Smt. Brijesh Shrivastava vs Hindustan Petroleum Corporation ...
2021 Latest Caselaw 3776 MP

                      :: 1 :: W.P.No.3157/2017
 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.
                              and others)


             HIGH COURT OF MADHYA PRADESH :

                          BENCH AT GWALIOR

                        Writ Petition No. 3157/2017

       Smt. Brijesh Shrivastava                      ...PETITIONER

                                      versus

       Hindustan Petroleum Corporation

       Ltd. and others                               ...RESPONDENTS



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CORAM :

Hon'ble Shri Justice Vishal Mishra

Shri Arvind Dudawat, learned counsel for the petitioner.

Shri Harish Dixit, learned counsel for the respondents.


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Whether approved for reporting : Yes


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Date of decision :               31.7.2021

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                                   ORDER

( 31.7.2021)

Per Vishal Mishra , J.

:: 2 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

(1) The present petition is being filed against the illegal action on

the part of the respondents in not completing the formalities for

grant/establishment of Retail Outlet Dealership at Barahed Road in

between Pendra and Rayatpura, District Bhind though after holding

the interview and completing all the formalities a Letter of Intent has

been issued on 17.1.2014 in favour of the petitioner. The petitioner

has fulfilled all the required formalities as directed by the respondent-

Corporation. But despite of the same for the reasons best known to

the respondents they have not completed the formalities and not

permitting the petitioner to open the retail outlet dealership, therefore,

the petition has been filed.

(2) It has been argued that the petitioner is a citizen of India and

permanent resident of District Bhind and the respondent no.1 is a

Corporation for regulating the selection of the Retail Outlet

Dealerships and wherein certain guidelines have been issued in the

name of Guidelines for selection of Retail Outlet Dealers. An

advertisement was issued in Dainik Bhaskar newspaper on 15.9.2011

inviting applications for grant of Retail Outlet Dealership on various

locations including the location at Barahed between Pendra and

Rayatpura, District Bhind which is at S.No.85 of the advertisement.

The same was for an open category. The petitioner fulfilling the

eligibility has applied for the same and has submitted affidavits in the

prescribed format and the project report along with all the relevant :: 3 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

documents to the respondents. As the petitioner was fulfilling all the

required criteria and was found eligible, therefore, a letter dated

19.12.2011 was issued by the respondent no.2 directing the petitioner

calling for a interview on 13.1.2012 at 3:00 PM before the Hindustan

Petroleum Dealer Selection Committee. The petitioner duly appeared

before the selection committee, and the petitioner was granted 100

marks considering the candidature and the documents and she has

been placed at S.No.1 of the table of marks awarded by the Selection

Committee which is reflected from Annexure P/4. Thereafter the

matter was kept pending for almost one year and on 17.1.2014 a

Letter of Intent was issued for proposed retail outlet dealership in

favour of the petitioner. Acceptance to the proposal was submitted by

the petitioner to the respondent-Corporation. The petitioner has

submitted all the relevant documents including the documents

pertaining to ownership of the land in question that it belongs to the

petitioner and no objection certificate from the Revenue Department

was submitted, but despite of the same the respondents authorities

themselves have issued a letter to the Collector and District

Magistrate/District Bhind for issuance of no objection certificate for

development of the new Retail Outlet on the land in question. No

objection certificate was granted by the District Magistrate, District

Bhind for establishment of the retail outlet dealership of Indian Oil

Corporation Limited in favour of the petitioner on 13.5.2014. The :: 4 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

petitioner has purchased the land from Aakash Shrivastava, who has

got the aforesaid land diverted by the competent authority i.e. S.D.O.

Gohad, District Bhind and deposited the requisite diversion fees. The

S.D.O. has issued no objection certificate. The Additional District

Magistrate, District Bhind again sought a clear opinion from the

S.D.O. Gohad, District Bhind vide letter dated 16.9.2014 with respect

to the land in question. The S.D.O. Gohad after making an inquiry

into the matter has submitted a report regarding issuance of NOC by

the District Magistrate, District Bhind on 31.5.2014. It was informed

that the land in question was recorded as Charnoi land in Samvat 2039

and was thereafter converted as Kabil Kast in Samvat 2051 and vide

order dated 6.2.1995 passed in the Case No.10/Aa-19/94-95, the said

land was settled in favour of one Sohan S/o Sobaran Singh, who

later-on sold the said land to one Balvir Kaur from which the

predecessor-in-title of the petitioner purchased the said land through

registered sale deed. The aforesaid letter was forwarded to the

respondent-Corporation, but despite of the same they are sitting tight

over the matter for the reasons best known to them and are not

completing the formalities as required for establishment of the

petroleum retail outlet. The petitioner personally approached the

respondent no.2 and requested for completing the formalities, but the

same was not done. A legal notice was thereupon served through

counsel through registered post on 23.2.2016, but of no consequence.

:: 5 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

In reply to the legal notice it is submitted that the land was earlier

recorded as charnoi land, therefore, even after grant of NOC by the

competent authority as per the legal advise of the legal cell the

matter cannot be proceeded further for establishment of new retail

outlet (Annexure P/14 is the reply). It is submitted that once the

competent authority of the revenue department i.e. Collector has

issued no objection certificate in favour of the petitioner then no

question of disputed land arises. After the issuance of Letter of

Intent the proposal sent by the respondent-Corporation as well as the

acceptance letter submitted by the petitioner and after completing all

the formalities by the respondents it cannot be said that the land is a

disputed land especially in the circumstances when the Collector,

District Bhind has himself issued a NOC in favour of the petitioner

after the inquiry report being submitted by the S.D.O. The matter has

already been investigated by the Revenue Authorities that too on the

basis of the letter issued by the Corporation itself. Therefore, the

reason assigned by the Corporation declining to complete the

formalities and permit the petitioner to open the retail outlet

dealership of Hindustan Petroleum Corporation the same is perse

illegal and is contrary to Article 14, 19 and 21 of the Constitution of

India as after issuance of LOI and the no objection certificate from the

competent authority right is accrued in favour of the petitioner. In

such circumstances, the present petition is being filed. In view of the :: 6 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

aforesaid, the petition may be allowed and the respondents authorities

be directed to complete the formalities within the stipulated time

frame and permit the petitioner to open the retail outlet. It is stated at

bar that till date no other petrol pump is being opened near vicinity of

the aforesaid land. In such circumstances, petitioner still is entitled to

open the retail outlet dealership.

(3) Per contra counsel appearing for the respondents Corporation

has vehemently opposed the contentions of the petitioner and has

submitted that mere issuance of Letter of Intent does not create any

right in favour of the petitioner. He has not even impleaded the

Hindustan Petroleum Corporation Limited as a party to the

proceedings. It is submitted that the petitioner was required to

demonstrate by filing of documents with respect to his title over the

property in question for title clearance and for completing the

formalities the respondents sought 30 years title documents, but the

same was not supplied by the petitioner. During the title search and

on perusal of the khasra records for the year 1981 to 1993 it was

noticed by the respondents that the land of Khasra No.62 old new

Khasra No.101 min total comprised area of 0.560 hectare situated at

Village Chak Tumera, Tahsil Gohad, District Bhind (M.P.) originally

belongs to the Government of M.P. in the form of Nistar Charnoi

Bhumi (Reserved Bhumi under the provisions of M.P. Land Revenue

Code, 1959). Thereafter on 6.2.1995 the same was settled in the :: 7 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

name of one Sohan Singh S/o Sobren Singh. How the aforesaid land

was settled in the name of Sohan Singh is not clear from the

documents. Therefore, the petitioner was required to demonstrate his

clear title over the property by filing all the relevant documents

including the predecessor's documents. It is settled preposition of law

that at the time of settlement of the government land in favour of

private person the permission from the competent authority is required

to be taken i.e. Collector, but whether the permission from Collector

is taken or not prior to settlement of the land in question could only

be cleared from the revenue records. The petitioner could not file the

complete revenue records before the respondents authorities,

therefore, in absence of clear title in favour of the petitioner the

retail outlet of petroleum cannot be extended in favour of of the

petitioner. Time was granted to the petitioner by the respondent-

Corporation to complete the formalities with respect to the title over

the land in question, but till date it has not been done by the petitioner.

As far as contention of the petitioner with respect to issuance of NOC

by the District Magistrate/Collector is concerned, it is a settled

preposition of law as has been held by the Hon'ble Supreme Court in

the case of C. Albert Morris Versus K. Chandrashekhran, (2006)

1 SCC 228, wherein it is held by the Hon'ble Supreme Court that

while granting NOC, the Collector is not concerned about the

ownership of the land. He is concerned about the location of the land :: 8 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

and its suitability as a place for storage of petroleum. Rule 144,

which deal with the grant of NOC, do not contemplate an enquiry into

the ownership of the land nor does it require the Collector to inquire

into the nature of the right claimed by the person who has applied for

NOC. In such circumstances, merely submission of NOC by the

competent authority i.e. Collector will not suffice the terms and

conditions and will not clear the title of the petitioner. Therefore,

once the petitioner himself could not demonstrate the clear title over

the property in question, therefore, the authority has rightly decided

not to complete the formalities and permit the petitioner to open the

retail outlet of Hindustan Petroleum Corporation.

(4) The law with respect to the rights will created by issuance of

Letter of Intent is clear as has been held by the Hon'ble Supreme

Court recently in the case of South Eastern Coal Fields Limited and

others Vs. M/s. S Kumars Associates Akm (Jv) in Civil Appeal

No.4358/2016 decided on 23rd July, 2021, wherein the Hon'ble

Supreme Court has held that the contents of the Letter of Intent are

having utmost importance and merely issuance of letter of intent is not

create any right in favour of the person who has applied for the retail

outlet. There is a big difference between the condition precedent and

the condition subsequent. Relying upon the several judgments of the

Hon'ble Supreme Court, the Hon'ble Supreme Court has categorically

held that the issuance of Letter of Intent does not create any right in :: 9 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

favour of the persons like petitioner. In view of the aforesaid facts

and circumstances of the case, he has prayed for dismissal of the writ

petition.

(5) Per contra by filing a rejoinder to the return the petitioner has

denied the contents of the return and submitted that the law which has

been relied upon by the respondents is not applicable in the facts and

circumstances of the case. As far as the direction to the petitioner to

submit all the relevant documents is concerned the petitioner has

made all possible efforts by filing an application to the respondents

authorities asking for the order of settlement in favour of Sohan Singh

in the year 1995, but the same was not supplied by the authorities to

the petitioner which is clearly reflected from the NOC issued and the

enquiry done by the S.D.O. Gohad District Bhind. In absence of the

documents supplied by the State Authorities, petitioner was not in a

position to file the same before the authorities, but once the

competent authority i.e. the Collector, District Bhind has issued the no

objection certificate in favour of the petitioner with respect to the land

in question then by stretch of imagination it can be stated that the

petitioner was not having any clear title over the property in question.

In such circumstances, the stand taken by the respondents in the return

having no value and the petitioner is having clear title over the

property in question as is reflected from the documents issued by the

revenue authorities itself. In such circumstances, the petition should :: 10 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

be allowed.

(6) Heard the learned counsel for the parties and perused the

record.

(7) The principle question for consideration before this Court is that

whether the letter of intent issued by the authorities in favour of the

petitioner will create any right in favour of the petitioner seeking a

direction to the respondents to complete all the formalities and permit

the petitioner for establish a retail outlet dealership of the respondents-

Corporation. The aforesaid question has been answered by the

Hon'ble Supreme Court recently in the case of South Eastern

Coalfield Limited (supra), wherein it has been held as under:

"18. A consideration of the matter in the conspectus of the aforesaid pleas leads to a conclusion that it cannot be said that a concluded contract had been arrived at inter se the parties.

19. We have already reproduced aforesaid the terms of the letter of award and what it mandated the respondent to do. None of the mandates were fulfilled except that the respondent mobilized the equipment at site, handing over of the site and the date of commencement of work was fixed vide letter dated 28.10.2009. Interestingly this letter has been addressed to the Sub Area Manager of the appellant by the office of the appellant. The respondent, thus, neither submitted the Performance Security Deposit nor signed the Integrity Pact. Consequently, the work order was :: 11 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

also not issued nor was the contract executed. Thus, the moot point would be whether mobilization at site by the respondent would amount to a concluding contract inter se the parties. The answer to the same would be in the negative.

20. We would like to state the issue whether a concluded contract had been arrived at inter se the parties is in turn dependent on the terms and conditions of the NIT, the LoI and the conduct of the parties. The judicial views before us leave little doubt over the proposition that an LoI merely indicates a party's intention to enter into a contract with the other party in future.12 No binding relationship between the parties at this stage emerges and the totality of the circumstances have to be considered in each case. It is no doubt possible to construe a letter of intent as a binding contract if such an intention is evident from its terms. But then the intention to do so must be clear and unambiguous as it takes a deviation from how normally a letter of intent has to be understood. This Court did consider in Dresser Rand S.A. (supra) case that there are cases where a detailed contract is drawn up later on account of anxiety to start work on an urgent basis. In that case it was clearly stated that the contract will come into force upon receipt of letter by the supplier, and yet on a holistic analysis - it was held that the LoI could not be :: 12 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

interpreted as a work order.

21. Similarly if we construe the documents as discussed in the judgment of this Court in Jawahar Lal Burman (supra) case it is unequivocally mentioned that "contract is concluded by this acceptance and formal acceptance of tender will follow immediately on receipt of treasury receipt." Thus, once again, it has been stipulated as to at what time a contract would stand concluded even though it was later subject to deposit of the security amount. It was in these circumstances that the requirement of security deposit was treated not as a condition precedent but as a condition subsequent. We have to also appreciate the nature of contract which was for immediate requirement of the full quantity of coconut oil to be supplied within 21 days. It was also explicitly mentioned in the LoI itself that any failure to deposit the stipulated amount would be treated as a breach of contact. This is not the case here, where the consequence was simply forfeiture of the bid security amount, and cancellation of the 'award' and not the 'contract'.

22. If we compare the aforesaid scenario in the present case, the period for execution of the contract was one year. The respondent worked at the site for a little over the month, facing certain difficulties - it is immaterial whether the same was of the own making of the respondent or :: 13 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

attributable to the appellants. No amount was paid for the work done. The respondent failed to comply with their obligations under the LoI. It is not merely a case of the non-furnishing of Performance Security Deposit but even the Integrity Pact was never signed, nor work order issued on account of failure to execute the contract. We are, thus, of the view that none of the judgments cited by learned counsel for the appellants would come to their aid in the contractual situation of the present case. The judgments referred by learned counsel for the appellants Jawahar Lal Burman (supra) case and Dresser Rand S.A. (supra) case, if one may say so are not directly supporting either of the parties but suffice to say that to determine the issue what has to be seen are the relevant clauses of the NIT and the LoI. On having discussed the non-

compliance by the respondent of the terms of the LoI we turn to the NIT. Clause 29.2 clearly stipulates that the notification of award will constitute the formation of the contract "subject only" to furnishing of the Performance Security/Security Deposit. Thus, it was clearly put as a pre-condition and that too to be done within 28 days following notification of the award. The failure of the successful bidder to comply with the requirement "shall constitute sufficient ground for cancellation of the award work and forfeiture of the bid security" as per :: 14 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

clause 30.2. If we analyse clause 34 dealing with the Integrity Pact the failure to submit the same would make the tender bid "as not substantially responsive and may be rejected."

23. We may also add that the definition of what constitutes a contract as per clause (ix) itself includes the NIT, the acceptance of the tender, the formal agreement to be executed between the parties post contractor furnishing all the documents and the bid security amount. 24. The result of the aforesaid is that as rightly held in terms of the impugned order all that the appellants can do is to forfeit the bid security amount and, thus, it was so directed. Since as a pre-condition of any coercive action against the respondent, the High Court called upon the appellants to deposit a sum of Rs.10 lakh in terms of the interim order dated 04.08.2010, a direction is made to deduct the bid security amount out of the sum of Rs.10 lakh and to refund the balance amount to the respondent. The needful would now have to be done within two months as in terms of the interim order of this Court dated 08.02.2013 such refund has been stayed.

25. We accordingly dismiss the appeal leaving the parties to bear their own costs."

(8) The Hon'ble Supreme Court further in the case of State of

Madhya Pradesh and another Vs. Firm Gobardhan Dass Kailash

Nath, AIR 1973 SC 1164 has held where in respect of a tender for :: 15 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

Government sale initial deposit of 25% of purchase price was an

essential precondition for acceptance or sanction of tender was not

complied with. It was held that taking into consideration what was

required to enter into a contract, i.e., in writing and in prescribed form

and 25% amount not being deposited, it could not be said that any

concluded contract was arrived at between the parties."

(9) The Hon'ble Supreme Court further in the case of Bhushan

Pawar and Steel Limited Vs. State of Orissa, (2017) 2 SCC 125

has considered the question that what an LOI was the nomenclature of

the letter would not be the determinative factor, but the substantive

nature of the letter would determine whether it can be treated as an

LOI which was per the legal dictionary means preliminary

understanding between the parties who intend to make a contract or

join together in another action."

(10) The Hon'ble Supreme Court further in the case of Rajasthan

Cooperative Dairy Federation Ltd. Vs. Maha Laxmi Mingrate

Marketing Service Pvt. Ltd. and others, (1996) 10 SCC 405 has

held as under:

".......The letter of intent merely expressed an

intention to enter into a contract. There was no

binding legal relationship between the appellant

and respondent no.1 at this stage and the appellant

was entitled to look at the totality of :: 16 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

circumstances in deciding whether to enter into a

binding contract with the respondent no.1 or

not."

(11) From the perusal of the aforesaid legal preposition of law it is

seen that the letter of intent issued in favour of the petitioner does not

create any right seeking a direction to the respondents to complete all

the formalities. The letter of intent is only a proposal being sent by the

respondents Corporation to the petitioner that they are intending to

enter into an agreement but the entire contract was not completed by

the authorities. The Corporation was still having its right to decline

to enter into a contract and once the contract is not completed the

respondents authorities cannot be directed to complete all the

formalities. In the present case the Letter of Intent is issued by the

authorities on 17.1.2014 (Annexure P/5) which is filed along with the

petition, wherein condition No.a is relevant :

"a. That you will lease the suitable plot of land to HPCL for a period of 30 years with renewal option as per mutually agreed terms and conditions. In case the offered land is taken on lease by you, the head lease should contain a Clause that you should have a right to sub-lease the said plot of land to HPCL without further reference to or consent of the Head Lessor for the lease period as stipulated above, under such terms and conditions as may be agreed upon between :: 17 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

                             and others)


                you      and HPCL.     In case   you fail to make

available the offered land within two months, this offer is liable to be withdrawn. However, there is no commitment form HPCL for taking the said land from you."

It was further seen from the Letter of Intent that "this letter is merely a

Letter of Intent and not to be construed as a firm offer of Dealership to

you".

(12) Thus, from the Letter of Intent issued in favour of the petitioner

clearly says that aforesaid is not a complete document pointing out the

fact that the contract formalities are completed.

(13) As far as the issuance of NOC by the competent authority i.e.

Collector, District Bhind is concerned it is a settled preposition of law

that merely NOC being issued by the competent authority does not

amounts to its clearance of title which has been held by the Hon'ble

Supreme Court in the case of C. Albert Morris (supra), wherein it

is held that:

"While granting NOC, the Collector is not concerned about the ownership of the land. He is concerned about the location of the land and its suitability as a place for storage of petroleum. Rule 144, which deal with the grant of NOC, do not contemplate an enquiry into the ownership of the land nor does it require the Collector to enquire into the nature of the right claimed by the person who has applied for NOC."

:: 18 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

(14) It is seen from the records that the land in question was initially

recorded in the name of Government land as Nistar Charno Bhumi

and thereafter far back from year 1981 to 1993 and thereafter the same

land was stated to be settled in the name of Sohan Singh S/o Sobren

Singh in Revenue Case No.10/Aa-19/94-95 vide order dated

6.2.1995. The aforesaid order was directed to be placed before this

Court by the petitioner vide order dated 18.5.2017, but despite of the

same the petitioner could not produce the aforesaid order before this

Court. However, an argument is advanced by the petitioner that he

has tried to obtain the copy of the order, but the same was not supplied

to him by the revenue authorities, but the fact remains that the

authorities have asked for the documents pertaining to the ownership

for the last 30 years. The petitioner could not deposit the same to the

authorities. Thus, in the circumstances when the petitioner himself

could not demonstrate the clear title over the property in question,

therefore, on the basis of legal advise given on the basis of the search

in 30 years documents it was found that earlier the land was recorded

as Nistar Charnoi Bhumi of State of Madhya Pradesh in the records.

Therefore, the decision is taken not to extend the retail outlet

dealership to the petitioner and was denied by filing a reply to the

show cause notice issued by the petitioner to the authorities. Thus,

from the aforesaid facts and circumstances of the case, no right has

accrued in favour of the petitioner. The petitioner cannot compel the :: 19 :: W.P.No.3157/2017 (Smt. Brijesh Shrivastava Vs. Hindustan Petroleum Corporation Ltd.

and others)

authorities to enter into a contract and complete all the formalities and

permit the petitioner to open a retail outlet dealership of Hindustan

Petroleum Corporation. In such circumstances, the petition sans

merits and is accordingly dismissed.

E-copy/Certified copy as per rules/directions.

(Vishal Mishra) Judge 31/07/2021 Pawar*

ASHISH PAWAR 2021.08.07 14:47:53 +05'30'