Dismissed

Namireddy Sekhar Reddy v. The Government of India, Ministry of petroleum, Oil

Telangana HC18 Jan 2008WP/25814/2006

Case brief

AI extract

What is this about?

Disposing multiple writ petitions, the Court held that the revised policy guidelines for converting temporary Company Owned Company Operated (COCO) outlets to regular dealerships were not arbitrary and served public interest. The Court rejected claims based on promissory estoppel and legitimate expectation, dismissing the petitions and upholding the Companies' adherence to Ministry guidelines.

What did the court decide?

All writ petitions were dismissed with no order as to costs. The directives regarding leasing and dealership were not granted.

Namireddy Sekhar Reddy Vs The Government… — Pension and Retirement Benefits | Telangana HC (2008)

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*HON'BLE SRI JUSTICE P.S. NARAYANA

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+W.P.Nos.5351of 2007 and batch

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%18-1-2007

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# Gottumukkala Sri Lakshmi W/o Latye Gottumukkala Venkata Raju and others

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.. Petitioners

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Vs.

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$ Government of India Ministry of Petroleum, Oil and Natural Gas, Sastri Bhavan, New Delhi and others

.. Respondents

<GIST:

>HEAD NOTE:

! Counsel for petitioners : Sri Adinarayana Rao and Sri C.V.R. Ruydra Prasad, Mrs. Gita, Sri G. Krishna Murthy ^ Counsel for respondents : Sri Deepak Bhattacharjee

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?CASES REFERRED :

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[1] (2007) 2 SCC 640 2AIR 1998 SC 966 3. AIR 1994 BOMBAY 155 4 AIR 1985 KERALA 255 5. (2007) 2 SUPREMNE COURET CASES 640 6.AIR 1998 SC 966 7. AIR 1994 BOMBAY 155 8. AIR 1984 SC 921 9. AIR 1985 KERALA 255

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THE HON’BLE SRI JUSTICE P.S.NARAYANA

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WRIT PETITION NOS. 5351 OF 2007, 23947, 25813, 25814, 25815, 25855,25858, 25859,25861,25862, 25883, 25930, 25929, 25931,26024,26084, 26086, 26087, 26429,26457, 26461, 26470, 26491, 26606,26611, 26703, 26755, 25856, 25857, 25860 OF 2006 AND 1200, 4786, 9774, 10610, 10623, 10627, 10628, 10929, 14822, 12229, 12238, 11710, 16845, 10828, 16607, 26692 OF 2007

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BETWEEN:

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GOTTUMUKKALA SRI LAKSHMI,

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W/O LATE GOTTUMUKKALA VENKATA RAJU, AGED ABOUT 37 YEARS, OCC. HOUSE WIFE, R/O II LANE, PATEL NAGAR, BAPATLA, GUNTUR DISTRICT AND OTHERS

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------ PETITIONERS

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AND

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THE GOVERNMENT OF INDIA, MINISTRY OF PETROLEUM, OIL AND NATURAL GAS, SASTRI BHAVAN, NEW DELHI, REPRESENTED BY ITS SECRETARY AND OTHERS.

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----- RESPONDENTS

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THE HON’BLE SRI JUSTICE P.S.NARAYANA

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COMMON ORDER:

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1. These matters are being disposed of by a common order in view of the commonality of the questions involved and argued by the counsel on record. 2. These Writ Petitions are filed praying for the issuance of Writ of Mandamus or any other appropriate writ declaring the action of M/s IBP Company Limited and the other Oil Companies in not applying the policy dated 8.10.2002 in Ref.Policy/ MDPM No. 319/02 in respect of the retail outlet situated at the respective places specified in the respective Writ Petitions and further seeking to

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apply the revised policy of the Government of India, Ministry of Petroleum, Oil and Natural Gas, Sastri Bhavan, New Delhi, represented by its Secretary dated 6.9.2006 regarding the appointment of regular dealer for the said outlet as arbitrary, illegal, colourable exercise of power, and direct the respondents to adhere to the policy dated 8.10.2002 by way of appointing either of the writ petitioners in the respective Writ Petitions or their nominees as dealers in respect to the said retail outlet and pass such suitable orders.

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3. The affidavits filed in support of the respective Writ Petitions are substantially same except for the names, places and other particulars. The counter affidavits filed in Writ Petition No. 10607 of 2007 by the Union of India and the material papers filed along with the counter affidavits had been strongly relied upon and it was stated that the defence in all these Writ Petitions by the Union of India is the same.

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4. Likewise, Sri Deepak Bhattacharjee, representing the respondents Oil Companies-M/s IBP Company Limited and others had strongly relied upon the counter affidavit filed in Writ Petition No. 25252 of 2006 and would maintain that the stand taken in the said counter affidavit is the general and the common stand, which would be applicable to almost all the Writ Petitions. In almost all

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these Writ Petitions, the owners of the respective properties, which had been listed out are the Writ Petitioners except in W.P.Nos. 12238 of 2007, 12229 of 2007, 10610 of 2007 and 11710 of 2007. As far as these four Writ Petitions are concerned, they are said to be the contractors but however, in view of the commonality of the questions involved and in substance the defence being the same by the contesting respondents, though the facts are slightly different in these four Writ Petitions, these Writ Petitions also are being disposed of with the other batch of Writ Petitions W.P.No. 5351 of 2007 and batch.

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5. Sri Adinarayana Rao, the learned counsel representing the Writ Petitioners in several of the Writ Petitions while making elaborate submissions, had taken this Court through the respective affidavits filed in support of the Writ Petition No. 25859 of 2006, W.P.No. 25862 of 2006 and also W.P.No. 23947 of 2006, and would maintain that in the light of several particulars furnished, it is clear that the impugned action is discriminatory and arbitrary. The learned counsel also pointed out that the initial policy dated 8.10.2002 did not envisage either issuance of advertisement or calling for applications and the only condition was that the land was to be acceptable to them. The learned counsel would maintain that when

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the land owners once offered the land, dealership had to be given to either the land owners or benamies. Thus, these lands are voluntarily offered by the respective owners in all these writ petitions, except in four of the Writ Petitions, which had already been referred to supra, in which they are contractors, in pursuance of the policy with the fond hope that the concerned Oil Companies would adhere to the Policy. The learned counsel also pointed out to the relevant directions and the relevant portions of the counter affidavits. The counsel also would maintain that having accepted the land, the concerned Oil Companies now cannot go back on the promise made. Having acted upon the Policy, now the Oil Companies cannot take such a stand and in such a case, the Oil Companies to be agreeable to put an end to the respective lease agreements, but unfortunately, such an option is also not available to the respective Writ Petitioners to wriggle out of such agreements at this stage. Hence, viewed from any angle, the reliefs prayed for in these Writ Petitions are to be granted both in law and also on the ground of equity, especially applying the doctrine of promissory estoppel. The learned counsel also placed strong reliance on ASHOKA SMOKELESS . COAL INDIA (P) LIMITED VS. UNION OF INDIA^[1]

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6. Sri C.V.R. Rudra Prasad, learned counsel representing the Writ Petitioners, would maintain that in almost all these Writ Petitions, the petitioners are the owners and the Union of India and the concerned Oil Corporations are the contesting respondents. The learned counsel made an elaborate submission that the Writ Petitions are perfectly maintainable since such companies would fall within the meaning of State or Authority under Article 12 of the Constitution of India. The learned counsel also pointed out that it is true that Writ Petition No. 12238 of 2007 and the other three connected Writ Petitions are concerned with the contractors. But however, even otherwise those writ petitioners also are entitled to the benefits of the Policy. The learned counsel also pointed out that the Writ Petitioners are governed by the Policy as it existed when these lease agreements had been entered into and in any view of the matter, it cannot be said that the subsequent policy would have retrospective operation. The learned counsel would emphasize that the mere change of the policy subsequent thereto, or revised policy cannot take away the rights of the petitioners and the Writ Petitioners are to be given the benefits and may be from the date of the Policy, the changed Policy may be operative. The

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learned counsel while elaborating the submissions would maintain that the Union Government had laid down only broad Policy and further no directives, as such, had been given. But however, the Oil Companies under the guise of such broad policy had totally changed the same by introducing new guidelines or revised guidelines with a view to deprive of the legitimate rights of the petitioners. The learned counsel pointed out to the similarly placed persons on whom the benefits had been conferred during the years 2002-04. The counsel also would maintain that the doctrine of ‘promissory estoppel’ and also the doctrine of ‘legitimate expectation’ would apply to the facts of these cases. Absolutely, there are no reasons why such discriminatory attitude is being adopted as against the Writ Petitioners, inasmuch as an order of status-quo was made by this Court except in certain of the cases. Absolutely, there is no impediment to grant permanent dealership on regular basis in the facts and circumstances of these cases.

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7. Sri M. Sridhar Reddy, learned counsel representing the Writ Petitioners in certain of the Writ Petitions, pointed out to the respective pleadings of the parties and would maintain that only on the specific assurance or the promise for a long period of 15 years the writ petitioners leased the valuable property, that too, with a further

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extension for further period of 15 years and this may have to be considered with all seriousness. The counsel also pointed out that as far as W.P.No. 11710 of 2007 and other three connected Writ Petitions are concerned, the facts are slightly different but however, the substantial stand taken by the respective parties being the same, these writ petitioners also are entitled to the reliefs prayed for in the respective Writ Petitions.

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8. Sri Poorna Chandra Reddy, learned counsel representing the Writ Petitioner in one of the Writ Petitions, virtually adopted the submissions made by the other counsel on record. 9. Mrs. Gita, learned counsel representing the Writ Petitioners in certain of the Writ Petitions, had pointed out to the respective portions of the proceedings and would maintain that this discriminatory and arbitrary action of the Oil Companies is violative of principles of natural justice, having taken away the valuable property for sufficiently long time, committing breach of promise, would not be just and proper.

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10. Sri G. Krishna Murthy, representing the counsel for the petitioners in certain of the Writ Petitions also adopted the submissions made by the other counsel.

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11. Sri Rajasekhar Reddy, the Assistant Solicitor General

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had taken this court through para 6 of the counter affidavit and also would maintain that it is a matter concerned with the distribution of state largesse and there must be transparency in the case of land owners and hence the guidelines had been changed. This being a public policy, uniform policy had been adopted and there is no discrimination and even otherwise the public interest has to be kept in mind inasmuch as the discretion to be exercised properly while exercising power under Article 226 of the Constitution of India. In the light of the facts and circumstances, it is not a fit case to be interfered with. The counsel placed reliance on certain decisions.

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12. Sri Rakesh, learned counsel representing the Union Government in certain of the matters, had adopted the submissions made by the learned Assistant Solicitor General.

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13. Sri Deepak Bhatacharjee, the learned counsel representing the respective Oil Companies in this batch of Writ Petitions had made elaborate submissions in relation to W.P.No. 10610/07, W.P.No. 11710 of 2007, W.P.No. 12227/07 and W.P.No. 12238/07, and would maintain that they being not the land owners but only the Contractors, the Policy guidelines of the year 2002 are not applicable at all to these cases. The learned counsel while elaborating the submissions would maintain that these are

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all cases where lease deeds had been executed and registered in accordance with the provisions of the Indian Registration Act, as well. Hence, these parties are governed by the terms and conditions specified in the respective lease deeds. The very fact that the outlets are being operated by the Companies would go to show that the companies had no intention of following the 2002 guidelines. The learned counsel also would maintain that the cases of discrimination pointed out are old cases and there is not even a single case of discrimination as far as the present batch is concerned. The learned counsel also pointed out that the revised guidelines issued on 19.8.2003 had superseded earlier guidelines. The counsel also pointed out that here is a peculiar case, where the Oil Companies, in the light of the broad guidelines formulated by the Government of India, had introduced the present guidelines which are being challenged, but the guidelines of the Government of India, as such, had not been challenged. The counsel also would maintain that these lease deeds are not conditional lease deeds and hence, when such a condition is not there in the lease deed, the same cannot be introduced or the benefits under the prior policy cannot be claimed. Even otherwise, when a policy decision had been taken in

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public interest to maintain utmost legitimacy and transparency under the policy, which is a well known policy, the same cannot be attacked on the ground that the same is arbitrary and illegal. The counsel relied upon several decisions reported in ASHOK KUMAR

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MAHESHWARI VS. STATE OF U.P^[2] , VIDARBHA VENEER INDUSTRIES LIMITED VS. STATE OF MAHARASHTRA^[3] and JACOB PHILIP VS. UNION OF INDIA^[4] .

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14. Heard the learned counsel and perused the material available on record.

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15. As already referred to supra, except in the four cases specified above, where respective writ petitioners are contractors, in all other writ petitions in this batch, the writ petitioners are the land owners, who offered their lands for the purpose of running the retail outlets by the oil companies. Except the names of the writ petitioners, the places and the other particulars and except for the fact that in all these batch of writ petitions the owners filed these writ petitions and in four of the writ petitions, specified above, the contractors filed the writ petitions, the other factual matrix in all these writ petitions being substantially same and in view of the commonality of the

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respective stands taken by the Union of India and also the Oil Companies in the respective counter affidavits specified above, these Writ Petitions are being disposed of by this common order.

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16. For the purpose of convenience, since all the facts are similar except for certain minor differences in particulars, the averments made in the affidavit filed in the Writ Petition No. 5351 of 2007 are being referred to for the purpose of convenience. 17. It is averred that the second respondent is a public sector oil marketing company and it is under the direct control of the first respondent and as such it is a State, within the meaning of Article 12 of the Constitution of India and its decisions are amenable to the judicial review of this Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. The policy decision being taken by the respondents are questioned from time to time by the affected parties before this court and this court was pleased to decide the same, and the present writ petition is filed ventilating the grievance against the arbitrary, illegal and discriminatory action of the respondents and as such, the same is maintainable. 18. Further, it is averred that the first respondent was administering the price mechanism of several sectors including the oil, petroleum, gas, etc. However, due to

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change in its policy, the petroleum sector was taken away from the direct control of the first respondent in so far as the administration of price mechanism is concerned in order to provide commercial freedom to the public sector oil marketing companies (OMCs), such as the second respondent to formulate their respective policies and procedures for operating retail outlets and selection of retail dealers, etc. But the second respondent could not formulate the regular policy and procedure for operating the retail outlets in uniform manner.

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19. It is further stated that the second respondent being M/s IBP Company Limited, being one of the Public Sector Oil Marketing Companies in India framed its own policy guidelines for selection of retail outlet dealers in the deregulated scenario, which includes the procedure for location of outside marketing plans in different categories vide ref. Policy/MDPM No. 319/02 dated 8.10.2002. A copy of the Annexure I to the said guidelines had been filed.

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20. In terms of the said policy, for the purpose of selection procedure for dealership to be categorized for all retail outlets, Category I is considered for land owners consisting of 4 sub-categories therein and the petitioners fall under category I. Eligibility criteria for selection is

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prescribed and upon satisfaction of the same, the procedure is contemplated in point NO. 1.2.2 for appointment of dealership.

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21. Further, it is stated that the said policy came into force in the year 2002 and it contemplates that where the land owner offers his land to the second respondent for locating the petroleum retail outlet and if the company decides to take the same on a long lease of 15 years with the renewal option for a further period of 15 years, upon evaluation of the same and on satisfying about the location and otherwise suitability of the land, the second respondent or other respondents would enter into lease agreement. A reading of the aforesaid clause would clearly disclose that on successful negotiation and after obtaining the approval of the competent authority, Letter of Intent (LOI) will be issued to the land owner and further action will be taken towards procurement of land as per the said policy. Similarly, on completion of all the formalities, the land owner or his/her nominee will be appointed as dealer and the retail outlet will be commissioned. The proposal will be examined by the committee/concerned divisional head, any other divisional head of the region and any other officer in grade ‘D’ and above, after obtaining the approval of the competent authority as per the guidelines. Further, marketing head

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of the concerned region will recommend the committee members. Based on the same, the Regional General Manager (RGM) will approve the respective cases. The present case falls under category I of the said policy. 22. It is also averred that based on the guidelines issued in respect of policy dated 8.10.2002, the petitioner’s husband evinced interest to apply for dealership of the outlet that is going to be established in Karlapalem Village. Her husband approached the office of the 4^th respondent seeking details for applying to establish and run a retail outlet. He was informed that unless he owns the land suitable for establishing a retail outlet, the Company will not consider his request, thus advised to purchase a piece of land on the main road which will be suitable for establishment of a retail outlet.

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23. It is further stated that in order to settle, in life the petitioner’s husband purchased the land in Karlapalem Village, Kotanandaipalem Panchayat, Bapatla SRO, Narasaraopet Registration District, vide village demarcation No. 278. Out of A.c.10.35 cents, an extent of 2178 sq.yds. vide sale deed dated 11.11.2002, registered in the Office of the Sub-Registrar, Narsaraopet Registration District vide document No. 2724 of 2002. It is also relevant to point out here that the purpose of

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purchase of the said property is to establish the petrol/retail outlet. Her husband also obtained permission to draw water from the existing bore and supply the same to the bunk. Thus, it can be safely concluded that in view of the promise made by the respondents 2 to 4 to purchase the suitable plot and offer the same by way of lease to enable them to give permanent dealership, her husband invested huge amount and purchased the subject land. 24. It is also averred that he offered 2178 sq.yds of land for establishment of a retail outlet, contending inter alia that after establishing the same, the dealership must be given to him or his nominee. Initially, the third and fourth respondents have visited the land. Upon satisfaction of the same, he offered the said land to give it on lease for a fixed period and demanded high rate of rent per month and an escalation for every five years, in view of the fact that he not only purchased the said piece of land at high price in the market, but also developed the same spending few lakhs. He also imposed certain terms in the said offer, such as the dealership should be awarded to him or his nominee. However, the third respondent requested to submit the revised offer and as such, her husband submitted the original as well as revised offers agreeing to lease out the subject land for 15 years for a

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rent of Rs. 7,800/- per month with escalation of 15% for every five years from the date of commencement of the outlet. He reduced his initial offer with a fond hope of obtaining the dealership of the outlet that is going to be established in their land, though they are going to receive meager amount towards rent. He also agreed to fill the land up to road level, construct compound wall to the total area at her cost, apart from making the said property convenient for construction of a retail outlet. The same was received by the respondents 3 and 4 and acknowledged. It is relevant to point out here that the Standing Technical Committee for negotiation of lease rentals, recommended for taking his site with a condition that his request for dealership will be considered as per the company’s policy. If the respondents 3 and 4 are directed to produce the record pertaining to selection, the said fact will come to light. Though the said land is on the main road, in order to make it convenient for running the outlet, the petitioner invested huge amounts and entered into a lease deed dated 21.2.2003 with the respondents 2 to 3 represented by their Additional Divisional Manager. A copy of the lease deed is filed herewith and the same may be read as a part of the affidavit filed in support of the petition.

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25. It is also averred that her husband had been insisting the respondents three and four to appoint the petitioner as dealer, as the retail outlet was already commissioned. However, they have been sating that initially the contract for maintenance and handling of the retail outlet will be given in favour of the third party under the control of the company. Thereafter it will permanently appoint him or his nominee as a dealer. Accordingly, the fourth respondent entered into an agreement dated 2.5.2006 for maintenance and handling of the outlet at Karlapalem with their nominee Mr. M.V. Narasa Raju, right from the day of establishment. They also obtained an indemnity bond/undertaking from the said person to comply with the terms and conditions provided in the agreement apart from the declaration. The same had been renewed from time to time and the latest being on 3.3.2006 for a period of one year. Since then, the said person had been functioning as the contractor of the subject retail outlet. A copy of the M & H agreement is herewith filed and the same may be read as part of the affidavit. 26. Further, it is stated that the said retail outlet is doing very good business. Thus, the respondents 2 to 4 are duty bound to appoint the petitioner in respect of the retail outlet stated supra, as dealer. But for the reasons best

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known to them, the contract for maintenance and handling of the said retail outlet is being extended every year, initially in favour of their nominee and recently in favour of a third party. Whereas in respect of few other outlets, wherein the land owners who had offered their lands and outlets were commissioned, the third and fourth respondents appointed the nominees of the landowners as dealers and the petitioner understands and believes the same to be true that except for those who had entered into a lease agreement during their tenure, all other land owners from whom the respondents 2 to 4 had taken the land, they had been constantly adopting the procedure of appointing either land owners or their nominees as their dealers to the respective outlets, as per the policy stated supra. The said fact would clearly disclose that the respondents 2 to 4 are adopting different standards in respect of the different contractors to suit their convenience. However, on knowing the same, when the petitioner approached the office of the 4^th respondent, they promised to obtain clearance from the second respondent to appoint her husband or her nominee as a regular dealer. The petitioner believed the said version and as such waited for long period. Meanwhile, all of a sudden her husband expired on 21.11.2006 due to renal

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failure. Immediately after expiry of her husband, she obtained all relevant documents from the concerned authorities, such as death certificate, relation certificate, etc, and took steps for mutation of her name in place of her husband. She had addressed a letter to the respondent company on 15.2.2007 for payment of lease rent and the same was acknowledged by the respondents vide letter dated 10.3.2007, stating that the company would process her application as per company policy for payment of lease rent. It is also relevant to point out here that the respondents 2 to 4 are always treating the contractors on par with the dealers, in view of the fact that as per the contract, a contractor is duty-bound to sell the products supplied by the company and take his commission as per the terms and conditions stipulated therein. Though it is shown as if the contractor need not invest any amount for procuring petroleum products as the retail outlet was treated as the company owned and operated, on ground reality, the contractor is forced to pay the amount, purchase the products and in turn sell the same as is being done by a third party dealer who is conducting business with the second respondent. The said fact is known from the invoices being issued by the representatives of the company from time to time. 27. Further, it is stated that while things stood thus, the

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petitioner came to know that the second respondent is contemplating to invite applications for appointment of dealers in respect of company owned and operated outlets, including the one at Karlapalem which was established in her land leased out to it. Immediately thereafter, she made enquiry and was informed that the company had revised a policy and communicated the same to all its regional offices vide order dated 30.8.2006. The revised policy stipulates that the temporary retail outlet established at Karlapalem, being the company owned and operated, would be converted on appointing the regular dealer. The basis for such a revised policy is the order of the first respondent’s letter dated 6.9.2006, a copy of which is filed herewith and the same may be read as a part and parcel of this affidavit. However, to her utter dismay and surprise, the respondents 2 to 4 are taking hectic steps for appointment of the permanent dealers in respect of the COCOs, including the one leased out by her for managing the outlet.

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28. Further, it is averred that her husband offered the land for a meager amount with a fond hope of either obtaining regular dealership in their favour or in favour of their nominee in view of the fact that the respondents 2 to 4 had been constantly following the policy decision for the

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year 2002 prior and later to the agreement executed by him. If the respondents had not promised to offer such a facility, he would not have invested huge amounts and leased out the subject land in their favour after reducing the original offer amount for a meager sum, more so, after investing huge amounts in it and making the same suitable for running an outlet. The policy of the second respondent itself speaks the aforesaid fact and as such it cannot deviate from the same, at any rate, against those who had already entered into agreement and willing to take dealership on their own or in favour of their nominees. Though the respondents have been following the policy in respect of majority of the cases, and when it comes to the petitioner, they want to deviate from the same resulting in discrimination. If they succeed in their attempts to deviate from the earlier policy and adopt new policy appointing third party as regular dealer in respect of the retail outlet situated at Karlapalem, though the same was established in terms of the policy for the year 2002, she will suffer grave and irreparable loss.

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29. It is also averred that the policy of the second respondent pursuant to the order of the first respondent dated 6.9.2006 must be applied prospectively for the present cases and the same cannot be applied in respect of the earlier cases like the petitioner as she falls under

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the category of those who had executed lease deeds under the policy dated 8.10.2002. If the respondents 2 to 4 apply ;the present policy to the case of the petitioner ignoring the earlier one, it amounts to discrimination among equals and the same is violative of Article 14 of the Constitution of India. Similarly, as per the policy dated 8.10.2002, the second respondent authorized her husband to obtain dealership of his choice in respect of retail outlet in the land owned by her and such a right cannot be taken away unilaterally and on that ground alone, the action of the respondents 2 to 4 in seeking to appoint regular dealer in respect of the outlet established in her land must be declared as arbitrary, illegal. Further, with a fond hope of getting the dealership, they invested huge amount apart from giving the land owned by the petitioner for meager amount on lease and, as such, they are legitimately expecting to hold leasehold rights as per the policy for the year 2002. Thus, the respondents 2 to 4 are estopped from taking away the right accrued to us through the policy for the year 2002 and apply the revised policy. The petitioner would not have parted with their land if it was known to them that the person of her choice will not be given the retail outlet and on the contrary the petitioner would have established some other business in

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the subject land and earned more money and goodwill, than what is offered by the respondents. Therefore, the respondents 2 to 4 had indirectly taken away the Fundamental Right guaranteed under Article 19(1)(g) and on that ground alone, the impugned action in the Writ Petition must be declared as against the interest of the petitioner. The procedure followed in respect of the similarly situate persons, must be extended to her or else, it amounts to showing favoritism in favour of a particular class and the said action of the public sector undertaking is being declared by the Apex Court as well as this Court as arbitrary, unjust, illegal, colourable exercise of power apart from being violative of the Fundamental Rights guaranteed in favour of a citizen. The respondents 3 and 4 also promised some of the land owners who had leased out for establishment of retail outlet that they will be given the dealership and addressed letters to that effect. Though the said promise was made to her husband and herself, resulting in legitimate expectation on part of the lessors, the respondents 2 to 4 cannot turn around and insist upon implementing the revised policy. Unless this Court is pleased to declare the action of the respondents in not applying the policy dated 8.10.2002 issued by the second respondent as arbitrary, illegal and further direct the respondents 2 to 4 to give regular dealership to run

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the retail outlet established in her land either to her or to her nominee, she will suffer grave and irreparable loss. In such circumstances, it is stated that the Writ Petitioner approached this court.

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30. It is needless to say that except for the names of the Writ Petitioners, the places, the properties offered substantially, the stand taken by the Writ Petitioners in all these Writ Petitions is one and the same. The respective lease deeds presented before this court also substantially contain the same terms and conditions.

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31. As already referred to supra, W.P.Nos. 12238 of 2007, 12229 of 2007, 10610 of 2007 and 11710 of 2007 were filed by the contractors but the efforts made in the respective affidavits filed in support of the Writ Petitions also are substantial and are on similar lines except for the fact that they are the contractors.

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32. Common counter affidavits filed by the Union of India in W.P.No. 10607 of 2007 had been strongly relied upon and it is averred in paragraph (3) that after dismantling of the Administered Pricing Mechanism (APM) in the petroleum sector with effect from 1.4.2002, the entire selection process of dealers/distributors is conducted by the Oil Marketing Companies (OMCs) themselves. The government has neither any role nor does it interfere with

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the selection process. The OMCs, viz., Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and IBP Co. Limited (Now having merged with Indian Oil Corporation Limited) enjoy commercial freedom in the matter of marketing/distribution of petroleum products through their respective networks of Retail Outlet (RO) dealerships (petrol pumps), LPG distributorships (gas agencies) and SKO-LDO dealerships (kerosene dealerships). The OMCs choose their own locations for setting up such dealership/distributorships, if found viable after feasibility study thereof, by the oil companies and have their own respective guidelines for selection of dealers/distributors for such agencies and manage and run their retail outlets, as per their own guidelines. 33. Apart from providing broad guidelines on policy issues in consultation with the IMCs, which are meant to make the selection of dealerships/distributorships more transparent and objective as well as uniform across OMCs and also to streamline the procedures or for betterment of any existing system being followed by the OMC’s, this Ministry plays no further role. 34. On 19.8.2003, the Ministry of Petroleum and Natural Gas had advised broad guidelines to the OMCs for selection of dealers/distributors and thereafter, the

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companies framed their own guidelines in this regard. Copy of letter 19.8.2003 is enclosed as AnnexureRespondent -1/1 and the said proceeding No. P- 19011/3/2002-IOC, Government of India, Ministry of Petroleum and Natural Gas, Shastri Bhawan, New Delhi dated 19.8.2003, which reads as under:

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“The question of formulating guidelines for selection of retail outlet dealers after dismantling of the Administered Pricing Mechanism (APM) has been under consideration of the Government for some time. The draft guidelines submitted by IOC, HPC and BPC have been examined. I am directed to convey the concurrence of the Ministry to the draft guidelines with the following advice:-

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(i) For the Marketing Plan locations advertised by the OMCs for which no interviews were held, the selection of dealers may be made by a selection committee consisting of three officials form the concerned Oil Company to which the dealership belongs, in accordance with the guidelines contained in this Ministry’s OM No. Petitioner - 39012/1/1999-IOC, dated 9.10.2000. The criteria for evaluation of candidates for these already advertised locations will be communicated separately.

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(ii) The new guidelines will apply to the selection of dealers for the approved Marketing Plan locations which are yet to be advertised, and also to the new locations outside these Marketing Plans.

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(iii) The percentages of reservation for various sections of the society should be the same as those prescribed in the guidelines contained in this Ministry’s OM.No. Petitioner -

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39012/ 1 / 1999 - IOC dated 9.10.2000. The reservation policy may be reviewed by the OMs after two years.

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(iv) The Corpus Fund Scheme shall continue in its present form.

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(v) There shall be no ceiling on the income of th prospective allottees.

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(vi) The multiple dealership norms provided in the guidelines contained in this Ministry’s OM No. P-39012/1/1999-IOC dated 9.10.2000 shall be modified to the extent that only one dealership may be allowed to a family unit consisting of the individual concerned, his/her spouse and unmarried sons/daughters.

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(vii) A certain degree of uniformity should be ensured across the industry in assigning marks to the applicants under the different criteria. While more weightage may be given to capability in providing land and infrastructural facilities, educational qualification, ability to provide finance, etc., criteria like ‘personality’ should be kept only after a fully transparent and objective method of assessment of the candidate under these criteria is feasible. Weightage to such criteria should be minimal.

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(viii) There should be uniformity in the Industry on application fees and security deposits. This may be discussed among the OMCs.

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2. The guidelines will be applicable for selection of SKO-LDO dealers and LPG distributors also.

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3. The OMCs are requested to finalize the guidelines after incorporating the above parameters and send them to the Ministry for information and record after obtaining approval of

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their respective Board of Directors. The guidelines should be finalized and made operational by September 10, 2003.”

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35. Subsequently, with a view to improve the procedure for selection of dealers/distributors for lending more transparency in the selection procedure, this Ministry vide letter No. P-19011/1/2004-IOC dated 27th December 2004 had advised that OMCs should temporarily suspend allotment of dealerships under the ‘Land Owners’ Category, which were being done by the OMCs without following the transparent procedure like advertisements, etc. A copy of letter dated 27.12.2004 is annexed hereto as Annexure Respondent -1/2. The said P-19011/1/2004IOC dated 27th December 2004 reads as under:

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“I am directed to refer to this Ministry’s letter of even number dated 3.11.2004 and IOCL’s letter No. 6069(DSG) dated 18.11.2004 on the above subject. It is advised that the OMCs should temporarily suspend allotment of dealerships under the ‘Land Owners’ category. 2. The OMCs are requested to furnish detailed information in this regard as under:-

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(i) The number of dealerships allotted under the new guidelines- category wise, reservation status wise;

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(ii) The number of dealerships allotted under ‘land owners’ category,

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(iii) The number of dealerships allotted to the nominees of land owners.(out of it above)

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3. The above mentioned information may be sent to this Ministry by

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29.12.2004 positively.”

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36. That after detailed discussions with the OMCs from time to time , the guidelines of OMCs, which provided for allotment of dealerships, etc. “Land Owners” Category without recourse to advertisements, were partially modified vide letter No. P-19011/1/2004-IOC dated 22.2.2005. A copy of letter NO. P-19011/1/2004-IOC dated 22.2.2005 is annexed hereto as Annexure Respondent -1/3. By this letter OMCs were advised to follow the advertisement route for such cases of selection of dealers/distributors to render transparency in the matter of selection. This aspect was reiterated vide letter dated No. P-19011/1/2005-IOC dated 17.11.2005 by this Ministry. A copy of letter No. P-19011/1/2005-IOC dated 17.11.2005 is annexed hereto as Annexure Respondent - 1/4. The OMCs were accordingly advised that they should after receipt of direct offers of land, assess the viability of the location and if the same was found viable, OMCs must release an advertisement in two leading newspapers, which are in circulation in the area, stating the fact that they have received offer(s) of land for dealership(s), etc., and are inviting similar offers from others. Further, the advertisements must indicate that

¶95

final selection of the dealer will be on the basis of evaluation of the lands offered and evaluation of the candidates in respect of other parameters as provided for in the guidelines.

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37. The letter No. P-19011/1/2005-IOC, Government of India Ministry of Petroleum and Natural Gas, Shastri Bhawan, New Delhi dated 17.11.2005, reads as under:

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“In various interactions with the oil marketing companies (OMCs), it has been felt that their guidelines or various aspects of marketing of petroleum products, including the following need to be made more objective and transparent:-

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(i) Reconstitution /resitement/ revival of dealership/ distributorships.

¶99

(ii) Allotment of retail outlets to landowners on the basis of direct offers of land.

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2. These issues were also discussed by Secretary (Petroleum and Natural Gas) with the representatives of the OMCs on 29.8.2005 and by the Minister (Petroleum and Natural Gas) on 27.10.2005. Based on the deliberations in these meeting, I am directed to forward herewith, in Annex 1to V, a set of broad guidelines on the above mentioned issues and certain other aspects of the dealer selection process and marketing plan. The OMCs are requested to frame detailed guidelines on these issues, which should be objective and transparent, based on these broad guidelines. A copy of the guidelines framed by the OMCs may, thereafter, be forwarded to this Ministry for record and reference. The guidelines should also be given publicity through website, brochure, etc.

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3. With the issue of this letter, all other guidelines/instructions

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issued by this Ministry from time to time in the past, on all the issues covered by this letter, stand superseded.”

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38. The letter dated 22.2.2005, No, P-19011/1/2004-IOC reads as under:

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“The undersigned is directed to refer to this Ministry’s letters of even number dated 27.12.2004 and 17.2.2005 on the above subject and to say that a meeting was taken by the Additional Secretary in this Ministry with the representatives o the oil marketing companies (OMCs) on 18.2.2005 to review the provisions in the guidelines of OMCs for selection of dealers, which provide for allotment of dealerships, etc without recourse to advertisements. After review, it has been decided that in partial modification of the said letters, the OMCs should follow the following procedure.:-

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(i) The OMCs should, after receipt of direct offers of land, assess the viability of the location and if the same is found viable, OMCs must release an advertisement in two leading newspapers, which are in circulation in the area, stating the fact that they have received offers of land for dealerships, etc., and are inviting similar offers form others. Further, these advertisements must indicate that final selection of the dealer will be on the basis of evaluation of the lands offered and evaluation of the candidates in respect of other parameters as provided for in the guidelines.

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(ii) In respect of other bodies like Government organizations, Government undertakings, Semi-Government/Autonomous Bodies, Public Limited Companies, Charitable Trusts, Large Fleet Operators with volume commitment, the OMCs should follow a common definition. The same may be done and communicated to the Ministry at the earliest.

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2. This procedure indicated in para 1(i) above sould also be given due publicity through brochure/website, etc, as they have done in respect of the selection guidelines.”

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39. Specific stand had been taken that the said procedure had been advised to be followed to make the entire selection procedure objective, fair and transparent and to provide equal opportunity to all concerned.

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40. It is also stated that on 6.9.2006, this Ministry after due consultations with OMCs, had provided broad guidelines for operation of retail outlets of OMCs on Company Owned Company Operated (COCO) basis, and OMCs were accordingly, advised to frame their own guidelines in this regard.

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41. Further, it is stated that it is worthwhile to mention that for establishment of any COCO, all the expenses are borne by the OMC concerned and the no objection certificate or any other clearances that are required are obtained by the OMCs themselves. There are two kinds of COCOs of the OMCs; permanent and temporary. Permanent COCOs, which are of strategic importance for the oil companies are operated permanently by the companies themselves through their own offices being over all in charge with additional manpower through labour contractors (to be appointed through advertisement

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routes). While, temporary COCOs are operated temporarily by OMCs through labour contractors till appointment of regular dealers.

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42. That since, huge investment is made by the oil companies in procurement and establishment of the temporary COCO outlets, appointment of regular dealers is necessary. Therefore, these broad parameters interalia provide for phasing out of temporary COCO outlets of the oil companies, preferably within a year. Further, it had been advised to the oil companies that temporary COCO ROs, subject to suitability should first be handed over to the pending letter of intent holders under the following categories in the order indicated below:

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(a) Special Scheme (Operation Vijay-Kargil) the Kargil allottees.

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(b) Discretionary quota scheme (DQS)

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(c) Corpus Fund Scheme (SC/ST category of dealerships, widows and women above 40 years of age without earning parents)

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(D) Other categories as prescribed in the marketing plans.

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(e) In case no suitable LOI holder under these categories are available then these dealerships should be advertised for selection of dealers under

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normal process.

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43. It is to clarify that under the Special Scheme, DQS and Corpus Fund Scheme, all the investment including procurement of land and development of RO is done by OMC concerned in favour of the LOI holders. COCO ROs typically fit the requirements, as they are the ROs where all the investment including procurement of land and development of infrastructure on the RO is done by the OMCs themselves. Since, there is a huge pendency with regard to LOI holders of categories a), b) and c) above, therefore, it was advised in concurrence with OMCs to offer temporary COCO ROs to LOI holders under the Special Scheme, DQS and Corpus Fund Scheme. 44. It is further stated that the act of respondents in applying the policy dated 6.9.2006 issued by the answering respondent, is in no way discriminatory, illegal, arbitrary or violative of any rights of the petitioner, including under Article 14 of the Constitution. Further, any act or agreement, if any, between the petitioners and other respondents i.e., in contravention of any policy issued by the answering respondent, is liable to be set aside. Hence, it was prayed that the Writ Petitions be dismissed. 45. The relevant annexures also had been placed before this court. Proceedings No. P-19011/9/2001-IOC dated

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6^th September 2006, which reads as under:

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“ I am directed to state that in order to provide commercial freedom to the public sector oil marketing companies (OMCs), postAdministered Pricing Mechanism regime in the petroleum sector , it was decided by this Ministry vide its letter of even number dated 9.9.2003 that the OMCs would formulate their own policy and procedure for operating those retail outlets, where sites had been procured and facilities created, or which had been decommissioned because of termination of dealerships, on Company-Owned-CompanyOperated (COCO)/ ad hoc basis till regular dealers were appointed. However, this could not be formulated by the OMCs uniformerly on industry basis so far. The matter has been in consideration for a long time and a number of discussions were held in the Ministry, at different levels, with the OMCs.

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2. With a view to finalizing the guidelines, a meeting was again taken by this Ministry on 19.7.2006, under the Chairmanship of Hon’ble Minister of State (Petroleum & Natural Gas), with the Chief Executives and other officers of the OMCs, where a presentation on the subject was made by BPCL on behalf of the OMCs. Minutes of that meeting have been circulated to all concerned vide this Ministry’s letter No. R-30024/17/2006-Municipal Commissioner , dated 27.7.2006. Based on the deliberations in the said meeting and meeting taken by Secretary (P&NG) on 25.7.2006 and various discussions held earlier, it has been decided to lay down the following broad parameters, on the basis of which the OMCs may finalise their guidelines for operation of company-owned-company-operated (COCO) retail outlets.

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(i) While the OMCs may operate permanent COCO retail outlets (i.e. flagship ROs, Jubilee Retail Outlets, Model Outlets, etc) by their own officers (without job-contractors or

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ad-hoc dealers), they should phase out the existing temporary COCO retail outlets within a time frame preferably within a year. However, in special circumstances like court cases, complaints, etc, they may have to operative some ROs on temporary COCO basis till final decision on those court cases/complaints.

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(ii) The permanent COCO retail outlets should be operated by an officer of the OMC concerned being in overall charge of the outlet. If the OMCs so like, they may post their own personnel for running the permanent COCO ROs. In that case, no labour contractor should be appointed. In case OMCs are not able to deploy sufficient number of their own staff, the balance manpower requirement may be arranged through a labour contractor. The OMCs should stop jobcontractorship or ad-hoc dealership for operating permanent COCO ROs and follow the model stated above or shift their such ROs into the category of temporary COCOs, within a period of one month.

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(iii) Selection of labour contractors should be in an open and transparent manner, through advertisements only. OMCs should adopt objective parameters for evaluation of candidates for labour contractorship. These parameters should be uniform for all the OMCs. The labour contractor should not be asked to invest in working capital as the working capital has to be arranged by the OMC concerned for running of COCO ROs.

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(iv) For the permanent COCO ROs, the labour contractorship may preferably be given for a period of three years in the first instance, instead of the one year system being followed as

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present. After three years, the labour contractorhsip may again be advertised for selection.

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(v) As regards temporary COCO retail outlets, the period of the labour contract should not exceed one year, by which time the action for appointment of dealers for the COCO ROs in question should be completed. Even for this period, the labour contractors should be selected in the same open and transparent manner by advertisement, as a labour contractor is to be selected for a permanent COCO outlet.

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(vi) The phasing out of temporary COCO Ros preferably within a year may be competed as follows:

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The temporary COCO ROs, may first be offered and handed over, subject to suitability, to the pending Letter of Intent (LOI)-holders under the following categories in the order these are indicated:-

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(a) Special Scheme (Operation Vijay-Kargil) the Kargil allottees

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(b) Discretionary quota scheme.

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(c) Corpus Fund Scheme (SC/ST category of dealerships, widows and women above 40 years of age without earning parents).

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(d) Other categories as prescribed in the marketing plans.

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(e) The Industry may pool their available temporary COCO ROs for offering to the categories under (a) & (b) above. In case no LOI-holder under these categories are available, then these dealerships should be advertised for selection of dealers under normal process.

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(vii) The OMCs should stop job-contractorship or ad-hoc dealership for operating the temporary COCO ROs also. The system of ad hoc dealership may be resorted to only in cases of dealerships which have been terminated and where new dealers are to be appointed. The period of ad hoc dealership should not, in any case, be more than four months as adhoc dealership violates the multiple dealership norms. If the deale can not be appointed within this period of four months, the RO may be taken over by the OMC concerned and operated as temporary COCO with the selection of labour contractor by advertisement.

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3. OMCs should frame their detailed guidelines, on the basis of above broad parameters, and with the approval of their respective Board of Directors, without further loss of time as this has been long overdue. A copy of those guidelines, after formulation, may be forwarded to this Ministry for its record. It is stated that while laying down detailed guidelines, OMCs must ensure objectivity and transparency in the mater, and, as far as possible, there should be uniformity in the guidelines of the OMCs. Further, the guidelines should also be given wide publicity by way of hosting on the websites of the OMCs, etc.

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4. With the issue of this letter, any other instructions/ letters issued by this Ministry in the past, on the subject of running of retail outlets on COCO/ ad hoc basis, shall stand superseded.”

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46. Strong reliance was placed by Sri Deepak Bhattacharjee, representing the Oil Companies on the

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counter affidavit filed in detail in W.P.No. 25929 of 2006. It is needless to say that the respondents in the respective Writ Petitions are not arrayed in the same order and for the purpose of convenience they will be referred to as Union of India and Oil Companies. Be that as it may, counter affidavits of respondents 2 to 4 in Writ Petition No. 25929 of 2006 which had been relied upon, the relevant averments made there under are extracted for easy reference. 47. It is averred that under guidelines dated 6.9.2006, the Ministry of Petroleum and Natural Gas, Government of India issued directions to the Oil Companies to convert all the temporary company owned and Company Operated Retail Outlets (COCO) into regular dealerships. The said circular stated that the phasing out of the temporary COCO Retail Outlets would have to be completed preferably within a year, by first offering the same to the pending Letter of Intent (LOI) holders under the specified categories including ‘Discretionary Quota Scheme’. It is pertinent to state that the Supreme Court of India in its judgment in “Common Cause, Registered Society Vs. Union of India and others, reported in (1996) 6 SCC 530” held that allotment of Retail Outlet Dealerships of a discretionary quota without any guidelines or criteria was illegal. However, the decision therein was with regard to

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the allotments which were subject matter of the said case and certain LOI holders who were allotted Dealerships/Distributorships under the Discretionary Quota, which were not quashed by a Court of Law, are still awaiting the establishment and commissioning of their Retail Outlet Dealerships which was held up due to various infrastructural reasons. Thus, the understanding of the petitioners that under the Discretionary Quota, the Oil Companies are given a wide discretion while allotting Dealership under the said clause is completely without substance. At present, there is no Discretionary Quota under the guidelines.

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48. Further, it is averred that in the instant case, the petitioner is seeking a direction to declare the action of the respondents in making applicable the policy dated 13.10.2006 in respect of retail outlet situated at R.S.No. 687/8B of Kalidindi Village, Padamatipalem Panchayat, Kalidindi Mandal, Krishna District as irrational, arbitrary and further direction to adhere to the earlier policy dated 8.10.2002 based on which the petitioner’s land was obtained on lease by the respondents. It is also averred that the circular of IBP Company Limited dated 13.10.2006 was issued following the guidelines issued by the Ministry of Petroleum and Natural Gas, Government of

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India with letter No. P-19011/9/2001-IOC dated 6.9.2006. The guidelines issued by Government of India are not challenged in the above referred writ petition and the writ petition is liable to be dismissed on the aforesaid grounds alone.

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49. It is also averred that the transaction of lease between the lessor and the lessee is governed by the terms of lease deed. The terms and conditions agreed under the lease deed do not manifest that the lease was conditional and that the property was let out to IBP Company Limited subject to the condition that the lessor shall be provided dealership in the event COCO is converted into a dealer-run retail outlet. It may be only incidental that friends/relatives of the lessors were selected as Maintenance and Handling Contractors to operate the COCO Retail outlets. The appointment as Maintenance and Handling Contractors does not confer any absolute right on the petitioner to continue in perpetuity or claim the dealership, in the event COCO is converted into a dealer-run retail outlet. The relief sought for by the petitioner, is therefore, untenable in the eye of law.

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50. It is also stated that guidelines issued by Ministry of Petroleum and Natural Gas from time to time do not have statutory force as per the ratio laid down by various High

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Courts in the country including the High Court of Andhra Pradesh and Hon’ble Apex Court. The right is claimed by the petitioner for appointment as dealer in the event the temporary COCO is converted into dealer-run outlet, on the strength of earlier policy dated 8.10.2002. As the said policy letter had no statutory force, the petitioners are not entitled to invoke the extraordinary jurisdiction of High Court under Article 226 of the Constitution of India, as there is no violation of any statutory rules or enactment in force. The petitioners are also not entitled to seek judicial review of the subsequent decision taken by Government of India and the policy letter issued by the respondent company on 13.10.2006 by invoking the extraordinary jurisdiction of the High Court, as there is no violation of any rules/ regulations or any enactment. 51. Further, it is stated that once a temporary COCO is converted into dealer run outlet, the Government of India Policy concerning the rule of reservation and reservation for specified category like SC/ST, Physically Challenged, War Widows, Ex-servicemen etc., shall have to be taken into consideration in its proper perspective. If the contention of the petitioners is accepted, the same shall defeat the above reservation policy of Government of India and also the Constitutional guarantee in case of

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reservation. Neither the terms and conditions of lease deed nor the terms and conditions of Maintenance and Handling Contract manifest that a special right was created in favour of the petitioners under Law of Contract, agreeing to make the Lessor or his/her nominee as a dealer in the event the COCO is converted into dealer-run retail outlet. The writ petition is not maintainable on the sole ground that the petitioner failed to point out any violation of any rules or regulations. It is denied that the property was let out on lease on the sole ground that the lessor shall be made a dealer in the event the COCO is converted into a dealer-run retail outlet. On the contrary, it is respectfully submitted that the main purpose of letting out the property was to enjoy the rent offered to be paid by the respondent company taking into consideration the market value of the property. Therefore, there was no inducement by the respondent company, as alleged. The majority share in the respondent company is owned by the India Oil Corporation, a Government of Indian enterprise. The present guidelines are issued taking into consideration the fresh guidelines issued by the Ministry of Petroleum and Natural Gas, Government of India. The guidelines are issued in the best interest of the general public. 52. It is further averred that consequent upon dismantling

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of administrative pricing mechanism with effect form 1.4.2002, IBP embarked upon expanding their retail network by setting up of Company-Owned Company Operated Retail Outlets (COCOROs) in line with the resolution adopted in its Board Meeting held on 22.5.2002, pending finalization of Company’s policy on appointment of dealers. The Company’s policy dated 8.10.2002 on appointment of dealers was implemented in November, 2002. This policy provided for appointment of land owners or their nominees as dealers wherever the sites were found suitable for setting up of Retail Outlet and the Landowners/nominees suitable for dealership. This policy also provided for conversion of the then existing COCOs to dealerships. However, in February, 2003 further award of retail outlet dealerships was suspended pending formulation of fresh dealership selection guidelines. However, COCOs were being commissioned. The new policy, duly approved by Ministry of Petroleum and Natural Gas, was implemented in September/October, 2003. The landowners of the COCOs were well aware that there was no policy for award of dealership existing at the time of commissioning and it was with their full knowledge, the COCOs were commissioned, after finalization of rentals after

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negotiations and signing of lease agreements, as per new dealership selection policy that was implemented in September/October, 2003.

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53. Further, it is stated that lands were procured/taken on lease at commercially viable and strategically important locations on lease basis from the petitioners as well as other land owners on agreed terms and as such it was not the case that IBP was singularly benefited as properties were taken after due negotiation in respect of lease rental for setting up such retail outlets.

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54. It is also averred that filling up of land up to road level and construction of retention wall by the petitioners (as landlord) are conditions agreed by them at the time of negotiation/finalization of lease rental. After taking land on lease, the company applied for various statutory approvals applicable for setting up of retail outlets. The petitioners, on their own initiative, had followed up the matter of pending statutory approvals with competent authorities.

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55. Further, it is stated that all the temporary COCOs since commissioning are operated through Maintenance and Handling (Municipality &H) Contractors. It was the Maintenance and Handling Contractor, who had to satisfy the requirements of the various statutory authorities as per the terms of Municipality &H agreement. The M&H

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Contractor selection policy permitted award of M&H contract to any suitable individual, inter alia, Fleet Owners, Truck Operations, Taxi Associations etc. However, it prohibited award of M&H contract to the land owners. The M&H Contract, thus selected, had to comply with various statutory provisions and obtain

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licenses/permissions/registrations etc, as per the agreement. It may be only incidental that friends or relatives of the land owners had been selected as M&H contractors.

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56. It is also averred that the amount of capital expenditure involved was known to the petitioners and the same had been considered while finalizing the rentals. It is M&H contractors who are required to raise sufficient working capital to operate COCO as per the contract and not the petitioners/landlord.

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57. It is further stated that the petitioners have no right or interest in the retail outlet, except that they are the owner/lesser of the land and the M&G contractor appointed is working under the direct supervision and control of the respondent-company. The land was developed for setting up the retail outlet and all superstructure/infrastructure were constructed by the respondent company. It is incorrect to say that operating

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the retail outlet through a contractor who is incidentally friend/relative of the landlords is, in reality, treated as a regular retail outlet managed by a dealer.

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58. It is also stated that the respondent company being a Public Sector Undertaking under the administrative control of Ministry of Petroleum and Natural Gas, has to adhere to the instructions issued by Ministry of Petroleum and Natural Gas from time to time. The petitioners hope that the company, as a matter of prevailing practice, shall regularize the petitioners as permanent/regular dealers, is the petitioners personal interpretation of the situation without the knowledge and consent of the respondentcompany and for which respondent company is in no way responsible.

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59. Further it is averred that in September, 2006, Ministry of Petroleum and Natural Gas issued guidelines advising all oil marketing companies inter alia that COCOs, which were being operated on temporary basis, may first be offered and handed over to the pending LOI holders under the following categories in the same order as indicated, subject to suitability:

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1. Special Scheme (Operation Vijay-Kargil)- the Kargil allottees.

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2. Discretionary quota scheme

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3. Corpus Fund Scheme (SC/ST category of

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dealerships, widows and women above 40 years of age without earning parents

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4. Other categories as prescribed in the marketing plans.

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It is also advised that industry may pool their available temporary COCOs for offering to the categories under (1) and (2) above. In case no LOI holders under the above categories are available, these dealerships should be advertised for selection of dealers under normal process. OMCs should also stop job contractorship or adhoc dealership for operating temporary COCOs. In line with the above guidelines, industry including the company had framed a common policy which had been circulated under policy dated 13.10.2006. It is denied that the petitioners have vested legal right to receive grant of dealerships.

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60. It is also averred that the Ministry of Petroleum and Natural Gas issued guidelines in respect of existing COCOs in September, 2006. Since the company is under the administrative control of Ministry of Petroleum and Natural Gas, it has to adhere all guidelines of Ministry of Petroleum and Natural Gas. Hence, it is denied that any advertisement which will be required to be issued as per guidelines of September, 2006 for selection of dealerships

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for handling over such temporary COCOs is ultra vires the company policy on selection of retail outlet dealers. It is also denied that petitioners have accrued legal rights for dealership. The petitioners could not be awarded dealerships for the reasons as submitted above. 61. It is also further averred that the respondent company has to adhere to the policy guidelines/instructions issued by Ministry of Petroleum and Natural Gas from time to time and as such there would be no violation of guidelines for selection of retail outlet dealers as alleged by the petitioner. It is denied that there was discrimination between one set of COCO operators from that of the other set of COCO operators, who have been regularized prior to and after the commissioning of COCOs on petitioner’s land. In fact during the applicability of the policy dated 8.10.2002, certain existing COCOs were converted to Dealerships in favour of land owners/nominees as per the provisions of then existing policy. The new policy introduced in September/October, 2003 did provide for award of dealership to land owners/their nominees and dealerships awarded whatsoever were fresh cases under that policy. Hence, there was no estoppel from issuing dealership to any other person other than the petitioners as alleged. 62. Further, it is stated that the outlets on petitioner’s land

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leased to the company are operated by Maintenance and Handling contractor and as per the Maintenance and Handling agreement, the contractor has to engage the required man power. These contracts are for a limited period and the contracts are liable to be changed. Hence, the question of affecting of livelihood of several hundred families working with the petitioners in the retail outlets does not arise. It is incorrect to state that the petitioners are deprived from gainful utilization of their lands as they had leased out their lands to the company and are receiving rents regularly at agreed rate, which is also periodically enhanced as per the terms of lease. It is denied that non award of dealership to the petitioners will infringe the fundamental rights guaranteed under Article 19(1)(g) of Constitution of India. There is no breach as there is no accrued legal right of the petitioners to become dealers. The plea of the petitioners that the company is estopped from pursuing appointment of dealers under the policy is not within the four corners of law.

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63. Further, it is averred that with the issue of revised guidelines, the policy of the company is also changed. The doctrine of ‘Promissory Estoppel’ or the principles of ‘Constructive Res judicata shall not apply in the instant case, as the guidelines are changed from time to time by

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the Ministry taking into consideration the public interest and general policy. The lands were obtained from the petitioner for setting up the Company Owned and Company Operated Retail Outlets on lease basis and the lease is governed by the terms and conditions of the lease deed executed between the landlord and IBP Company Limited. There is no whisper in the lease deed that the property was let out to IBP Company by Landlord/Landlady subject to the condition that the Landlord/Landlady shall be appointed as the dealer in due course. As the lease of the property was not subject to the above condition, the petitioner does not have the right to invoke the extraordinary jurisdiction of this court seeking the mandamus as prayed for. The policy guidelines are issued in the best interest of the public. It is pertinent to mention that as per the guidelines issued in September, 2006 by the Ministry of Petroleum and Natural Gases that while converting the temporary COCOs into dealer run retail outlet should be handed over to pending LOI holders under the following categories in the same order as indicated therein subject to suitability:

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(a) Special Scheme (Operation Vijay-Kargil

¶173

(b) Discretionary quota scheme

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(d) Widows and women of 40 years of age

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without any earning parents and other category as prescribed for marketing plans.

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If the mandamus is issued by Hon’ble Court and the guidelines are not followed, special category of allottees will be deprived of getting the allotment. The hardship to be suffered by allottees as per the guidelines (as referred above) in the event the allotment is not made to them as per September, 2006 guidelines of Ministry of Petroleum and Natural Gas, Government of India, will definitely overweigh the hardship to be suffered if the mandamus is refused to be granted by the Hon’ble Court to the petitioners herein. The balance of convenience for claiming the dealership is more in favour of the persons who are the major beneficiaries under the September 2006 guidelines and not in favour of the petitioners. The petitioners have also failed to establish any prima facie case for seeking the relief as prayed for. 64. Certain other averments also had been made that certain of the companies are not necessary parties. 65. It is no doubt true that in certain of the Writ Petitions, certain instances of discrimination had been pointed and submissions in elaboration had been made on the ground that in the light of the same since the changed policy

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cannot be taken as retrospective and to be taken as prospective only, the petitioners are entitled to relief as prayed for in W.P.Nos. 12238 of 2007, 12229 of 2007, 10610 of 2007 and 11710 of 2007. These are not the owners but only contractors, and the respective lease deeds had also been placed before this court and it is needless to say that the respective petitioners are bound by the terms and conditions of the lease deed of the respective lease deeds and these lease deeds are not conditional lease deeds. The change of policy is being attacked on the ground that the same is arbitrary and discriminatory and at any rate the Oil Companies are bound by the promise made by the Oil Companies at the time of taking the land. Strong reliance was placed on SHOKA SMOKELESS COAL INDIA (p) LIMITED VS. UNION OF INDIA^[5] , wherein the scope and ambit of legitimate expectation had been dealt with in elaboration. In DR. ASHOK KUMAR MAHEWARI VS. STATE OF U.P^[6] , the Apex Court at paragraphs 8 to 23 observed as under:

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“( 8 ) DOCTRINE of "promissory Estoppel" has been evolved by the Courts, on the principles of equity, to avoid injustice.

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( 9 ) "estoppel" in Black's Law Dictionary, is indicated to mean that a party is prevented by his own acts from claiming a right to the detriment

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of other party who was entitled to rely on such conduct and has acted accordingly. Section 115 of the Indian Evidence Act is also, more or less, couched in a language which conveyes the same expression.

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( 10 ) "promissory Estoppel" is defined as in Black's Law Dictionary as "an estoppel which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise. "

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( 11 ) THESE definitions in Black's Law Dictionary which are based on decided cases, indicate that before the Rule of "promissory Estoppel" can be invoked, it has to be shown that there was a declaration or promise made which induced the party to whom the promise was made to alter its position to its disadvantage.

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( 12 ) IN this backdrop, let us travel a little distance into the past to understand the evolution of the Doctrine of "promissory Estoppel. "

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( 13 ) DIXON, J. , an Australian jurist, in Grundt v. Greater Boulder Pty. Gold Mines Ltd. , (1938) 59 CLR 641, laid down as under :-"it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or

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harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. "

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( 14 ) THE principle, set out above, was reiterated by Lord Denning in Central London Properties Ltd. v. High Trees House Ltd. , (1947) 1 KB 130, when he stated as under :-"a promise intended to be binding, intended to be acted upon, and in fact acted upon is binding. . . "

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( 15 ) LORD Denning approved the decision of Dixon, J. (supra) in Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. (1956) 3 All ER 905. Apart from propounding the above principle on judicial side, Lord Denning wrote out an article, a classic in legal literature, on "recent Developments in the Doctrine of Consideration", Modern Law Review, Vol. 15, in which he expressed as under :-"a man should keep his word. All the more so when the promise is not a bare promise but is made with the intention that the other party should act upon it. Just a contract is different from tort and from estoppel, so also in the sphere now under discussion promises may give rise to a different equity from other conduct. THE difference may lie in the necessity of showing "detriment". Where one party deliberately promises to waive, modify or discharge his strict legal rights, intending the other party to act on the faith of promise, and the other party actually does act on it, then it is contrary, not only to equity but also to good faith, to allow the promisor to go back on his promise. It should not be necessary for the other party to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it. "

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( 16 ) SO far as this Court is concerned, it invoked the doctrine in

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Union of India v. Indo-Afghan Agencies, AIR 1968 SC 718 : (1968) 2 SCR 366, in which it was, inter alia, laid down that even though the case would not fall within the terms of S. 115 of the Evidence Act which enacts the Rule of Estoppel, it would still be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by Art. 299 of the Constitution. To the same effect are the decisions in Century Spinning Co. v. Ulhasnagar Municipal Council, AIR 1971 SC 1021 and Radhakrishna v. State of Bihar, AIR 1977 SC 1496.

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( 17 ) IN Motilal Padampat Sugar Mills Co. Ltd. v. State of U. P. (1979) 2 SCR 641 (1979) 2 SCC 409 : AIR 1979 SC 621, while reiterating the above principles and quoting with approval the passage of Dixon, J. , extracted above, it was observed as under :-"we do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promisee to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. "

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( 18 ) THEREAFTER, in successive cases, as for example, Union of India v. Godfrey Philips India Ltd. (1985) 4 SCC 369 : 1985 Supp (3) SCR 123 : AIR 1986 SC 806; Delhi Cloth and General Mills Ltd. v. Union of India AIR 1987 SC 2414; Kasinka Trading v. Union of India (1995) 1 SCC 274 : (1995 AIR SCW 680); Darshan Oil (P) Ltd. v.

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Union of India (1995) 1 SCC 345 : (1994 AIR SCW 4565); Shabi Construction Co. Ltd. v. City and Industrial Development Corporation (1995) 4 SCC 301; Shrijee Sales Corporation v. U. O. I. (1997) 3 SCC 398; Pawan Alloys and Castings (P) Ltd. v. U. P. State Electricity Board (1997) 7 SCC 251 : (1997 AIR SCW 3839), the Rule of "promissory Estoppel" was discussed, explained and elaborated. ( 19 ) THERE are many aspects of "promissory Estoppel", but in the instant case we are concerned only with one aspect which is to the effect that if any "promise" has been made contrary to law, can it still be enforced by invoking this rule.

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( 20 ) THE basic principle is that the plea of estoppel cannot be raised to defeat the provisions of a statute.

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( 21 ) THIS principle was reiterated in Union of India v. R. C. D'souza AIR 1987 SC 1172 : (1987) 2 SCC 211, where a retired army officer was recruited as Assistant Commandant on temporary basis and was called upon to exercise his option for regularisation contrary to the statutory rules. It was held that it would not amount to estoppel against the Department.

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( 22 ) WHETHER a Promissory Estoppel, which is based on a 'promise' contrary to law can be invoked has already been considered by this Court in Kasinka Trading v. Union of India, (1995) 1 SCC 274 : (1995 AIR SCW 680) as also in Shabi Construction Co. Ltd. v. City and Industrial Development Corporation (1995) 4 SCC 301 wherein it is laid down that the Rule of "promissory Estoppel" cannot be invoked for the enforcement of a 'promise' or a 'declaration' which is contrary to law or outside the authority or power of the Government or the person making that promise.

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( 23 ) APPLYING the above principles to the instant case, even if it is accepted that the State Government or the Director, Medical Education

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and Training, assured the appellant or any of his colleagues that they would be promoted to the posts of Lecturer, such a 'promise' cannot be enforced against the respondents as the avenue of promotion for demonstrators to the post of Lecturers was not provided either under the Statute or any executive instruction. Moreover, if the post of Lecturer was filled up by promotion of Demonstrator, it would defeat the existing mode of recruitment, namely, that it can be filled up by direct recruitment only and not by promotion. It may also be stated that the appellant did not make any clear, sound and positive averment as to which officer of the Government, when and in what manner gave the assurance to the appellant or any of his colleagues that they would be promoted as Lecturers. It was also not stated that the appellant had, at any time, acting upon the promise, altered his position, in any manner, specially to his detriment. Bald pleadings cannot be made the foundation for invoking the Doctrine of Promissory Estoppel.”

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66. Further strong reliance was placed on VIDARBHA VENEER INDUSTRIES LIMITD VS. STATE OF MAHARASHTRA^[7] , wherein the Division Bench of the Bombay High Court at paragraph 10 observed as under: “It is also pointed out by the respondents that the principle o promissory estoppel is not absolute. It may be required to give way to public interest. In other words, the Court would have to weigh the public interest served by holding the Government to its promise as against the public interest which may be served if the Government is required to go back on this promise in such circumstances where public interest so requires. (See in this connection M/s Motilal Padampat Sugar Mils Co. Limited. Vs. State of Uttar Pradesh reported

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in AIR 1979 SC 621 at page 644). The respondents submit that public interest requires that in respect of forest-produce, the State Government should get from the purchasers who have entered into agreements for the purchase for such produce over long term periods, a fair price for the produce; so that no loss is caused to the public exchequer. Merely reducing the period of revision of price does not cause any substantial prejudice to the petitioners when the basic factor for determining the price remains the same namely the prevailing market price. This , therefore, is a case where assuming that there is any promise, public interest requires the Government to modify that promise.”

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67. Further reliance was placed on A.C. JOSE VS. SIVAN PILLA I^[8] , wherein at paragraph 38 it was observed as under:

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“Lastly, it was argued by the counsel for the respondents that the appellant would be estopped from challenging the mechanical process because he did not oppose the introduction of this process although he was present in the meeting personally or though his agent. This argument is wholly untenable because when we are considering a constitutional or statutory provision there can be no estoppel against a statute and whether or not the appellant agreed or participated in the meeting which was held before introduction of the voting machines, if such a process is not permissible or authorized by law he cannot be estopped from challenging the same.”

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68. Further strong reliance was placed on JACOB PHILIP VS. UNION OF INDIA^[9] , wherein at paragraph 9 the learned Judge observed as under:

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“Advocate Shri P. A. Mohammed appearing on behalf of the petitioners submits that for the reason of the issue of permits in the form of delivery orders to the stockists there is a promise, at any rate a representation, by the State Government on the faith of which the petitioners have acted in making the payments of the advance price and also incurring expenses by starting construction of buildings. Counsel, therefore, submits that applying the principle of promissory estoppel the State Government is bound to supply the quantity of cement covered by the permits issued to the respective petitioners. Counsel relies on the decision of the Supreme Court in Motilal Pandampat Sugar Mills Co. Limited vs. State of U.P (1979) 44 STC 42: (AIR 1979 SC 621) in support of the above proposition. As adverted to earlier, the quantity of cement available for distribution was considerably reduced for the reason of the partial decontrol of cement brought about by the amendment of the Cement Control Order in the year 1982. The amendment was in exercise of the powers conferred on the Central Government under Sections 18G and 25 of the Industries (Development and Regulation) Act, 1951. Corresponding amendments were made to the State Order in 1982 in exercise of the powers vested under the Essential Commodities Act. These amendments are effected by statutory orders issued by the Central and State Governments. There cannot be any question of promissory estoppel against statutory orders issued by competent authorities having the force of law. There can be no estoppel against a statute is clear from the decision of the Supreme Court in Chhaganlal Vs. Narandas, AIR 1982 SC 121. The above discussion covers all the contentions raised by counsel in this batch of writ petitions the facts of which do not vary in material particulars.”

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69. The respective stands taken by the parties already

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had been referred to supra. The terms and conditions of the lease deeds placed before this Court, being self explanatory, need not be further elaborated. The Deputy Secretary to the Government of India in the guidelines dated 6^th September 2006 referred to above, specifically specified that OMC framed their detailed guidelines on the basis of the above broad parameters and with the approval of their respective Board of Directors, and without further loss of time, as this has been long overdue, a copy of those guidelines after formulation, had been forwarded to the ministry in this regard. It is stated that while laying down detailed guidelines, OMCs must ensure objectivity and transparency in the matter, and, as far as possible, there should be uniformity in the guidelines of the OMCs. Further, the guidelines should also be given wide publicity by way of showing on the websites of the OMCs, etc.

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70. In pursuance of the same, the concerned Oil Companies had taken the present action and the said action had been challenged by the respective petitioners in this batch of writ petitions on the ground that the changed policy or revised policy cannot be applied retrospectively, further on the ground of promissory estoppel and also on the ground of legitimate

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expectation. No doubt, the further grounds of arbitrariness and discrimination also had been argued in elaboration. In the light of the settled principles of law in relation to the power of judicial review in interfering with such policy decisions, it is needless to say that writ courts are expected to be slow in interfering with such policy decisions. These are cases where parties are bound by the terms and conditions of the respective lease deeds. The change in policy is an uniform policy and, no doubt, in the broad policy laid down by the Union of India, the modalities or the details had not been elaborated but the fundamentals of the policy had been clearly spelt out and in pursuance thereof, the Oil companies had adopted the present policy, which cannot be said to be either arbitrary or discriminatory. Further, the applicability of the promissory estoppel or the legitimate expectation also would not arise. At any rate, this court is thoroughly satisfied that this uniform policy had been adopted only in public interest. Hence, in the light of the clear guidelines which had been specified above, and also the clear stands taken by the Union of India and also the respective Oil Companies which had been referred to above, this court is thoroughly satisfied that these Writ Petitions are devoid of merit and the same are liable to be dismissed. 71. Accordingly, all the Writ Petitions are hereby

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dismissed. No order as to costs.

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__________________ P.S. NARAYANA,

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J DATE: --01--2008.

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Note: L.R. Copy to be marked (YES / NO) KA

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