THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO.16773 of 2005 DATED 22.01.2008 Between: Nagaratnam and another. ...PETITIONERS Versus Union of India, represented by its Secretary, Petroleum Department, New Delhi and another. … RESPONDENTS THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION NO.16773 of 2005 ORDER: Heard Sri S.Niranjan Reddy, learned counsel representing the writ petitioner, learned Assistant Solicitor General representing the 1st respondent and Sri Ravindranath Reddy, learned counsel representing the 2nd respondent. 2. The Writ Petition is filed for a Writ of Mandamus declaring the action of the respondent-authorities in advertising the petrol pumps of the petitioners for appointment of dealers at sl.No.167 as arbitrary, illegal, violative of Articles 14, 21 and 300-A of the Constitution of India and consequently direct the respondent-authorities to continue the 2nd respondent as dealer for the petrol pumps located on their lands and pass such other suitable orders. 3. The learned counsel representing the writ petitioner had taken this Court through the contents of the affidavit filed in support of the Writ Petition and also the counter affidavit and the terms and conditions of the lease agreement, and would maintain that in the light of the facts and circumstances the Writ Petition to be allowed. 4. On the contrary, the learned Assistant Solicitor General representing 1st respondent and Sri Ravindranatha Reddy, learned counsel representing 2nd respondent had taken this Court through the counter affidavit filed by the 2nd respondent and the contents of the lease agreement and would maintain that even in the light of the terms and conditions agreed upon, the Writ Petition is not maintainable and the same is liable to be dismissed. 5. It is stated that the 2nd respondent constructed Petrol Station on the land of the 1st petitioner at Marripadu village, Nellore District. The land of the petitioners being on the highway/main road has potential for the sale of petrol and diesel. The 2nd respondent on an assurance that the dealership would be given to the 2nd petitioner, made the petitioners to give their property on a nominal lease to the 2nd respondent. In order to have a regular source of income as commission on the sale of petrol and diesel and on the assurance of the 2nd respondent that the dealership would be given to the 2nd petitioner, agreed to give her land on lease on a nominal rent for Petrol Pump. The 2nd petitioner who is actually doing the business, as herself being a housewife unable to do the business by sitting in the petrol stations from morning till evening. Further it is averred that on the assurance of the officer of the 2nd respondent who was working at that time at Nellore, she had agreed to give her property on a nominal rent to the 2nd respondent as they were interested in doing business of petrol and diesel. The valuable land of petitioner was given to the 2nd respondent on a nominal rent as the main concentration and the interest of the petitioners was on doing business as petrol dealer which the 2nd respondent assured to the petitioner. In order to set up the petrol pump, petitioners had followed up the matter with the authorities for the purpose of obtaining various licenses for setting up of petrol stations on the petitioners’ lands. The 2nd respondent, as promised, gave the dealership of the petrol pumps constructed on their lands to the 2nd petitioner. Though the 2nd respondent gave the said dealership initially for a limited period, the promise on which petitioner permitted the construction of petrol stations on their lands, was for a permanent dealership which the 2nd respondent promised after the said initial limited period. It is stated that due to utter dismay of the 1st petitioner, the respondents advertised in Eenadu daily newspaper dated 20.6.2005 that petrol pump of the petitioners mentioned at sl.No.167 would be changed and the same would be given to the new persons. Further it is averred that apart from advertising the said petrol pump, which were existing and running, the respondents had advertised several other new petrol pumps to be constructed by the dealers themselves at various other places in Nellore district. The action of the respondents in advertising for fresh candidates for the dealership for the petrol pumps constructed on the lands of the petitioners is illegal, arbitrary and violative of Articles 14, 21 and 300-A of the Constitution of India and contrary to the promise made by the 2nd respondent. It is also stated that that the action of the 2nd respondent is contrary to various guidelines issued by the 1st respondent for appointment of dealers. Respondents 1 and 2 always held that preference would be given to the land owners. The promise made by the respondents is evident from the fact that the rent agreed by the petitioners is very nominal for the land which has got potential of shopping complex. The sequence of events like the petitioners themselves following with the authorities for licenses indicates the promise made by the respondents for continuing the petitioners or persons suggested by the petitioners, for the petrol pumps constructed on their lands. The 2nd respondent is estopped from appointing new dealers for the petrol pumps constructed on the lands of the petitioners by displacing the 2nd petitioner. Further it is stated that the respondents have given dealerships to five other dealers who are the owners of the lands. The dealership to the following dealers at Kovur, Kanigiri, Kondapuram, Davisppet and Naidupet was given to them only as they are owners of the land where the petrol pump is located. The above said five persons were given dealerships after the establishment of the petrol pumps of the petitioners’ lands. The petitioners at that juncture itself represented to the respondents that the petitioners also stand on the same footing and that permanent dealerships as in the case of the above five dealers should also be given to them. The 2nd respondent assured the petitioners that even their dealerships would be made permanent. However, contrary to the said promise, the respondents issued the impugned notification. The action of the respondents in granting permanent dealership to others on the ground that they are the owners of the land and denying the same to the petitioners is arbitrary, illegal, discriminatory and violative of Article 14 of the Constitution of India. It is also stated that the petitioners have agreed for setting up of the petrol pumps only on the promise made by the 2nd respondent that the dealerships would be given to them in spite of the fact that the lands of petitioners would fetch huge rent for any other construction on their lands more particularly shops. Most of the lands of the petitioners where the petrol stations are constructed have potential for commercial shops as the said land is located at vantage points on the main road having substantial movement of traffic. The petitioners have forgone their opportunity for regular income on shops on the promise made by the 2nd respondent that the dealerships would be given to the 2nd petitioner. The respondents agreed that the dealerships initially would be for a limited period and then would be continued on permanent basis. The action of the 2nd respondent in advertising the petrol stations and giving them to the new incumbents would cause permanent loss of income and damage to the petitioners’ property and livelihood. In such circumstances, the writ petitioners approached this Court praying for the appropriate reliefs specified supra. 6. The relevant portion of the contents of the lease agreement, which had been filed before this Court, reads as hereunder: “PROVIDED ALWAYS and it is mutually agreed as follows: (a) The lessee shall be at liberty to license or sublet the demised premises or any part thereof for use for all or any of the purpose aforesaid without the consent of the lessors. (b) The lessee shall be at liberty (1) to construct, fix, erect and maintain in or upon or fasten to the demised premises office and trade, fixtures and fittings such as screens, counters, partitions, benches, shelves, lockers and sun blinds and gas, electric fittings, lights and fans and construct other building, structures, wells, tube-wells or install equipments or to provide install operate Any Time Money (ATM0 counter, Public Call Office (PCO), Internet Centre (Cyber kiosk/Cyber Café), convenience stores, beverage fountains (cold drink, coffee, tea etc), without the consent of the lessor, and (2) to remove the said fixtures and fittings and also the said underground tank(s) and delivery pump(s) and shelter with their appurtenances and other building erections and equipment during the term of the lease or at the expiration or sooner determination of the lease or within one month thereafter without objection on the part of the lessors but in such case the lessee shall make good any damage which may be caused to the demised premises by such removal. (c) The lessee shall be at liberty to affix, place or display name board, sign boards, advertisement boards and advertisement and signs of any nature whatsoever in relation to the business of the lessee or its sub-lessee or licensees to in open or from any part of the demises premises without the consent of the lessor. (d) If any rent shall be 90 days in arrears and after being demanded in writing the rent remains in arrears for another period of 90 days or if the lessee shall omit to perform or observe any covenant or conditions or the part of the lessee herein contained and shall continue for 90 days after issuance of written notice thereof to the lessee, the lessors may have right to re-enter upon the demised premises or upon any part thereof in the name of whole and the lease shall thereupon determine, provided the lessor has also issued final notice in writing to the lessor stating re-entry and determining the lease and 30 days period is elapsed from the date of receipt of such notice by the lessee but without prejudice to any claim which either parties hereto may have against the other in respect of any breach, non-performance of any of the covenants and conditions herein contained. (e) The lessee shall be at liberty to determine this agreement by giving to the lessor thee months notice in writing expiring at any time during the currency of this agreement. (f) The stamp duty and registration charges payable in respect of this agreement and duplicate thereof shall be borne and paid by the lessee”. 7. In the counter affidavit filed by the 2nd respondent, which is sworn to by the Chief Regional Manager of the 2nd respondent. Several allegations had been specifically denied. It is stated that the Writ Petition is not maintainable as the agreement for maintenance and handling with effect from 1.3.2004 entered with the 2nd petitioner by the Corporation contains a clause for arbitration i.e., 19.1 for resolution of disputes and differences if any arising out of or in relation to the said agreement. Hence, on this ground alone the Writ Petition is liable to be dismissed. In reply paragraphs 3, 4, 8 and 10 it had been averred that the respondents-Corporation had issued a public tender on 8.11.2002 inviting applications from the interested parties to offer vacant sites on long term lease for a period of 30 years or on outright sale basis for putting up its company owned and company operated outlets. In response to the said tender, the 1st petitioner offered vacant site on lease to the respondents-Corporation. Subsequently, negotiations were held with the 1st petitioner on 8.9.2003 and a registered Lease Agreement dated 18.12.2003 was entered for a period of 30 years with effect from 1.3.2004 to 28.2.2034. In the above said lease Agreement, clause 3(A) reads as follows: “The lessee shall be at liberty to license or sublet the demised premises or any part thereof for use for all or any of the purpose aforesaid without the consent of the lessors”. From the reading of the above clause it is evident that the lessor, i.e., 1st writ petitioner had agreed for the lessee i.e., the respondents- Corporation to have the liberty to appoint any person as dealer for running the Retail Outlet on the said site. It is also stated that it is not correct to state that the respondents-Corporation had given assurance to the 1st petitioner that it would be giving dealership to 2nd petitioner and therefore she had given her land on lease on nominal rent. The said averment is without basis and the petitioners are put to strict proof of the same. Further, as stated above, the said site was taken on lease from the 1st petitioner through public tender and after following the due process of negotiations. Thereafter, the lease agreement was entered and registered as per negotiated rentals. It is also relevant to mention that the 1st petitioner also executed individual affidavit at the time of entering into lease agreement stating that she would not claim any right over the COCO operatorship/dealership on the outlet erect6ed by Corporation in the site offered by her on lease. Therefore, in view of clause 3(A) of the said lease agreement and also the affidavit of the 1st petitioner, she is not entitled to obstruct the allotment of dealership to other eligible persons. In reply to paragraph 5 of the affidavit it is stated that after taking the land of the 1st petitioner on lease, the Corporation as per clause (b) of the lease agreement obtained various licenses in its name such as NOC, Explosives license etc., and set up the outlet. It is stated that the Corporation in order to facilitate the operation of the said outlet had appointed labour contractor i.e., 2nd petitioner for a limited period after following due process of the selection as per the laid down policy and entered into agreement w.e.f., 1.3.2004 for maintenance and handling of the said outlet. It is not correct to state that Corporation has got5 constructed the outlet and given the same to the 2nd petitioner as promised by them earlier. Further, it is also not correct to state that the petitioners have followed up the matter with the authorities for obtaining licenses etc., for establishing outlet. Further, the question of the writ petitioners permitting the Corporation to construct the retail outlet on her land on assurance that she will be given dealership is not correct for the reason that the lease agreement itself was entered for the purpose of establishing retail outlet by the Corporation itself. In reply to paragraphs 6 and 7 of the affidavit filed in support of the Writ Petition that (i) in order to appoint regular dealer for not only the retail outlet established by the Corporation in the land leased out by the 1st petitioner but also at other places the Corporation issued an advertisement in the newspaper on 20.6.2005. (ii) As per the Ministry of Petroleum and Natural Gas guidelines the oil industry has to make a 100 point roster in order to follow reservations to various categories such as open, SC/ST, PH etc. Accordingly, the Corporation made roster for identified locations including the outlet in question along with 23 other company owned and company operated outlets. As per the roster the site in question is reserved as shown in the advertisement dated 20.6.2005. (iii) Hence, the contention of the petitioner that the action of the Corporation in advertising for fresh candidates for the dealership to appoint regular dealer is illegal, arbitrary and violative of Articles 14, 21 and 300-A of the Constitution of India is not correct. The petitioner has no locus standi to question the issuance of the advertisement for appointment of regular dealer as per the dealer selection policy guidelines followed by Oil Industry in view of agreement entered by her. Further in reply to paragraph 9 of the affidavit it is stated that the 1st petitioner has not given details of the said five persons who are land owners and who have been given dealerships so as to give effective reply. But, as per the dealer selection policy guidelines followed by the industry, dealers were appointed at various locations by HPCL from time to time as per the terms and conditions stipulated in the advertisements. As per the industry norms the applicants having lands or taken lands on lease from others have weightage in selection process. Accordingly the candidates have been selected for dealerships at various locations. Hence, the contention of the petitioners that other land owners were granted dealerships and she was denied is arbitrary, illegal and discriminatory and violative of Article 14 of the Constitution of India is without basis and the Corporation has been granting dealerships to landholders if they fulfill the conditions such as reservations, owner of land etc. Thus, it is stated that the writ petitioners have no right to stall the selection process which is as per the guidelines of MOP&ENG and also the Corporation as a public sector undertaking has to act in accordance with the principles of fair play in appointing dealers and it cannot pick and choose or assure any person that it would grant dealerships. 8. In the light of the respective stands taken by the parties and also in the light of the terms and conditions which had been agreed upon, already specified supra, and further in the light of the existence of the arbitration clause, this Court is of the considered opinion that the Writ Petition is not maintainable. However, liberty is given to the petitioners to avail such remedies which are available to them in law. Except making this observation, no positive relief can be granted. 9. The Writ Petition is accordingly dismissed. There shall be no order as to costs. --------------------------- 22.01.2008 SSR