Roshan Lal & Anr v. UOI & Ors

order dated October 12, 201.1. Appellant Parmod Malik had' sought quashing of Notification dated

06.09.2006 as a result prayejCl that' IBP Company be I' restrained from terminating the supply of petroleum products to hira with respect to the sales outlet on Panipat-Sanouli Road. Alternatively it was prayed that if the first relief was not granted, oil company be directed to surrender 8094 sq.mtr. land leased by him to the oil company. Appellant Roshan Lai and co-appellant Surender Gupta have likewise made prayers similar to the prayers made by Parmod Malik. Appellant Virender Singh had pleaded pari materia with the writ petition filed by Parmod Malik and has sought similar relief.

¶2The learned Single Judge has held that the issue raised in the writ petitions was squarely covered l3y a decision of a Division Bench of this Court reported as 147 (2008) DLT 764 (DB) IBP Company Ltd. I/5. Nand Kishore Baioai & Ors.

¶3Since learned counsel for-the appellants had strenuously, urged that the issues raised in the writ petition(s) LPA Nos.962/2011, 985/2011 & 986/2011 filed by. thejappellantswere distinctfrom the issues raised and decided by'the Division Bench in Nand Kishore Bajpai's case (supra), we propose to firstly analyze the decision of the Division Bench.and then look into the issues raised in the writ petitions filed by the appellants.

¶4. At the outset it may be noted that the Division Bench wasldealing with a challenge to the Notification dated I

06.09.20061 i.e. same Notification which has been challenged by the appellants. , . 5. the decision of the Division Bench commences its journey by, noting in para .2 of the decision, that-the writ i petitioners jwere either land owners who had leased land to oil companies; for running petroleum retail outlets were appointed !Maintenance Handling Contractors (M&H Contractors;) or were ad-hoc dealers running outlets on contract but under supervision of the oil companies.

¶6thereafter, learned Division Bench, in paragraphs 3 to 5 of its decision, noted the controversy; being the difference of opinion .amongst two learned Single Judges of this Court. IDeclining relief, one of whom took,the opinion that the oil companies could not sub-lease the lands taken on lease I from writ petitioners for operating retail .outlets I declining relief another learned Single Judge took a view to the contrary.' | ;

¶7in paragraph 6 of the decision, the learned Division Bench noted that writ petitioners before. it were M&H Contractors or ad-hoc dealers pertaining to four public sector •oil companies; namely:

(i) Bharat Petroleum Corporation Ltd.

(BPCL), (ii) jHindustan Petroleum Corporation Ltd. (HPCL) ,(iii) LPA NOS.-962/2011,985/2011 &986/2011 Page 3 of10 ' )o Indian Oil'.Corporation Ltd. (.lOCL) and, (iv) IBP Company Tabulating1the relevant data pertaining to the various writ petitionerslwhowere litigatingwith the four oil• companies,in the next para i.e. para 7 of the decision, the learned Division I Bench noted in paras 8 and 9 that the lease deeds executed by the writ petitioners in favour of the oil companies had clauses permitting the oil company to assign, transfer or sub let the land taken on lease by the oil companies. The Division Bench thei[eafter. noted in para 10 that on the leased iands petrol pu.mjps were established by appointing M&H Contractors I thesd retail outlets were called 'Company Owned Company {Operated' (COCO) outlets, a misnomer for the reason thjese outlets were actually operated by-M&H Contractors. Thereafter, in-para onwards, Division Bench not^:-^ (a) that on 08.10.1999 a policy decision was taken by tlpe Government of India to dismantle Administrative Price Control by de-regulating, from Government control, retail business of petroleum products inasmuch as hitherto prior retail; business of petroleum products in India was under . the-control of public sector oil companies and dealership of r retail outleits was through a process of selection conducted by the Oil Selection Boards. The decision taken was to dismantle the AdminilstrativePrice Control mechanism giving freedom tq-the public isector oil companies to frame policies keeping in view the fact that private players would be soon entering market.- | However, decision to de-regulate sale of petroleum Iproducts through retail business could only come into effect! on 01.04.2002 and thus the Division Bench noted LPA Nos.962/20'll,985/2011&986/2011 ' ' • Page 4 of10 that till 31.i03.2002 the public sector oil companies alone could market petroleum products in retail.

¶8With respect to the decision taken on 08.10.1999, the Divisioh Bench noted that the policy decision'taken by the Governmeint of India was keeping in view that private players could entice and wean away the owners of retail sites of the public sector oil companies and thus it was decided that the oil companies]would hithertofore take on long term Ipse lands and wouldi operate therefrom the COCO outlets by appointing M&H Contjractors for a period of one year, extendable by another, With a sales officer of the concerned oil company entrusted -to each COCO outlet so that quality could be maintained. The policy specifically excluded by providing that landlords, existing dealers, distributors or letter of intent holders would under no circumstances be appointed as M&H Contractors. The Division Bench thereafter noted that from the pleadings of the parties before it, it was clear.that:

(i) M&H Contractors were appointed without proper selection,

(ii) some I M&H Contrjactors were existing dealers or distributors, and (iii) some oil cpmpanies had appointed ad-hoc dealers by calling them Reta|il Outlet Dealers and the appointment was without - ( undertaking a selection process. '• V

¶9The Division Bench noted that only IBP Company had formuiatecji a policy on October 08, 2002 for appointment of dealers and that this policy.lasted only for five months till it • was suspended in February 2003 and finally. superseded on September 19, 2003: The Division Bench noted that the policy framed by IBP -company on October 08, 2002 categorized I dealership Iin Category 1 and Category II; Category I would be • LPA Nos.962/2011, 985/2011 &986/2011 ' , those dealers who were also the land owners and who would be obliged to provide infrastructure by spending nnoney on constructing petrol pumps, installing equipments providing service centres. These Categury I dealers i.e. land owner dealers were not to be COCO outlets. Category II were COCO outiets even as per which the land owner had to be given a first option to act as M&iH Contractor.

¶10Thereafter, the Division Bench noted that the policy decision under challenge wa-s to undo wrongs being committed by the public sector oil marketing companies, for the reason M&H Contractors were being appointed without any ' i selection process, existing dealers and distributors were being appointed,as M&H Contractors and even in respect of COCO retail outlets ad-hoc dealers were being appointed. The-Division Bench-notedthat the oil companies vlere venturing into ad-hocism without there being any uniformity consistency and it was thus decided as per the policy that all COCO retail outlets being hithertofore managed would be phased oiit within a year and the oil marketing companies would operate COCO retail outlets by appointing Sales Officers at each ojutlet and for operating the retails outlets labour contractors would be appointed. I •

¶11'Relevant would it be to note that the Notification dated 6"" September, 2006 clarifies as to what would be a COCO retajil outlet. This is apparent from Clause (i) of para 2 ofthe Notihcationin question wherein it is written:- ;"While the OlMCs'may operate permanent COCO Iretail outiets (i.e. Flagship ROs, Jubilee Retail iOutlets, Model Outlets etc.) by their own officers " t LPA Nos.962/2011,985/2011&986/2011 . ' Page 6of 10

¶12iThus, it is ctear that COCO retail outlet is the genus of which flagship, jubilee retail outlet and model outlet are a specie of. ;

¶13sThe Division Bench thereafter concluded that the policy decision notified as-'per Notification dated 06.09.2006 was actually given effect^ to policy decision dated

08.10.1999 whereunder Administrative Price Mechanism was : dismantled in the petroleum retail segment. The learned Division Bench noted that the claim under the policy decision ' dated October 08, 2002 could only be predicated under IBP • • ' Company ^nd in none others and that too only if it could be shown that the person concerned was appointed as a dealer . between October 08, 2002 till February 2003 i.e. during the period thelpolicy remained in operation, it being suspended in February, 2003 and ultimately superseded on 19.09.2003.

¶14iln para 18 the Division Bench categorically noted that as pen the policy dated 08.10.2002, only such land owners ^ , could be ajDpointed dealers who had spent money on creating the infrasti]UGture. The Division Bench noted that after leasing ^ . the lands, ho petitioner was appointed a dealer and thus relief was declined holding that principle of legitimate expectatioip was not attracted to those who had neither ' applied notj were granted dealershipsand that ho, vested right had accrued in their favour.

¶15It be noted that principle of legitimate expectation was sought to be attracted on the pleadings that the land owners gave on lease their lands on the belief that LPA Nos.962/20ll,985/2011&986/2011 Page7of10 \ under the! policy, decision dated

08.10.2002 they would be appointed las dealers of the retail outlets.

¶16We now proceed to note the difference which the appellants' seek to Jay bare between them and those whose writ petitions were decided by the Division Bench. It was urged that the Jubilee Retail outlets COCO outlets are different outlets and that the learned Single Judge ignored that the Divisioin Bench was concerned with COCO outlets and not the Jubileei Retail outlets and for which they highlight para 3 of the policy dated 08.10.2002 which draws a distinction between JROs i.e.Jujbilee Retail outlets and COCO outlets.

¶17The distinction sought to be urged ignores that the policy deciision dated' 06.09.2006, as noted hereinabove in para Ifias equated flagship retail outlets,' jubilee retail • ..outlets and model outlets under the banner of COCO outlets and thus, it cannot be said that the decision of the Division Bench does not apply. , ' ,

¶18;At the heart of the matter is the decision of the Government of India taken on 08.10.1999 that no^publicsector oil company would appoint anybody as a dealer to sell petroleum iproducts in retail without a selection process. The Division.Bench recognized this as the core of its opinion and we respectfullyconcur. We highlightthat the policy decision dated 06.09.2006 clearly notes ad-hocism, an expression . which is a softer version of the actual hard reality i.e. corruption.' i 19-in this connection we find that on 04.10.1999the Government of India had clearly written to all public sector oil companies'that labourcontractorsappointedto manage COCO LPA.Nos.962/2011,985/2011&986/2011 Page 8of10 retail outlets would not be landlords, or existing dealers/disitrrbutors of the oil companies. .

¶20The appellants sought to distinguish their cases on policy' of the Indian Oil Corporation, dated

23.07.2003 which provjides that M&H Contractors would be the nominee of the landloitds and further the policy permits dealership to be awarded to land owners or their nominees.

¶21Suffice would it be to state that the taint in the said policy decision of the Indian Oil Corporation is th6 same which tainted policy decision dated

08.10.2002 framed by IBP Company and thus the reasoning of the Division Bench would be applicable in instant matters as well. Besides, appellants ihave no clajm against Indian Oil Corporation.

¶22The plea urged that not only have the appellants leased thelir land but have even spent money on effecting some constructions and thus an additional right flows to them on said account is neither here nor there for reason supplementary lease deeds have been executed by them and for which ' they are receiving lease money from oil company. ^Thus, it is not a case.where the appellants have been out of pocket by spending money on constructions on the land. They|are gettinga return for the money spent.

¶23The plea that such huge chunks of land would not be needed! by. the oil companies to operate the petrol pumps thus !the lease should be determined oil companies|shguld be directed to revert possession cannot be accepted inasmuch as the lease is determinable on the terms \ of the lease and not by a judicial direction de-hors the terms of the lease, i : LPA Nos.962/2011,985/2011&986/2011 I' Page 9of10

¶24' We concur with view taken by the learned Single Judge and thus we dismiss the appeals but refrain from imposing any costs. (PRADEEP NANDRAJOG) JUDGE • DECEMBEI^16, 2011 rk LPA Nos.962/2011, 985/2011 &986/2011 (S<P.GARG) JUDGE

* IN THE HIGH COURT OF DELHI AT NEW DELHI % ludament Reserved On: November 28. 2011 ludament Delivered On: December 16. 2011 + LPA 985/2011 ROSHAN LAL & ANR. Appellants Through: Mr.Sanat Kumar, Advocate with Mr.Tanamaya Mehta, Advocate versus UNION OF INDIA & ANR. Respondents Through: Mr.B.V.NIren, Advocate for R-1 Ms.Mala Narayan, Advocate for R-2 • CORAM: HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MR. JUSTICE S.P. GARG PRADEEP NANDRAIOG. I. For orders, see LPA 962/2011. -TT ^ ^ (PRADEEPNANDRy^OG) JUDGE (^.GARG) JUDGE DECEMBER 16, 2011 rk Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. % THE HIGH COURT ,0F 'DELHI At 'NEW DELHI ludament Reserved On: November 28: 2011 fudament Delivered On: December 16. 2011 + ; LPA 962/2011 PARMpD MALIK Appellant through: Mr.Sanat Kumar, Advocate with Mr.Tanamaya Mehta, Advocate versus UNION OF INDIA & ANR.. ...-.Respondents Through: Mr.B.V.Niren, Advocate for R-1 Ms.Mala Narayan, Advocate for R-2 LPA 985/2011 • ROSHAN LAL & ANR. Appellants Through: Mr.Sanat Kumar, Advocate with Mr.Tanamaya'Mehta, Advocate versus' UNIOI^I OF INDIA & ANR. ....Respondents Through: Mr.B.V.Niren, Advocate for R-1 Ms.Mala Narayan, Advocate for R-2 LPA 986/2011 VIRENDER SINGH Appellant Through: Mr.Sanat Kumar, Advocate with Mr.Tanamaya Me'hta, Advocate versus LPA Ngs:962/2011, 985/2011 & 986/2011 I UNION OF IIVDIA & ANR. ....Respondents Through: Mr.B.V.Niren, Advocate for R-1 Ms.Mala Narayan, Advocate for R-2 COR^M: HON'BLE MR. JUSTICE PRADEEP IMANDRAJOG, 'HON'BLE MR. JUSTICE S.P. GARG • PRADEEP NKNDRAIOG, I. I I 1. Four writ petitions, tinree of wlnich were filed fey appellants Parmod Malik, Roshal Lai & Anr. and Virender Singh, have been dismissed by learned Single judge vide impugned