corporation
on non-existent, irrelevant and on extraneous considerations.
There has been a total violation of provisions of law and the
principles of natural justice. Samples were collected in
complete violation of the procedural laws and in non-
adherence of the guidelines of the respondent corporation".
..ANSARI../ R.S. Sahare
Judgment 29 8wp3139.21+1.odt
(25) In support of his contention that in case of Hindustan Petroleum
Corporation Limited and others (supra), wherein the Hon'ble Apex
Court observed as under:
"31. The cancellation of dealership agreement of a party
is a serious business and cannot be taken lightly. In
order to justify the action taken to terminate such an
agreement, the authority concerned has to act fairly and
in complete adherence to the rules/guidelines framed for
the said purpose. The non-service of notice to the
aggrieved person before the termination of his dealership
agreement also offends the well established principle that
no person should be condemned unheard. It was the duty
of the petitioner to ensure that Respondent 1 was given a
hearing or at least serious attempts were made to serve
him with notice of the proceedings before terminating his
agreement."
(26) In Hindustan Petroleum Corporation Ltd., Nagpur (supra), this
Court relied on Allied Motors Ltd. (supra) and held that as no
opportunity was granted before action of termination of dealership,
the order passed by the Company terminating dealership is illegal.
(27) As no proper procedure is followed by the respondent
Corporation, while passing order of handing over possession and
allotment in favour of Laksha Petrolium Company for even temporary
..ANSARI../ R.S. Sahare
Judgment 30 8wp3139.21+1.odt
period is illegal. In fact, in case of nomination, the Corporation was
required to intimate within 10 days after receipt of information of
death of LOI holder, only to the nominee for submitting the
document.
(28) The respondent Company has not made clear, when this
Multiple Dealership Norms came into effect. As per their norms, the
Multiple Dealership Norms would be applicable in all cases of
reconstitution, except where selection of the concerned dealership was
made prior to multiple dealership norms came into existence. This
relaxation shall be available only to spouse children, grandchildren of
the dealers.
(29) In our considered opinion, the action on the part of
respondents is not at all in adherence with the guidelines issued by
respondents. They are also in total violation of principle of natural
justice. In view of above guidelines, it also needs to be considered
whether this Multiple Dealership Norms are in existence when an
original LOI was executed in favour of father of the petitioner.
Secondly, for disqualifying under Multiple Dealership Norms, it is
applicable only when any dealer holds the dealership of "A/CC" site
..ANSARI../ R.S. Sahare
Judgment 31 8wp3139.21+1.odt
and it is not applicable when the applicant is holding dealership of
"B" site. Now petitioner is in possession of succession certificate. Even
if it is case of the respondent that petitioner failed to produce
succession certificate, there is provision of filling affidavit. Ultimately
Court proceedings are not within the control of petitioner once he
applied.
(30) So far as claim in Writ Petition No.265/2023 is concerned, the
petitioner has no right to ask for dealership, in view of the fact that
father of the petitioner already availed the facility of nomination in
favour of his son Rahul Jaiswal. Secondly, the succession certificate of
100% share in respect of dealership of M/s Indian Services is in favour
of Rahul Jaiswal. Even dealership of subject Outlet is bequeathed by
registered will deed by deceased Suryalalji Jaiswal in favour of Rahul
Jaiswal. As such, the petitioner in Writ Petition No.265/2023 has not
made out any right in his favour as on today. Unless the eligibility
issue is decided by respondent No.2 Company by following due
procedure and by granting fair opportunity to the petitioner to
substantiate his claim, there is no question of rights accruing in favour
of respondent No.3/petitioner in Writ Petition No.265/2023. As such,
the said petition is liable to be dismissed. For the reasons stated above,
..ANSARI../ R.S. Sahare
Judgment 32 8wp3139.21+1.odt
the order passed by the respondent dated 15/05/2023 is unsustainable
being arbitrary and contrary to the norms and procedure hence liable
to be set aside. According, we proceed to pass the following order:
ORDER
(i) Writ Petition No.3139/2021 is partly allowed.
(ii) The impugned communication dated 15/05/2023 issued
by respondent No.2 is hereby quashed and set aside.
(iii) Respondent No.2 is hereby directed to consider afresh
applications made by the petitioner in Writ Petition No.3139/2021
dated 14/03/2019, 25/04/2019 and 20/09/2019 by granting due
opportunity to the petitioner.
(iv) The respondents are directed to take decision within a
period of two months from the receipt of the copy of this judgment
after giving opportunity of hearing to all concerned.
(v) Writ Petition No.265/2023 is hereby dismissed.
Both the Writ Petitions are disposed of as above. No Costs.
(SMT. M.S. JAWALKAR, J.) (VINAY JOSHI, J.)
Signed by: Mrs. Ranjana Sahare
..ANSARI../ R.S. Sahare
Designation: PA To Honourable Judge
Date: 09/10/2024 18:29:26
