Mohd. Jamal vs Union Of India & Anr

2. Leave granted in all the matters. During the hearing of these matters, Mohd. Jamal's case was taken up as the lead matter.

3. From the facts as disclosed in the several Special Leave Petitions (now Appeals), there are three groups of matters included in these Appeals. The first group relates to the State of Karnataka, where the Union of India is the Petitioner/Appellant. The second group involves matters filed by the private parties where the jurisdiction is that of Delhi. The third group deals with the similar question in regard to the States of Gujarat and Madhya Pradesh.

9. However, on 1st April, 2000, the Government of India notified its policy for operation of COCO outlets through contractors. In February, 2002, the Indian Oil Corporation purchased 33.58% of Equity Shares of IBP Ltd. Till 31st March, 2002, no oil company could by itself select its dealers or award its dealership to them. The Government appointed Dealer Selection Boards, who were entrusted with the task of selection of dealers for all oil companies. It was only from 1st April, 2002, that the Administered Price Mechanism was dismantled and the Dealer Selection Boards were dissolved. The Oil Companies were, thereafter, given a certain amount of freedom to frame their own policies, relating to the setting up of the retail outlets by selection of dealers.

12. It is also the Appellant's case that it was mutually agreed that till the issuance of the Letter of Intent, as an interim arrangement, a nominee of the Appellant would be appointed as the Maintenance and Handling Contractor to run the petrol pump, provided that an affidavit in the prescribed form would be furnished by the Contractor. According to Mr. Ghosh, relying on such assurance, the Appellant offered his land on lease to the Oil Company on 14.3.2003, subject to the condition that the monthly rental of the land would be Rs.27,000/- and would commence from the date of registration of the documents. Further to the said understanding on 29th March, 2003, a contract for Maintenance and Handling was executed between the Oil Company and Mohd. Ishtiaq Alam, the brother and nominee of the Appellant, for running the said petrol pump. Before Mohd. Ishtiaq Alam was appointed as M&H Contractor, on anticipation of the Oil Company that he would be granted dealership, invested a sum of about Rs.25 lakhs to set up infrastructure. Ultimately, on 31st March, 2003, the petrol pump was commissioned and started operating.

14. Mr. Ghosh submitted that the aforesaid arrangement was understood by all the parties to be of temporary duration, as would be evident from the fact that the rent initially settled at Rs. 27,000/- per month in respect of the Appellant's land at Sadatpur was reduced to Rs. 21,000/- per month after negotiation, which upon calculation comes to approximately 50 paise per square feet, which in terms of the valuation made, was abysmally low.

25. To bolster his submissions, Mr. Ghosh referred to the Single Bench decision of the Karnataka High Court dated 28th July, 2009, in Writ Petition No. 1016 of 2007, filed by one Shri Y.T. Narendra Babu and other connected Writ Petitions, wherein the facts identical to the facts in these cases were in issue. In fact, SLP(C) No. 9655 of 2010 (now Appeal) has been filed by the Indian Oil Corporation Limited against Y.T. Narendra Babu, against the appellate order of the Karnataka High Court dated 19.11.2009, in Writ Appeal No. 3248 of 2009, endorsing the judgment of the learned Single Judge in the Writ Petition. In the same set of facts, where lands had been taken on lease on the assurance that the land owners would be appointed as dealers in due course and that till then the retail outlet would be treated as a COCO unit to be run by a nominee of the land owner, the learned Single Judge was of the view that in view of the assurance given to the land owners and notwithstanding the change in policy guidelines regarding the allotment of dealership in favour of the land owners, the doctrine of promissory estoppel and of legitimate expectation would apply to the case. The learned Single Judge, therefore, allowed the Writ Petition and directed the Respondents to process the applications filed by the Petitioners or their nominees for grant of dealership on a co- terminus basis with the period of the lease of the land on which the retail outlets are established. As indicated hereinbefore, the said views were approved by the Division Bench, which did not interfere with the decision or the directions given consequent thereto by the learned Single Judge.

29. Mr. Rana Mukherjee, who appeared for some of the Petitioners (now Appellants) in this batch of cases and had also assisted Mr. Pradip Ghosh, while reiterating the submissions made by Mr. Ghosh, referred to some of the factual differences in the individual Writ Petitions and urged that, being in a dominant position, the Government cannot act arbitrarily. Having made a promise to grant dealership licences to some of the land owners, who had on the basis of such assurances demised their lands to the Oil Companies for rents which were markedly lower than the existing rents in the area and had also spent large amounts in making such sites ready, the Oil Companies could not go back on such assurances on the plea that there had been a change in the policy for grant of dealership. Mr. Rana Mukherjee submitted that the window period, which had been identified by this Court, between 8th October, 2002 and 5th February, 2013, was a period when the policy to grant dealerships was in full force and the applications received and processed during the said period would have to be treated differently from the applications made thereafter, after the change in the policy. Mr. Mukherjee, in fact, contended that in some of the cases, where applications had been made for grant of dealership pursuant to advertisements published in the Press, but in whose cases the decision to issue Letters of Intent had been kept in abeyance prior to 8th October, 2002, were also entitled to the same benefits in keeping with the doctrine of promissory equity.

28. Mr. Ghosh submitted that in the light of the above, the Oil Companies should either be directed to act in terms of the promise made to grant dealerships or in the event of their unwillingness to do so, they may be directed to restore possession of the lands leased out to them in accordance with the doctrine of restitution.

(iii) Offers made by land owners and lease Agreements executed within the aforesaid period;

(iv) Petrol pumps commissioned upon lease being executed after the new Policy came into existence on 5.2.2003.

60. These Appeals and Petitions must, therefore, fail and are dismissed. C.A. No.5259 of 2013 filed by the Indian Oil Corporation, stands allowed. The four Transfer Petitions, being T.P.(C) Nos. 971-973 of 2010 and T.P.(C) No. 1260 of 2011, which were heard along with these Appeals and Petitions, are allowed. The Writ Petitions, which are transferred as a consequence thereof, are also dismissed along with other matters. Accordingly, the Transferred Cases, arising out of T.P.(C) Nos. 971-973 of 2010 and T.P.(C) No. 1260 of 2011, are disposed of. However, it will be open to the Appellants and the Petitioners to approach the proper forum in the event they have suffered any damages and loss, which they are entitled to recover in accordance with law.

61. Having regard to the peculiar facts of these cases, the parties are left to bear their individual costs.

...................CJI.

CORRIGENDUM No.F.3/Ed.B.J./48/2013 dated 31.07.2013 issued (in judgment delivered by ALTAMAS KABIR, CJI.)(reportable -450/2013) In Page No.69, Para No.60, Line No.2 of para, FOR 'are dismissed. The four...' READ:' are dismissed. C.A. No.5259 of 2013 filed by the Indian Oil Corporation, stands allowed. The four...'