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W.P.(C) No.2011/2015 Page 1 of 44
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 7th
July, 2016.
+ W.P.(C) No.2011/2015 & CM No.31914/2015 (of the petitioner for
setting aside of the order dated 14th
December, 2015)
M/S. MASAURHI SERVICE STATION ..... Petitioner
Through: Mr. Amit Sibal, Sr. Adv. with Mr.
Sanat Kumar and Mr. Vivek Raja,
Advs.
Versus
BHARAT PETROLEUM CORPORATION LTD.
& ANR. ..... Respondents Through: Mr. Sudhir Chandra Aggarwal, Sr.
Adv. with Mr. Anil K. Batra and Mr.
Paramjit Sinha, Advs. for R-1.
Mr. Sanjay Jain, ASG with Mr.
Vikram Jetly, CGSC, Ms. Pallavi
Shali and Mr. Akash Nagar, Advs. for
UOI.
CORAM:
HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The petition (i) impugns the letter dated 24th February, 2015 of the
respondent No.1 Bharat Petroleum Corporation Ltd. (BPCL) resiting the
petitioner, a Retail Outlet (RO) dealer of the respondent No.1 BPCL from
Shanti Path to Azadpur, Delhi; (ii) seeks to restrain the respondent No.1
BPCL from taking over physical possession of the petitioner‟s petrol pump
at Shanti Path, Moti Bagh, New Delhi; and, (iii) seeks direction to the
W.P.(C) No.2011/2015 Page 2 of 44
respondent No.1 BPCL to resume sales and supplies and not to obstruct or
interfere in the operation by the petitioner of the Shanti Path RO.
2. It is the case in the petition:
(i) that the respondent No.1 BPCL is a Public Sector Undertaking
(PSU) and respondent No.2 Union of India through Ministry of
Petroleum & Natural Gas (MoPNG) is the parent Ministry of the
respondent No.1 BPCL;
(ii) that the petitioner was originally operating a RO dealership in
Bihar;
(iii) that in the year 1999, the petitioner was resited from Bihar to
Azadpur, Delhi and operated the RO at Azadpur from 1999 to 2010-
2011;
(iv) that the petitioner‟s RO was one of the best performing RO in
the northern region contributing considerably to the respondent No.1
BPCL‟s market share in Delhi;
(v) that due to various infrastructure developments undertaken in
and around Delhi, specially around the RO of the petitioner at
Azadpur, the traffic flow got reduced, thereby making the RO at
W.P.(C) No.2011/2015 Page 3 of 44
Azadpur almost non-functional and economically unviable;
(vi) that consequently in April, 2007, a decision was taken to resite
the petitioner‟s RO from Azadpur to railway land at Shakurbasti,
Delhi; however, due to withdrawal of the offer of land by the railways,
the resitement to Shakurbasti did not materialise;
(vii) that finally by letter dated 16th
April, 2010, the petitioner was
resited from Azadpur to Shanti Path, Moti Bagh, New Delhi;
(viii) that complaints with respect to irregularity in resitement of the
petitioner from Azadpur to Shanti Path were examined by the Board
of Directors of the respondent No.1 BPCL which on 10th
February,
2012 noted that the resitement of the petitioner was in the commercial
interests as well as in accordance with the broad guidelines issued by
the respondent No.2 MoPNG and contained in the Company Owned
Company Operated (COCO) Policy dated 6th
September, 2006 and the
letter dated 17th
November, 2005 containing the resitement policy;
(ix) that the RO at Shanti Path was earlier operated by another
dealer whose dealership was cancelled in the year 2001 and upon
taking over thereof by the respondent No.1 BPCL, the same was
classified as COCO and has since the year 2001 been so operated;
W.P.(C) No.2011/2015 Page 4 of 44
(x) that in the year 2005, the labour contract for operating the
Shanti Path RO, under the direct supervision of the designated officer
of the respondent No.1 BPCL, was given to one Ms. Rajni Goyal,
whose contract was ultimately terminated / came to an end on 16th
April, 2010;
(xi) that on 25th
March, 2010, classification of the said RO was
again changed from that of a permanent COCO to a temporary COCO;
(xii) that since there was no pending Letter of Intent (LOI) holder
under the social objective category in Delhi, the RO at Shanti Path
was handed over to the petitioner which was an existing regular dealer
of respondent No.1 BPCL, by way of resitement;
(xiii) that the aforesaid Ms. Rajni Goyal had filed a suit against the
respondent No.1 BPCL and on account of pendency thereof, the RO at
Shanti Path could not be advertised for dealership and the allotment
thereof in favour of the petitioner was subject to the outcome of the
Court case;
(xiv) that the respondent No.1 BPCL vide its letter dated 25th
November, 2014 to the respondent No.2 MoPNG confirmed that the
resitement of the petitioner from Azadpur to Shanti Path was in
W.P.(C) No.2011/2015 Page 5 of 44
accordance with the guidelines;
(xv) that however suddenly on 24th February, 2015, without any
notice, the respondent No.1 BPCL attempted to forcibly take
possession of the Shanti Path RO from the petitioner and upon being
unsuccessful therein stopped supplies of petroleum products to the RO
of the petitioner at Shanti Path.
3. The petition came up first before this Court on 2nd
March, 2015 when
notice thereof was issued.
4. The respondent No.1 BPCL filed a counter affidavit pleading:
(a) that the Licence Agreement dated 17th April, 2010 between the
petitioner and the respondent No.1 BPCL contains an arbitration
clause and the writ petition is not maintainable;
(b) that under the licence agreement, the respondent No.1 BPCL
has reserved into itself the right to take back the whole or any portion
of the RO and / or the RO or to alter the same at any time during the
continuance of the licence and at its sole discretion and that the RO
shall always continue to be the property and in sole possession of the
respondent No.1 BPCL;
W.P.(C) No.2011/2015 Page 6 of 44
(c) that the claim of the petitioner, a mere licensee, of possession of
the property during the pendency of the licence is not maintainable;
reliance in this regard is placed on Gesture Hotels and Food Pvt.
Limited Vs. The New Delhi Municipal Council 210 (2014) DLT 359
and The Corporation of Calicut Vs. K. Srinivasan AIR 2002 SC
2051;
(d) that the petitioner thus does not have any enforceable right and
the right of the petitioner to enter the RO at Shanti Path had come to
an end on 24th
February, 2015;
(e) that vide letter dated 10th March, 2015, the Dealership
Agreement dated 17th
April, 2010 of the petitioner had also been
revoked;
(f) that it was the petitioner who was obstructing the operation of
the said RO by the respondent No.1 BPCL;
(g) that the respondent No.1 BPCL resited the petitioner from
Azadpur to Shanti Path on a perception that the same was permissible
under the policy; however such a perception of respondent No.1
BPCL was not found correct by the Chief Vigilance Officer (CVO) of
the respondent No.1 BPCL who submitted a report to the respondent
W.P.(C) No.2011/2015 Page 7 of 44
No.2 MoPNG with the observation that the petitioner, under the
policy, could not have been resited at Shanti Path;
(h) that the respondent No.2 MoPNG had vide its letter dated 25th
February, 2015 to the respondent No.1 BPCL directed the cancellation
of the resitement of the petitioner to Shanti Path;
(i) that the site at Azadpur is ready and operations can be carried
out therefrom by the petitioner;
(j) that since it was a case of recall / revocation of decision of
resitement not in conformity with the policy / guidelines of the
respondent No.2 MoPNG with the permissibility to the petitioner to
commence operations at Azadpur, from where the petitioner had been
operating prior to resitement at Shanti Path, there was no requirement
to give any show cause notice or hearing, as the business relationship
between the petitioner and the respondent No.1 BPCL continued;
(k) that the resitement of the petitioner from Masaurih, Bihar to
Azadpur, Delhi was effected in the year 2004 and not in the year 1999;
(l) that resitement of the petitioner from Azadpur to Shanti Path
could not have been granted as the policy did not permit so;
W.P.(C) No.2011/2015 Page 8 of 44
(m) that as per the Guidelines dated 6th
September, 2006 of the
respondent No.2 MoPNG, the COCO RO at Shanti Path could be
divested to pending LOI holders belonging to the categories of
Operation Vijay-Kargil or Discretionary Quota Scheme or Corpus
Fund Scheme (SC / ST category of dealerships, widows and women
above 40 years of age without earning parents) or other categories as
prescribed in the marketing plans and if none was available in any of
the aforesaid categories, by advertising under normal process;
(n) that since the petitioner had been resited at Shanti Path in
contravention of the policy / guidelines, it was essential to correct the
said mistake;
(o) that the reliance by the petitioner in the petition on the letter
dated 9th August, 2010 of the respondent No.2 MoPNG is
misconceived as, as per the said letter itself the final decision was still
to be taken.
5. The respondent No.2 MoPNG in its counter affidavit pleaded:
(i) that the supply and sale of petroleum products to the general
public across the country is done by the Public Sector Oil Marketing
Companies viz. Indian Oil Corporation Limited, BPCL and Hindustan
W.P.(C) No.2011/2015 Page 9 of 44
Petroleum Corporation Limited through their duly appointed dealers
and distributors; though the MoPNG does not interfere in the day-to-
day affairs of the Oil Marketing Companies but has framed guidelines
governing selection, resitement, reconstitution of the dealers and / or
distributors so as to ensure transparency, uniformity and
accountability and in case of any discrepancy or irregularity or
violation in the implementation of the broad guidelines, directions are
issued for taking corrective action;
(ii) that on examination of the complaints received and on the basis
of the report of the CVO of the respondent No.1 BPCL, it was found
that resitement of the petitioner by the respondent No.1 BPCL from
Azadpur to Shanti Path was in blatant and gross violation of the extant
policy / guidelines; it is believed that certain officials of the
respondent No.1 BPCL flouted the guidelines so as to give undue
favour to the petitioner on account of certain extraneous
considerations;
(iii) that accordingly, the respondent No.2 MoPNG vide letter dated
25th February, 2015 read with corrigendum dated 25
th February, 2015
directed the respondent No.1 BPCL to cancel the resitement of the
W.P.(C) No.2011/2015 Page 10 of 44
petitioner from Azadpur to Shanti Path with immediate effect;
(iv) that in fact the resitement of the petitioner from Masaurih in
Bihar to Azadpur in Delhi was also found to be in violation of extant
guidelines;
(v) that the RO at Shanti Path was originally allotted to M/s Rajnath
Motors whose dealership was terminated in the year 2001; M/s
Rajnath Motors initiated litigation which is still pending adjudication;
(vi) that pursuant to the termination, the said RO was operated by
the respondent No.1 BPCL as a temporary COCO which was managed
by Ms. Rajni Goyal on labour contract basis and was managed by all
women and which labour contract was terminated just before the
resitement of the petitioner from Azadpur to Shanti Path;
(vii) that as per the Guidelines dated 6th September, 2006, temporary
COCOs were required to be phased out by handing over to pending
LOI holders in the order of priority mentioned therein and in case of
no LOI holder under the specific category was available, the said ROs
were to be advertised for selection of dealer in normal process;
(viii) that the respondent No.1 BPCL misinterpreted and violated the
said guidelines in resitement of the petitioner at Shanti Path;
W.P.(C) No.2011/2015 Page 11 of 44
(ix) that the Board of Directors of the respondent No.1 BPCL in the
meeting held on 24th
September, 2010 was informed that the petitioner
was being resited in accordance with the respondent No.2 MoPNG
guidelines; however the respondent No.2 MoPNG vide its letters dated
29th December, 2010, 9
th February, 2011, 14
th March, 2011, 3
rd May,
2011, 27th May, 2011, 9
th August, 2011, 14
th September, 2011, 25
th
November, 2011 and 6th
March, 2012 asked the Board of respondent
No.1 BPCL to reconsider but was not reconsidered;
(x) that in the meanwhile, the respondent No.2 MoPNG received
complaint dated 25th May, 2011 from one Member of Parliament
wherein it was alleged that some of the officials of the respondent
No.1 BPCL had permitted resitement of the petitioner at Shanti Path in
violation of the guidelines and on receipt of which complaint, a
vigilance investigation was commenced; the CVO of the respondent
No.1 BPCL concluded vide his report dated 17th October, 2012 that
divesting COCO at RO Shanti Path by the officers tantamounts inter
alia to violation of the guidelines and breach of rules and violation of
laid down procedures and was null and void;
W.P.(C) No.2011/2015 Page 12 of 44
(xi) that the respondent No.2 MoPNG on examination of the report
of the CVO vide its letter dated 25th February, 2015 directed the
respondent No.1 BPCL to cancel the resitement of the petitioner;
(xii) that further suitable action as may be deemed fit shall be taken.
6. When the petition came up before this Court on 27th May, 2015, both
the petitioner as well as the respondent No.1 BPCL claimed to be in
possession of the RO at Shanti Path. In this view of the matter, both parties
were directed to maintain status quo as it was obtained on that date, till the
next date of hearing.
7. The petitioner applied for amendment of the petition to also impugn
the letter dated 10th March, 2015 of cancellation of dealership of the
petitioner. The said application came up before this Court on 17th
September, 2015 when it was allowed un-opposed and the amended petition
taken on record. The respondent No.1 BPCL and the respondent No.2
MoPNG have filed counter affidavits thereto.
8. On 14th
December, 2015, the following order was passed:
“1. An adjournment is sought on the ground of unavailability
of the counsel for the petitioner. It is stated that the counsel for
the petitioner is unwell.
W.P.(C) No.2011/2015 Page 13 of 44
2. The senior counsel for the respondent No.1 vehemently
opposes. It is reminded to the Court that on 6th
October, 2015
also when the matter could not be taken up, the respondent no.1
Bharat Petroleum Corporation Ltd. (BPCL) had expressed
urgency and thus the counsel for the petitioner was aware that
the matter would be taken up today. It is yet further contended
that in fact the counsel whose illness is pleaded as a ground for
adjournment has not been arguing and on arguing dates a
senior counsel has been engaged and could have been engaged
today also.
3. The counsel for the petitioner states that the senior
counsel who was to be engaged is also out of station today.
4. The senior counsel for the respondent no.1 BPCL further
states that the petitioner after obtaining an interim order from
this Court has been delaying the matter, sometimes by seeking
adjournments and sometimes by making frivolous applications
including for amendment of the petition and which amendments
have no relevance to the controversy. It is further contended
that the petitioner at best was a mere licensee of the respondent
no.1 with respect to the subject petrol pump and which licence
also had been obtained in violation of the Rules/Guidelines
therefor, in collusion with some officials of the respondents no.1
BPCL and in a vigilance inquiry, action has been taken against
as many as five officials of the respondent no.1. It is stated that
action against two others could not be taken as they had retired.
It is also informed that the respondent no.1 BPCL has stopped
supplies to the subject petrol pump and now the petitioner is
illegally squatting thereon under protection of the interim order
of status quo of this Court and the respondent no.1 BPCL is
also suffering a loss from being not able to sell its petroleum
products therefrom. It is also pointed out that the petitioner has
also been given an option to go back to the original Azadpur
site from which he was shifted / re-shifted to the subject site.
5. Having considered all the aforesaid facts and factors, I
am of the view that the ad interim injunction obtained by the
petitioner is to be vacated not only for the reason of the
petitioner having chosen not to after notice / after completion of
W.P.(C) No.2011/2015 Page 14 of 44
pleadings argued but also in the larger public interest.
6. Not only is the respondent no.1 BPCL being deprived of
the revenues from the subject petrol pump but the public must
also be suffering owing to non availability of petroleum
products at the said site.
7. Accordingly, the interim order dated 27th
May, 2015
directing the parties to maintain status quo is vacated.
8. The application for interim relief is dismissed.”
9. CM No.31914/2015 was filed by the petitioner for setting aside of the
order dated 14th December, 2015. The same came up before this Court on
22nd
December, 2015 when notice thereof was issued and while adjourning
the matter to 6th
January, 2016, the counsels were asked to come prepared to
argue the writ petition also on the said date. The senior counsels for the
petitioner was heard on 6th January, 2016, 8
th January, 2016 and 25
th January,
2016. The learned ASG appearing for the respondent No.2 MoPNG was
heard on 28th January, 2016. On 8
th February, 2016, the following order was
passed:
“1. The senior counsel for the respondent no.1 Bharat
Petroleum Corporation Ltd. (BPCL) has been heard to an
extent.
2. It is inter alia the contention of the respondent no.1
BPCL that the re-sitement of the petitioner from Azadpur to
Shantipath COCO site was violative of the Guidelines therefor
as filed at pages 33 to 35 of the paper book. During the
hearing, the Re-sitement Guidelines w.e.f. 17th November, 2005
at pages 36-41 have also been perused and on a prima facie
W.P.(C) No.2011/2015 Page 15 of 44
reading thereof it appears that the re-sitement of the petitioner
from Masaurhi, Bihar to Azadpur, Delhi also was contrary
thereto. The counsel for the petitioner states that the said re-
sitement was as far back as in 2004 and is not under challenge.
The senior counsel for the respondent no.1 BPCL states that the
Guidelines applicable in 2004 will be produced on the next date
of hearing.
3. The respondent no.1 BPCL to also produce the file
containing the decision making process for re-sitement of the
petitioner from Bihar to Azadpur, Delhi and from Azadpur,
Delhi to Shantipath, New Delhi.
4. The senior counsel for the respondent no.1 BPCL to on
the next date also address on whether the Policies regarding
Retail Outlets have been examined vis-a-vis the judgment of the
Supreme Court in Natural Resources Allocation, In Re,
Special Reference No.1 of 2012 (2012) 10 SCC 1. It appears
that BPCL and other Oil Marketing Companies cannot be
permitted to create rights in perpetuity in retail outlets and
there should be allotment of retail outlets except for categories
reservation for whom may be deemed necessary, through
competitive bidding process.
5. I have already in Bharat Petroleum Corporation Ltd.
Vs. Union of India MANU/DE/4431/2015 made certain
observations in this regard. The obliviance of the officers of
BPCL present in Court thereto shows the scant
regard/consideration by BPCL of Courts orders.
6. List on 25th February, 2016.”
The senior counsel for the respondent No.1 BPCL concluded his
arguments on 25th February, 2016. The senior counsel for the petitioner was
heard in rejoinder on 14th March, 2016 and 5
th April, 2016 when judgment
was reserved.
W.P.(C) No.2011/2015 Page 16 of 44
10. The senior counsel for the petitioner in addition to the factual matrix
recorded hereinabove, argued:
(a) that the petitioner operated the RO at Shanti Path till 23rd
February, 2015 as an all women served RO and won several awards
therefor;
(b) that the revocation by the respondent No.1 BPCL of the
allotment of the RO at Shanti Path to the petitioner vide notice dated
24th February, 2015 was without giving any reason and without any
show cause notice and liable to be set aside on this ground alone;
(c) that reliance in this regard was placed on paras 58 and 59 of
M/s. Allied Motors Ltd. Vs. M/s. Bharat Petroleum Corpn. Ltd. AIR
2012 SC 709 and on paras 1, 9 to 11 and 16 of Ashish Gupta Vs. IBP
Co. Ltd. 125 (2005) DLT 298;
(d) that no arbitration is possible because the respondent No.2
MoPNG on whose direction the respondent No.1 BPCL has acted is
not a party to the arbitration agreement; even otherwise, there can be
no arbitration qua rights under Article 14 of the Constitution of India;
(e) that the termination of the dealership agreement of the petitioner
is also without any notice; as per the licence agreement, termination
W.P.(C) No.2011/2015 Page 17 of 44
could be effected after 90 days notice, if without any cause and after
30 days notice, if for any breach; reliance was placed on paras 14, 16
and 18 to 21 of Bharat Filling Station Vs. Indian Oil Corporation
Ltd. 104 (2003) DLT 601 and it was argued that no urgency has also
been disclosed so as to be dispensed with the notice; attention was
invited to the letter dated 29th
December, 2010 of the respondent No.2
MoPNG to the respondent No.1 BPCL with respect to the operations
of the RO at Shanti Path advising the respondent No.1 BPCL to
examine the matter, keeping in view the Guidelines dated 6th
September, 2006 and “considering the commercial interest of the
company”;
(f) attention was invited to the extract of the meeting of the Board
of Directors held on 24th
September, 2010 recording that Shri
Shailender Kumar of the petitioner was not a relative of the Chairman
& Managing Director of the respondent No.1 BPCL and that there is
no mala fide wrong-doing by any officer of respondent No.1 BPCL in
resitement of the petitioner at Shanti Path and that the resitement was
carried out in the best interest of the respondent No.1 BPCL;
W.P.(C) No.2011/2015 Page 18 of 44
(g) attention was also invited to the agenda item for the Board
meeting of 3rd
February, 2012 also containing the reasons for
resitement of the petitioner;
(h) it was informed that the Court case with respect to the RO at
Shanti Path is still pending;
(i) that from all the aforesaid documents it is evident that there was
no mala fide or errors in the resitement of the petitioner at Shanti Path;
attention was also invited to the letter dated 25th
November, 2014 of
the respondent No.1 BPCL to the respondent No.2 MoPNG reiterating
that the resitement of the petitioner from Azadpur to Shanti Path was
in accordance with the guidelines and in the best interest of the
respondent No.1 BPCL and there was no hanky-panky therein and it is
argued that when the respondent No.1 BPCL had taken such a stand
till three months before 24th February, 2015, could not, merely
because of the directive dated 25th February, 2015 of the respondent
No.2 MoPNG, change its stand;
(j) that the petitioner, at the time of filing of the petition was not
even aware of the reasons for which action divesting it of the RO at
Shanti Path was taken and thus could not challenge the same and the
W.P.(C) No.2011/2015 Page 19 of 44
decision for the said action had emerged only from the counter
affidavit of the respondent No.2 MoPNG and without there being any
inkling of it earlier;
(k) that the same also demonstrates the need for a show cause
notice; had an opportunity been given to the petitioner, the petitioner
would have had a chance to explain that there was no violation of the
policy or mala fide on the part of the respondent No.1 BPCL on
resitement of the petitioner at Shanti Path;
(l) that even from the counter affidavit of the respondent No.2
MoPNG and the documents filed therewith, no finding of any mala
fides on the part of anyone in the respondent No.1 BPCL in resitement
of the petitioner emerges and the decision to resite the petitioner was
on hearsay / impressions;
(m) that no report of the CVO has been placed on record and in any
case the said report itself is stated to be three years old, of 17th
October, 2012;
(n) that the CVO of the respondent No.1 BPCL also did not conduct
any inquiry from the petitioner and the report of the CVO also is thus
in violation of natural justice and arbitrary;
W.P.(C) No.2011/2015 Page 20 of 44
(o) that the report of the CVO in any case is advisory in nature;
(p) that till date no prosecution has been launched nor any
disciplinary proceedings initiated against anyone for the illegality, if
any in such resitement of the petitioner;
(q) that the dicta of this Court in Bharat Filling Station supra
where it was held that no such action could be taken on the basis of
First Information Report (FIR) alone squarely applies and rather in the
present case there is no FIR also;
(r) that once the Board of Directors of the respondent No.1 BPCL
had considered the matter and were satisfied, the petitioner without
any notice could not have been so divested of its RO allotted to it;
(s) that the respondent No.1 BPCL is not to act at the behest of the
respondent No.2 MoPNG, specially when the Board of Directors of
the respondent No.1 BPCL had decided otherwise;
(t) that the respondent No.1 BPCL even in its counter affidavit to
this petition does not say that the resitement of the petitioner was not
in consonance with the policy or that there was any wrongdoing;
W.P.(C) No.2011/2015 Page 21 of 44
(u) that there are no findings of any extraneous consideration for
resitement of the petitioner;
(v) that the letter dated 25th
February, 2015 of the respondent No.2
MoPNG to the respondent No.1 BPCL also does not contain any
reason and the respondent No.1 BPCL could not have blindly acted
thereon, when its Board had earlier concluded that the resitement of
the petitioner was in accordance with the extant policy;
(w) that thus the divestment of the petitioner of the allotted site
challenged in this petition is without any reasons whatsoever and
without application of mind; reliance in this regard is placed on para
47 of Kranti Associates Private Limited Vs. Masood Ahmed Khan
(2010) 9 SCC 496 and on para 46 of Ravi Yashwant Bhoir Vs.
District Collector, Raigad (2012) 4 SCC 407 (DB);
(x) that in any case reasons for the action could not have been given
in the counter affidavit and there is nothing to show that any such
reasons existed at the time when action was taken; reliance is placed
on para 8 of Mohinder Singh Gill Vs. The Chief Election
Commissioner, New Delhi (1978) 1 SCC 405; attention was drawn to
the policy for resitement of a commissioned dealership /
W.P.(C) No.2011/2015 Page 22 of 44
distributorship enclosed to the letter dated 17th November, 2005 of the
respondent No.2 MoPNG providing for road widening, diversion of
road, re-alignment of existing road by a new one, as a ground for
resitement and it was argued that no error has been pointed out in
violation thereof;
(y) that a note dated 25th March, 2010 was prepared by a
Committee of Chief Manager (Highway Retailing), General Manager
(Retail) Headquarter, General Manager, Headquarter (Brand & ARB)
and General Manager (Highway Retailing) with regard to COCOs was
handed over and on the basis thereof, it was argued that all the COCOs
which were not meeting the desired standard were agreed to be
divested and it was argued that the decision for resitement of the
petitioner was thus felt to be the in the best commercial interest of the
respondent No.1 BPCL;
(z) that the CVO did not know the reasons for the respondent No.1
BPCL choosing not to advertise for Shanti Path RO i.e. the pendency
of suit filed by the earlier dealer;
W.P.(C) No.2011/2015 Page 23 of 44
(aa) that in equity there was nothing wrong in resitement of the
petitioner;
(bb) in response to my query it was informed that Mohinder Singh
Gill supra has not been diluted and has been followed in Rashmi
Metaliks Limited Vs. Kolkata Metropolitan Development Authority
(2013) 10 SCC 95;
(cc) that the respondent No.1 BPCL as a statutory authority and a
writ petition is maintainable against it; reliance in this regard was
placed on Bharat Petroleum Corporation Ltd. Vs. Maddula
Ratnavalli (2007) 6 SCC 81;
(dd) that the respondent No.2 MoPNG at the relevant time having
left the matter of allotment of the Shanti Path RO to the decision of the
respondent No.1 BPCL could not have subsequently issued a direction
to the respondent No.1 BPCL to revoke the said resitement. A lot of
emphasis was made on the respondent No.1 BPCL having rewarded
the petitioner for its performance;
(ee) had there been any involvement of any of the officers of the
respondent No.1 BPCL in such resitement of the petitioner,
disciplinary action would have followed;
W.P.(C) No.2011/2015 Page 24 of 44
(ff) that no undue favour was shown to the petitioner;
(gg) that notwithstanding an arbitration clause writ remedy is
available; reliance was placed on Harbanslal Sahnia Vs. Indian Oil
Corpn. Ltd. (2003) 2 SCC 107;
(hh) that the respondent No.1 BPCL ought not to have taken such
mid-night action against its best dealer;
(ii) that photographs of the Azadpur RO site were shown to contend
that the same is still not viable. Reliance was placed on M/s. Dadri
Cement Co. Vs. M/s. Bird and Co. Pvt. Ltd. AIR 1974 Delhi 223 to
contend that the petitioner could not have been reverted to Azadpur
RO, the agreement with respect whereto stood novated;
(jj) that the respondents have, in the garb of termination of
resitement, in fact terminated the licence of the petitioner;
(kk) that the landlord of the Azadpur RO has instituted a suit for
possession and which is pending adjudication;
(ll) that the mid-night action of the respondent No.1 BPCL against
the petitioner was also contrary to public interest. Reliance was also
placed on M/s R.K. Associates & Hoteliers Pvt. Ltd. Vs. Indian
W.P.(C) No.2011/2015 Page 25 of 44
Railways Catering & Tourism Corporation (IRCTC) 2015 SCC
OnLine Del 9528 to contend that existence of arbitration clause in the
licence agreement is not a bar to the maintainability of the writ
petition;
(mm) that the mere fact that the respondents have taken over Shanti
Path site would not make the writ petition infructuous, inasmuch as if
the petitioner succeeds, it is entitled to restoration of possession of the
Shanti Path site.
11. The learned ASG appearing for the respondent No.2 MoPNG
contended:
(I) that the petitioner has travelled a long distance from Masaurih
in Bihar to Shanti Path, New Delhi and the decision of the respondent
No.1 BPCL to permit the same was flawed and contrary to policy;
(II) that the dealership is a state largesse;
(III) that the petitioner was operating the RO from 2004 when
according to the petitioner also the proposal for its resitement from
Azadpur was first mooted, till the year 2010 when the petitioner was
ultimately resited;
W.P.(C) No.2011/2015 Page 26 of 44
(IV) that the permanent COCOs were converted to temporary COCO
to be ultimately phased out;
(V) that the policy of the year 2005 of allotment of temporary
COCOs did not provide for resitement thereof of the existing dealers;
(VI) that the resitement policy annexed to the letter dated 17th
November, 2005 on which reliance is placed by the petitioner is not
with respect to the temporary COCOs and there could be no
resitement at temporary COCO thereunder;
(VII) that even as per the policy enclosed to the letter dated 17th
November, 2005, there could be no resitement on the ground of loss of
revenue;
(VIII) that though the respondent No.1 BPCL had terminated the
dealership of the petitioner but the petitioner can go back to Azadpur;
(IX) that the COCO Phasing Out Policy dated 6th
September, 2006
was the applicable policy and under which the petitioner could not
have been resited at Shanti Path;
(X) that the petitioner was / is deemed to be fully in the know of all
the policies of the respondent No.1 BPCL and had no bona fides in
W.P.(C) No.2011/2015 Page 27 of 44
claiming or in retaining resitement at Shanti Path;
(XI) that the conduct of the petitioner disentitles it from any relief;
reliance was placed on M/s. Dharampal Satyapal Ltd. Vs. Deputy
Commissioner of Central Excise, Gauhati 2015 (6) SCALE 612
where it was held that when certain benefits were accorded contrary to
policy and were thus refundable, issuance of notice would be an empty
formality and useless formality theory was invoked;
(XII) reliance was placed on paras 69, 70.4 and 70.5 of Joshi
Technologies International Inc. Vs. Union of India (2015) 7 SCC
728 to contend that a writ petition is not maintainable where an
arbitration clause exists and in contractual matters; reliance in this
regard was also placed on State of U.P. Vs. Bridge & Roof Company
(India) Ltd. (1996) 6 SCC 22;
(XIII) that reference was made to K.D. Sharma Vs. Steel Authority of
India Limited (2008) 12 SCC 481 holding that a petitioner whose
conduct is not found to be bona fide, his petition has to be rejected on
this ground only;
(XIV) that the petitioner has not suffered from any act of the State and
the petition is not maintainable for this reason also. The petitioner in
W.P.(C) No.2011/2015 Page 28 of 44
any case had no right to remain a licensee of the Shanti Path RO.
12. The senior counsel for the respondent No.1 BPCL argued:
(A) that the petition does not disclose any vested right of the
petitioner which can be said to have been violated;
(B) that the petitioner has invested neither in land nor in equipment
nor in supplies of the petroleum products retailed from the RO, all of
which were provided by the respondent No.1 BPCL;
(C) that the claim of the petitioner of being in possession and to
possession, when as per the terms of the licence, the possession is of
the respondent No.1 BPCL, also disentitles the petitioner from any
relief in the writ petition;
(D) attention was invited to Clauses 15, 18, 19(a) & (b) of the
licence to contend that the arbitration is contemplated therein is also
empowered to restore possession;
(E) that a supplementary affidavit was handed over to the effect that
Azadpur RO is accessible from three directions and likely to have
sales of more than 500 KL per month, which is much above the
threshold volume of 150 KL required for setting up of a new RO in
W.P.(C) No.2011/2015 Page 29 of 44
Delhi;
(F) that the petitioner having got Shanti Path RO through unfair
means had to be necessarily divested thereof in public interest;
(G) that the policy prevalent at the time of resitement of the
petitioner from Masaurih in Bihar to Azadpur Delhi was handed over
to show that such resitemetn of the petitioner was also contrary thereto
and did not even have the approval in accordance with the policy;
(H) that the petitioner in terms of Clauses 1, 4, 15, 18 & 21 of the
licence agreement had no vested right with respect to any RO;
(I) that since the resitement of the petitioner at Shanti Path was
through the backdoor, there is no injustice in reverting the petitioner to
Azadpur and no notice was required to be issued;
(J) that the writ remedy is to be invoked to meet the ends of justice;
here there is no injustice;
(K) that reference was made to Rajasthan State Industrial
Development and Investment Corporation Vs. Diamond & Gem
Development Corporation Limited (2013) 5 SCC 470 to contend that
the Court should not exercise its writ jurisdiction to enforce
W.P.(C) No.2011/2015 Page 30 of 44
contractual obligations;
(L) attention was invited to para 98 of Ramesh Chandra Sankla
Vs. Vikram Cement (2008) 14 SCC 58 laying down that the
discretionary and inequitable powers under Article 226 of the
Constitution are required to be exercised in the larger interest of
justice, balancing the interests and equities and relief can be denied in
public interest;
(M) reliance was placed on Dharampal Satyapal Limited Vs.
Deputy Commissioner of Central Excise, Gauhati (2015) 8 SCC 519
laying down that a breach of procedure cannot give rise to a remedy in
the Courts, unless behind it there is something of substance which has
been lost by the failure;
(N) that now when this Court has heard the petitioner, if this Court
were to be of the view that the removal of the petitioner from the RO
of Shanti Path is justified, even if this Court to be of the view that the
petitioner should have been granted a hearing, the petitioner ought not
to be restored to the RO at Shanti Path for the said reason;
W.P.(C) No.2011/2015 Page 31 of 44
(O) that this is not a fit case for exercise of extraordinary power of
prerogative writ.
13. The senior counsel for the petitioner in rejoinder, besides
recapitulating his opening arguments, contended:
(i) that the resitement policy enclosed to the letter dated 17th
November, 2005 and the COCO policy dated 6th
September, 2006
have to be read harmoniously;
(ii) that as per the 17th November, 2005 policy, the petitioner had to
be resited on account of road re-alignment;
(iii) that there is no bar in the 6th September, 2006 policy to
resitement at the COCO RO;
(iv) that at the relevant time, owing to the road realignment at
Azadpur, the petitioner had to be resited and had the COCO RO at
Shanti Path not been allotted to it, the right of the petitioner of
resitement would have been violated;
(v) that the petitioner was employing women at the RO of Shanti
Path and all of whom had been rendered unemployed;
W.P.(C) No.2011/2015 Page 32 of 44
(vi) that the tearing hurry shown by the respondent No.1 BPCL in
vacating the petitioner from the RO of Shanti Path shows the mala
fides of the respondent No.1 BPCL;
(vii) that the petitioner in accordance with the policy of the
respondent No.1 BPCL was also operating an „In and Out‟ store from
the Shanti Path RO and has been vacated therefrom also;
(viii) that Azadpur RO is still not functional;
(ix) distinguished the judgments cited by the counsels for the
respondents.
14. I have considered the rival contentions.
15. Though at one time, the respondent BPCL had terminated the
dealership of the petitioner but is now not insisting on such termination and
the question to which this writ petition is confined is whether the action of
the respondent BPCL of reverting the RO of the petitioner from Shanti Path
to Azadpur is illegal.
16. The first illegality argued by the senior counsel for the petitioner is, of
the said reversion being without notice and without hearing to the petitioner.
In this regard, the reason for which such action has been taken becomes
W.P.(C) No.2011/2015 Page 33 of 44
important. It is the case of BPCL and MoPNG that the resitement of the
petitioner from Azadpur to Shanti Path was illegal and the action of undoing
what was illegal does not require any notice or hearing to be given. I,
however, do not deem it necessary to adjudicate the said question at this
stage, when the petition is pending before this Court for the last nearly 1 ½
years and when the petitioner, though had sought, did not get any interim
relief of restoration of supply of petroleum products which had been stopped
since 24th
February, 2015 and managed to get interim relief only of
maintenance of status quo qua possession and appears to have been satisfied
therewith. The reason thereof is obvious. The petitioner, besides a retailing
petroleum products from the RO at Shanti Path, was also operating an “In
and Out” store from the said outlet and the business of an “In and Out” store
appears to have been more lucrative and more rewarding than the business of
operating the RO. The petitioner felt the pinch only after was divested of the
“In and Out” store pursuant to vacation on 14th December, 2015 as of the
interim order earlier granted of „status quo‟. I am of the view now that all
the issues have been thrashed out before this Court in the lengthy and
elaborate hearing, in the facts of the present case, even if I were to find that
the petitioner before the impugned action was required to be given a notice
W.P.(C) No.2011/2015 Page 34 of 44
and an opportunity of being heard, disposal of the petition simply with that
direction without returning any findings on the other arguments urged would
be a wastage of judicial time.
17. Moreover, no prejudice is found to have been caused to the petitioner
from being deprived of notice and hearing, even if were to be given.
Petitions, one of the ground of challenge to the impugned action wherein is
of non-grant of hearing/notice, depending upon their peculiar facts can be
either disposed of at the initial stage with a direction for hearing to be given
and if remain pending and are heard finally, can be disposed of with such a
direction only if the petitioner is found to be suffering from any prejudice by
being deprived of the notice and/or hearing. In most cases, including the
present one, disposal of the petition with the direction for hearing to be given
would only delay, keeping the rights of the respective parties at sea and
thereby preventing both parties from beneficial use and enjoyment o the
property concerned. Considering the nature of the property concerned in the
present case i.e. a RO, keeping the rights at sea any longer would be against
public interest.
18. There is another reason for which I say that keeping the issue at sea is
contrary to public interest. According to the respondents, the petitioner was
W.P.(C) No.2011/2015 Page 35 of 44
resited from the RO at Azadpur to the RO at Shanti Path to the detriment of
others who, as per the policy of MoPNG were required to be allotted the
same. If that is found to be true, then no illegality can be seen in undoing
thereof at the earliest so as to enable the RO at Shanti Path to be allotted to
its rightful claimants.
19. Supreme Court recently in Dharampal Satyapal Ltd. supra, after
holding that there was a requirement of issuance of a show cause notice
before taking the action impugned therein, proceeded to hold that the
principles of natural justice are very flexible principles and cannot be applied
in any straight jacket formula. It was held that it may not be necessary for the
Court to strike down the action and refer back the matter to the authorities
concerned to take a fresh decision after complying with the procedural
requirements in those cases where non grant of hearing has not caused any
prejudice to the person. It was further held that rules of natural justice are to
be followed for doing substantial justice and are not ritualistic.
20. As far as the objections of the respondents as to the maintainability of
the petition for the reason of existence of an arbitration clause in the
dealership agreement is concerned, the principle of non-maintainability of a
writ petition if an alternative suitable remedy is available is also a principle
W.P.(C) No.2011/2015 Page 36 of 44
of discretion and not an absolute principle. I am again of the view that once
the writ petition remains pending and arguments have been fully heard
thereon and if the question involved can be adjudicated conveniently in writ
jurisdiction, the Court should ordinarily attempt to dispose of the question in
writ jurisdiction even if the alternative remedy is available, so that judicial
time is not wasted.
21. That brings me to the illegality if any on merits in the action of the
respondents, of reverting the petitioner from Shanti Path to Azadpur.
Though to the petitioner, as a dealer of BPCL, it should matter not whether it
deals in the BPCL products from Shanti Path or from Azadpur, but obviously
the petitioner has reason to feel aggrieved therefrom. The reasons which
have come forward are two-fold. First, commercial and second being the
fear of losing the dealership at Azadpur also in the eventuality of BPCL
being evicted from the said site by the owner/landlord thereof. As aforesaid,
the petitioner till was not divested of “In and Out” store being operated by it
at the RO at Shanti Path was satisfied with the interim order of status quo
qua possession even without being able to operate/retail petroleum products
therefrom and of which additional source of revenue there appears to be no
possibility from the RO at Azadpur. However, the same, in my view will not
W.P.(C) No.2011/2015 Page 37 of 44
qualify as reasons for which the petitioner can legally be said to feel
aggrieved. The petitioner has not been assured any minimum revenues while
becoming a dealer of BPCL. In any case it has come on record that the sales
from the RO at Azadpur have also always been above the minimum „off
take‟ which is required of a dealer of BPCL.
22. Before proceeding to discuss the question further I may record that
several cases have come before this Court where as a result of development
of civil infrastructure in the city resulting in realignment of the roads, or for
other varied reason, RO‟s of oil companies have had to shut down or close
and dealers whereof have been left without any RO to operate. The
consistent stand of the oil companies in those cases has been that resitement
is subject to policy and availability and not as a matter of right and those
petitions have been disposed of with directions to the oil companies to
accommodate such dealers subject to availability. Reference can be made to
Khandelwal Oil Company Vs. Indian Oil Corporation 2012 SCC OnLine
Del 1400 (DB) and to Bharat Petroleum Corporation Ltd. Vs. Union of
India MANU/DE/4431/2015.
23. On the contrary, here is a case where the petitioner by acquiring the
dealership of BPCL with respect to a RO in a remote corner of Bihar has
W.P.(C) No.2011/2015 Page 38 of 44
used the same to successively shift to more lucrative RO‟s of BPCL. Indeed
a special treatment appears to have been given by BPCL to the petitioner.
24. The petitioner, along with the petition, in support of its plea of
resitement from Azadpur to Shanti Path being in accordance with law, filed
the letters dated 17th November, 2005 and 6
th September, 2006. The letter
dated 17th November 2005 of MoPNG to the oil companies annexing thereto
the marketing guidelines including with respect to resitement of dealerships
and distributorships. It inter alia provides that resitement of a commissioned
dealership / distributorship “may be considered” inter alia on the ground of
re-alignment of existing road and subject inter alia to (i) being within the
same district/area/State and class of markets; (ii) the
dealership/distributorship at the old location being decommissioned. The
letter dated 6th September, 2006 is with respect to operation of RO‟s on
COCO basis and directing phasing out of temporary COCOs by offering and
handing over of the same subject to suitability to the pending letter of intent
holders under the following categories:-
“(a) Special Scheme (Operation Vijay-Kargil), the Kargil
allottees
(b) Discretionary quota scheme
(c) Corpus Fund Scheme (SC/ST category of dealerships,
widows and women above 40 years of age without
W.P.(C) No.2011/2015 Page 39 of 44
earning parents).
(d) Other categories as prescribed in the marketing plans.
(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.”
25. It would thus be seen that while the letter dated 17th November, 2015
supra enables resitement but does not provide where the dealer/ distributor
can be resited; the letter dated 6th September, 2006, though not concerning
resitement of a commissioned dealer / distributor, provides for phasing out
of ROs being operated on temporary COCO basis. It is not in dispute that the
Shanti Path RO was being operated on temporary COCO basis and was to be
dealt with in accordance with letter dated 6th September, 2006. The question
for consideration is, whether under the policy contained in the letter dated 6th
September, 2006, it could have been allotted to the petitioner by way of
resitement from Azadpur.
26. According to the petitioner, at the time of phasing out of Shanti Path
RO from the category of temporary COCO, no LOI holder belonging to
either of the categories of, Operation Vijay-Kargil or Discretionary Quota
Scheme of any of the Oil Companies or of other categories prescribed in the
W.P.(C) No.2011/2015 Page 40 of 44
marketing plans of the respondent BPCL was available. Though the same
does not inspire confidence as it is unbelievable that no LOI holder of any of
the Oil Companies from the Operation Vijay-Kargil or Discretionary Quota
Scheme was available but even if that be so, according to the letter dated 6th
September, 2006, the Shanti Path RO then had to be advertised for selection
of dealers under the normal process. The same was admittedly not done and
instead the petitioner was resited thereat. The other reason given by the
petitioner for the RO being not advertised because of pending Court case is
also not only without any basis but also not tenable in law. There admittedly
was no stay from the Court against advertisement. Just like the petitioner,
notwithstanding the Court case was willing to be resited, so could have
others been willing. In any case, even if it were to be believed that the
petitioner was willing to be resited there as a temporary measure, the
petitioner cannot now claim any permanency with respect thereto. Also,
there is no absolute right of resitement as aforesaid. The right is only to be
considered for resitement and subject to availability.
27. Such resitement of the petitioner at Shanti Path RO which was till then
being operated on temporary COCO basis is clearly in violation of the policy
contained in letter dated 6th September, 2006. The petitioner was certainly
W.P.(C) No.2011/2015 Page 41 of 44
given something by respondent BPCL, to what he was not entitled to, not
only in violation of policy with which the respondent BPCL was bound but
also at the cost of dependents of martyrs of Operation Vijay - Kargil or those
in Discretionary Quota Scheme, of any of the Oil Companies and/or at the
cost of selection of dealer / distributor thereof through advertisement,
offering equal opportunity to all. The fact that none of the officials of the
respondent BPCL responsible for this violation have been proceeded against
or punished therefor will not convert what was given to the petitioner in
violation of the policy, in accordance with the policy and will not diminish
the need to undo the illegality committed. Similarly, the decision of the
Board of Directors of the respondent BPCL, of the resitement of the
petitioner being in accordance with the extant policy, did not take away the
right of MoPNG to, upon finding the same to be against the policy, direct the
respondent BPCL to undo the illegality.
28. It was in this context that I had vide my order dated 8th February 2016
supra drawn the attention of the counsels to the directions issued by me in
Bharat Petroleum Corporation Ltd. Vs. Union of India,
MANU/DE/4431/2015 and to which no heed appears to have been shown by
the BPCL till now. I had therein wondered, as I had now also, as to what is
W.P.(C) No.2011/2015 Page 42 of 44
the right of a person who once becomes the dealer of an Oil Company to the
dealership in perpetuity. Ordinarily no contracts of the Governments are in
perpetuity, the intention being to give opportunity to all desirous of availing
thereof. If dealerships are given a perpetual status, considering the fact that
there is hardly any scope for any new dealership in the city, it would amount
to those who have succeeded in acquiring the same, enjoying it like
ownership rights in immovable property and to the detriment of others when
a dealership is but a largesse. There can possibly be no justification for
allowing a dealership once obtained, say under the operation (Vijay-Kargil
Scheme) to help out martyrs, to continue in the family of such martyrs and
resulting in none being available subsequently for another who may have
similarly suffered.
29. I have in this context also enquired of the commission which the
dealers of oil companies get from sale of the petroleum products and had yet
further inquired why should the dealership not be auctioned to a person who
tenders the minimum commission. The only answer forthcoming was that
introducing competition in commission may introduce an element of
adulteration of petroleum products. However, in my understanding, payment
of a high fixed commission does not insure that adulteration will not be
W.P.(C) No.2011/2015 Page 43 of 44
indulged in.
30. Be that as it may, these issues are for the respondent BPCL to consider
in pursuance to my directions in the judgment aforesaid.
31. The only response of the petitioner to my repeated query, that without
the letter dated 6th
September, 2006 supra (laying down modus of phasing
out of temporary COCOs) providing for resitement therein of existing
dealers, how could the petitioner be resited therein, was that since the
guidelines circulated under cover of letter dated 17th
November 2005
provided for resitement and there was no bar in the letter dated 6th
November, 2006 to such resitement at the temporary COCO being phased
out, there was no illegality in the petitioner being resited there.
32. I am unable to agree. Once the policy of phasing out of temporary
COCOs was clear and the residuary clause therein provided for dealers to be
invited by advertisement, if there were no existing LoI holder of the
specified categories and since there was no provision therein for resitement
of an existing dealer, such resitement is excluded therefrom. Significantly,
the policy contained in the letter dated 6th September, 2006 is not under
challenge.
W.P.(C) No.2011/2015 Page 44 of 44
33. The illegality in resitement of the petitioner at Shanti Path is thus writ
large. In fact it has also come on record that the Azadpur RO has not been
decommissioned and which is one of the requirements of resitement under
the letter dated 17th November, 2005. It being so, there can be no illegality
in undoing the illegality taking benefit whereof the petitioner in the first
place came to Shanti Path.
34. No merit is thus found in the petition. Dismissed.
35. The petitioner having availed of the interim order having taking
benefit thereof also continued to earn from the “In and Out” store and to the
deprivation of the respondent of earnings from the said RO is also burdened
with costs of Rs.1 lakh of this petition to be payable to BPCL within four
weeks hereon.
RAJIV SAHAI ENDLAW, J.
JULY 07, 2016
„bs‟/gm