Partly allowed

Sri. Thejaswikumar v. the Deputy General Manager

Karnataka HC4 Oct 2023WP/3204/2020

Case brief

AI extract

What is this about?

The High Court set aside the respondent's order cancelling the petitioner's letter of intent to establish an LPG outlet. While noting the statutory requirement for four months to commission, the Court held that regulatory delays made this impossible and that the respondent's delayed cancellation caused financial loss. The petitioner was granted a fresh three-month extension.

What did the court decide?

The impugned order withdrawing the letter of intent is set aside. The petitioner is directed to commission the distributorship within three months; failure results in automatic cancellation.

Sri. Thejaswikumar Vs the Deputy General… — Contract and Commercial Disputes | Karnataka HC (2023)

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1 - NC: 2023:KHC:35917 WP No. 3204 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ WRIT PETITION NO. 3204 OF 2020 (GM-RES)

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BETWEEN:

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SRI. THEJASWIKUMAR S/O CHANDRACHARI, AGED ABOUT 29 YEARS, R/AT HOSUR GATE, BALLENAHALLI POST, HANAGUDU HOBLI, HUNSUR TALUK, MYSURU DISTRICT-571188.

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…PETITIONER

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(BY SRI. P. MAHESHA, ADVOCATE)

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AND:

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THE DEPUTY GENERAL MANAGER HINDUSTAN PETROLEUM CORPORATION LTD., LPG REGIONAL OFFICE, 3 AND 4, WHITEFIELD ROAD, MAHADEVAPURA POST, BENGALURU-560048

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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THE CHIEF REGIONAL MANAGER HINDUSTAN PETROLEUM CORPORATION LTD., LPG REGIONAL OFFICE, 3 AND 4, WHITEFIELD ROAD, MAHADEVAPURA POST, BENGALURU-560048

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HINDUSTAN PETROLEUM CORPORATION LTD., NO.17, JEMSHEDJI TATA RAOD, MUMBAI-400020 REPRESENTED BY ITS MANAGING DIRECTOR

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…RESPONDENTS

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(BY SRI. B.K. SRIDHAR, ADVOCATE RESPONDENT NOS.1 AND 2;

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2 - NC: 2023:KHC:35917 WP No. 3204 of 2020

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VIDE ORDER DATED 08.02.2021, SERVICE OF NOTICE TO RESPONDENT NO.3 IS HELD SUFFICIENT)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER PASSED BY THE 1^ST RESPONDENT AUTHORITY THE DEPUTY GENERAL MANAGER, BANGALORE LPG, RO, HINDUSTAN PETROLEUM CORPORATION LIMITED, BENGALURU IN REF BLRO/AVK/LO/WD DATED 31.12.2019 VIDE ANNEXURE-M.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has challenged an order dated 31.12.2019 passed by the respondent No.1 bearing No.BLRO/AVK/LOIWD by which, a letter of intent issued to the petitioner to establish a LPG outlet was withdrawn/cancelled.

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The writ petition discloses that the petitioner was granted a letter of intent by the respondent No.2 to establish a LPG outlet at Varanchi (Gurupura), Mysuru District. As per the letter of intent dated 19.03.2014, the petitioner was expected to "make all out efforts to commission the outlet within four months from the date of letter of intent." However, the petitioner could not establish the required infrastructure within four months due to the reasons beyond his control, which

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prompted the respondent No.2 to cause a notice dated 14.07.2014 calling for an explanation as to why the letter of intent should not be withdrawn and the location be further notified. The petitioner replied to the said notice on 28.07.2014 indicating the difficulties faced by him in obtaining certain approvals. From the year 2014, till the year 2017 there was a lull at the end of the respondent No.2. On 22.08.2017, the respondent No.1 addressed a letter warning the petitioner that even after the lapse of three years, he had not commissioned the distributorship and therefore, indicated that the letter of intent would be withdrawn unless it received satisfactory reply from the petitioner along with recommendation from the field officer. The petitioner again replied to this notice on 08.09.2017 bringing to the notice of the respondent No.2 regarding the delay in approval of building plan and obtaining khata certificate after conversion of the land for non-agricultural use. Again from the year 2017 till the year 2019, the respondent No.1 did not take any action but on 30.07.2019 it addressed another notice to the petitioner seeking for an explanation as to why the letter of intent should not be withdrawn. The petitioner again replied to this notice

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bringing to the notice of the respondent No.2 that the Panchayath had issued the building plan and that the same would be furnished to the respondent No.2. Thereafter, on 28.10.2019, the respondent No.1 addressed a notice again forewarning the petitioner that no progress was made towards commissioning the distributorship and hence, as a final reminder called upon the petitioner to obtain approval from the Department of Explosives, failing which, the letter of intent would be withdrawn. Following this, the respondent No.1 issued the impugned order withdrawing the letter of intent issued to the petitioner.

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The petitioner is therefore, before this Court challenging the order withdrawing the letter of intent. The petitioner contended that the process of obtaining conversion of the land, obtaining khatha, building plan and licence, approvals by the local authorities are time consuming and the respondent No.1 which knew about this did not take any action to cancel the letter of intent. He contended that he has now completed the construction of the building and the cancellation of letter of intent has come as a rude shock.

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NC: 2023:KHC:35917 WP No. 3204 of 2020

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The respondent No.1 has filed its objection and contended that the grant of letter of intent to the petitioner was challenged by another competitor named, Smt. R.V. Shruthi in W.P.No.19242/2014. Since the said writ petition was pending consideration before this Court, the respondent No.1 did not take any action to cancel the letter of intent issued to the petitioner. In the meanwhile, the Government of India issued a notification dated 14.07.2016 cancelling the advertisement of all locations under Rajiv Gandhi Gramin LPG Vitrak Scheme (RGGLVS) where draw or re-draw was required or yet to be conducted, excluding locations which were under litigation. It contended that since the letter of intent granted to the petitioner was the subject matter of writ petition before this Court, the respondent No.1 did not take any steps to cancel or withdraw the letter of intent granted to the petitioner. However, the writ petition filed in W.P.No.19242/2014 was dismissed for non-prosecution by this Court on 14.01.2019 and therefore, the respondent No.1 started pushing the petitioner to commission the project at the earliest and since the petitioner did not show any signs of completion/commissioning

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the distributorship, the respondent No.1 was forced to withdraw the letter of intent.

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The learned counsel for the petitioner reiterated the contentions urged in the writ petition and contended that the respondent No.1 had granted four months time to commission the distributorship, which was impossible in view of the time needed for conversion of the land for non-agricultural purpose, obtaining building plan from the local authorities, obtaining permission from the Department of Explosives and other local authorities. Even otherwise, he contends that from the year 2014, the respondent No.1 have held out representations till the month of December, 2019 and had kept the letter of intent alive, during which time, the petitioner expended substantial sums of money for establishment of the infrastructure required for the distributorship. He therefore, contends that the petitioner be granted a last and a final opportunity to establish the distributorship.

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Per contra, the learned counsel for the respondent Nos.1 and 2 submits that in the matters of contract, the parties are governed by the terms and conditions of the contract and

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this Court may not exercise jurisdiction under Article 226 of the Constitution of India to undo or take away the effect of the relevant conditions in the contract. He submits that the petitioner was granted a letter of intent to establish the distributorship within a period of four months from 19.03.2014 and till the year 2019, the petitioner did not commission the distributorship and therefore, there is no justification to continue the letter of intent granted in favour of the petitioner. He contends that due to the pending litigation, the respondent Nos.1 and 2 could not take any decision to cancel the letter of intent issued to the petitioner and it is only upon dismissal of the writ petition filed by Smt. R.V. Shruthi in W.P.No.19242/2014 that steps were taken for cancellation of the letter of intent. The learned counsel for the respondent Nos.1 and 2 has relied upon the judgment of the Division Bench of the High Court of Judicature at Allahabad in the case of

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Sudhanshu vs. Indian Oil Corporation Limited (WRIT-C

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No.18183/2017) where the petitioner therein had challenged the policy decision of the Oil Corporation for cancellation of RGGLV at the advertised location. The Division Bench of the High Court of Judicature at Allahabad relying upon the

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judgment of the Hon'ble Apex Court in the case of Maharashtra State Board of Secondary and Higher Secondary Education vs. Paritosh Bhupesh Kumarsheth

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[AIR 1984 SC 1543] held that judicial review of policy decision is impermissible and the Court cannot sit in judgment over the wisdom of the policy evolved by the legislature and subordinate regulation making body. It also relied upon the judgment of the Hon'ble Apex Court in the case of Tamil Nadu Education Deptt., Ministerial and General Sub-ordinate Services Association vs. State of Tamil Nadu [AIR 1980

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SC 379] and held that once the policy of the Government is rational, a few freak instances of hardship cannot be a ground to invalidate the order or the policy. It therefore, held that conducting a fresh draw for the advertised locations is within the realm of policy decision and therefore, the Courts cannot upset such policy decision. The learned counsel for the respondent Nos.1 and 2 also relied upon the judgment of the High Court of Punjab and Haryana where too, such policy decision was challenged and the High Court of Punjab and Haryana had held that the petitioner therein had no fundamental or vested rights to claim the distributorship.

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During the pendency of this writ petition, this Court

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directed the respondent Nos.1 and 2 to visit the location where the petitioner intended to establish distributorship and report

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the developments at the site. The respondent Nos.1 and 2 have visited the site and have reported that the petitioner has constructed the building for the purpose of the distributorship.

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No doubt, the petitioner was required to commission the distributorship within a period of four months as far as possible. However, having regard to the fact that the petitioner had to obtain a series of permissions such as conversion of land from agricultural to non-agricultural commercial purpose, plan from local authorities to put up construction, licence from the local authorities, permission from the Deputy Commissioner for establishment of the LPG distributorship, it is well-nigh impossible for any individual to obtain such permissions within a period of four months. Having said so, the conduct of the petitioner in not obtaining required permissions from the year 2014 till the year 2019 is unacceptable. However, the respondent Nos.1 and 2 who were entitled to cancel the letter of intent, did not do so within a reasonable time. On the contrary, they issued notices calling

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for explanation from the petitioner as to why the letter of intent should not be cancelled. In the meanwhile, the petitioner has constructed the building required for the purpose of distributorship. Therefore, now canceling the letter of intent would be causing immense financial and pecuniary loss to the petitioner.

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The judgments relied upon by the learned counsel for the respondent Nos.1 and 2 would not be applicable to the facts and circumstances of this case as in the present case, the respondent Nos.1 and 2 have continuously held out from the year 2014 till the year 2019 that the letter of intent granted to the petitioner would be withdrawn unless satisfactory reply is furnished by the petitioner.

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Since it is stated at the bar by the learned counsel for the respondent Nos.1 and 2 that the present location is not notified again, ends of justice would be met by permitting the petitioner to commission the distributorship within a period of three months from today. It is made clear that if the petitioner fails to commission the distributorship within a period of three months from today, the respondent Nos.1 and 2 shall be at

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liberty to issue fresh notification inviting applications from the suitable candidates.

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In that view of the matter, this writ petition is allowed in part. The impugned order dated 31.12.2019 passed by the respondent No.1 in bearing No.BLRO/AVK/LOIWD canceling/withdrawing the letter of intent to the petitioner is set aside. The petitioner is directed to commission the distributorship within a period of three months from today, failing which, the letter of intent granted to the petitioner shall stand cancelled automatically and the respondents shall be at liberty to invite fresh applications from eligible candidates to establish the LPG distributorship at Varanchi (Gurupura), Mysuru District.

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Sd/JUDGE

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PMR

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List No.: 1 Sl No.: 42

Sri. Thejaswikumar v. the Deputy General Manager

Case brief

What is this about?

What did the court decide?

Sri. Thejaswikumar v. the Deputy General Manager

Case brief

What is this about?

What did the court decide?

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