Indian Oil Corporation Limited & ... vs Vipul Anand Singh
2023 Latest Caselaw 6173 Cal

14.09.2023.
Item No. 3.
Court No. 13
   ap
                           F.M.A. No. 899 of 2022

                   Indian Oil Corporation Limited & Ors.
                                   Versus
                             Vipul Anand Singh

                   Mr. Jaydip Kar, ld. Sr. Advocate,
                   Mr. Amit Kumar Nag,
                   Mr. Partha Banerjee.
                                               ...For the appellants.
                   Mr. Debabrata Saha Ray,
                   Mr. Pingal Bhattacharyya,
                   Mr. Subhankar Das.
                                              ...For the respondent.


           The Proceedings

           1. M.A.T. No. 524 of 2021 had been filed against a

           judgment and order dated 16th March, 2021 passed by

           a Single Judge of this Court in W.P. No. 7257 (W) of

           2019.

           2. By    the   impugned    judgment,   the   petitioner's

           application for allotment of Distributor Controlled

           Retail Outlet (DCRO) submitted with the delay of one

           day, was condoned and directed to be considered.

           3. Prior thereto the writ petitioner had filed a writ

           petition being W.P. No. 25807 (W) of 2018. In the said

           writ petition, the petitioner challenged Clause 10 of the

           Brochure for selection of Dealers for regular and Retail

           Outlet Dealership dated 24/25th November, 2018 (said

           Brochure). It was also prayed that the petitioner

           should be allowed to participate in the selection

           process under the said Brochure, 2018 published by
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the respondent Oil Companies. The petitioner wanted

to apply for a DCRO on the left hand side from

Nandakumar to Nimtouri on NH-41, Purba Midnapur.

4. By an interim order dated 21 st December, 2018,

passed in W.P. 25807 of 2018, a Single Bench prima

facie, found that the petitioner was eligible under

Clause 10 of the said Brochure and permitted him to

apply and participate in the selection process for a

DCRO. The participation was made subject to final

result of the writ petition.

5. An appeal was preferred by the Oil Companies

against the said order dated 21 st December 2018 in

M.A.T. No. 1675 of 2018. A Division Bench noted that

the petitioner's participation was subject to final result

of the writ petition declined interference in its order

dated 21st February, 2019.

6. The   petitioner   was      then   notified   by   the   Oil

Companies, that he was successful but could not

submit all the documents, particularly a sworn

affidavit that he is married since he was single.

7. While considering admission of the instant appeal,

a Co-ordinate Bench of this Court by an order dated

16th June, 2021 was of the view that this appeal,

arising out of W.P. No. 7257 (W) of 2019, would be

heard along with the first writ petition being W.P. No.

25807 (W) of 2018. The records of the said writ

petition were directed to be placed before this Court.
                                       3




Facts

of the Instant Case

8. The four Oil Companies in India had three

categories of Retail Outlets which are set out

hereinbelow:

"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     &     Added
                                 Facilities                        by
                                                                   this
                                                                   Court
i        Locations               The offered land would be CFS
       under     Corpus          taken                   on
       Fund      Scheme          lease/purchased      and
       (CFS sites)               fully    developed      as
                                 Corporation owned site.
ii       Other                   The offered land would be CCRO
         Corporation             taken                   on
         Owned      Sites        lease/purchased      and
         ("CC" / Ä"              fully    developed      as
         sites)                  Corporation owned site.
iii      Dealer Owned            The offered land and the DCRO
         sites    ("DC"/         super structure will be
         "B" sites)              developed by the dealer.
                                 Pump, 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. All locations rostered as SC/ST category will be developed as per (I) above.

9. Prior to November 2018, the Oil Companies

followed a uniform policy under Clause 10 of their

Brochure then existing. The old policy debarred and

disqualified any other person of one family unit

holding a Letter of Intent or Dealership or

Distributorship from any of the Oil Companies, from

applying for another Dealership in any of the three

categories aforementioned, i.e. CFS, CCRO or DCRO.

10. The said disqualification clause in the earlier

brochure was as follows:-

"10. Disqualification.

A. Individual Applicants:

The persons while meeting the above mentioned eligibility criteria if do not satisfy any for the following requirements will be considered as ineligible for applying for the dealership:

(i) Fulfil Multiple dealership norms: Multiple Dealership/Distributorship norms means that the applicant or any other member of 'family unit' should not hold a dealership/distributorship or Letter of Intent (LOI) for a dealership/distributorship of any Oil Company i.e., only one Retail Outlet/SKO-LDO dealership/LPG distributorship or an LOT of an Oil Company will be allowed to a 'Family Unit'.

'Family Unit' in case of married applicant, shall consist of individual concerned his/her Spouse and unmarried son(s)/daughter(s). In case of unmarried person/applicant, 'Family Unit' shall consist of individual concerned, his/her parents and his/her unmarried brother(s) and unmarried sister(s). In case of divorce, 'Family Unit' shall consist of individual concerned, unmarried son(s)/unmarried daughter(s) whose custody is given to him/her. In case of widow/widower, 'Family Unit' shall consist of individual concerned, unmarried son(s)/unmarried daughter (s)."

11. The legality and propriety of the said clause

came to be challenged before the Allahabad High Court

in the year 2014 in the case of Ravi Kumar Vs. Union

of India reported in 2014 SCC Online All 15833,

and the definition of family unit and the restriction of

another family member holding any other Dealership

or Distributorship was duly upheld by a division

bench of this Court.

12. On 28th October, 2018, the Central Government

amended the aforesaid policy, and diluted the

restriction. Clause 10 came to be amended. Post

amendment, Clause 10 of the Brochure published on

24/25th November 2018 is as follows:-.

"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"/"C" sit RO dealerships.

Multiple Dealership norms means that the applicant or any other member of his/her 'family unit' should not hold a Corporation owned "A"/ "CC"sit RO/SKO-LDO dealership or RO/SKO-LDO dealerships/LPG distributorships 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 & partnership firms only) can also apply for RO dealerships (for both "A" / "CC" site & "B" / "DC" site ROs) as per Clause 4 (viii).

'Family Unit' in case of married applicant, shall consist of individual concerned, his/her Spouse and unmarried son(s)/daughter(s). In case of unmarried person/applicant, 'Family Unit' shall consist of individual concerned, his/her parents and his/her unmarried brother(s) and unmarried

sister(s). In case of divorcee, 'Family Unit' shall consist of individual concerned, unmarried son(s)/unmarried daughter(s) whose custody is given to him/her. In case of widow/widower, 'Family Unit' shall consist of individual concerned, unmarried son(s) unmarried daughter(s).

Oil company for this purpose would also include Private sector Oil Marketing Companies as per Gazette notification of 2002 i.e. (1) Indian Oil Corporation Ltd. (2) Bharat Petroleum Corporation Ltd. (3) Hindustan Petroleum Corporation Ltd. (4) Mangalore Refinery and Petrochemicals Ltd. (5) Oil & Natural Gas Corporation Ltd. (6) Reliance Industries Ltd. (7) Essar Oil/Nyara Energy (8) Shell Corporation or any other Oil Marketing Company as defined by the Govt Of India/MOP&NG from time to time."

Pleadings and Arguments of the Parties

13. The writ petitioner would contends that he was

informed by the Oil Companies, that since his father is

already a Letter of Intent holder in respect of a CCRO

situated and lying at Panskura near Kharagpur,

Paschim Medinipur (43 kms away), he would be

otherwise ineligible even for applying for a DCRO.

14. In W.P. No. 25807 (W) of 2018 it was contended

that since the petitioner is an unmarried son of an

existing C.C. Distributor, the disqualification Clause

would debar him from making any application. A

married on would, however, be entitled to apply as he

is not considered part of the same family unit.

15. Across the bar, Mr. Debabrata Saha Ray would

argue that a plain reading of the disqualification

should not debar his client from making an

application for a DCRO. The restriction under clause

10 would apply only to application by a family member

for a CCRO. He submits that his client's father was a

LOI holder of a CCRO as on 2018 and is running it

full-fledged as on date.

16. Mr. Jaydip Kar, learned Senior Advocate

appearing on behalf of Oil Companies has made very

detailed submissions on the interpretation of Clause

10 contending that sub-clause A(i) would essentially

debar the writ petitioner from participating in the NIT

even for a DCRO, by operation of the Multiple

Dealership Norms restriction therein.

17. Reliance in this regard is placed on a decision of

Allahabad High Court in the case of Ravi Kumar

(supra) and also another decision of the Single Bench

of Punjab & Haryana High Court in the case of Petrol

Pump Dealers Association - Vs. - Indian Oil

Corporation Limited & Ors. being an unreported

decision dated 20th December, 2018 rendered in

C.W.P. No. 37800 of 2018.

18. Mr. Kar seeks thereafter to rely upon two other

decisions about power of a State Authority to "Play in

The Joint", while specifying terms and conditions in an

NIT. Reliance is placed on paragraph 94(4) of the

decision of the Supreme Court of India in the case of

Tata Cellular - Vs. - Union of India reported in

(1994) 6 Supreme Court Cases 651. Mr. Kar also

places a decision of the Supreme Court of India in the

case of Central Coalfields Limited & Anr. - Vs. -

SLL-SML (Joint Venture Consortium) & Ors.

reported in (2016) 8 Supreme Court Cases 622,

particularly paragraphs 33, 38, 43, 44 and 48 thereof.

Analysis and Findings of this Court

19. This Court has very carefully considered the

arguments of Mr. Kar and Mr. Saha Ray, Learned

Counsel for the parties. This Court is of the view that

an incorrect understanding of any law or rule, based

on which a pleading is made cannot and does not

estopp a party from taking a correct stand in a Court

of law.The statement in the writ petition that the

petitioner would be barred from applying by reason of

Clause 10 therefore cannot estopp or bind him.

20. A plain reading of Clause 10 being the

disqualification clause set out hereinabove essentially

indicates, to this Court that the restriction on Multiple

Dealership norms, would disentitle a person from

applying for another CCRO if a member of his family

unit (defined in the said clause), has an existing

CCRO. The said Multiple Dealership norms, are

therefore restricted to applications for another CCRO

by any family member of an existing LOI holder or the

CCRO.

21. The notes 'a' and 'b' appended to the

disqualification clause also further clarify that bar

under the clause would essentially imply that the bar

cannot apply to a family member applying for a DCRO,

if there is already an existing CCRO allottee in the

family. It is only application by a member of the same

family unit applying for another CCRO dealership that

is barred.

22. The aforesaid interpretation is fortified by a

comparison of the Disqualification Clause 10 as it

stood before May, 2018 and thereafter, both of which

has been set out hereinabove.

23. It appears clearly to this Court as per the clause

10 existing prior to 2018 there was a blanket

restriction on any family member holding one

Dealership, either CCRO or DCRO from applying for

any other Dealership of any nature.

24. A change of policy occurred and was

implemented in the amended Brochure dated 24 th

November, 2018. The change has a very rational basis.

25. In DCRO the Oil Companies have no

investment/ or financial outgo, whatsoever. It is the

applicant who makes the investment both in the land

as well as the setting up of the infrastructure for the

pump. The demand for petroleum products is ever

increasing. The Oil Companies would be able to cater

to a larger consumer base if such DCROs are kept out

of the mischief of clause 10. Supply to the increasing

demand of its outlets can be made without any

financial burden or to the Oil Companies.

26. The dilution of the pre-existing disqualification

was and is in the interest of the Oil Companies. Such

dilution would also increase the number of Retail

Outlets for selling petroleum products. The Oil

Companies were, therefore, increasing sales with

much lesser capital outlay or exposure in permitting

more DCROs as opposed to investing and setting up

CFS and CCRO stations..

27. In the backdrop of the above and obvious object

and purpose behind the amended Brochure of the year

2018, it is totally irrational for the Indian Oil

Corporation Ltd. (IOCL) to contend that because the

writ petitioner's father has an LOI for a CCRO, he

would be debarred from applying for and participating

in a selection process for a DCRO station. It is the

petitioner who would make a huge investment of his

own without any financial exposure to the IOCL. The

restriction under the Multiple Dealership norms

cannot be applied to te petitioner.

28. The interpretation given by the IOCL to

Clause10 is ex facie irrational apart from defeating the

very object and purpose for which the amended Clause

10 under theBrochure of November 2018, which

watered down the clause that existed prior thereto.

29. The irrationality of the Oil Company is also

evident from the consequence that would follow from

their incorrect interpretation of the said clause 10. If

one family member has a CCRO another member of

the same family would be debarred from applying even

for a DCRO. Whereas if a family member has a DCRO

any number of persons in the same family can apply

for another DCRO. Hypothetically therefore one family

can have four or more DCROs. A paradoxical situation

would emerge if the respondent's interpretation of

clause 10 is accepted.

30. Further it would clearly be a violation of Article

19(1)G of the Constitution of India, if an unmarried

son of an existing CCRO dealer is prevented from

applying for a DCRO. Particularly, when the oil

companies have no financial exposure at all in setting

up the DCROs. The said restriction as interpreted and

argued by the counsel for the IOCL is totally irrational,

unreasonable and bears no rational nexus with the

object sought to be achieved by clause 10 of the

brochure of 24th November 2018.

31. It would also imply an unmarried son of a

CCRO dealership would be forced to get married to be

able to apply for a DCRO since being single, the Oil

companies wil not allow him to apply even for a DCRO

station. To compel a citizen to do so would violate

Article 19(i)g but also basic freedoms and liberties

under Article 21 of the Constitution of India.

32. The decision of Ravi Kumar (supra) would have

no manner of application as already stted above, as it

was dealing with clause 10 as it existed before the

Brochure dated 24th November 2018.

33. In so far as the case of Petrol Pump Dealers

Association (supra) this Court finds that the decision

of the Single Bench in fact clearly is in harmony with

the views taken by this Court. The Punjab and

Haryana High Court found a reasonable classification

between the two categories of ROs. It has also found

that restriction was applicable only to families having

a member running a CCRO and not applicable family

members having DCRO dealership. The classification

was found reasonable.

34. The other decisions relied upon by Mr. Kar have

no manner of application in the facts of the case.

35. This Court's mind is not free from doubt the

refusal by the Oil Companies may have been actuated

by a deliberate misreading of the disqualification

under the new Clause 10 above, for collateral

purposes. The father of the petitioner had been

litigating for long against the Oil Companies (BPCL) in

connection with his individual Company Controlled

Retail LOI and outlet.

Conclusion

36. W.P. No.25807 of 2018 is allowed with costs

assessed at Rs.75,000/- (Rupees seventy five

thousand only) payable by the Oil Companies to the

writ petitioner. There shall be a writ of mandamus

holding that the petitioner was and is entitled to

participate in the selection process under the

Brochure dated 24th November, 2018.

37. It appears that since the petitioner was found

successful in all respects and was delayed by one day

in submission of one document, he had already put in

the field verification fees within time.

38. The petitioner shall comply with any other

requirements of the Oil Companies under the NIT

brochure dated 24th November, 2018.

39. MAT No.524 of 2021 is therefore dismissed.

40. All parties are directed to act on a server copy of

this order duly downloaded from the official website of

this Court.

(Rajasekhar Mantha, J.)

(Supratim Bhattacharya, J.)