*HON'BLE SRI JUSTICE P.S. NARAYANA +W.P.Nos.5351of 2007 and batch %18-1-2007 # Gottumukkala Sri Lakshmi W/o Latye Gottumukkala Venkata Raju and others .. Petitioners Vs. $ 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 ?CASES REFERRED : [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 THE HON’BLE SRI JUSTICE P.S.NARAYANA 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 BETWEEN: GOTTUMUKKALA SRI LAKSHMI, W/O LATE GOTTUMUKKALA VENKATA RAJU, AGED ABOUT 37 YEARS, OCC. HOUSE WIFE, R/O II LANE, PATEL NAGAR, BAPATLA, GUNTUR DISTRICT AND OTHERS ------ PETITIONERS AND THE GOVERNMENT OF INDIA, MINISTRY OF PETROLEUM, OIL AND NATURAL GAS, SASTRI BHAVAN, NEW DELHI, REPRESENTED BY ITS SECRETARY AND OTHERS. ----- RESPONDENTS THE HON’BLE SRI JUSTICE P.S.NARAYANA 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 COMMON ORDER: 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 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. 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. 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 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. 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 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]. 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 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. 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 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. 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. 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. 11. Sri Rajasekhar Reddy, the Assistant Solicitor General 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. 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. 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 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 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 MAHESHWARI VS. STATE OF U.P[2], VIDARBHA VENEER INDUSTRIES LIMITED VS. STATE OF MAHARASHTRA[3] and JACOB PHILIP VS. UNION OF INDIA[4]. 14. Heard the learned counsel and perused the material available on record. 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 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. 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 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. 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 de- regulated 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. 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 prescribed and upon satisfaction of the same, the procedure is contemplated in point NO. 1.2.2 for appointment of dealership. 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 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 4th 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. 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 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 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. 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 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