Jharkhand High Court
Kavita Devi vs Indian Oil Corporation Limited on 28 October, 2021
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No.3787 of 2019
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Kavita Devi .......... Petitioner.
-Versus-
1. Indian Oil Corporation Limited, having its registered office at G-9,
Ali Yavar Jung Marg, Bandra, Mumbai-400051.
2. Chief Area Manager, Ranchi Area Office, Indian Oil Corporation
Limited (Marketing Division), Eastern Region, Indane Area Office,
Line Tank Road, Ranchi.
3. Senior Area Manager, Indian Oil Corporation Limited (Marketing
Division), Eastern Region, Indane Area Office, Line Tank Road,
Ranchi.
4. Sri Kundan Kumar
.......... Respondents.
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CORAM : HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioner : Mr. A. K. Sinha, Sr. Advocate
Mr. Raunak Sahay, Advocate
For Respondent Nos.1 to 3:Mr. Ajit Kumar, Sr. Advocate
Mr. Rahul Lamba, Advocate
For Respondent No.4: Mr. M. S. Mittal, Sr. Advocate
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Order No.11 Date: 28.10.2021
1. The present writ petition has been filed for quashing letter dated
15.07.2019 issued by the Chief Area Manager, Ranchi Area Office,
Indian Oil Corporation Limited (Marketing Division), Eastern Region,
Ranchi-respondent no.2, whereby the candidature of the petitioner for
LPG distributorship has been rejected and security amount of
Rs.40,000/- deposited by her with the respondent authorities has been
forfeited. Further prayer has been made for issuance of direction upon
the respondent authorities not to allot LPG Distributorship to any
person pursuant to advertisement dated 13.08.2017 and further to
reconsider the claim of the petitioner for LPG distributorship at the
advertised location.
2. The factual matrix of the case as stated in the writ petition is that the
respondent-Indian Oil Corporation published an advertisement on
13.08.2017 in the local daily newspaper, namely, "Prabhat Khabar
(Ranchi Edition)" for Gramin distributorship of LPG under open
category for the location "Parho", Gram Panchayat- Parho, Block
Domchanch, District Koderma. The petitioner submitted her
application in the prescribed format on 12.10.2017 and was declared
successful in the draw of lots held on 27.12.2017. Thereafter, vide
letter dated 28.12.2017 the petitioner was directed to submit the
required documents along with bank draft of Rs.40,000/- within seven
working days. The respondent no.3 vide letter dated 05.02.2018 also
advised the petitioner to submit documents, such as map for both the
lands offered for godown as well as showroom, indicating the
dimension and duly filled format P1A & P1B. Pursuant to the said
direction, the petitioner deposited security amount of Rs.40,000/- as
well as the required documents including deed of lease executed on
14.09.2017 and registered on 15.09.2017. The respondent no2 vide
letter dated 04.10.2018 (served to the petitioner on 08.10.2018)
informed the petitioner that her candidature had been rejected on the
ground that as per Clause 8 of the lease deed, the same would be
effective only after start of construction of the godown, which vitiated
the eligibility criteria of minimum 15 years of valid lease period
commencing on any day from the date of advertisement till the last
date of submission of application as specified either in the
advertisement or corrigendum (if any) and the Corporation had also
decided to forfeit an amount of Rs.40,000/- as per the terms and
conditions of the advertisement. Thereafter, the respondent-IOCL
published another advertisement for the same location and the date of
lottery was fixed as 11.10.2018 for deciding the distributorship of LPG
for which the claim of the petitioner had already been rejected vide
order dated 04.10.2018. The petitioner also submitted application
dated 08.10.2018 before the respondent no.3, requesting inter alia to
reconsider her claim for LPG distributorship in respect of the advertised
location, however, no action was taken on the petitioner's application.
Aggrieved thereby, the petitioner moved this Court by filing a writ
petition being W.P.(C) No.5277 of 2018, which was disposed of vide
order dated 10.12.2018, directing the respondent no.2 to take a fresh
decision in this regard after providing due opportunity of hearing to
the representative of the petitioner. Thereafter, the petitioner
submitted her representation before the respondent no.2, however,
the same was rejected vide impugned letter dated 15.07.2019 and the
security amount of Rs.40,000/- deposited by her with the respondent-
IOCL was also forfeited. Hence, the present writ petition.
3. Learned senior counsel for the petitioner submits that vide order dated
10.12.2018 passed in W.P.(C) No.5277 of 2018, the respondent no.2
was directed to take a fresh decision, but the said respondent has
passed the same order, which was earlier passed on 04.10.2018 and
no fresh decision has been taken by the said respondent. The
candidature of the petitioner has been rejected straightaway forfeiting
the security amount of Rs.40,000/- deposited by her with the
respondent-IOCL. Several clauses of the registered deed of lease
suggest that the same is in conformity with the terms and conditions
of the advertisement, but the authorities of the respondent-IOCL have
not at all applied their mind. The lease deed was executed on
14.09.2017 and got registered on 15.09.2017 following all the
requirements, which were mentioned in the brochure on Unified
Guidelines for Selection of LPG Distributors-2017 (hereinafter referred
as the 'said guidelines'). It is further submitted that while passing the
impugned order dated 15.07.2019, the respondent no.2 has neither
issued any show cause notice to the petitioner nor has assigned any
reason. It is also submitted that there was no condition in the
advertisement dated 13.08.2017 to forfeit the security amount of
Rs.40,000/- deposited with the respondent-IOCL. It is further
submitted that as per sub-clause (iii) of Clause 8(A)(i) of the said
guidelines, the required minimum dimension of the plot for godown to
award distributorship is 21 meters X 26 meters = 5500 sq. ft., which
is fulfilled by the petitioner, whereas the land of the respondent no.4
does not fulfil the said dimension.
4. Per contra, the learned counsel for the respondent nos.1 to 3 submits
that since the petitioner had offered the property under lease hold
category, according to the said Guidelines, she was required to have a
registered lease deed of the concerned property for a period of at least
15 years commencing from or being effective on any day from the date
of advertisement i.e. 13.08.2017 till the last date of submission of
application i.e. 16.10.2017. However, in the present case, the
concerned lease deed dated 15.09.2017 was going to be effective on
a future date after commencement of the construction work of the gas
godown over the concerned land. The respondents have also validly
and legally forfeited the security amount of Rs.40,000/- deposited by
the petitioner in view of Clause 26 of the said guidelines, which
provides that if the selection of the candidature is rejected after field
verification and before issuance of letter of acceptance, the security
amount deposited by the selected candidate is to be forfeited. The
petitioner in her application had also admitted and undertaken that her
deposited amount would be forfeited by the respondent if her
candidature was rejected. It is further submitted that the respondent-
IOCL vide its letter dated 02.01.2020 issued letter of intent in favour
of the respondent no.4 for LPG distributorship at Parho for the same
location for which the candidature of the petitioner was rejected. The
respondent no.4 has substantially complied the conditions of the said
letter of intent and, accordingly, right and interest have been created
in his favour. The petitioner had filed her representation on 15.01.2019
against rejection of her candidature for LPG distributorship before the
respondent-IOCL, however, she did not put forth any new ground or
fact in support of her contention regarding validity of her candidature.
In view of the order dated 10.12.2018 passed in W.P.(C) No.5277 of
2018, the petitioner was also given opportunity of personal hearing on
01.02.2019 and the impugned letter dated 15.07.2019 has been issued
thereafter. The respondent no.2 has mentioned in the impugned letter
that the option of alternate land was given to the petitioner with an
intent to reconsider her candidature for the said distributorship, but
the same was not provided by her and finding no way, the impugned
order has been passed, rejecting the candidature of the petitioner and
forfeiting the security amount of Rs.40,000/-.
5. The learned counsel for the respondent no.4 submits that the
respondent no.4 has been selected for Gramin Distributorship of LPG
under open category for the location- Parho Gram Panchayat vide
advertisement dated 13.08.2017 and thereafter he has taken
substantial steps for compliance of the conditions mentioned in the
letter of intent. Moreover, considerable amount, time and effort have
also been spent for securing compliance of the same.
6. Heard the learned counsel for the parties and perused the materials
placed on record.
7. The petitioner had applied for LPG distributorship at Parho Gram
Panchayat and she was selected for the said distributorship. However,
subsequently, on examination of the lease deed of the land, the
candidature of the petitioner was rejected on the ground that the same
did not satisfy the conditions of the said guidelines, which specifically
provides that the registered lease deed must have minimum 15 years
of valid lease period commencing on any day from the date of
advertisement up to the last date of submission of application as
specified either in the advertisement or corrigendum, if any.
8. The contention of the respondent-IOCL is that in view of the specific
condition contained in clause 8 of the lease deed that the same will
commence from the date on which the construction of gas godown
starts, the conditions of the said guidelines are not satisfied and as
such the impugned order has been passed in accordance with the
terms and conditions of the said guidelines.
9. The learned counsel for the respondent-IOCL puts reliance on the
judgments of the Hon'ble Supreme Court rendered in the case of
Bharat Coking Coal Limited & Others Vs. AMR Dev Prabha &
Others, reported in (2020) 16 SCC 759, the relevant paragraphs
of which are quoted hereinbelow:-
"(III) Deference to authority's interpretation
50. Lastly, we deem it necessary to deal with another fundamental
problem. It is obvious that Respondent 1 seeks to only enforce terms
of the NIT. Inherent in such exercise is interpretation of contractual
terms. However, it must be noted that judicial interpretation of
contracts in the sphere of commerce stands on a distinct footing than
while interpreting statutes.
51. In the present facts, it is clear that BCCL and C1-India have laid
recourse to clauses of the NIT, whether it be to justify condonation of
delay of Respondent 6 in submitting performance bank guarantees or
their decision to resume auction on grounds of technical failure. BCCL
having authored these documents, is better placed to appreciate their
requirements and interpret them. [Afcons Infrastructure
Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, para 15]
52. The High Court ought to have deferred to this understanding,
unless it was patently perverse or mala fide. Given how BCCL's
interpretation of these clauses was plausible and not absurd, solely
differences in opinion of contractual interpretation ought not to have
been grounds for the High Court to come to a finding that the appellant
committed illegality."
10. Further reliance has been put on the judgment rendered by the Hon'ble
Supreme Court in the case of Caretel Infotech Limited Vs.
Hindustan Petroleum Corporation Limited & Others, reported
in (2019) 14 SCC 81, wherein it has been held as under:-
"39. Another aspect emphasised is that the author of the document is
the best person to understand and appreciate its requirements. In the
facts of the present case, the view, on interpreting the tender
documents, of Respondent 1 must prevail. Respondent 1 itself,
appreciative of the wording of Clause 20 and the format, has taken a
considered view. Respondent 3 cannot compel its own interpretation
of the contract to be thrust on Respondent 1, or ask the Court to
compel Respondent 1 to accept that interpretation. In fact, the Court
went on to observe in the aforesaid judgment that it is possible that
the author of the tender may give an interpretation that is not
acceptable to the constitutional court, but that itself would not be a
reason for interfering with the interpretation given. We reproduce the
observations in this behalf as under: [Afcons Infrastructure
Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818] , SCC p. 825,
para 15)
"15. We may add that the owner or the employer of a
project, having authored the tender documents, is the
best person to understand and appreciate its
requirements and interpret its documents. The
constitutional courts must defer to this understanding and
appreciation of the tender documents, unless there is
mala fide or perversity in the understanding or
appreciation or in the application of the terms of the
tender conditions. It is possible that the owner or
employer of a project may give an interpretation to the
tender documents that is not acceptable to the
constitutional courts but that by itself is not a reason for
interfering with the interpretation given."
40. We may also refer to the judgment of this Court in [Nabha Power
Ltd. v. Punjab State Power Corpn. Ltd., (2018) 11 SCC 508], authored
by one of us (Sanjay Kishan Kaul, J.). The legal principles for
interpretation of commercial contracts have been discussed. In the
said judgment, a reference was made to the observations of the Privy
Council in [Attorney General of Belize v. Belize Telecom Ltd., (2009) 1
WLR 1988 : 2009 Bus LR 1316 (PC)] as under: ([Nabha Power
Ltd. v. Punjab State Power Corpn. Ltd., (2018) 11 SCC 508] , SCC pp.
534-36, para 45)
"45. ... '16. Before discussing in greater detail the
reasoning of the Court of Appeal, the Board will make
some general observations about the process of
implication. The court has no power to improve upon
the instrument which it is called upon to construe,
whether it be a contract, a statute or articles of
association. It cannot introduce terms to make it fairer
or more reasonable. It is concerned only to discover
what the instrument means. However, that meaning is
not necessarily or always what the authors or parties
to the document would have intended. ...
***
19. ... In [Trollope &Colls Ltd. v. North West
Metropolitan Regional Hospital Board, (1973) 1 WLR
601 (HL)] Lord Pearson, with whom Lord Guest and
Lord Diplock agreed, said: (WLR p. 609 B-D)
"...the court does not make a contract for the parties.
The court will not even improve the contract which the
parties have made for themselves, however desirable
the improvement might be. The court's function is to
interpret and apply the contract which the parties
have made for themselves. If the express terms are
perfectly clear and free from ambiguity, there is no
choice to be made between different possible
meanings: the clear terms must be applied even if the
court thinks some other terms would have been more
suitable. An unexpressed term can be implied if and
only if the court finds that the parties must have
intended that term to form part of their contract: it is
not enough for the court to find that such a term would
have been adopted by the parties as reasonable men
if it had been suggested to them: it must have been a
term that went without saying, a term necessary to
give business efficacy to the contract, a term which,
though tacit, formed part of the contract which the
parties made for themselves."...' ([Attorney General of
Belize v. Belize Telecom Ltd., (2009) 1 WLR 1988 :
2009 Bus LR 1316 (PC)] , WLR pp. 1993 A-B, F-H &
1994 A, paras 16 & 19)"
(emphasis in original)
41. Nabha Power Ltd. v. Punjab State Power Corpn. Ltd., (2018) 11
SCC 508] also took note of the earlier judgment of this Court in [Satya
Jain v. Anis Ahmed Rushdie, (2013) 8 SCC 131] , which discussed the
principle of business efficacy as proposed by Bowen, L.J. in [The
Moorcock, (1889) LR 14 PD 64 (CA)] . It has been elucidated that this
test requires that terms can be implied only if it is necessary to give
business efficacy to the contract to avoid failure of the contract and
only the bare minimum of implication is to be there to achieve this
goal. Thus, if the contract makes business sense without the
implication of terms, the courts will not imply the same.
42. The judgment in [Nabha Power Ltd. v. Punjab State Power Corpn.
Ltd., (2018) 11 SCC 508] concluded with the following observations in
para 72: (SCC p. 546)
"72. We may, however, in the end, extend a word of
caution. It should certainly not be an endeavour of
commercial courts to look to implied terms of contract.
In the current day and age, making of contracts is a
matter of high technical expertise with legal brains
from all sides involved in the process of drafting a
contract. It is even preceded by opportunities of
seeking clarifications and doubts so that the parties
know what they are getting into. Thus, normally a
contract should be read as it reads, as per its express
terms. The implied terms is a concept, which is
necessitated only when the Penta test referred to
aforesaid comes into play. There has to be a strict
necessity for it. In the present case, we have really
only read the contract in the manner it reads. We have
not really read into it any "implied term" but from the
collection of clauses, come to a conclusion as to what
the contract says. The formula for energy charges, to
our mind, was quite clear. We have only expounded it
in accordance to its natural grammatical contour,
keeping in mind the nature of the contract."
43. We have considered it appropriate to, once again, emphasise the
aforesaid aspects, especially in the context of endeavours of courts to
give their own interpretation to contracts, more specifically tender
terms, at the behest of a third party competing for the tender, rather
than what is propounded by the party framing the tender. The object
cannot be that in every contract, where some parties would lose out,
they should get the opportunity to somehow pick holes, to disqualify
the successful parties, on grounds on which even the party floating the
tender finds no merit."
11. In the aforesaid judgments, the Hon'ble Supreme Court has held that
the tender inviting authority is the best person to understand and
appreciate its requirements and to interpret its documents. It may be
possible that the interpretation to certain terms and conditions of the
tender documents so given by the tender inviting authority is not
acceptable to the constitutional courts but that by itself is not a reason
for interfering with the interpretation so given. The constitutional
courts should give some latitude to the understanding and appreciation
of the tender inviting authority, unless there is mala fide or perversity
in interpreting such terms and conditions of the tender.
12. The Hon'ble Supreme Court in the case of Bharat Petroleum
Corporation Limited & Others Vs. Swapnil Singh [Civil Appeal
Nos.6928-6929 of 2015], as has been relied upon by the
respondents-IOCL, has observed that the brochure and the application
form clearly require that the applicant must be owner of the specified
area of land or must have a registered lease deed of the specified area
of land on the date of application i.e. 13.09.2011, however, the
applicant was having notarized lease agreement and lease deed
executed on 20.12.2012 which was registered on 21.12.2012 and thus
the applicant was not eligible for selection of LPG distributorship in
terms with the brochure and the application form.
13. Reverting back to the facts of the present case, it would be appropriate
to refer Clause 1(w) of the said guidelines, which reads as under:-
"w. Ownership or "Own" for godown/showroom for Sheheri Vitrak,
Urban Vitrak, Gramin Vitrak and Durgam Kshetriya Vitrak Type of
Distributorship means having:
a. Ownership title of the property
or
b. Registered lease deed having minimum 15 years of valid lease
period commencing on any day from the date of advertisement up to
the last date of submission of application as specified either in the
advertisement or corrigendum (if any)."
14. The said guidelines in Clause 8 stipulates that all the applicants fulfilling
the eligibility criteria will be eligible for the draw for selection of LPG
distributorship. Clause 8(j) provides that the applicants having
registered lease deed commencing on any date prior to the date of
advertisement will also be considered provided that the lease is valid
for a minimum period of 15 years from the date of advertisement. The
petitioner's application also contained the aforesaid conditions for
grant of LPG distributorship.
15. I have also perused the lease deed of the petitioner executed on
14.09.2017 and registered on 15.09.2017 and the same was valid for
a period of 20 years i.e. for the period from 15.09.2017 to 14.09.2037.
However, as per Clause 8 of the said lease deed, the parties were in
the agreement that the lease deed would become effective only after
commencement of the construction work of the gas godown and the
rent would also commence from the said date.
16. In view of the specific Clause (8) of the said lease agreement, the
enforcement of the lease was contingent on the construction of the
gas godown which was further clarified with the stipulation that the
rent would also commence from the construction of the gas godown.
The said stipulation in the lease deed made the petitioner ineligible for
being allotted the LPG distributorship since it was a mandatory
condition in the said guidelines that the lease had to commence on any
day from the date of advertisement till the last date of submission of
application. Since the guideline on this aspect is clear and explicit and
the respondent-IOCL has acted in accordance with the terms and
conditions of the said guidelines, no unreasonability appears in the
impugned decision of the respondent no.2. The terms which are clear
and have been so understood by the tender inviting authority acting in
bona fide manner should be applied in normal course even if, in the
view of the court, any other meaning could be possible. This court does
not find any mala fide or perversity in the action taken by the
respondent-IOCL. It is also possible that a tender condition may cause
hardship to any of the tenderer, however the same may not be a
ground to seek direction from the constitutional courts for modification
or ignoring the said tender condition. It is a settled law that if an
attempt of unsuccessful tenderers persuades the courts to interfere by
exercising power of judicial review with imaginary grievances or some
technical/procedural violation or some prejudice to self, the same
should be resisted. There must be judicial restraint in interfering with
administrative action and ordinarily the soundness of the decision
taken by the employer should not be questioned, however, the
decision-making process can certainly be subject to judicial review.
17. So far the forfeiture of the security amount deposited by the petitioner
is concerned, learned counsel for the respondent-IOCL has invited the
attention of this court to Clause 26 of the said guidelines which
empowers the respondent IOCL to forfeit the security deposit remitted
by a candidate in case his/her selection as a distributor is rejected after
the field verification of credentials (FVC) or after issuance of LoI but
before issuance of the letter of appointment. The petitioner herself had
undertaken in the application for appointment of LPG distributorship
that if the information given in the application was found
false/incorrect/misrepresented, her candidature would be liable to be
cancelled along with forfeiture of the amount deposited before FVC.
Since the respondent-IOCL has acted in accordance with the terms and
conditions of the said guidelines as well as the advertisement, this
court does not find any reason to interfere with the decision of
forfeiture of the security amount under the writ jurisdiction.
18. One of the arguments of the learned senior counsel for the petitioner
is that no opportunity of hearing was provided to the petitioner before
passing the impugned order. The learned counsel for the respondent-
IOCL has refuted the said contention and has submitted that the
petitioner was given every opportunity to satisfy her claim and even
personal hearing was given to her, however she failed to explain as to
how the lease deed in question satisfied the conditions of the said
guidelines. The respondent-IOCL has contended that the petitioner
was also given opportunity to provide another land for awarding the
distributorship, but she did not accept the said offer and as such having
no option left, the impugned order has been passed. Be that as it may.
The petitioner has failed to bring on record any other document to
suggest that she was eligible to be awarded the LPG distributorship as
per the terms and conditions of the said guidelines.
19. The writ petition being devoid of merit is, accordingly, dismissed.
(Rajesh Shankar, J.)
Sanjay/AFR
