Allowed

K Sudhamani v. the Union of India

Karnataka HC13 Sept 2024WP/21754/2024

Case brief

AI extract

What is this about?

A writ petition challenged the cancellation of a letter of intent for a petrol bunk dealership based on a complaint filed over thirty days after the draw of lots. The court found this violated the selection guidelines and quashed the impugned notice, directing the Corporation to permit commissioning of the dealership per the original letter of intent.

What did the court decide?

Impugned notice dated 02.08.2024 quashed; respondent directed to permit commissioning of Retail Outlet Dealership as per Letter of Intent dated 24.08.2023 within four weeks.

K Sudhamani Vs the Union of India — Public Procurement and Tenders | Karnataka HC (2024)

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1 - NC: 2024:KHC:38577 WP No. 21754 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 21754 OF 2024 (GM-RES)

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BETWEEN:

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K SUDHAMANI W/O Y SRINIVAS AGED ABOUT 44 YEARS R/O NO.840, MASJID ROAD 4TH BLOCK, BETHAMANGALA KGF KOLAR-563116.

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…PETITIONER

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(BY SRI. K N PHANINDRA, SENIOR COUNSEL FOR SRI. R HEMANTH RAJ., ADVOCATE)

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AND:

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Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA

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THE UNION OF INDIA MINISTRY OF PETROLEUM AND NATURAL GAS REPRESENTED BY ITS PRINCIPAL SECRETARY, SHASTRI BHAVAN DR RAJENDRA PRASD ROAD NEW DELHI-110001.

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THE DIVISIONAL RETAIL SALES HEAD INDIAN OIL CORPORATION LIMITED MARKETING DIVISION BANGALORE DIVISIONAL OFFICE INDIAN OIL BHAVAN NO.29 P KALINGA RAO ROAD (MISSION ROAD) BANGALORE-560027.

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…RESPONDENTS (BY SMT. RESHMA K THAMMAIAH, CGC FOR R1; SRI. UDAYA PRAKASH MALIYA, ADVOCATE FOR R2)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO

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NC: 2024:KHC:38577 WP No. 21754 of 2024

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QUASH THE NOTICE DTD. 02.08.2024 ISSUED BY THE R-2 BEARING NO. REF NO.BDO/RS/SRMP-2018/450 (PRODUCED AS ANNX-A).

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

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ORAL ORDER

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The first respondent issued a notification for the allotment of a Retail Outlet Dealership (Petrol Bunk). The petitioner submitted an application for the allotment of the Retail Outlet Dealership (Petrol Bunk) by offering land in Property No. 88/2 of Panthanahalli Village, Kyasamballi Hobli, KGF Taluk. The petitioner was selected in the draw for the allotment of the Retail Outlet Dealership (Petrol Bunk) held on 20.07.2022. In accordance with the notification, the petitioner was required to pay an initial security deposit and upload the relevant documents.

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The petitioner entered into a lease deed for Sy. No. 52/1 of Mittakothur Village, Kyasamballi Hobli, KGF Taluk, Kolar, on 15.06.2023, and submitted a representation to the first respondent on 07.07.2023 to change the land from Sy. No. 88/2 to Sy. No. 52/1. Subsequently, the second respondent accepted the petitioner’s request and issued a letter of intent dated 24.08.2023. At the instance of the respondent-Corporation, the petitioner received a necessary No Objection Certificate (NOC) from the competent authority for establishing the retail outlet petrol bunk.

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Given these circumstances, a complaint lodged by one Chinnaswamy on 20.11.2023 resulted in an impugned communication canceling the allotment made in favor of the petitioner. This was based on allegations that the petitioner concealed the surrender of lease rights concerning Property No. 88/2, which was earlier offered for the allotment of the petrol bunk.

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I have heard the arguments advanced by the learned counsel for the parties.

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The notification was issued on 25.11.2018, and the Guidelines Brochure on the Selection of Dealers for Regular and Rural Retail Outlets through a draw of lots/bidding process was provided on 24.11.2018.

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Note 3 appended to the said guidelines reveals that candidates offering land in their application have the option to offer an alternative parcel of land for “whatsoever reason,” but this must occur before the issuance of the letter of intent.

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The withdrawal of the letter of intent is governed by Note/Clause 16 of the guidelines, which states that if a selected candidate is unable to provide the land or develop facilities within the specified time, or due to non-fulfillment of the terms and conditions of the letter of intent, then the letter of intent may be withdrawn. It further provides that a show cause notice must be issued to the letter of intent holder, and a decision to withdraw the letter of intent will be made by the competent authority based on

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the response. In such situations, the initial security deposit would be forfeited.

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Note 22 of the guidelines addresses false information, stating that if any statement made in the application or in the documents enclosed therewith, or subsequently submitted, is found to have been suppressed, misrepresented, incorrect, or false at any stage, then the application is liable to be rejected without assigning any reason. If the applicant has been appointed as a dealer, the dealership is liable to be terminated, and the candidate/dealer shall have no claim whatsoever against the respective oil company.

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In this instance, the petitioner did not misrepresent, suppress, or provide incorrect or false statements in the application for the allotment of the petrol bunk. The application was submitted in the year 2019, and the leasehold over land bearing Sy. No. 88/2 in favor of the petitioner’s husband had not been terminated as of the date of the application.

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Note 18 of the guidelines includes a grievance redressal system, which provides for receiving complaints against the selection process, including eligibility. It states that any complaint received more than 30 days after the draw of lots/bidding process will not be entertained.

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In this case, the draw of lots for the selection of the allotment of the retail outlet dealership was conducted on 20.07.2022, and the letter of intent was issued in favor of the

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NC: 2024:KHC:38577 WP No. 21754 of 2024

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petitioner. However, a complaint was lodged on 20.11.2023, after 30 days from the date of the draw of lots/bidding process.

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Thus, the withdrawal of the letter of intent and the impugned show cause notice contravenes the aforementioned guidelines.

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The decisions cited by the learned counsel for the respondent are not applicable to the facts of this case, as those cases involved claims for cancellation and consequent damages, where the Hon'ble Supreme Court held that disputed questions of fact existed, necessitating the parties to approach the jurisdictional civil court.

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The High Court of Punjab and Haryana, in the case of Meenakshi Yadav v. Indian Oil Corporation Ltd. and Anr., 2013 SCC Online P&H 20847, in reference to a similar situation, held that the cancellation of a letter of intent based on proceedings arising from a time-barred complaint, in contravention of the guidelines of the tender inviting authority, was unreasonable, unjust, and legally unsustainable.

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Hence, the impugned show cause notice dated 02.08.2024 lacks authority, and consequently, the cancellation of the letter of intent is arbitrary and discriminatory.

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Accordingly I, pass the following:

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ORDER

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i) The writ petition is allowed.

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6 - NC: 2024:KHC:38577 WP No. 21754 of 2024

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ii) The impugned notice dated 02.08.2024 issued by the 2^nd respondent at Annexure-A is hereby quashed.

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iii) The 2^nd respondent is hereby directed to permit the petitioner to commission the Retail Outlet Dealership as per Letter of Intent dated 24.08.2023, at annexure-L forthwith within four weeks from today.

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In view of the disposal of the main petition, the pending I.As. do not survive for consideration, and are disposed of.

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Sd/(HEMANT CHANDANGOUDAR) JUDGE

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K Sudhamani v. the Union of India

Case brief

What is this about?

What did the court decide?

K Sudhamani v. the Union of India

Case brief

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What did the court decide?

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