Landowners and their nominees claimed permanent petroleum dealership under alleged oral agreements despite written lease and maintenance-and-handling contracts. The court found no proved dealership agreement, rejected declaratory and consequential relief, and dismissed all appeals. Applications to receive additional evidence were also dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE N.K.BALAKRISHNAN
THURSDAY, THE 23RD DAY OF JANUARY 2014/3RD MAGHA, 1935
RSA.No. 1305 of 2010 ( )
------------------------AGAINST THE JUDGMENT IN AS 338/2008 of VI ADDL.DISTRICT COURT, ERNAKULAM AGAINST THE JUDGMENT IN OS 1361/2006 of II ADDL.MUNSIFF COURT ERNAKULAM
APPELLANT(S)/APPELLANTS/IST PLAINTIFF:
V.K.HANEEFA, S/O.KUNHAPPA, L.P.MADAM, PIRAYIRI AMSOM, PALAKKAD TALUK PALAKKAD DISTRICT
BY ADVS.SRI.GEORGE POONTHOTTAM
SRI.PHILIP T.VARGHESE SRI.SUJITH MATHEW JOSE SRI.MANOJ P.KUNJACHAN
RESPONDENT(S)/RESPONDENTS/DEFENDANTS AND 2ND RESPONDENT:-
BY ADV. SRI. P.GOPAKUMARAN NAIR & ADV. SRI. N.K. SUBRAMANIAN AND ADV. SRI. C.S. DIAS (for R1 & R2)
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 23-01-2014, ALONG WITH RSA. 1306/2010, RSA. 1307/2010, RSA. 1308/2010, RSA. 1309/2010, RSA. 1320/2010, RSA. 1321/2010, RSA. 1322/2010, RSA. 1323/2010, RSA. 1356/2010, RSA. 386/2012, RSA. 540/2012, RSA. 541/2012, RSA. 542/2012, RSA. 544/2012, RSA. 545/2012, RSA. 546/2012, RSA. 560/2012, RSA. 561/2012, RSA. 565/2012, RSA. 566/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
CR
N.K.BALAKRISHNAN, J.
............................................ R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and
1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012 ............................................
Dated: 23rd January, 2014
COMMON JUDGMENT
The suits involved in the first 10 appeals were filed
before the Munsiff's Court, Ernakulam. A common judgment was pronounced by the trial court in those cases. All those suits were dismissed by the trial court. Appeals filed against those decrees and judgments were dismissed by the appellate court as per a common judgment.
2
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Kozhikode. That suit was also dismissed. The appeal against the same was also dismissed.
3
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
the business of petroleum products. It was stated that applications were invited on behalf of the defendants through advertisement in news papers from land owners, their nominees and agents in prominent location for taking on lease suitable land for a minimum period of 15 years. It is stated that the owner of the land (one of the plaintiffs in the respective suits) submitted applications offering to give the plaint schedule property shown in respective plaints for lease.
4
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
beneficial to the owner of the land or his nominee, owner of the land agreed to reduce the rent to a considerable extent. The rent demanded and which was stated to have been reduced has been shown in respective suits.
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
5
in the plaint schedule property and later it was commissioned. The date of commissioning has been mentioned in respective plaints. More than three months thereafter, the lease deed was executed by the owners of the land in favour of the first defendant Company and it was registered. After commissioning of the RO, it was functioning without any interruption.
6
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
owner of the land would be appointed as the dealer of RO. There had been specific understanding between the owner of the land and defendants that the owner of the land or his nominee would be the holder of RO in the plaint schedule property.
7
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
duration and thereafter regularise the appointment as a 'dealer'. Thus plaintiffs contended that defendants appointed the first plaintiff as the dealer after being satisfied about his competence to be appointed as the dealer or running the Retail Outlet.
8
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
That the first plaintiff is the owner of the plaint schedule property is admitted. Property is in the possession of the first defendant Company as per the lease arrangement. Consequent upon the dismantling of administrative pricing mechanism with effect from 01/4/2002, the first defendant Company embarked upon expanding their retail network with a view to locate potential sites for setting up retail petrol outlets and for that the advertisement was published. The plaintiff/owner of the land responded to that notice. The site offered by him was found suitable. After discussions and negotiations, it was decided to take the plaint schedule property on lease for the purpose of setting up an RO. The rate of rent was fixed at the market rate prevalent in the area at the relevant time. The Company policy then provided for
9
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
appointment of land owners or their nominees as dealers wherever sites were found suitable for setting up of ROs and the land owners/nominees were found suitable for dealership. Defendants did not offer to grant dealership to the first plaintiff or his nominee as alleged in the plaint. The rent was fixed as it was fair, based on the market rate, at the relevant time. The allegation that the defendant had informed the first plaintiff that the second plaintiff (nominee to the owner of the land) has been selected by them for dealership, is denied. It is not correct that the first plaintiff had agreed to lease the land based on the award of dealership to the second plaintiff. The lease of land was a separate and distinct transaction. It was because of the lease arrangement the first plaintiff's nominee's name (2nd plaintiff) was considered and approved as per the Company policy prevailing at that point of time as M & H contractor. The Company was put in possession of the land based on
10
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
the lease agreement so that the work for setting up of RO could be commenced. The lease deed was executed and registered after the commissioning of RO. The rent fixed was paid with effect from the date of commissioning of the RO. There was no need or occasion for the Company to execute a dealership agreement with the plaintiffs. The 1st or 2nd plaintiff was not appointed as a dealer. The defendant never requested him to execute any dealership agreement. The RO is a COCO outlet. Such ROs are run either by the Company officials or under job contractorship. In such cases M & H contracts are given to suitable persons.
12. Following are the substantial questions of law framed in this case :-
11
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
12
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
the notification dated 6-09-2006 and the consequent actions taken pursuant thereto ?
13
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
said that the land offered was selected by the Company for the new RO. It was further made clear that the letter of appointment would be issued only in line with the Company policy, that too, once the RO has reached the commissioning stage. Therefore, it is vehemently argued that no offer as such was given by the Company to the land owner or his agents or nominees that they would be given dealership for the new RO. It is further submitted that this letter was sent at an embryo stage and that ultimately after processing, it culminated into a concluded contract evidenced by written M & H contract. Nothing was stated about the offer or conferment of dealership and as such whatever was said earlier, prior to the written contract, can be given no legal effect for more reasons, than one, namely; that at the commissioning stage no dealership agreement was executed also; the agreement that was entered into between the parties does not speak of a dealership
14
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
agreement which would negative the plea that there was a similar oral contract.
15
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Ext.A5 does not speak of an offer made by one party or acceptance made by the other party. It was in the processing stage. The conferment of dealership was subject to the policy which would be in existence at the stage of commissioning of RO.
16
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
appointment of dealers, appointment of managers and M & H contractors and selection of land owners were done as per the Company policy. It was also admitted that the first defendant Company did not give any letter or promise to the plaintiff that they would be given dealership. According to him the letter sent to the two parties was to the effect that it would be subject to the Company policy. He also admitted that plaintiffs cannot ask him to confirm the dealership as on the date of commissioning of the outlets. The plaintiffs also do not dispute the fact that the advertisements were caused to be effected or done by the first defendant Company only for the purpose of leasing out suitable land for establishing RO. Though it was contended by the plaintiffs that the M & H contractors had spent money, the evidence would clearly show that the amount was spent by the Oil Company only. It was admitted by PW12 and was not disputed by the plaintiffs also that the
17
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
amount collected from M & H contractors during the supply of first load was only as a security deposit for the security of products supplied by the Company. PW12 further admits that he had not recommended the plaintiffs to be appointed as dealers of the first defendant Company. It was also admitted by PW12 that as per the directions issued by the first defendant Company he had kept policy on hold and because of the direction issued by the Company, none of the ROs in India were converted into dealerships. The admission as aforesaid made by PW12 during crossexamination would demolish the entire case set up by plaintiffs that by the letters obtained by plaintiffs from PW12 the conferment of dealership should be discerned.
18
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
plaintiffs that the land offered by them was selected by the Company for development of an RO. The learned counsel for the appellants has very much relied upon one sentence in this letter which is to the effect that the Company had appreciated the fact that the site rental had been negotiated on the basis of award dealership to the plaintiff. But it was made clear that the dealership appointment letter would be issued by the Company depending upon the Company policies as and when implemented. Therefore, it is submitted by the learned counsel for the respondents that there was no verbal commitment or unequivocal or unconditional promise regarding the grant of dealership.
19
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
said that there was any concluded simultaneous oral contract which can be enforced by a court of law. If a concluded oral contract is not proved, the question of granting a declaration to the effect that the dealership was granted to the land owner or his nominees does not arise at all since the declaration of the legal character sought to be claimed in the suit can only be founded on a contract enforceable under law. It is submitted by the learned counsel for the respondents that in fact, if there was a concluded simultaneous oral contract, the remedy open to the appellants is to sue for specific performance of that contract. If such a contract was there, the party setting up that contract must plead what are the terms and conditions agreed upon by the parties to that contract. The terms and conditions of such a contract are conspicuously absent in the pleading and evidence adduced by the appellants. If so, how could the plaintiffs seek for a declaration of legal
20
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
character as if the plaintiffs had been granted dealership by the respondent Company.
21
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
already been incorporated in the M & H contracts entered into between the parties. Plaintiffs have absolutely no case that such contracts are vitiated by any of the vitiating circumstances like fraud, undue influence, misrepresentation,coercion etc.
22
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
had once worked under the 1st defendant Company. Since the person who was stated to have issued these letters was not examined and since the admissibility and acceptability of those documents were seriously questioned no credence can be given to the same. No document was produced by plaintiffs to show that at the time of commissioning of ROs there was in existence any policy which obliged the Company to grant dealership to the owners of the land or their nominees. It was fully knowing the policy existing as on the date of entering into the written contract, the land owners executed the rent agreement and subsequently, the M & H contracts were entered into by the Company and the nominees of the land owners. The further fact that the Company itself had spent nearly 30 to 50 lakhs for₹ putting up structures, super structures and for providing infra structure etc. would clearly show that the Company had acted based on agreements or contracts entered into
23
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
between the land owners and the Company, and the M& H contractors and the Company. The fact that it was the Company who spent money as aforesaid can be gathered from the admissions made by PW1 to PW11. Therefore, there can be no iota of doubt that the Company alone had spent money for the purpose as aforesaid. The oral evidence of P.W.12 or the documents referred to above were considered by the courts below though not in detail. However, it does not in any way help the appellants.
24
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
products and render services stated therein and shall have no right, title or interest whether as owner, lessee, tenant or otherwise in the said premises. It was further made clear that he shall not be entitled to claim the right of lessee/tenant or any other interest in the premises or outlet.
“Nothing contained in this Agreement shall be construed to prohibit the Company from making direct or indirect sales to any other person whomsoever or from appointing any other person for the purpose of direct or indirect sales at such place or places as the Company may deem fit. The M & H contractor shall not be entitled to any claim or allowance for any such direct or indirect sales.”
the Controller of Explosives and other authorities for installation of the RO were obtained by the Company alone and not by the M & H contractor or the owner of the land. Clause 10 of Ext.A3 reads to the effect that the licence and the permission granted by the Company to the M & H contractor shall terminate immediately on the termination
25
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
of the agreement or on breach of any terms thereof.
26
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
26. Clause 27 of Ext.A3 reads:
“The M & H contractor shall not assign or transfer his/its obligations or benefits under this Agreement to any one nor shall appoint a sub-contractor for the said purpose. A responsible person on behalf of the M & H contractor should always be available at the said premises during working hours to supervise the work being undertaken at the retail outlet.”
27
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
can the appellants byepass that written contract and adduce oral evidence to vary or contradict the terms thereof is the pertinent question that would stare at the appellants.
28
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
and other commitments made by the parties must be deemed to have ultimately culminated in the formation or execution of a written contract. The plaintiffs are precluded from contending that there was a totally different oral contract between the parties. Even if it is permissible, the plaintiffs could not prove the existence of any such concluded oral contract.
29
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
may not have any reliance in the light of what have been already stated.
30
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
grant or conferment of dealership based on those letters or bills.
31
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
"The grounds of exclusion of extrinsic evidence are (i) to admit inferior evidence when law requires superior would amount to nullifying the law, and (ii)
when parties have deliberately put their agreement into writing, it is conclusively presumed, between
32
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
themselves and their privies, that they intended the writing to form a full and final statement of their intentions, and one which should be placed beyond the reach of future controversy, bad faith and treacherous memory."
It is not a case where the appellants contend that the agreements executed were never intended to operate as an agreement but at the same time some other agreement altogether, not recorded in the document, was entered into between the parties. Since the terms of the contract were incorporated in the documents, Exts. A1 and A3, which are the lease agreement and M&H contract marked in one case (similar documents were marked in all the other cases), it cannot be said that those documents were never intended to be acted upon or were only sham documents.
33
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
"The law will not couple and mingle matters of speciality, which is of the higher account, with matter of averment which is of inferior account in law."
Relying on the same it was observed by the Apex Court that it would be inconvenient that matters in writing made by advice and on consideration, and which finally import the certain truth of the agreement of parties should be controlled by averment of the parties to be proved by the uncertain testimony of slippery memory.
"It is likewise a general and most inflexible rule that wherever written instruments are appointed, either by the requirement of law, or by the contract of the parties, to be the repositories and memorials of truth, any other evidence is excluded from being used either as a substitute for such instruments, or to contradict or alter them. This is a matter both
34
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
of principle and policy. It is of principle because such instruments are in their own nature and origin, entitled to a much higher degree of credit than parol evidence. It is of policy because it would be attended with great mischief if those instruments, upon which men's rights depended, were liable to be impeached by loose collateral evidence."
"Section 91 relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This
35
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
section merely forbids proving the contents of a writing otherwise than by writing itself; it is covered by the ordinary rule of law of evidence, applicable not merely to solemn writings of the sort named but to others known sometimes as the "best-evidence rule". It is in reality declaring a doctrine of the substantive law, namely, in the case of a written cotract, that all proceedings and contemporaneous oral expressions of the thing are merged in the writing or displaced by it."
36
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
landowners have no vested or legal right to claim appointment of themselves or their nominees as dealers of retail outlet. They can sustain their claim only if there was a concluded contract which would bind the respondent – Company. It is pointed out that so far as the lease deeds in O.S. No.1366/2006 and O.S. No.1387/2006 are concerned, they were executed in 1999 when the Administrative Price Mechanism was not even in contemplation by the authorities concerned. There is also no case for the appellants that there is any covenant in the lease agreement or in the M&H contract which obliges the Company to grant dealership to the M&H Contractors or to the owners of the land. The very fact that there is a stipulation in the lease deed, empowering the respondent - Company to sublet the premise to its agents or dealers and also to terminate the agreement given to the M&H contractors, would scuttle the plea that there was a
37
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
simultaneous oral contract or any other verbal commitment legally obliging or compelling the respondent - Company to grant dealership to the land owners or to their nominees.
38
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
of due execution, want of capacity in any contracting party, (want or failure) of consideration, or mistake in fact or law.
Gangabai v. Smt. Chhabubai - AIR 1982 SC 20:
“The sub-section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral evidence is admissible to show that the document executed was never
39
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
intended to operate as an agreement but that some other agreement altogether, not recorded in the document was entered into between the parties”.
40
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
dealt with therein are also entirely different. That was a case where, in order to circumvent the provision relating to the sub tenancy, a device was adopted by the tenants entering into a partnership deed. In the circumstances of that case it was held that the landlord is not excluded from demonstrating the untrue or collusive nature of the document or the fraudulent or illegal purpose for which it was brought into being because so far as that agreement is concerned, the landlord is a stranger.
41
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
facts of these cases.
by the learned counsel for the appellants that proper issues were not framed by the trial court and the points formulated by the appellate court are also not relating to the actual controversy between the parties. Therefore, it is argued that unless the issues are properly framed or points are properly formulated, the decision rendered in such cases cannot be said to be legal.
Bombay 98, has been relied upon by the learned counsel for the appellants. In that case the appellate judge formulated the sole point as ; whether the judgment and decree of the trial court are liable to be set aside ?. Hence, it was held by the High Court that the points for determination formulated by the appellate judge was
42
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
hopelessly inadequate and inaccurate and in a highly unsatisfactory manner.
43
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
questions were formulated. Therefore, it cannot be said that the lower appellate court did not consider each and every point pressed for consideration at the time of argument. But on going through the judgments, it can be seen that the lower appellate courts have disposed of the appeals after taking note of the argument advanced, the points arising from the arguments and other materials though the points were not seen properly formulated. But that cannot be a reason to say that the judgments rendered by the lower appellate courts are vitiated by illegality. Of Course, the lower appellate court should not have forgotten the legal requirement of formulating the points in the manner required by law. The decision of the Andhra Pradesh High Court in Iruvanti Gopinatha Rao & Others v. Vadlapudi Narayana and Others - 1997 (2) ALT 785 which is also in line with the decision cited supra has been relied upon. There, it was held that even
44
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
if points for determination are not formulated in the judgment , if the appellate judge has considered all the disputed questions and recorded its finding thereof, it will be substantial compliance. Whether it is concurring or reversing the judgment, it is necessary for the appellate court to consider evidence and give its decisions in accordance with Order 41 Rule 31 CPC. The decision of the Andhra Pradesh High Court in Viyyapu Danayya v. Peethala Appa Rao & Ors. - 1997 (3) ALT 266 has also been relied upon where also, the lower appellate court formulated only a point whether the judgment and decree of the learned Munsiff is liable to be set aside which does not satisfy the requirements of Order 41 Rule 31 of the Code which squarely envisages that the judgment of the appellate court shall state the points for determination, the decision thereon, the reasons for the decision, and if the decree appealed from is reversed or varied, the relief to
45
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
which the appellant is entitled.
46
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
for shirking the duty cast on it. Though the learned counsel for the appellant would submit that a perusal of the judgment rendered by the appellate court would disclose that the appeals were disposed of by the appellate courts without complying with the provisions of Order 41 Rule 31. I do not agree with the same. There was proper consideration of the points in dispute. Hence, this point is also answered against the appellants.
47
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
for allotment of retail outlets. After considering the various contentions raised in the Writ Petitions it was held by the High Court of Delhi that almost all the petitioners before that court had sought for quashing of notification dated 6.9.2006 issued by the Government of India, Ministry of Petroleum and Natural Gas, New Delhi. It was contended before that court that the said notification is not applicable to the cases of land owners/M & H Contractors in as much as, allegedly the land owners or their nominees mentioned therein were given retail outlets under the 'land owner category' in terms of the policy guidelines for selection of retail outlets/dealers in the de-regulated scenario. Those petitioners sought for an order restraining the oil companies from enforcing and implementing the said notification dated 6-09-2006. But all those Writ Petitions were dismissed by the High Court of Delhi.
48
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
learned counsel for the respondents to fortify his submission that it was the very same policy covered by the notification dated 6.9.2006 issued by the Union of India, Ministry of Petroleum and Natural Gas which is attached in these cases as well. It was noticed that till 31-03-2002 only public sector oil companies were entitled to market petroleum products in retail. With effect from 1.4.2002 Administrative Price Mechanism (APM) was to be dismantled. It was noticed that on dismantling of APM, Dealer Selection Board could be dissolved and certain amount of freedom could be given to the oil companies to frame and follow their own policies to be competitive. Accordingly, guidelines were framed by the Ministry of Petroleum and Natural Gas to ensure that the Public Oil Companies are able to meet the challenges of post dismantling of APM with effect from 1.4.2002. Thus it was decided that oil companies would purchase land or take
49
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
land on long lease and set up petrol pumps and operate their own retail outlets. Such outlets were named as "Company - owned-Company-operated outlets / "COCO" outlets. It was further decided that the land owners were to be selected by selection process and M & H Contractors were appointed to operate these outlets. It was decided that M&H contractors were to be selected independently and such contract was to be for a period of one year, extentable by another year. It was noticed that by the notification issued earlier it was not able to formulate any policy on COCO outlet and as such ad hocism was prevailing and there was absence of uniformity and consistency. It was decided that the companies should operate permanent COCO outlets through their own officers and no labour contractor should be appointed for permanent COCO retail outlets. It was further decided that temporary COCO outlets were to be phased out within a
50
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
period of one year by appointing a dealer or issuing Letter of Intent.
51
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
retail outlets it was governed by the M&H Contracts. It was only for a limited period of one year, extendable by another one year. There was a clause in the lease agreements granting liberty to the oil companies to create sub-lease. It was stipulated that the owner of the land would have no objection if someone else is appointed as a dealer. The relevant clauses have already been quoted by me earlier. All these aspects were considered by the High Court of Delhi.
52
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Gas and were executed through public sector oil companies. In 1998 the Central Government decided to partly deregulate the production, supply and distribution of petroleum and indicated 2002 as a cut-off year to completely deregulate the production and supply of petroleum and petroleum products. The Central Government again took steps to make certain changes with regard to the functioning of Natural Oil and Gas Companies under the Market Driven Pricing Regime and to work out the modalities of setting up petrol pumps on natural and State Highways which led to the creation of the concept of Company owned /Company Operated Outlets (COCO) as a means to enable National Oil Companies to run and operate their own outlets which were to be run as model retail outlets. A uniform policy was formulated for manning and controlling of outlets.
53
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
recommended that the dealership be given to the appellants in those cases and directed that letter of intent be issued in favour of the appellants. While so, on 5-2-2003 the policy adopted on 8-10-2002 was suspended. It was also contended that as an interim arrangement, a nominee of such aspirants be appointed as Maintenance and Handling Contractors (M & H) to run the petrol outlets. There was an assurance that those appellants be offered their land on lease to the Oil Company subject to the condition that the monthly rental of the land would be paid. Pursuant thereto a contract for maintenance and handling was executed between the Oil Company and the Aspirants/the appellants mentioned therein. It was contended before the Hon'ble Supreme Court that on the basis of the then existing policy the Oil Companies had offered full dealership to the land owners and caused such land owners to act on their position to their disadvantage and so the Oil
54
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Companies are estopped from going back on their promise.
55
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
the contention raised by the appellants herein that they had spent huge sum of money for putting up constructions, installations etc. have been stoutly opposed by the learned Sr. counsel appearing for the respondents.
56
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
full dealership in respect of such retail outlets. Hence, the contention that was raised by the appellants before the Apex Court was that the party who had acted on a representation made by the Government or the Oil Companies should be bound to carry out the promise made by it, though not recorded in the form of a formal contract. It was further contended before the Hon'ble Supreme Court that having held out a promise to grant a dealership to the various appellants in respect of the lands offered by them for setting up retail outlets for the sale of petroleum and petroleum products and having acted thereupon just prior to the stage of grant of letters of intent, it was no longer available to the Oil Companies to renege on their promise, particularly, when the aspirants for dealership had altered their position and had spent enormous sums of money to make the sites ready for setting up the retail outlets. Such a plea cannot be sustained in these cases for the reasons
57
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
already stated. It was also vehemently argued before the Apex court that where lands had been taken on lease on the assurance that the land owners would be appointed as the dealers in due course and that till then the retail outlet would be treated as a COCO unit to be run by a nominee of the land owner and notwithstanding the change in policy guidelines regarding the allotment of dealership in favour of the land owners, the doctrine of promissory estoppel and of legitimate expectation would apply. Though such a view was taken by the High Court of Karnataka, that was held against by the Hon'ble Supreme Court in the batch of Appeals referred to above. The appellants before the Hon'ble Supreme Court had also referred to the certain letters termed as 'comfort letters', where the lease deeds had been executed prior to 8-10-2012, assuring the land owners of the demised plots that they would enjoy the right of first refusal if COCO outlets set up on their lands were to
58
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
be converted into dealership.
59
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
conduct on the part of the Oil Companies which had altered the position of the appellants so as to apply the doctrine of promissory or equitable estoppel.
60
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
respondents it was their duty to produce the same and they should not have waited for an application to be filed by the plaintiffs for causing production of the same, it is argued. The learned Senior counsel for the respondents would submit that since the plaintiffs have come forward with a case that they are entitled to get a dealership license granted in their name it is for them to plead and prove by producing all documents necessary for sustaining their claim. The question of production of the policy document does not arise at all since the appellants founded their case on the alleged simultaneous oral contract and so they should win or lose on proof or otherwise of the plea so raised by them and for that purpose there was no necessity for production of the policy. Even if for any reason the plaintiffs/appellants wanted to have that policy produced in court, to say that there was no change of policy or that the change of policy was detrimental to the interest of the
61
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
persons to whom the Oil Companies had made promises or contracts, then it was the duty of the plaintiffs to have applied to the court directing the respondents to cause production of any such document. No such petition was filed in any of the cases before the Ernakulam Court or before the Kozhikode Court where the batches of cases were dealt with.
62
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
agreement itself and as such the parties are bound by the agreement.
63
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
by the appellants there is any foundation laid in support of the assertion that a separate oral contract had been entered into to the effect that the dealership would be given to the land owners or their nominees or that the awarding of M & H contract was only an interim measure.
64
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Companies would have no avail, for the alleged promise made in such letters does not constitute a promise which could be enforced. It is further pointed out that even in those letters it was specifically mentioned that it would depend upon the policy decision. Not only that those letters were issued long prior to the execution of the written contracts/agreements referred to earlier. Therefore, all those promises or commitments can have no effect at all when the terms of the contract were subsequently reduced to writing and the parties signed those agreements with open eyes knowing fully well the contents of the same. The plea that the parties simply signed those agreements without understanding the real import or purport of the same cannot be accepted at all. There is no such evidence also.
65
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
appellants in most of the cases was based on the doctrine of promissory estoppel on the basis of a promise apparently made by the respondents to the land owners that they would be granted dealerships in lieu of the lands offered by them for setting up of the retailed outlets. It was held that there was sufficient evidence to indicate that initially negotiations had been conducted by the Oil Companies with aspiring land owners that in lieu of the lease to be granted they would be provided with dealership. 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 dealership would be categorised as indicated in the guidelines.
66
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
introduced w.e.f. 6-09-2003 in supersession of the earlier policy dated 8-10-2002 . There is no acceptable evidence to show that there was any understanding or contract that once the earlier policy was restored, the land owners would be given the option for having the COCO Units converted into regular Retailed Outlets. The concept of a dealership in respect of a Retailed Outlet is inconsistent with that of a COCO Unit.
67
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
agreements with the Oil Companies cannot claim any right on the basis of the earlier policy in the absence of any written contract in support thereof.
68
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
nominees.
69
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Supreme Court in the batch of cases referred to earlier.
70
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
below is factually incorrect. In fact in R.S.A. 386/2012
and 10 other appeals (R.S.A. Nos. 566, 565, 561, 560, 546,
545, 542, 541, 540 and 544 of 2012 ) one substantial question raised by the appellants is with respect to the legitimate expectation and promissory estoppel. The contention that no such arguments were addressed before the courts below cannot thus be accepted at all. However, in view of the submission now made by the learned counsel for the appellants that their claim is not founded on the doctrine of promissory estoppel or equitable estoppel it is not necessary to delve much on that aspect. There is nothing on record to show that any such promise or commitment was made by the Oil Companies which caused such land owners to alter their position to their disadvantage.
71
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
below did not address themselves to the plea so raised by the appellants. But what are the terms and conditions of that oral contract are absolutely silent in the pleading and evidence. There cannot be any oral contract without the terms being so clear, precise and certain. Simply by saying that there was a promise that the license would be given to the land owners or the licensees, the appellants cannot sustain their claim. It is argued that if in fact there was any agreement to do or omit to do a particular thing, the remedy open to the appellants is to sue for specific performance of the contract so entered into. The suit is not for specific performance. But the learned counsel for the appellants would submit that when the suit is for declaration as to the legal character that would take within it the enforcement of the oral contract relied upon by them. I cannot agree.
72
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
owners and the Oil Companies are in the same form. In one of the cases it is marked as Ext.A1. Similar agreements were executed by the land owners on various dates. But there is no dispute as to the nature or content of the lease agreements entered into between the parties. According to the land owners (one or some of the plaintiffs in each suit), they nominated M & H Contractors, (who were also impleaded as plaintiffs), for the purpose of running the outlets and for entrusting the dealership. According to them, defendants had represented that under the existing guide lines it will be difficult for them to straight away enter into dealership agreement and instead a contract would be entered into initially for a period of one year with an understanding that it will be extended from time to time till a pacca dealership agreement is executed. According to them, till the execution of such a pucca dealership agreement, the outlet would be known as
73
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
COCO Retail Outlets (COCORO) and accordingly, the persons nominated by the land owners applied for appointing them as M& H Contractors in respect of the various outlets. As stipulated they also filed affidavit on a stamp paper of Rs. 100/- each and process fee was also paid. According to them, though such retail outlets were run in the respective plaint schedule properties as COCO Outlets, for all practical purposes it was being run by the plaintiffs as if they were actually the dealers or that they obtained the dealership license.
74
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
localities, for nominal rent. The defendants on the other hand contend that the rent fixed was reasonable and fair taking into account the rate prevalent in the locality at the relevant point of time. There was stipulation for quinquennial enhancement. The respondents would further contend that there is absolutely no evidence to show that the rent which would have fetched at the time of entering into the contract was much more than what was stipulated as per the lease agreement. Though it is contended by the plaintiffs that they agreed to lease out the premises on a nominal rent only on the assurance and understanding given by the defendants, by their conduct and representation that the dealership would be conferred on them or their nominees, that contention remained in the realm of pleadings or suggestions alone. In other words, there is no legal foundation to sustain such a plea. Similarly, though it was contended that by such
75
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
understanding, assurance and representations the defendants induced the plaintiffs to let the plaint schedule property for a nominal rent under the legitimate expectation that dealership would be granted to the land owners or the nominees that also remained unsubstantiated. The defendants would contend that since the parties are governed by the lease agreement and M&H Contract, they are bound by the terms thereof. Those contracts or agreements are not vitiated by fraud, misrepresentation, undue influence, coercion or anything of that sort. Those agreements were entered into after the commissioning of the Outlets. If there had been any such offers, promises, understanding or commitments, the same must have been incorporated in Exts.A1 or A2, but nothing of that sort is seen incorporated in any of the agreements entered into between any of the parties.
76
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
would only bespeak a lease agreement and Ext.A2 would only speak of a M & H Contract. There is nothing to indicate in any of the agreements that any representation or promise was made by the defendants that the land owners or their nominees would be granted dealership. The lease deeds would show that it was executed for a period of 15 years with a stipulation for renewal for a further period of 15 years. Clause (3) provides for a hike of rent by 15 % every five years. There is also a stipulation that the lessee shall have full liberty to sub lease the premises to its agents or dealers for any of the purposes for which they are demised without restrictions and without reference to the lessor. This clause really precludes the land owners or the lessors from questioning the authority of the lessees (Oil Company) in leasing out the premises to its agents or dealers. There is also another clause, Clause 13, which stipulates that the lessee may without assigning any
77
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
reason during the currency of the lease, terminate the lease, on giving 3 months notice to the lessor in which case on expiry of the said notice the lessee shall give vacant possession of the scheduled property after removing/dismantling all the structures/machineries etc. If really there was a promise or undertaking that dealership would be given. then certainly such a recital must have been incorporated in the lease deed. The parties to Ext. A1 signed the same without demur. There was no difficulty for them to get a clause incorporated in Ext.A1 so as to get the dealership granted to them on a future date. Therefore, the parties to the agreement cannot resile from the same or say anything which would run counter to the stipulations contained in Ext.A1 in view of the embargo contained in Sec. 92 of the Evidence Act, for the purport of the plea put forward by the plaintiffs would tantamount to varying or subtracting from the terms of the agreements
78
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
executed between the parties. There is absolutely nothing in Ext.A1 to show that there was an offer or undertaking or representation by the defendants to the effect that either the land owners or their nominees would be granted the dealership, license or agreement. Hence, the contention to the contrary advanced by the appellants cannot be sustained.
79
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
living , the inflation rates etc. are matters which cannot be lost sight of by the courts . Those factors will certainly have an impact on the rent of the buildings or lands as well. There is a stipulation in Ext.A1 itself that every five years rent can be enhanced by 15%. Such a stipulation was incorporated without any demur. That itself will indicate that the rent originally fixed was fair and reasonable. That apart, this is not a suit for fixation of fair rent or for enhancement of rent. But, such a plea has been advanced by the appellants only to contend that there was a promise or understanding by the defendants that dealership would be conferred on the owners of the land or their nominees. It has already been found that there was no stipulation in the written contract. The alleged oral promise cannot supersede or outweigh the written contracts.
80
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
the Company was desirous of engaging the contractor to operate the outlet for retail sale of the said product and to run the other services at the said premises to the best satisfaction of the customers. A perusal of the several clauses in the M&H contract would only show that the products which were to be sold were the products of the respondent Company. Further stipulation is that the M&H Contractor was bound to maintain correct account for all transactions carried out every day through banks. That would strengthen the contention advanced by the respondents that the nominees or M&H Contractors were not given any special right but they were only selling the articles or selling the petrol or petrol products of the respondents. In other words, there is nothing to indiate that the appellants were granted dealership or that they were doing the business independently.
81
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
showing some receipts or bills that the petrol or diesel in bulk quantity was purchased by the plaintiffs/M&H Contractors and it was not a mere stock transfer from the Company to the retail outlet. But all the bills and receipts produced by the appellants would show that the sale was only as COCO outlet and not as a pucca sale by the Company in favour of any dealer. Those receipts were produced only before this Court. I found it not necessary to receive those bills or receipts for the adjudication of questions involved in thse Second Appeals. Hence the certifications for reception of those documents were dismissed by me. It is not disputed that the terms or stipulations in Exts.A1 and A2 would never indicate that those documents were executed with the intention of creating or conferring any allotment or dealership but were executed only to create lease deeds for obtaining the land for setting up of retail outlets by the Oil Companies.
82
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Similarly, there was also no dispute regarding Ext.A2 and similar other M&H Contracts that those contracts were entered into for the purpose of COCO Units for a limited period under the supervision of the sales officers of the Oil Company. Therefore, the contention that there was a promise or representation on the part of the respondents and so the land owners were having a legitimate expectation of conferring dealership in due course is only a story invented by the appellants to bolster up their untenable claim.
83
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
applicability of the principle of legitimate expectation and promissory estoppel. The decision of the Supreme in Union of India and Another v. International Trading Company and Another - AIR 2003 SC 3983 and Kusumam Hotels Pvt. Ltd. v. K.S.E B - 2008 (3) KLJ 276 have been cited before the courts below. Since the suit before the Ernakulam Court (Batch A cases) were filed for a declaration of the legal character of the plaintiffs or their nominees as the dealers of the outlets concerned, a plea was raised by the respondents that the claim is barred by limitation. It was contended that the suit should have been filed within a period of 3 years from the date of execution of M & H Contract. In some of the cases findings were entered against the plaintiffs. But in respect of some other cases, the findings were rendered in favour of the plaintiffs. The respondents did not challenge the finding rendered against them. Now the learned counsel for the
84
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
respondents has fairly submitted that since no cross appeal was filed, the plea of limitation does not survive for consideration.
85
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
outlets following the then prevailing policy of the Company. But there is a further stipulation that the appointment orders were yet to be issued. In other words, there was no contract or promise that the addressees of those letters were agreed to be given the dealership. The learned counsel for the appellants would submit that the suit for a declaration as to the legal character of the suit is perfectly maintainable but it may be remembered that if the plaintiffs are to obtain a declaration of the legal character as dealers then it must be a case where the dealership had already been granted to them or that they were recognized as dealers. If they were recognized as dealers then the terms of the dealership should be there.
86
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
by the plaintiffs and marked on their side would only show that they were treated only as M & H Contractors and not as dealers. There is nothing on record to show that the defendants had treated or recognised the landowners or their nominees as dealers in respect of the retail outlets in question. It was pointed out by the lower appellate court that in some of the suits, the plaintiffs contended that they were treated by the Company as dealers. But in some other cases their contention is that they are entitled to be treated as dealers of the outlets in terms of the verbal agreements or commitments. It is too vague a plea to be countenanced by a court, the learned Senior Counsel for the respondents submits.
87
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
nominees will be conferred on them the dealership of the retail outlets. It is not a case where dealership had already been granted. Therefore, the question of granting a declaration of a legal character that the plaintiffs or their nominees are the dealers of the retail outlet does not arise at all. If there was any such promise that was something to be enforced by filing a suit for specific performance.
88
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
contracts which were incorporated in the respective lease agreements and M & H contracts did survive as on that date. Therefore, the courts below were perfectly justified in holding that the appellants have miserably failed to prove the case advanced by them so as to get a decree for declaration as sought for.
89
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Supreme Court:-
“ It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his view point on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision making authority. Needless to add that internal notings are not meant for outside exposure. Noting in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making authority in the department, gets his approval and the final order is communicated to the person concerned”.
90
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
91
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
parties. It is submitted by the learned counsel for the respondents that in this case also even if it is assumed that the author of the letter had expressed his view that the addressee is competent to be appointed as a dealer that does not confer on him any right unless the Company itself has decided to grant a dealership license in favour of the owner of the land or his nominee. A letter containing casual observation of one of the officers of the Company cannot be treated as a right conferred on the addressee that he has been conferred the dealership license. That being the legal position and in the light of the factual scenario as highlighted above it is difficult to hold that the letters referred to above would tantamount to recognizing or conferring on the owners of the land or the nominees dealership in respect of the respective retail outlets. Based on the casual observations contained in those letters Ext.A1, A5, A47 and A48, one cannot have a reasonable or
92
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
legitimate expectation and those letters by themselves would not create any distinct enforceable right.
93
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
India v. Kamadhenu Cattle Feed Industries - (1993) 1 SCC 71; Union of India v. Hindustan Development Corporation - (1993) 3 SCC 499.
94
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Construction Corporation v. S. Raghunathan - (1998) 7 SCC 66; Bannari Amman Sugars Ltd. v. CTO - (2005) 1 SCC 625; Jitendra Kumar v. State of Haryana - (2008) 2 SCC 161 .
for running and promoting the business as an M & H Contractor and not for installation or for erection of any
95
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
structures or super structures. Actually it is a case where defendant Company had spent several lakhs of rupees for commissioning each of the retail outlets and so in fact it is a case where equitable consideration can only be in favour of the defendant Company and not in favour of the plaintiffs. Even if it is assumed that there was any verbal promise or commitment which cannot be recognized in the eye of law, there is nothing to show that the parties were put in a disadvantageous position or that the position of the plaintiffs had been altered by any such inducement, promise or commitment. Therefore, the argument vehemently advanced by the learned counsel for the appellants that the equitable considerations may also be weighed in their favour so as to grant relief to the plaintiffs must fall to the ground.
96
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Wednesbury Corpn. - (1948) 1 KB 223 has been relied upon by the learned Sr. counsel appearing for the respondents in support of his submission that a party can question the change in the policy only on the ground that he was not heard before such a change was made and that such a change was not made on relevant considerations or was malafide. The plea of legitimate expectation cannot be invoked against the higher public interest of the State of earning higher revenue. A case of substantive legitimate expectation would arise when a body, by representation or by past practice, aroused expectation that would be within its power to fulfill. It is arbitrary when the decision is taken without application of mind or on irrelevant consideration or is malafide. Legitimate expectation is a test of arbitrariness; it is not a right in itself. Commentaries on Administrative Law 7th Edition (Re-print - 2012 page 445) has been referred to here. In Food
97
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
Corporation of India v. Kamadhenu Cattle Feed Industries (supra) the Food Corporation of India had invited tenders for sale of stocks of damaged foodgrains and the respondent's bid was the highest. All tenderers were invited to negotiation but the respondent did not raise its bid, while others did. The respondents filed a Writ Petition claiming that it had legitimate expectation of the acceptance of its bid, which was the highest. Though the High Court allowed the Writ Petition, the Hon'ble Supreme Court reversed the same and held that even though the respondent's bid was the highest it had no right to have it accepted if the Corporation reasonably felt that the amount offered by the respondent was inadequate and so the nonacceptance could not be faulted.
98
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence”. It was held that “substantive legitimate expectation would arise when a body by representation or by past practice aroused expectation which would be within its power to fulfill” . The court could interfere only if the decision taken by the authority was arbitrary, unreasonable or not taken in public interest.
(Supra) the Hon'ble Supreme Court dealt with the law of legitimate expectation more comprehensively . It was held that the Court would allow the government to belie expectation if a change of policy had occurred, but the court would examine whether such change of policy was arbitrary. It was held by the Hon'ble Supreme Court that doctrine of legitimate expectation permitted the court to examine whether the change of policy was irrational,
99
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
perverse or one that no reasonable person could have made.
100
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
contract with open eyes knowing full the terms and conditions thereof.
5,63,471.73. But they were given an import entitlement certificate only for 1,99,459/-. The question that arose for determination was whether the government was estopped from denying the101
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
statement it made in the export promotion scheme relying upon which the respondent had exported the goods of stated value. It was held that the government and their authorities were not entitled to ignore the promises held out by them at their mere whim. It was held by the Supreme Court that the Government was bound not by contract but on ground of equity. It was further held that even though there might not be a verbal contract, the government would be bound by a representation made on its behalf. It is argued on behalf of the respondents that in order to invoke the principle of promissory estoppel it must be a case where the Company must have made a representation and the land owners or his agents must have acted on that representation and put themselves in a disadvantageous position in which case the Court would be entitled to require the Company to act according to the scheme or the agreement or the representation. So far as the case on
102
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
hand is concerned, in view of the submission made by the all the counsel appearing for the appellants it is not necessary to delve into the question of legitimate expectation or promissory estoppel. The appellants have confined their claim based on the alleged simultaneous oral contract or verbal commitment made by the oil companies to the effect that dealership would be given to the plaintiffs. The plea that such a concluded oral contract was there and so the plaintiffs are entitled to get a declaration as to their legal character, that they are the dealers of the respondent Oil Companies, cannot be sustained at all. There is absolutely no scintilla of evidence to show that the dealership was ever given or agreed to be given to any of the appellants. Though the policy as such was not produced or caused to be produced by the plaintiffs, what actually was the policy can be discerned from the judgment of the Delhi High Court in the case
103
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
referred to above. The plaintiffs did not choose to apply for issuance of summons to the parties concerned to produce the policy documents. What actually was the policy has been dealt with elaborately by the High Court of Delhi in the case referred to above. It is true that the judgment of the Delhi High Court is not a document produced before Court but it is a decision rendered by the High Court. When the facts of the case dealt with therein are almost identical to the facts of this case, it cannot be said that this Court should not go through that judgment at all or that the policy of 2006 referred to in that judgment cannot be referred to by this Court at all.
104
R.S.A. Nos. 1305, 1306, 1307, 1308, 1309, 1320, 1321, 1322, 1323 and 1356 of 2010 , R.S.A. 386, 540, 541, 542, 544,545, 546, 560, 561, 565, 566 of 2012
The evidence would only show that the appellants were not conferred any right or dealership as alleged by the appellants. It could not be proved that any such oral agreement agreeing to confer dealership was entered into.
As such, the plaintiffs are not entitled to get a declaration or consequential reliefs. Hence, all these appeals are dismissed. Parties are directed to bear their own costs but without costs.
Dated this the day of 23rd January, 2014.
Sd/- N.K. BALAKRISHNAN, JUDGE
ani/
/trie copy/
P.S. To Judge
3 issues framed by the court
Could an alleged oral dealership agreement override the subsequent written lease and maintenance-and-handling contracts?
Were the landowners or their nominees entitled to a declaration of dealership without proof that dealership had been conferred?
Did failure to formulate proper appellate points vitiate judgments that considered all disputed questions?
Colour shows how this judgement treated each authority
Roop Kumar v. Mohan ThedaniApplied¶154
Roop Kumar v. Mohan Thedani – (2003) 6 SCC 595 · Who else cites this
Gangabai v. Smt. ChhabubaiDistinguished¶191
Gangabai v. Smt. Chhabubai - AIR 1982 SC 20: · Who else cites this
Parvinder Singh v. Renu Gautam and OthersDistinguished¶197
Parvinder Singh v. Renu Gautam and Others - (2004) 4 SCC 794 · Who else cites this
Anita M. Hrretto v. Abdul Wahid SanaullahDistinguished¶207
Anita M. Hrretto v. Abdul Wahid Sanaullah - AIR 1985 Bombay 98, · Who else cites this
Iruvanti Gopinatha Rao & Others v. Vadlapudi Narayana and OthersRelied on¶215
Iruvanti Gopinatha Rao & Others v. Vadlapudi Narayana and Others - 1997 (2) ALT 785
Viyyapu Danayya v. Peethala Appa Rao & Ors.Distinguished¶218
Viyyapu Danayya v. Peethala Appa Rao & Ors. - 1997 (3) ALT 266
Khatunbi Wd/O Muhammed Sayeed v. Aminabi , W/o. MohammedSabirDistinguished¶222
Khatunbi Wd/O Muhammed Sayeed v. Aminabi , W/o. MohammedSabir - 2006 (6) MHLJ 759. · Who else cites this
Civil Appeal No. 5228 of 2013Relied on¶69
judgment dated 8.2.2008Relied on¶226
Union of India v. M/s. Indo-Afgan Agencies LimitedReferred¶272
Union of India v. M/s. Indo-Afgan Agencies Limited - (1968) 2 SCR 366, · Who else cites this
Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and OthersReferred¶272
Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Others - (1979) 2 SCC 409, · Who else cites this
Union of India and Others v. Godfrey Philips India LimitedReferred¶272
Union of India and Others v. Godfrey Philips India Limited (1985) 4 SCC 369, · Who else cites this
State of Bihar v. Kalyanpur Cement LimitedReferred¶272
State of Bihar v. Kalyanpur Cement Limited - (2010) 3 SCC 274. · Who else cites this
Sethi Auto Service Station vs. Delhi Development AuthorityApplied¶389
Sethi Auto Service Station vs. Delhi Development Authority - (2009) 1 SCC 180 . · Who else cites this
Bachhittar Singh v. State of PunjabRelied on¶396
Bachhittar Singh v. State of Punjab - AIR 1963 SC 395 · Who else cites this
Food Corporation of India v. Kamadhenu Cattle Feed IndustriesReferred¶422
Food Corporation of India v. Kamadhenu Cattle Feed Industries - (1993) 1 SCC 71; · Who else cites this
Union of India v. Hindustan Development CorporationReferred¶406
Union of India v. Hindustan Development Corporation - (1993) 3 SCC 499. · Who else cites this
Punjab Communications Ltd. v. Union of IndiaReferred¶407
Punjab Communications Ltd. v. Union of India - (1999) 4 SCC 727 · Who else cites this
National Buildings Construction Corporation v. S. RaghunathanReferred¶410
National Buildings Construction Corporation v. S. Raghunathan - (1998) 7 SCC 66; · Who else cites this
Bannari Amman Sugars Ltd. v. CTOReferred¶410
Bannari Amman Sugars Ltd. v. CTO - (2005) 1 SCC 625; · Who else cites this
Jitendra Kumar v. State of HaryanaReferred¶410
Jitendra Kumar v. State of Haryana - (2008) 2 SCC 161 · Who else cites this
Associated Provincial Pictures Ltd. v. Wednesbury Corpn.Referred¶416
Associated Provincial Pictures Ltd. v. Wednesbury Corpn. - (1948) 1 KB 223
Council of Civil Service Union v. Minister for the Civil ServicesReferred¶432
Council of Civil Service Union v. Minister for the Civil Services - 1985 SC 374 page 469
J.P. Bensar v. State of RajasthanReferred¶432
J.P. Bensar v. State of Rajasthan - AIR 2003 SC 1405 · Who else cites this
India v. Anglo-Afgan AgenciesReferred¶437
India v. Anglo-Afgan Agencies - AIR 1968 SC 718 · Who else cites this
3 provisions across 2 enactments
V.K.HANEEFA
IBP COMPANY LTD
THE SENIOR DIVISION MANAGER, IBP COMPANY LTD
V.H.ANVAR
N.K.BALAKRISHNAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court