Delhi High Court
Harinam Singh & Anr vs Uoi & Anr on 30 October, 2013
Author: V. K. Jain
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 21.10.2013
Date of Decision: 30.10.2013
+ W.P.(C) 4963/2007 & CMs 9271/2007 &683/2010
SHIV PATTI
..... Petitioner
Through: Mr. Sanat Kumar and Mr. Gaurav
Khanna, Advs.
versus
UOI & ANR
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
+ W.P.(C) 8785/2007 & CM Nos.2835/2009 & 6507/2009
R.C.GUPTA & ANR
..... Petitioner
Through: Mr. Sanat Kumar and Mr. Gaurav
Khanna, Advs.
versus
UOI & ANR
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
+ W.P.(C) 9148/2007
AVINASH CHAND GUPTA
..... Petitioner
Through: Mr. Sanat Kumar and Mr. Gaurav
Khanna, Advs.
versus
W.P.(C) No.4963/2007&connected matters Page 1 of 41
UOI & ANR
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
+ W.P.(C) 8786/2007 & CM Nos.2833/2009,6506/2009
PARVEZ AHMED
..... Petitioner
Through: Mr. Sanat Kumar and Mr. Gaurav
Khanna, Advs.
versus
UOI & ANR
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
+ W.P.(C) 8920/2007 & CM Nos.2831/2009 & 6552/2009
CHANDER BHUSHAN DUBEY & ANR.
..... Petitioner
Through: Mr. Sanat Kumar and Mr. Gaurav
Khanna, Advs.
versus
UOI & ANR.
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
Mr. Jatan Singh, CGSC for UOI
Judgment reserved on: 22.10.2013
+ W.P.(C) 9213/2007
HARINAM SINGH & ANR ..... Petitioner
W.P.(C) No.4963/2007&connected matters Page 2 of 41
Through: Mr. A Maitri and Ms. Radhika
Chander Shekhar, Advs.
versus
UOI & ANR
..... Respondent
Through: Mr. A.D.N. Rao, Mr. A.
Venkatesh and Ms. Vaishali
Ramesh, Advs. for R-2
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN
JUDGMENT
V.K.JAIN, J.
CM 6507/2009 in W.P(C) No.8785/2007
CM 6506/2009 in W.P(C) No.8786/2007
CM 6552/2009 in W.P(C) No.8920/2007
1. During pendency of these petitions, the aforesaid applications
were filed by the aforesaid petitioners seeking amendment of the writ
petitions. Vide order dated 18.5.2009, the aforesaid petitioners were
allowed to file the amended writ petitions. Vide order dated 1.7.2009,
BPCL was permitted to file counter affidavits to the amended writ
petitions subject to its right to oppose the amendment applications and
the petitioners were permitted to file rejoinder to the said counter
affidavits. Consequently, the amended writ petitions as well as the
pleadings are on record. Considering the aforesaid developments, the
applications are allowed and the amended pleadings are taken on record.
The applications stand disposed of.
W.P(C) No.4963/2007
2. The petitioner in this case is the owner of land measuring 1050
square meters in Village Khanpur alias Birbhanpur, Pargana & Tehsil
Salon, District Chatrapati Sahuji Maharaj Nagar, U.P. An advertisement
was issued by the respondent - Bharat Petroleum Corporation Ltd.
(hereinafter referred to as „BPCL‟) in the newspapers, seeking proposal
from the land owners, for sale or lease of the land for a period of thirty
(30) years, for establishment of retail outlets. Vide Lease Deed dated
23.9.2003, the above referred land in Village Khanpur alias Birbhanpur,
Pargana & Tehsil Salon, District Chatrapati Sahuji Maharaj Nagar, U.P
was leased by the petitioner to respondent no.2 - BPCL for a period of
thirty (30) years, with effect from 1.9.2003, for running a retail outlet/
petrol pump on the said land. Vide communication dated 28.10.2003,
BPCL appointed M/s Shanti Filling Station as an ad hoc dealer for
running the retail outlet on the land which the petitioner had leased out
to BPCL. The aforesaid ad hoc dealership, unless terminated earlier, was
to come to an end on 27.10.2004. In case the dealer was interested to
carry out business even after expiry of the said date, he was to make a
formal application and obtain approval of BPCL before 28.10.2004,
failing which the dealer was to be treated as trespasser.
Though the case of the petitioner, as set out in the writ petition is
that M/s Shanti Filling Station was his nominee, the said averment has
been denied by BPCL, and there is no communication from the
petitioner to BPCL nominating M/s Shanti Filling Station for grant of
above referred ad hoc dealership. The Lease Deed executed between the
parties also carried no stipulation requiring BPCL to grant ad hoc
dealership on the land leased out by the petitioner only to the nominee
of the petitioner. Though the case of the petitioner is that he had leased
out the aforesaid land to BPCL on the assurance that the dealership
would be given to her or her nominee, there is no document evidencing
such an understanding. The ad hoc dealership granted to M/s Shanti
Filling Station was, however, terminated vide letter dated 11.6.2007 on
the ground that in order to confirm to the directives issued by the
Government of India, BPCL had decided to award temporary COCO/ ad
hoc dealership for running retail outlets to the existing LoI holders
belonging to SC/ST, Corpus Fund Category. The ad hoc dealership
agreement was terminated by giving one month notice to the dealer in
terms of clause 21 of the agreement executed between the dealer and
BPCL on 28.10.2003, whereby BPCL had reserved the right to
terminate the said dealership, without assigning any reason whatsoever.
The petitioner therefore is seeking the following reliefs in this writ
petition:
i) Quashing the notification/ Circular No.P-19011/9/2001 -
IOC dated 6th September, 2006 as the same is ultra vires,
illegal, arbitrary and contrary to the principles of equity,
fair play and natural justice.
ii) Quashing the notification no. No.P-19011/9/2001 - IOC
dated 6th September, 2006 qua the petitioner‟s retail outlet/
petrol pump at Salon, Distt. Chatrapati Sahuji Maharaj
Nagar, Rai Bareilly, U.P.
iii) To restrain the respondent no.2/oil company from
terminating/ cancelling the petitioner‟s retail outlet/petrol
pump at Salon, Distt. Chatrapati Sahuji Maharaj Nagar, Rai
Bareilly, U.P. on the basis of Notification No.P-
19011/9/2001 - IOC dated 6.9.2006.
iv) If for any reason this Hon‟ble Court is of the opinion that
granting of above reliefs will not meet the ends of justice,
the respondent no.2/oil company be directed that since the
object of taking the land on lease for allotment of retail
outlet for the petitioner or his nominees has been frustrated
the lease in respect of land admeasuring 1050 square
meters comprised in Plot/Khasra No.209, Khata/ Khatauni
No.317 situated at Village Khanpur alias Birbhanpur,
Pargana & Tehsil Salon, District Chatrapati Sahuji Maharaj
Nagar, U.P. be surrendered to the petitioner and petitioner
be put in actual and physical possession of land within the
time frame to be fixed by this Hon‟ble Court.
W.P(C) No.8785/2007
3. The petitioner no.1 in this matter is the owner of the land
measuring 1114.65 square meters in Pargana & Tehsil Sadar, District
Pratapgarh, U.P. He also executed a similar lease deed dated 9.7.2003 in
favour of BPCL, which appointed M/s Partapgrah Auto Stores as ad hoc
dealer to run the retail outlet on the aforesaid land for a period of one
year commencing 28.6.2003. After expiry of the aforesaid dealership
agreement, the respondent no.2 short-listed four other persons for award
of ad hoc dealership. One such dealer was M/s Speed Motors in which
son of the petitioner no.1 is a partner. In the course of evaluation, M/s
Speed Motors obtained highest marks and, therefore, the ad hoc
dealership on the aforesaid land was awarded to the said firm. The case
of the petitioner is that BPCL is threatening to cancel the aforesaid
dealership agreement with Speed Motors, pursuant to the
communication dated 6.9.2006 sent by the Government of India to Oil
Marketing Companies. This is also the case of the petitioner no.1 that
the petitioner no.2 who is his daughter and nominee was interviewed by
BPCL for grant of a retail outlet, but instead of awarding the dealership
to her and by way of an interim arrangement, ad hoc dealership was
granted to M/s Speed Motors. The petitioner, therefore, is seeking the
following reliefs:
"i. to call for records of the case from the Respondent Oil Company
including all their files containing the landowner policy guidelines
framed from time to time; and
ii. Quashing the Notification/Circular No.P-19011/9/2001-IOC dated
6.9.2006 as the same is ultra vires, illegal, arbitrary and contrary to the
principles of equity, fair play and natural justice.
iii. Quashing the Notification No.P-19011/9/2001-IOC dated
6.9.2006 qua the petitioner‟s retail outlet/petrol pump at Sukhpal Nagar,
Distt. Pratap Garh, U.P.
iv. To restrain the respondent No.2/Oil Company from
terminating/canceling, suspending the sales and supplies of the retail
outlet being run by the Petitioner at Sukhpal Nagar, Distt. Partap Garh,
U.P. on the basis of Notification No.P-19011/9/2001-IOC dated
6.9.2006.
v. To direct the Respondent Oil Company to grant dealership of the
petrol pump being run by the Petitioners at Sukhpal Nagar, Distt. Pratap
Garh, U.P. to Petitioner No.1 or his nominee; and
vi. If for any reason this Hon‟ble Court is of the opinion that granting
of above reliefs will not meet the ends of justice, the Respondent
No.2/Oil Company be directed that since the object of taking the land on
lease for allotment of Retail outlet for the Petitioner or his nominees has
been frustrated and leased out land admeasuring 1114.65 sq.mtrs. falling
in khata/khatauni No.164, Khasra of each Gata No.625 and 626/1
situated in Pargana & Tehsil Sadar, Distt. Pratapgarh, U.P. be
surrendered to the Petitioner and petitioner be put in actual and physical
possession of land within the time frame to be fixed by this Hon‟ble
Court."
W.P(C) No.9148/2007
4. The petitioner in this case is the owner of land at Nabi Ganj,
Mainpuri, U.P which he leased out to respondent - BPCL vide lease
deed dated 27.2.2003. The case of the petitioner is that the aforesaid
lease was conditional and subject to allotment of dealership to the
petitioner. His case is that on 31.3.2003, he was allowed to run the
petrol pump on the aforesaid land and since then the petrol pump is
being run by him at the aforesaid site. According to him the officials of
BPCL have conveyed to him that they are going to allot the aforesaid
dealership to some other person. Being aggrieved, petitioner is before
this Court seeking the following reliefs:
i) restrain the respondent no.2/ oil company from terminating/
cancelling, suspending the sales and supplies of the retail
outlet/ petrol pump being run by petitioner at Nabi Ganj,
District Mainpuri, Uttar Pradesh on the basis of notification
no.P-19011/9/2001 - IOC dated 6.9.2006 till the decision
of the writ petition.
W.P(C) No.8920/2007
5. The petitioner no.1 in this petition is the co-owner of the land
measuring 2000 square meters situated in Village Siyarabasi, Pargana &
Tehsil Patti, District Pratapgarh, U.P. Vide lease deed dated 14.10.2003,
the petitioner no.1 leased out the aforesaid land to the respondent -
BPCL for a period of thirty (30) years. Vide communication dated
31.3.2004, M/s Baghrai Automobiles was appointed as ad hoc dealer to
run a retail outlet on the aforesaid land purely on temporary basis. The
lease was to expire on 30.3.2005, unless terminated earlier. It was,
however, stipulated that if the dealer was interested to carry on business
even after expiry of the said date, it will have to make a formal
application and obtain its approval before 31.3.2005 failing which it
shall be deemed to be a trespasser and BPCL reserved its right to
terminate the lease without assigning any reasons. According to BPCL it
had short-listed four dealers including M/s Baghrai Automobiles and
since the highest marks were obtained by M/s Baghrai Automobiles, ad
hoc dealership was awarded to it for a period of one year commencing
31.3.2004 whereafter it has continued on temporary basis. The petitioner
has, therefore, sought following reliefs:
"i. to call for records of the case from the Respondent Oil Company
including all their files containing the landowner policy guidelines
framed from time to time; and
ii. Quashing the Notification/Circular No.P-19011/9/2001-IOC dated
6.9.2006 qua the retail outlet/petrol pump run by the Petitioner at Sheera
Basi, Distt. Pratapgarh, U.P.
iii. To restrain the respondent No.2/Oil Company from
terminating/canceling, suspending the sales and supplies of the retail
outlet/petrol pump being run by the petitioner at Sheera Bassi, Distt.
Partapgarh, U.P. on the basis of Notification No.P-19011/9/2001-IOC
dated 6.9.2006.
v. To direct the Respondent Oil Company to grant dealership of the
petrol pump being run by the Petitioners at Sheera Bassi, Distt. Pratap
Garh, U.P. to Petitioner No.1 or his nominee; and
vi. If for any reason this Hon‟ble Court is of the opinion that granting
of above reliefs will not meet the ends of justice, the Respondent
No.2/Oil Company be directed that since the object of taking the land on
lease for allotment of Retail outlet for the Petitioner or his nominees has
been frustrated and the lease in respect of land admeasuring 2000
sq.mtrs. comprising of Gata Nos.34 & 35 khata/khatauni No.17, situated
at Village Siyarabasi, Pargana & Tehsil Patti, District Pratapgarh, U.P.
be surrendered to the Petitioner and petitioner be put in actual and
physical possession of land within the time frame to be fixed by this
Hon‟ble Court."
W.P(C) No.8786/2007
6. The petitioner in this case is the co-owner of the land measuring
1187.10 square meters in Pargana & Tehsil Chail, District Kaushambi,
Uttar Pradesh. Vide lease deed dated 20.2.2003, he leased the aforesaid
land to BPCL for a period thirty (30) years. The retail outlet on the
aforesaid land was awarded to one M/s Janta & Company after
evaluating three dealers including M/s Janta & Company which
obtained highest marks during the aforesaid evaluation. The petitioner
before this Court is a partner of M/s Janta & Company. The petitioner is
seeking the following reliefs in this writ petition:
"i. quashing the Notification No.P-19011/9/2001-IOC dated 6.9.2006
qua the Retail Outlet/Petrol being run by the Petitioner at Kasenda,
Distt. Kaushambi (U.P.).
ii. To restrain the respondent No.2/Oil Company from
terminating/cancelling, suspending the sales and supplies of the Retail
Outlet/Petrol Pump being run by the Petitioner at Kasenda, Distt.
Kaushambi (U.P.) on the basis of Notification No.P-19011/9/2001-IOC
dated 6.9.2006.
iii. If for any reason this Hon‟ble Court is of the opinion that granting
of above reliefs will not meet the ends of justice, the Respondent
No.2/Oil Company be directed that since the object of taking the land on
lease for allotment of Retail Outlet for the Petitioner or his nominee has
been frustrated the lease in respect of land measuring 1187.10 sq.mtrs.
comprising of Gata No.69 & 130, Pargana & Tehsil Chail, District
Kaushambi (U.P.) be surrendered to the Petitioner and Petitioner be put
in actual and physical possession of land within the time frame to be
fixed by this Hon‟ble Court."
W.P(C) No.9213/2007
7. The petitioner no.1 in the aforesaid matter was appointed as a
dealer in respect of a filling station at Sadat, Ghazipur, Uttar Pradesh.
The retail outlet at Sadat, however, was re-sited to a place called
Chaktalvi, District Ghazipur, Uttar Pradesh in the year 1999. Thereafter,
the site at Sadat also became suitable for such an outlet on account of
improved connectivity and the land at Sadat was leased out by the
petitioner no.1 to BPCL for a period of thirty (30) years, vide lease deed
dated 3.1.2004. Pending appointment of a regular dealer at Sadat site,
BPCL, after considering as many as seven (7) dealers, awarded ad hoc
dealership on the aforesaid site to M/s Shiva Filling Station for a period
of one year commencing on 21.2.2004, on the basis of highest marks
obtained by the said dealer during the process of evaluation. The
apprehension of the petitioners is that the aforesaid outlet at Sadat will
be terminated by BPCL. Accordingly, they are claiming following
reliefs in this petition:
i) quashing the notification no.P-19011/9/2001-IOC dated
6.9.2006 qua the retail outlet/ petrol pump being run by the
petitioner at Sadat, Ghazipur, U.P.
ii) to restrain the respondent no.2/ oil company from
terminating/ cancelling, suspending the sales and supplies
of the retail outlet/ petrol pump being run by the petitioner
at Sadat, Ghazipur, U.P. on the basis of notification no.P-
19011/9/2001 - IOC dated 6.9.2006.
iii) If for any reason this Hon‟ble Court is of the opinion that
granting of above reliefs will not meet the ends of justice,
the respondent no.2/ oil company be directed that since the
object of taking the land on lease for allotment of retail
outlet for the petitioner or his nominee has been frustrated
the lease in respect of land ad measuring 1689.2 SQ.
MTRS, falling in Gata/ Khasra no.230, Khata/ Khatauni
no.141, situated at Village Mardapur, Pargana - Shadibad,
Tehsil Jakhania, District Ghazipur, U.P. be surrendered to
the petitioner and petitioner be put in actual and physical
possession of land within the time frame to be fixed by this
Hon‟ble Court.
8. The first question which arises for consideration in these cases is
as to whether the communication/decision dated 06.09.2006 sent by the
Government of India to the Oil Marketing Companies is liable to be
quashed or not. A perusal of the aforesaid notification would show that
in order to provide commercial freedom to the Public Sector Oil
Marketing Companies, the Government had decided that such
companies would formulate their own policies and procedures for
operating retail outlets where sites had been prepared and facilities
created or which had de-commissioned because of termination of
dealership on COCO/ad hoc basis till regular dealers were appointed,
but that could not be done on a uniform basis. Based upon the
discussion in a meeting held on 19.07.2006 and 25.07.2006, it was
decided to lay down certain broad parameters on the basis of which the
companies could finalized their guidelines for operation of COCO retail
outlets. To the extent it is relevant, the said communication, reads as
under:-
"(i) While the OMCs may operate permanent
COCO retail outlets (i.e. flagship ROs, Jubilee
Retail Outlets, Model Outlets, etc.) by their own
officers (without job contractors or ad-hoc
dealers), they should phase out the existing
temporary COCO retail outlets within a time frame
preferably within a year. However, in special
circumstances like court cases, complaints, etc.,
they may have to operate some ROs on temporary
COCO basis till final decision on those court
cases/complaints.
...
(vi) The phasing out of temporary COCO ROs
preferably within a year may be completed as
follows:
The temporary COCO ROs may first be offered
and handed over, subject to suitability, to the
pending Letter of Intent (LOI) holders under the
following categories in the other these are
indicated:-
(a) Special Scheme (Operation Vijay - Kargil)
the Kargil allottees.
(b) Discretionary quota scheme.
(c) Corpus Fund Scheme (SC/ST category of
dealerships, widows and women above 40 years of
age without earning parents).
(d) Other categories as prescribed in the
marketing plans.
(e) The industry may pool their available
temporary COCO ROs for offering to the
categories under (a) & (b) above. In case no LOI-
holder under these categories are available, then
these dealerships should be advertised for selection
of dealers under normal process.
(vii) The OMCs should stop job-contractorship or
ad-hoc dealership for operating the temporary
COCO ROs also. The system of ad hoc dealership
may be resorted to only in cases of dealerships
which have been terminated and where new
dealers are to be appointed. The period of ad hoc
dealership should not, in any case, be more than
four months as adhoc dealership violates the
multiple dealership norms. If the dealer cannot be
appointed within this period of four months, the
RO may be taken over by the OMC concerned and
operated as temporary COCO with the selection of
labour contractor by advertisement."
It would thus be seen that vide above-referred decision, the
Government decided to phase out the existing temporary COCOs by
handing them over to the pending Letters of Intent holders under certain
specified categories. It was further decided by the Government that the
Oil Marketing Companies should stop granting ad hoc dealership for
operating the temporary COCO retail outlets. I fail to understand how
the aforesaid policy of the Government can be said to be illegal,
arbitrary or irrational in any manner. The aforesaid policy, as such in
any manner, did not mandatorily affect leases already executed by the
Oil Marketing Companies nor did it have the effect of
withdrawing/cancelling the regular dealerships already granted by such
companies. It is primarily for the Government and the Oil Marketing
Companies to decide how they want to operate the Company Owned
Company Operated retail outlets and so long as the decision taken by
them does mandatorily affect any legal or contractual right of the
petitioners, they would have no locus standi to challenge such a
decision. The said decision did not mandate the OMCs to terminate a
valid and subsisting contract. As regards ad hoc dealership, no right
accrues to an ad hoc dealer to continue such dealership on a perpetual
basis and the Oil Marketing Company was entitled in law to terminate
such dealership at any point of time so long as such termination did not
affect an existing contractual obligation of the concerned Oil Marketing
Company. During the course of arguments, the petitioners failed to
show how the aforesaid decision of the Government can be said to be
arbitrary, illegal or irrational in any manner. Their contention was that
the said decision cannot be applied to their case. Even if that be so,
cannot be a ground to quash the decision itself. I, therefore, find no
merit in the challenge to the aforesaid decision of the Government. It
goes without saying that the aforesaid decision of the Government
cannot, in any manner, have the effect of terminating an existing
contract, if any, between the parties, during the subsistence of the said
agreement.
9. The thrust of the case of the petitioners is that the land owned by
them was leased out by them to BPCL at a concessional rate, pursuant to
a promise made by BPCL to grant regular dealership of the retail outlet,
to be commissioned on the leased land, to them. This is also their case
that BPCL had granted ad hoc dealership of the aforesaid outlet to them
or their nominees, till the time regular dealerships in their favour was
finalized. A similar plea came to be considered by the Hon‟ble Supreme
Court in Special Leave Petition No. 5849/2013 titled Mohd Zamal v.
Union of India and other connected matters, decided on 08.07.2013.
The appellants in the aforesaid cases were aspirants for dealership in
respect of retail outlets of Indian Oil Corporation and the IBP. The Oil
Marketing Companies had come out with the concept of Company-
Owned-Company-Operated (COCO) outlets as a means to enable them
to run and operate their own outlets, which were to be run as model
retail outlets. The land for these outlets were to be under the control of
the marketing company either by way of purchase or on long-term lease
basis and the outlets were to have facilities and amenities to be
developed by the dealers in line with the norms laid down by the oil
companies. It appears from the aforesaid judgment that the scheme
formulated by the Oil Company provided that dealership of Company-
Owned-Company-Operated (COCO) outlet would be first given to the
landlord of the land on which the outlet was situated subject to his being
found suitable for such dealership and in the event of his declining to
accept the dealership, it was to be offered to the Maintenance and
Handling Contractors (MHC). In the event of even the Maintenance and
Handling Contractors, declining to accept the dealership, the same was
to be offered to be best candidate available. The appellant before
Supreme Court Shri Mohd. Jamal applied for a retail outlet dealership
for his land in the category of land owners, pursuant to an
advertisement, issued by the oil company. He also submitted a
dealership form to the company and his land was found suitable for
developing a retail outlet. The company even sought prior approval for
his site from the Joint Chief Controller of Explosives and a
recommendation was then made for grant of dealership of the said outlet
to him. When the matter for grant of dealership to the appellant Mohd.
Jamal was at final stage, the policy, pursuant to which he had applied for
dealership, was suspended. The appellant also claimed that it was
mutually agreed that till the issuance of Letter of Intent as an interim
measure, his nominee would be appointed as a Maintenance and
Handling Contractor to run the petrol pump and based on such assurance
he offered his land on lease to the oil company and a contract for
Maintenance and Handling was also executed between the oil company
and his nominee, who was his brother. The monthly rent of the land
was initially fixed at Rs 27,000/- per month, which, according to the
Mohd. Jamal, was reduced to Rs 21,000/- on account of the above-
referred understanding between the parties. According to the appellant
before the Supreme Court, a circular dated 30.03.2005 was then issued
by the company, whereby the land owners of Jubilee Retail and COCO
outlets were disqualified from being appointed as dealers. This was
followed by a new policy dated 06.09.2006, whereby concept of
offering dealership to land owners was abandoned to their prejudice at
the time when Letters of Intent for dealership were pending, despite the
fact that their land had been taken on long-term lease. By virtue of the
new policy, oil company proposed to run outlets on their own and/or
through Labour Contractors.
The appellant first filed a writ petition before this Court seeking
quashing of the aforesaid notification dated 06.09.2006 and also to
restrain the respondents from terminating/canceling the arrangement
with respect to running of the retail outlet on his land through his
nominee. The alternative relief sought by him was the return of his land,
if dealership was not granted to him. A learned Single Judge of this
Court referred a bunch of these writ petitions involving similar issue to a
Division Bench which, while retaining 11 writ petitions, which in view
of the Division Bench, required further consideration since they
projected an implied promise and/or understanding between the land
owners and the oil companies having regard to the low lease rentals,
dismissed the remaining writ petitions. The decision of the Division
Bench is reported as IBP Company Limited versus Nand Kishore Bajpai
and others [147 (2006) DLT 764(DB). Being aggrieved from the
aforesaid order of the Division Bench, dismissing his writ petition, Shri
Mohd.Jamal, approached the Apex Court by way of Special Leave
Petition No. 5849/2008. The following were the primary contentions
raised by the appellant before the Supreme Court:
(a) having acted on the basis of a policy by which the Respondent Oil
Companies had offered full dealership to land owners and having
caused such land owners to alter their position to their disadvantage,
the Oil Companies were now estopped from going back on their
promise;
(b) the decision to discontinue the grant of dealership and to introduce
the new concept of COCO outlets, to be run by the Maintenance and
Handling contractors, could not be used to the disadvantage of those
land owners in whose favour a decision had already been taken to issue
Letters of Intent for grant of dealership;
(c) these cases were clearly covered by the doctrine of promissory
estoppel, inasmuch as, in these cases the land owners had altered their
positions to their detriment in several ways;
(d) in most cases the rates of rents at which the lands were offered to the
Oil Companies were extremely low and did not reflect the market rental
of such lands, which is one of the indications that a promise had been
made to the land owners that they would be granted dealerships in
respect of the said lands, which was in tune with the policy, which had
been declared by the Oil Companies earlier;
(e) the landlords had invested large sums of money, as in the case of
Mohd. Jamal, in preparing the land offered for operating the retail
outlets of petroleum and petroleum products, ostensibly on the
promise that they would be granted dealership for running the said
outlets.
(f) In certain other cases, the land owners had been persuaded to
enter into long term lease agreements, again at nominal rents, on the
assurance that their nominees would be appointed as Maintenance and
Handling Contractors of the different COCO units, pending the decision
to grant full dealership in respect of such retail outlets, in keeping with
the earlier policy of reducing the number of COCO units and retaining a
few to be run by the Oil Companies as model outlets.
The counsel for some of the appellants before the Hon‟ble
Supreme Court, inter alia, contended (a) the lease deeds executed by the
land owners and the Maintenance and Handling Contracts were kept
separate, since it was the intention of the Oil Companies that in terms
of the policy of the Indian Oil Corporation dated 23.7.2003, despite
the two contracts being separate, as and when the Policy permitted,
dealership would be awarded to the land owners or their nominees. It
was, however, pointed out that in all the cases it had been decided to
grant Maintenance and Handling Contracts to nominees of the land
owners to enable them to run the retail outlets till a final decision was
taken in the matter; (b) the very fact that in the Policy of the Indian Oil
Corporation dated 23.7.2003, the Company had specifically
permitted the land owners to nominate anyone from the family or from
outside the family for being appointed as the Maintenance and
Handling Contractor, was sufficient indication that it was the intention
of the Respondents to grant permanent dealership to the land owners
once a clarification had been received in the matter.
Some of the appellants also urged before the Apex Court that the
lease deed executed between the parties did not represent the totality of
the matter, but were only the part of the transaction.
The learned Attorney General, who appears for the respondent,
however, submitted that once an agreement is entered into, the parties
are bound to the terms of the said agreement which extinguishes any
claim of promissory estoppel, which may have arisen prior to the
signing of the Agreement.
Rejecting the appeals, the Apex Court, inter alia, observed and
held as under:-
"56. Upon deregularisation of the distribution of
petroleum products, the Oil Companies issued
guidelines dealing with the procedure for
locations outside the marketing plans. It was also
stipulated that for the purpose of selection, the
dealerships would be categorised as indicated
in the guidelines and all retail outlets would be
developed only on A/C sites basis, which finds
place in Clause (2) of the guidelines.
57. The said guidelines referred to grant of
dealership which is completely different from the
grant of long-term leases by the land owners to
the Oil Companies upon the condition that the
same could be used by the lessees in any way
they liked, which included the right to sublet
the demised plot. The concept of Company
Owned and Company Operated outlets was
sought to be introduced on 6.9.2003, in
supersession of Policy No.MDPM- 319/02 dated
8.10.2002 and the two cannot be co-related unless
a link can be established by the Appellants that
they had entered into the lease agreements with
the Oil Companies upon the understanding that
once the earlier policy was restored, the land
owners would be given the option of having the
COCO units converted into regular retail outlets.
58. In order to appreciate the difference between
the two concepts, it has to be understood that the
concept of a dealership in respect of a retail
outlet is completely alien to the concept of a
COCO unit. While the former deals with the right
of the dealer to independently operate the retail
outlet, in the case of a COCO unit, the entire set up
of the retail outlet is owned by the Oil
Companies and only the day-to-day operation
thereof is outsourced to a M&H Contractor. With
the discontinuance of the earlier policy of
granting dealerships in respect of retail outlets and
the introduction of a new policy awarding M&H
Contracts in respect of the COCO outlets, in our
view, the land owners who had entered into
fresh lease agreements after the policy to grant
dealerships had been suspended, cannot now
claim any right on the basis of the earlier policy in
the absence of any Letter of Intent having been
issued thereunder. Had any Letter of Intent,
which tantamounts to grant of dealership, been
issued and then in respect of the same lands
COCO units were established, the situation would
have been different. Placed in such a position,
the land owners cannot claim any relief in these
proceedings and, if any loss or damages have been
suffered by them on account of the assurance
earlier given regarding grant of dealership,
particularly in making the sites ready therefor, the
remedy of such applicants would lie elsewhere.
59. We are inclined to hold that the doctrine of
promissory estoppel and legitimate expectation,
as canvassed on behalf of the Appellants and the
Petitioners, cannot be made applicable to these
cases where the leases have been granted by the
land owners on definite terms and conditions,
without any indication that the same were
being entered into on a mutual understanding
between the parties that these would be
temporary arrangements, till the earlier policy was
restored and the claim of the land owners for
grant of dealership could be considered afresh.
On the other hand, although, the nominees of the
lessors were almost in all cases appointed as the
M&H Contractors, that in itself cannot, in our
view, convert any claim of the land owner for
grant of a permanent dealership. As has been
indicated hereinbefore, even the M&H Contractor
had to submit an affidavit to the effect that he did
not have and would not have any claim to the
dealership of the retail outlet and that he would
not also obstruct the making over possession of
the retail outlet to the Oil Company, as and
when called upon to do so."
I propose to deal with each writ petition in the light of the view
taken by the Apex Court in the above referred case and the facts and
circumstances in each petition.
W.P(C) No.4963/2007
10. The lease in this case was executed on 23.09.2003. The lease rent
fixed at that time was Rs 1450/- per month, which was enhanced by
15% after every five years. There is absolutely no indication in the
lease deed that while taking the land of the petitioner on lease, the
respondent had assured the lessor that the retail outlet to be
commissioned on the lease land would be allotted only to him or to his
nominee. Initially, one Shanti Filling Station was appointed as ad hoc
dealer to run the aforesaid outlet for a period of one year, which could
be extended subject to approval of the respondent. Though the
petitioner claims that Shanti Filling Station was his nominee, the said
claim has been denied by the respondent and there is absolutely no
material on record which it may be inferred that the ad hoc dealership to
Shanti Filling Station was awarded as a nominee of the petitioner.
There is no document on record to indicate that before taking the land of
the petitioner on lease, BPCL had given an assurance to award
dealership only to her or her nominee. Since the dealership awarded to
Shanti Filling Station was only an ad hoc dealership which, in terms of
the clause 21 of the Allotment Letter, could be terminated at any time,
without assigning any reason, the respondent BPCL was competent in
law to terminate the said ad hoc dealership. In fact, it was clearly stated
in the Allotment Letter that BPCL was in the process of finalizing
regular dealership for the location in question and it was pending such
finalization that Shanti Filling Station was being appointed purely on
temporary basis and such licence shall not create any right, title or
interest in its favour in the aforesaid retail outlet nor shall it have any
right to have the dealership of the said retail outlet in due course. Had
the dealership granted to Shanti Filling Station been a regular
dealership, the aforesaid dealer could have been justified in contending
that his dealership cannot be terminated on account of the policy
decision contained in the communication dated 06.09.2006 sent by the
Government of India to the Oil Marketing Companies, but, an ad hoc
dealership could be terminated at any point of time and on any ground,
including the policy decision contained in the communication dated
06.09.2006. In any case, M/s Shanti Filling Station has not come to this
Court expressing any grievance against the respondent, and the
petitioner, who is neither the proprietor nor a partner in Shanti Filling
Station, has no locus standi to file a writ petition against cancellation of
ad hoc dealership awarded to the said firm. I, therefore, find no merit in
the aforesaid writ petition.
W.P.(C) No. 8785/2007
11. The lease in this case was executed on 09.07.2003 and the lease
rent was fixed at Rs 5000/- per month which was to be revised by 10%
after every five years. The lease deed contains no assurance that the
dealership of the outlet, which was to be commissioned on the leased
land, would be only given to the lessor or his nominee. There is no
material before the Court to find out what was the prevailing rental
value at the time the aforesaid lease deed was executed.
In fact, a Writ Court cannot go into a question of this nature
unless the respondent admits that the lease rental prevailing in the
market at the time the aforesaid lease rent was higher than the lease rent
fixed by way of the said lease deed.
The M/s Partapgarh Auto Stores was appointed as ad hoc dealer
to run the retail outlet on the aforesaid land for a period of one year
commencing on 28.03.2003. There is no material on record to show that
M/s Partapgarh Auto Stores was a nominee of the petitioner before this
Court. In fact, even the petitioners do not claim that M/s Partapgarh
Auto Stores was his nominee for the purpose of award of ad hoc
dealership. After expiry of the ad hoc dealership between M/s
Partapgarh Auto Stores and the respondent BPCL, the ad hoc dealership
in respect of the aforesaid outlet was awarded to Speed Motors in which
son of the petitioner No. 1 was a partner. Though the case of the
petitioners is that allotment of ad hoc dealership to Speed Motor was on
account of Speed Motors being his nominee, there is no material on
record to substantiate this claim of the petitioners. The case of the
respondents, on the other hand, is that in the course of evaluation, for
grant of ad hoc dealership, Speed Motors had obtained highest marks,
which resulted in awarding of the ad hoc dealership to it. A perusal of
the Allotment Letter dated 31.07.2004, issued to Speed Motors, would
show that it was appointed as ad hoc dealer till finalization of regular
dealership on the aforesaid outlet. This Allotment Letter also contained
terms and conditions similar to the terms and conditions contained in
W.P.(C) No. 4963/2007 and, therefore, the aforesaid ad hoc dealership
could be terminated at any time, in exercise of the powers preserved by
BPCL under clause 21 of the Allotment Letter. In any case, Speed
Motors has not come to this Court expressing apprehension of
cancellation of its ad hoc dealership and the petitioners, neither of whom
is even a partner in the said firm has any locus standi to seek an order
against cancellation of ad hoc dealership awarded to Speed Motors. I,
therefore, find no merit in the aforesaid writ petition.
W.P.(C) No. 8920/2007
12. The lease deed in this case was executed on 14.10.2003 and the
lease rent was fixed at Rs 6000/- PM, which was subject to enhancement
by 15% after every five years. This lease deed also contains no
obligation on the part of the lessee to award dealership of the outlet, to
be commissioned on the lease land, only to the lessor or his nominee.
Ad hoc dealership of the outlet on the aforesaid land was initially
awarded to M/s Baghrai Automobiles and in terms of clause 21 of the
Allotment Letter, it was competent for BPCL to terminate the grant at
any time, without assigning any reason. Therefore, the respondent was
entitled in law to terminate the aforesaid dealership on account of the
policy decision taken by the Government and conveyed to the Oil
Marketing companies vide letter dated 06.09.2006. Petitioner‟s
contention is that it is he, who is running the aforesaid outlet in the name
of M/s Baghrai Automobiles, though the writ petition does not disclose
as to who is the proprietor of M/s Baghrai Automobiles and what
connection the petitioner has with the aforesaid firm. Moreover, as
stated in the counter-affidavit of BPCL, it had listed as many as four
outlets, including M/s Baghrai Automobiles for award of the aforesaid
dealership and since highest marks were obtained by M/s Baghrai
Automobiles, the ad hoc dealership was awarded to it for a period of one
year commencing 31.03.2004. Be that as it may, since neither the lease
deed carried any obligation on the part of the lessee to award dealership
of the aforesaid outlet only to the lessor or his nominee there is no
material to show that the lease rent agreed with BPCL was substantially
lower than the prevailing rent in the market and there is no document on
record, which would indicate any promise on the part of BPCL, to
award dealership of the aforesaid outlet only to the petitioner or his
nominee and the dealership awarded to M/s Baghrai Automobiles was
only on ad hoc basis, which could be terminated at any time, the
petitioner can have no grievance even if the aforesaid ad hoc dealership
is terminated on account of the policy decision taken by the
Government.
W.P.(C) No. 8786/2007
13. The lease in this case was executed on 20.02.2003 and the lease
rent was fixed at Rs 2000/- PM, which was subject to enhancement by
25% after every five years. This lease deed also contains no obligation
on the part of the lessee to award dealership of the outlet, to be
commissioned on the lease land, only to the lessor or his nominee. It
has come in the counter-affidavit of respondent-BPCL that the only
reason for awarding the aforesaid outlet to M/s Janta & Company in
which the petitioner claims to be a partner, was the highest marks
obtained by the said firm during the process of evaluation. Since there
is no document, evidencing any promise or assurance by BPCL to the
petitioner to award dealership of the lease land only to him or his
nominee or that the lease rent was substantially lower than the lease
rentals prevailing in the market at the relevant time, ad hoc dealership
awarded to M/s Janta & Company could in terms of the Allotment
Letter could be terminated at any point of time, without assigning any
reason, the respondent BPCL is entitled in law to terminate the aforesaid
ad hoc dealership in view of the policy decision taken in the letter dated
06.09.2006.
W.P.(C) No. 9213/2007
14. The petitioner in this case was initially appointed as MS/HSD
Dealer in respect of filling station at Sadat with effect from 07.03.1994
for a period of 15 years. Admittedly, the aforesaid outlet at Sadet was
re-sited to Chaktalvi in District Ghazipur of U.P. The site at Sadat
remained closed from 1999 to 2004. Since the aforesaid site at Sadat
thereafter became suitable for retail outlet on account of improvement in
connectivity, the aforesaid land was leased out to BPCL vide lease deed
dated 03.01.2004. Vide Allotment Letter vide 21.02.2004, an ad hoc
dealership to run a retail outlet at Sadat was awarded to M/s Shiva
Filling Station. The aforesaid appointment as in other cases carried a
stipulation permitting BPCL to terminate the grant at any point of time,
without assigning any reason. A perusal of the counter-affidavit would
show that pending appointment of regular dealer at Sadat site, the
company considered as many as seven dealers for award of ad hoc
dealership and decided to award the same to Shiva Filling Station for a
period of one year. The lease deed executed on 03.01.2004, stipulated
rent of Rs 6000/- per month which was subject to enhancement by 15%
after five years. This lease deed contains no obligation on the part of the
lessee to award dealership for the outlet to be open on the said land only
to the lessor or his nominee. There is no document on record which
would show that any promise or assurance was given by BPCL to the
petitioner that the retail outlet on the lease land would be awarded only
to him or his nominee. There is no material to show that the agreed
lease rent was lower than the prevailing rent. Therefore, in exercise of
the powers conferred upon it under the terms of the Allotment Letter,
the respondent was competent to determine the ad hoc dealership at any
point of time, without assigning any reason. The petitioner, therefore,
can have no grievance even if the aforesaid ad hoc dealership is
terminated in view of the policy decision contained in the letter dated
06.09.2006.
A perusal of the counter-affidavit would show that the respondent
considered the number of existing dealers in the vicinity, namely, M/s
Dophin Service Centre, M/s Shiva Filling Station, M/s Sriranjan Service
Station, m/s Jamania Service Station, M/s Bharat Auto Centre, M/s
Bhrigunath filling Station and M/s Tiwari Filling Station for allotment
of ad hoc dealership at Sadat site and since Shiva Filling Station secured
highest marks from the aforesaid evaluation, the dealership was awarded
to it initially for a period of one year.
Admittedly, the petitioner continues to operate the regular
dealership, which was initially granted at Sadat, but was re-sited at
Chaktalvi in District Ghazipur. As pointed out in the counter-affidavit,
the multiple dealership norms contained in instructions dated
19.08.2003, issued by Government of India stipulate award of only one
dealership to one family unit consisting of any individual, his/her spouse
and his/her unmarried sons and daughters. The aforesaid norms dated
19.08.2003 stipulate that a person desirous of applying dealership
should not be having either Letter of Intent or dealership/distributorship
of MS/HSD/SKO/LDO/LPG of any Oil Company in his/her own name
or in the name of his/her family members. A copy of the said
instructions dated 19.08.2003 has been filed as Annexure R-6 to the
counter-affidavit of respondent. The respondent has placed on record
the detailed assessment sheet which shows the marks obtained by each
dealer who was interviewed for allotment of ad hoc dealership at Sadat
and this document fortifies the case of the respondent that grant of ad
hoc dealership at Sadat had nothing to do with the lease of the land. I,
therefore, find no merit in this petition.
W.P.(C) No. 9148/2007
15. The petitioner in this case has not placed on record any copy of
the lease alleged to have been executed by him on 27.02.2003. This is
not the case of the petitioner that the aforesaid lease deed contained a
stipulation, requiring the lessee to allot the retail outlet to be
commissioned on the lease land only to the lessor or his nominee. There
is no document on record which would show that any promise or
assurance was given by the respondent to the petitioner that the
dealership of the retail outlet on the aforesaid land would be awarded to
him or his nominee. In the absence of the lease deed, the Court is
not in a position to know what exactly were the terms agreed between
the parties. The petitioner has not filed even the letter, whereby the
dealership was allotted to him on ad hoc basis. Therefore, it is not
possible to know what exactly were the terms and conditions on which
allotment was made to the petitioner on ad hoc basis. In case the
allotment letter carried the terms and conditions identical to the terms
and conditions contained in the Allotment Letters issued by BPCL in
other cases, the respondent would be justified in determining the ad hoc
dealership at any point of time, without assigning any reason.
It is stated in the list of dates filed by the petitioner that in a
meeting held on 18.09.2013, it has been agreed between the parties that
the leased land could be bought back by the petitioner for a
consideration of Rs 15 lakh and the petitioner has agreed to pay the
aforesaid amount to the respondent. If that be so, it is open to the
petitioner to execute the aforesaid agreement by paying Rs 15 lakhs to
the respondent and simultaneously cancel the lease deed granted by him
in favour of BPCL.
16. The learned counsel for some of the petitioners referring to some
internal notes of BPCL contended that in terms of the policy as
dealership in the aforesaid note, the dealership of the outlet
commissioned on the leased land is to be granted only to the land
owners/ lessors or their nominees.
The first note dated 6.5.2003 which was submitted to GM
(Retail), inter alia reads as under:
"We are pleased to advise that the Committee of
Functional Directors in its meeting held on
11.4.2003 has approved the proposal for linking
landlords and dealerships for a few select sites in
our proposed network of new ROs.
Quote:
Shri S. Krishnamurti, ED (Retail) and Shri P.
Ghosh, G.M (Retail), HQ, who were invited,
explained. The Committee discussed the pros and
cons of award of dealerships to landlords as
indicated in the agenda note dated 25.3.2003 and
approved the proposal for appointment of
landlords as dealers in the event it is decided not to
operate the ROs as per the policy as explained in
the said Agenda Note, with the following
directions:
A. Such appointment should be made in
exceptional cases without diluting the existing
guidelines. Only land offered in response to our
advertisement for procurement of land should
be considered with proper justification,
competitive advantage of the site and financial
viability of the investment.
B. Maximum dealership to be awarded under the
Scheme should not exceed 100 in number for
2003-2004. While the ED (Retail) is authorized
to approve all such appointments, he may
allocate certain numbers to each Regional GMs
who should submit the proposals to ED (Retail)
with proper justifications.
C. Any provisional commitment to the landlords
for dealership should be subject to their
fulfilling the criteria for appointment of dealers
and strict adherence to the existing guidelines
in this regard.
D. The policy shall be reviewed after six months
and in any case immediately when the
dealership selection guidelines are approved by
the MOP&NG.
Unquote:
1. CFD while approving the scheme, suggested
that we must have a fully transparent system
to establish that all our efforts have been
made to locate suitable land before linking
the issue of landlords and dealerships. In
other words, prior to taking over the land
linked to dealership condition, it has to be
ensured that no other suitable land is
available in the market to set up a retail
outlet and the only recourse left is to agree
to the landlord‟s condition for dealership in
the event of company not operating to RO
and COCO basis. Further, only land offered
in response to our advertisement should be
considered with proper justification of
competitive advantage of the site and
financial viability of the investment.
2. CFD also suggested that such sites should be
very high potential locations.
3. Identification of sites:
a) Identification of sites would be through
Press Advertisements.
b) The guidelines in regard to procurement
of such sites are given below:
(i) The site selection committee
comprising of the Territory Manager,
Engineering Officer, Sales Officer
and the Manager RNF & RE of the
region will evaluate the sites offered
to BPCL on the basis of site visits and
evaluation criteria given below.
However, before assessing the same it
must be ensured that the title deeds of
the property are in order.
A perusal of the note dated 16.6.2003, submitted to GM (Retail)
would show that the salient features of the scheme were to be as under:
"There should be no other suitable site available in the
trading area under consideration except the one offered by
the land lord linking the offer to the dealership.
It should be a good site and also meeting the GAV/IRR
norms and also the volume criteria specified under this
scheme.
Each case has to be justified from all the above angles and
has to be put up only after exhausting all the normal
options to commission an outlet in the market has been
evaluated.
In this regard, we summarize below the steps to be
followed in this regard.
Site selection:
All the steps detailed in the site selection procedure
advised to you (copy enclosed for ready reference) has
to be strictly adhered to.
The following additional steps has to be followed
under technical evaluation.
a) Ensure that the selected site meets the volume
criteria laid down for this process.
b) Reject any dealership linked landlord proposal if
we have proposals without dealership linked
available after short list.
c) If all the offers are dealership linked, then go ahead
with the commercial evaluation process as
explained in the site selection process mentioned
above.
Dealer-landlord:
a) Issue the letter to the proposed dealer landlord in
the enclosed format expressing the willingness to
take the land on long term lease. It has to be very
clearly explained to the landlord that the offer of
dealership would be made by BPCL. ONLY if the
eligibility criteria as applicable for selection of
dealers at that point of time is met.
b) Carry out negotiations for land rentals at the
appropriate level Committee in accordance with the
laid down procedure.
c) After taking the land on lease make arrangements to
run the same on COCO basis till our dealer
selection policy is approved by the appropriate
authority.
d) For appointing the COCO operator, the extent
policy will apply.
e) Once the dealer selection policy is in place and if
we decide not to run the subject retail outlet on
COCO basis, the offer of dealership to the landlord
of the Retail outlet will be made subject to meeting
all the eligibility criteria specified in the selection
policy.
f) If the land lord meets all the eligibility criteria as
per the policy, the landlord will be offered the
dealership of the subject retail outlet without any
further formalities like interview etc.
The note dated 4.11.2003 submitted to ED(Retail), inter alia,
reads as under:
"Board approval has been subsequently obtained for
selection of dealers for retail outlets and SKO
dealership as advised by Company Secretary vide
letter SEC. 1.1.8/2003 dated 19.9.2003 and the same
has been circulated to the Regions vide note GM (R)
Policy. On dated 3.10.2003. The Board approval inter
alai provides for linking land lords with dealerships
for a few select sites without following the
advertisement route and is in line with the earlier CFD
approval.
The guidelines for award of such dealerships
conveyed vide our note of even reference dated
6.5.2003 and 16.6.2003 is explained below with
certain updations, post Board approval:
A. The Regions have to first decide on whether to
operate ROs on the land offered as COCO or not.
In case, it is decided to operate the ROs by dealers;
the guidelines will be as under:
B. Such appointments should be made in exceptional
cases without diluting the existing guidelines. Only
land offered in response to our advertisement for
procurement of land should be considered with
proper justification of competitive advantage of the
site and financial viability of the investment.
C. It must be made clear to the landlords who are
offering sites to BPCL that the same will be linked
with a Dealership offer only in case where the sites
are found suitable. The lease of the site should be
preferably for a minimum period of 30 years and
the rentals offered should be lower than the GAV.
Any deviations must be clearly justified in the
proposal submitted by the Regions to ED (Retails).
D. All proposals should be accompanied by the site
selection committee recommendations and
approved by GM of the Region. In this regard,
kindly refer to our letters mentioned at para 1
above. All proposals must be evaluated on the
basis of strategic importance of the site, sales
expected currently as well as the future potential.
At RSHQ this aspect will be accorded high
importance and proposals with sites having low/
nil future potential will not be considered.
Proposals must also be supported by the Divya
Drishti report.
E. All landlords offering the sites for dealership must
meet the minimum eligibility criteria laid down in
the Dealership Selection Guidelines of nationality,
age, educational qualifications. The prospective
candidates must not have any disqualification
criteria like multiple dealership norms, conviction,
signatory of terminated dealership/ distributorship
on account of adulteration/ malpractice paralyzed
or mentally unsound. The evaluation in this regard
will be completed by the Territory team of two
officials. If the landlord fails to meet the eligibility
criteria as above, the location will be advertised for
appointment of a regular dealer.
F. The candidates offering land will be interviewed
by a team of three officials nominated by the
Regional GM. The Chairperson of the interview
Board will be DGM (Retail) of the Region and the
members will comprise of two minimum group
"F" officials, one being from another SBU. The
individual Board members will award a maximum
of 65 marks each and the aggregate score will
represent the final performance of the candidate.
Candidate securing more than 60% marks i.e. 69%
of 65 marks will be eligible for appointment of
dealer for the particular site offered by him.
The parameters for evaluation are given below:
Capability to provide finance - 25 marks
Educational qualification &
General Level of intelligence - 15 marks
Capability to generate
Business - 10 marks
Age - 4 marks
Experience - 4 marks
Business ability/acumen - 5 marks
Personality - 2 marks
Total - 65 marks
(For further necessary details on parameters kindly
refer to the selection Policy approved by the Board
and available with you).
G. On completion of the above exercise the proposals
will be submitted to ED (Retail) by the Regions for
his concurrence and on receipt of approval from
ED (Retail) to the proposals, the appointment letter
of Dealership to the landlord can be issued by the
Region after completion of all the formalities like
payment of security deposit, submission of
affidavit, signing of DPSL etc.
11. In case the landlord fails to score the minimum
marks of 39 (65x60%=39) with regard to the
evaluation criteria then the location will be advertised
for appointment of a regular dealers. The final
recommendation to be approved by the Regional
General Manager."
17. There is absolutely no material on record to show that the
petitioners had applied for allotment of a retail outlet and had leased out
their respective lands pursuant to the aforesaid Land-Linked Policy
contained in the guidelines dated 6.5.2003, 16.6.2003 and 4.11.2003. In
fact, the petitioners had responded to an advertisement published by
BPCL on 18.1.2003 which did not and could not have any reference to
the Land-Linked Policy which came into existence at a much later date.
Therefore, no benefit of the aforesaid Land-Linked Policy can be
claimed by the petitioners. Even otherwise, there is no material on
record to establish that the land of the petitioners was taken on lease
pursuant to the Land-Linked Policy as stated in the above referred
notings. There is no evidence of the petitioners having leased out their
land to BPCL pursuant to the above referred Land-Linked Policy. There
is no material on record to show that the petitioners complied with the
requirement of the aforesaid policy and their applications were
processed in terms of the said policy. As recorded in the noting dated
6.5.2003, the dealership to the landlords was to be awarded only in
certain contingencies and such appointment was to be made only in
exceptional cases. Had the petitioners applied in terms of the Land-
Linked Policy, their applications would have been examined and
scrutinized in terms of the norms laid down in the said policy, as
amended from time to time. For instance, before taking over the Land-
linked to dealership conditions, it was to be ensured that no other
suitable land was available in the market to set up a retail outlet and the
only recourse left was to agree to the landlord‟s condition for dealership
in the event of company not operating the RO on COCO basis.
Moreover, the land offered in terms of the aforesaid policy was to be
considered with proper justification of the competitive advantage of the
site and financial viability of the investment, identification of the site
was to be done through press advertisements. The dealership from
landlord was to be considered only in the locations which were likely to
generate minimum 200 KL-MS or combined 500 KL - MA/HSD per
month. The proposals for such dealership were required to clearly
establish that no other site was available and the Land-Linked Policy
was the only recourse left to set up an outlet in that market. The
guidelines also envisaged rejection of any dealership linked landlords
proposals if BPCL had proposal without dealership linked land available
after shortlist. If all the offers were dealership linked then BPCL was to
go ahead with the commercial evaluation process. The guidelines also
envisaged interviews of the candidates offering land by a team of three
officials. Since the petitioners before this Court did not submit
applications in terms of the Land-Linked Policy nor were their proposals
considered in terms thereof, no benefit of the said policy can be claimed
by them. It would be pertinent to note that neither the lease deed nor the
letter awarding ad hoc dealership has any reference to the Land-Linked
Policy of the respondents.
In IBP Company Limited (supra), the Division Bench took the
view that there could be no vested or accrued right to any of the
petitioners to be allotted with the dealership licence with any retail
outlet on the basis of their holding a lease deed unless there was an
agreement and a lease deed was entered into with the said stipulation.
The same happens to be the position in the petition before this Court. In
none of the petitions, the lease deed contain a stipulation requiring the
lessee to award dealership of the outlet to the lessor nor is there any
independent contract to this effect between the petitioners and BPCL.
The Division bench rejected the contention that the petitioners had a
vested right to be allotted dealership of the petrol pumps that were to be
operated out of the lands that were given on lease. It was noted that the
lease deed had no expressed or implied promise to this effect. The
decision of the Divison Bench was upheld by the Hon‟ble Supreme
Court. The same is the position obtaining in the cases before this Court.
As noted by the Division Bench what was sought to be created by
executing the lease deed was a joural relationship of landlord and tenant
and there was no assurance at any point of time to any of the land
owners or any licensee of creating any dealership. That exactly happens
to be the position in the cases before this Court and, therefore, as held
by the Division Bench the rights and duties of the land owners and the
oil companies would be governed by the lease deed executed between
the parties, which give no right to the lessor to claim dealership in their
favour. A perusal of the advertisement dated 17.1.2003 would show that
it was an advertisement only for sale/ lease of the lands and contained
no promise to award dealership to the land owners.
18. During the course of arguments, the learned counsel for the
respondents vehemently contended that since the head office of BPCL is
not situated in Delhi and no transaction between the parties took place in
Delhi, this Court has no territorial jurisdiction to entertain the writ
petitions. It was also pointed out that all the communications with
respect to ad hoc dealership were issued from the office of BPCL
outside Delhi and the lease deeds were executed in places other than
Delhi. This was also the contention of the learned counsel for BPCL that
the petitioners are unreasonably challenging the communication/
decision of the Government dated 6.9.2006 only with a view to create
jurisdiction of this Court. However, considering that even otherwise the
writ petitions have no merit, I need not take a view on the aforesaid plea
taken by the respondent - BPCL.
19. For the reasons stated hereinabove, I find no merit in the writ
petitions and the same are hereby dismissed. Interim order, if any, stand
vacated. There shall be no orders as to costs.
V.K.JAIN, J
OCTOBER 30, 2013
rd/bg/ b'nesh
