Petitioner challenged termination of petrol station service agreement and demand for possession. Court held termination notice was valid and possession must be surrendered as interim relief expired. Petition dismissed.
Writ petition dismissed. Connection miscellaneous petitions dismissed.
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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 25.04.2014
CORAM
THE HONOURABLE MR.JUSTICE R.SUBBIAH
W.P.(MD)No.4291 of 2014 and M.P.(MD).Nos.1 to 3 of 2014
S.Seetharaman ... Petitioner
Vs.
1.The General Manager, Hindustan Petroleum Corporation Limited, South Zone - Retail, 4th Floor, Thalaimuthu Natarajan Building, Gandhi Irvin Road, Egmore, Chennai -600 008.
2.The Senior Regional Manager, Hindustan Petroleum Corporation Limited, No.7, III Floor, Rakesh Towers, Bye Pass Road, Madurai - 625 010.
3.Area Sales Manager, Tirunelveli (S/AKS), Tirunelveli. ... Respondents
Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, to call for the entire records pertaining to the order passed by the 2nd respondent, MDRO/SJ/RET, dated 03.03.2014 and quash the same as illegal and void, and consequently, direct the respondents to provide the usual supply of petroleum products and the payments due to this petitioner and other staffs given by these respondents, as usual and not to take possession of the retail outlet at Papanasam, Tirunelveli District.
For Petitioner : Mr.F.X.Eugene For respondents : Mr.M.Sridher
ORDER
This writ petition has been filed by the petitioner for a Writ of Certiorarified Mandamus, to call for the records relating to the order passed by the 2nd respondent, in MDRO/SJ/RET, dated 03.03.2014 and quash the same as illegal and void, and consequently direct the respondents https://hcservices.ecourts.gov.in/hcservices/ to provide the usual supply of petroleum products and the payments due to this petitioner and other staffs, as usual and not to take possession of retail outlet at Papanasam, Tirunelveli District.
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2.The brief facts which are necessary for the disposal of this writ petition are as follows;
(a) The petitioner’s father viz., Shanmugaraj, leased out his land, admeasuring 28.35 X 30 meters in Vickramasingapuram Village, Papanasam, Ambasamudram Taluk, Tirunelveli District, to the Hindustan Petroleum Corporation Limited on 05.12.2003 for a period of 30 years for monthly rent at Rs.5,000/- till 2008 and after every five year, there would be a meager increase in the rent. The Corporation has been running a petrol bunk in the said land with adhoc dealership, through public advertisement or by service provider. While so, on 22.12.2010, the Corporation has called for application for the appointment of service provider to run the Petrol Bunk. The petitioner has applied for the same and attended the interview. The Corporation by its letter, dated 09.11.2011, appointed the petitioner as the service provider for the same. In the said letter, the petitioner was directed to provide the Bank guarantee to the tune of Rs.10 lakhs and to execute an agreement. Subsequently, the petitioner has also furnished bank guarantee to the tune of Rs.10 lakhs and executed an agreement for maintenance and handling on 09.03.2012. As per the said agreement, the petitioner could be the service provider for one year i.e., from 16.03.2012 to 15.03.2013.
(b)While so, on 12.02.2013 the Corporation advised the petitioner to renew the bank guarantee, which would expire on 04.03.2013, for a further period. Since the service provider agreement would lapse on 15.03.2013, the petitioner had hesitated to renew the bank guarantee for Rs.10 lakhs. But, subsequently the petitioner has extended the bank guarantee for Rs.10 lakhs for a further period of one year. Though the bank guarantee was renewed by the petitioner, the Corporation by a notice dated 07.08.2013, directed the petitioner to hand over possession from 10.09.2013, as the service provider contract is only a temporary arrangement. The said order was challenged by the petitioner in W.P.(MD).No.14590 of 2013, before this Court. In the said writ petition, the petitioner has obtained an interim order of injunction as against the Corporation from stopping supply of petroleum products, by contending that the bank guarantee has been renewed by the petitioner till 28.02.2014, as per the direction of the Corporation. Now, after the expiry of the bank guarantee, the present impugned order, dated 03.03.2014 has been issued by the Corporation, directing the petitioner to hand over the possession of the retail outlet. Aggrieved over the said order, the present writ petition has been filed by the petitioner.
3.Heard the learned counsel for the petitioner and the learned counsel appearing for the respondents.
4.According to the learned counsel for the petitioner, originally by way of service provider agreement, he was allowed to run the petrol bunk in the subject premises for a period of one year, commencing from 16.03.2012 to 15.03.2013. For this purpose, the petitioner was also directed to execute bank guarantee for Rs.10 lakhs. Accordingly, he had also executed the bank guarantee in favour of the Corporation. The said bank guarantee was valid up to 04.03.2013. As per the agreement, https://hcservices.ecourts.gov.in/hcservices/ the Corporation has also supplied petroleum products regularly. While so, just few days before the expiry of the bank guarantee i.e., on
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12.02.2013, once again the petitioner was asked to renew the bank guarantee. The petitioner has also renewed the bank guarantee till 28.02.2014. After renewal of the bank guarantee by the petitioner, the Corporation issued termination notice on 07.08.2013 and directed the petitioner to hand over the possession on 10.09.2013. Aggrieved over the same, the petitioner herein has filed W.P.(MD)No.14590 of 2013. In the said writ petition, it was the submission of the learned counsel for the petitioner that having directed the petitioner to extend the bank guarantee upto 28.02.2014, the respondents cannot terminate the agreement. Hence, this Court has granted an interim order of injunction in that writ petition. Now, after the expiry of the bank guarantee on 28.02.2014, the impugned order has been issued directing the petitioner to surrender the possession of the retail outlet. As per clause (6) of the service provider agreement, the respondents ought to have issued one month prior notice before terminating the agreement. But, the respondents, without issuing any such notice, has directly issued the impugned order terminating the agreement and therefore, the impugned order is liable to be set aside.
5.Per contra, it is the submission of the learned counsel appearing for the respondents that the termination order was issued as early as on 07.08.2013 itself. The petitioner has been continuing in possession till 28.02.2014, pursuant to the interim order granted by this Court. Since the bank guarantee expired on 29.02.2014 and since a termination notice was issued as early as on 07.08.2013, the respondents Corporation have issued the termination order, dated 03.03.2014, directing the petitioner to surrender the possession. Therefore, this writ petition is liable to be dismissed.
6.Keeping in mind the submissions made on either side, I have carefully perused the materials available on record. I find that as per clause 6 of the agreement dated 09.03.2012, entered between the petitioner and the Corporation, the agreement can be terminated at the option of the Corporation by giving one month's notice to the service provider without assigning any reason thereof and the petitioner has to handover the possession on the date of expiry of the agreement ie., on 15.03.2013 or on getting termination notice from the Corporation without causing any hindrance / problem. The Corporation has issued termination notice on 07.08.2013, informing the petitioner to surrender the possession of the outlet on 10.09.2013. As rightly contended by the learned counsel for the respondents, only by way of interim order granted by this Court in W.P.(MD).No.14590 of 2013, the petitioner has been continuing his possession till 28.02.2014, the date on which the bank guarantee expired. Therefore, it is not necessary for the respondents / Corporation to issue once again the termination notice on the expiry of the bank guarantee. The impugned order is issued only to surrender possession of the petitioner, since the interim relief granted by this Court had come to an end. The impugned order is only a consequential order to the termination notice, dated 07.08.2013. Therefore, I do not find any force in the contention raised by the learned counsel for the petitioner.
https://hcservices.ecourts.gov.in/hcservices/ 7.In this regard, it would be appropriate to look into the judgment reported in 2014 (1) SCC 201 (Mohd. Jamal Vs. Union of India
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and another), wherein the Hon'ble Supreme Court in a batch of petitions has held as follows;
"59.We are inclined to hold that the doctrine of promissory estoppel and legitimate expectation, as canvassed on behalf of the appellants and the petitioners, cannot be made applicable to these cases where the leases have been granted by the land owners on definite terms and conditions, without any indication that the same were being entered into on a mutual understanding between the parties that these would be temporary arrangements, till the earlier policy was restored and the claim of the land owners for grant of dealership could be considered afresh. On the other hand, although, the nominees of the lessors were almost in all cases appointed as the M & H Contractor that in itself cannot, in our view, convert any claim of the land owner for grant of permanent dealership. As has been indicated hereinbefore, even the M & H Contractor had to submit an affidavit to the effect that he did not have and would not have any claim to the dealership of the retail outlet and that he would not also obstruct the making over possession of the retail outlet to the Oil Company, as and when called upon to do so. The decisions cited on behalf of the appellants/petitioners, are not, therefore, relevant for a decision in these cases....."
8.In a batch of Writ Petitions in W.P.Nos.34999 to 35004 of 2005, etc. batch, by a common order dated 15.12.2009, this Court in paragraph Nos.24 & 25 has held as follows;
"24.Similarly, a Division Bench of the Delhi High Court on hearing the appeals from the order of the learned Single Judge of the Court in granting the relief to similarly placed persons, reversed the order of the learned Single Judge of that Court by a common judgment dated 8.2.2009 in LPA.No.158/2007. In that judgment, they have held that none of the petitioners were granted Petroleum retail outlets by the companies and there was no vested right accrued to them. After obtaining the lease deeds, the M & H contract was executed on the three persons, who were some times, may be the petitioners. The legality of the policy issued by the oil companies were not under challenge. Though there is vested right was claimed for allowing dealership of petrol bunk, in the lease deed, there is no express or implied promise that retail outlet will be handed over to the landlord. On the contrary, the oil companies have incurred huge expenses to the length of Rs.30 to 50 lakhs on creation of necessary infrastructure. By the terms of the agreement, it was only the lease creating jural relationship with the https://hcservices.ecourts.gov.in/hcservices/ landlord and tenant. By the revised policy, there are many special categories will have to be adopted to LOI. Under the contract terms, the agreement is for a
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period of one or two years. The company is at liberty to terminate the agreement by giving one month notice. The COCO outlets are run by the contractors, who may some time happen to be the land owners and the question of legitimate expectation will not arise.
25.It was also stated that the petitioners were note entitled for any relief. Only in case where there was doubt regarding the land owners, the petitioners are entitled to transaction with the oil companies based on an understanding and the other circumstances. Thus, the questions were kept separated and a direction was issued to the oil companies to file a counter affidavit. In other respect, the writ appeals were allowed and the order of the learned Single Judge was reversed."
9.From the above judgment, it could be seen that the Corporation is at liberty to terminate the agreement by giving one month notice. In the instant case, one month notice was issued as early as on 07.08.2013. As per the agreement, on receipt of termination notice, he ought to have surrendered the possession of the outlet on the specified date. But, the petitioner has approached this Court in W.P.(MD). No.14590 of 2013 stating that the bank guarantee expired only on 28.02.2014 and thus obtained an interim order and as such, he has been in possession of the outlet. Hence, in my opinion, the petitioner has no right to continue in possession. The impugned order is only a consequential order to handover the possession. Therefore, I do not find any merit in the writ petition. This writ petition is liable to be dismissed and accordingly dismissed. No costs. Consequently, connected miscellaneous petitions are also dismissed.
Sd/-
Assistant Registrar (T&P)
/True Copy/
Sub-Assistant Registrar
To
gcg
order in W.P.(MD)No.4291 of 2014
13.05.2014 5p/6C
2 issues framed by the court
Whether the Corporation can terminate the service provider agreement and demand possession after issuing a valid termination notice.
Whether the petitioner has a right to continue in possession after the expiry of the interim order while the termination notice was already served.
Colour shows how this judgement treated each authority
Mohd. Jamal Vs. Union of IndiaExplained¶26
2014 (1) SCC 201 (Mohd. Jamal Vs. Union of India and another) · Who else cites this
Delhi High Court judgmentExplained¶30
LPA.No.158/2007
Previous writ petition in the same courtReferred¶23
W.P.(MD).No.14590 of 2013
S.Seetharaman
1.The General Manager, Hindustan Petroleum Corporation Limited, South Zone - Retail
2.The Senior Regional Manager, Hindustan Petroleum Corporation Limited
3.Area Sales Manager, Tirunelveli
R.Subbiah
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
