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Himachal Pradesh High Court · body

1998 DIGILAW 239 (HP)

NALAGARH WORKSHOP CO-OPERATIVE INDUSTRIAL AND CON SUMERS SOCIETY LTD. v. STATE OF HIMACHAL PRADESH

1998-12-28

D.RAJU, LOKESHWAR SINGH PANTA

body1998
JUDGMENT D. Raju, C.J.—These two writ petitions are dealt with together since the points involved for consideration are similar in industrial circumstances of fact, the respondents also being one and the same except the petitioners being different co-operative societies registered under the Co-operative Societies Act. The learned Counsel appearing on either side also highlighted the factual details in C.W.P. No. 508 of 1998-to project their legal claims and submissions and, therefore, it is useful to advert to the factual details in this writ petition, first. 2. The petitioner in C.W.P. No. 508 of 1998 is the Nalagarh Workshop Co-operative Industrial and Consumers Society, Ltd. It is stated that the said society was registered on 17.3.1986 and it was constituted of educated unemployed youth with an authorised share capital of Rs. 1,07,100/-. It is said to comprise of 21 members catering the livelihood of 15 families. According to the petitioner, for the expansion of L.P.G. network in Himachal Pradesh, the State was included in the Marketing Plan of the Petroleum Industry in the year 1979-80 and the first ever outlet was allotted to the Himachal Pradesh State Civil Supplies Corporation (For short, Civil Supplies Corporation) by the Indian Oil Corporation (for short, the IOC) in 1985 at Rampur and that since all procurement/distribution system items are dealt with by the Civil Supplies Corporation through co-operative, the management of L.P.G. Agency at Rampur was entrusted to Rampur Tehsil Union and for the said decision of the State Government written and tacit approval of the IOC was also obtained. Subsequent to this, it is stated that there was sudden flux in the matter of Agencies being allotted by the Government of India and in the teeth of glamour among the various co-operative societies to secure the management of such distribution scheme the Civil Supplies Corporation appears to have, according to the petitioner, formulated guidelines to avoid unhealthy societies getting into the field, after obtaining the approval from the Board of Directors of the Civil Supplies Corporation. The further claim of the petitioner is that the IOC informed the Civil Supplies Corporation in their letter dated 18.11.1985 that Government of India, Ministry of Petroleum & Natural Gas has approved the award of the LPG Distributorship to the Civil Supplies Corporation for marketing Indane at Nurpur, Nalagarh, Jogindernager, Rohru and Peo (Kalpa) on ad hoc basis and pursuant to the said decision the Civil Supplies Corporation has been appointed by the IOC as ad hoc LPG Distributor in the above places by their letter dated 10.12.1985. Thereupon, it is stated that the Government of Himachal Pradesh has taken up the matter with the IOC that the management of distributorship through Co-operative societies/Tehsil Unions may be permitted by their letter dated 19.3.1986 and the IOC in turn informed the first respondent-State by their letter dated 9.5.1986 that as a special case the Regional Office has approved the management of distributorship through Co-operative Societies/Tehsil Unions subject to certain conditions stipulated therein and among others it was one of the conditions that the Civil Supplies Corporation will continue to be the distributor of respondent No. 3-Corporation and would be accountable for working of the distributorship as per the policies laid down from time to time, besides the distributorship agreement having to be signed only by the Civil Supplies Corporation and all the licences relating to the business having to be necessarily taken in the name of the Civil Supplies Corporation and its accounts also to be maintained likewise by the said Corporation. The Civil Supplies Corporation was made to remain in overall accountable position for the proper operation of the distributorship since admittedly the distributorship had been awarded td it only as a special case. By a letter dated 16.7.1986 the IOC has addressed the first respondent-"State Government seeking for confirmation from the State department pursuant to the letter of the Civil Supplies Corporation dated 25.6.1986 with an emphasis in the footnote of the letter that all the conditions stipulated in the letter of the IOC dated 9.5.1986 will bind the petitioner-society also. 3. By a letter dated 16.7.1986 the IOC has addressed the first respondent-"State Government seeking for confirmation from the State department pursuant to the letter of the Civil Supplies Corporation dated 25.6.1986 with an emphasis in the footnote of the letter that all the conditions stipulated in the letter of the IOC dated 9.5.1986 will bind the petitioner-society also. 3. In the light of the above, it is claimed for the petitioner that they submitted an application for allotment of the L.P.G. Agency in the year 1986 meant for Nalagarh and after considering the request by a letter dated 19.7.1986, the Civil Supplies Corporation in consultation with the for IOC appears to have entrusted the petitioner society with running of the L.P.G. distributorship at Nalagarh, making it clear that the Civil Supplies would continue to be the distributor and the petitioner society will work on behalf of the said corporation. A formal and regular distributorship agreement was entered into between the Civil Supplies Corporation and the IOC and the petitioner entered into an agreement with the second respondent on an annual basis and it was the condition of the said agreement that the licence has to betaken in the name of the Civil Supplies Corporation after completing all the formalities like construction of go down/show room and the accounts were also to be maintained in the office of the Civil Supplies Corporation. The petitioner-society was obliged to deposit a sum of Rs. 50,000/- in cash with the Civil Supplies Corporation, besides which a sum of Rs. 5,000/- was also to be paid to the IOC and the petitioner was required to send written consent letter to the letter dated 19.7.1986. The petitioner accordingly claims to have submitted its letter of consent to the Civil Supplies Corporation and an agreement was said to have been entered into between the petitioner-society and the Civil Supplies Corporation on 28.7.1986. The petitioner-society claims to have been carrying on the distribution work by virtue of annual periodical agreements entered into between the petitioner society and the Civil Supplies Corporation and it was said to be doing so to the entire satisfaction of the residents of Nalagarh. The petitioner-society claims to have been carrying on the distribution work by virtue of annual periodical agreements entered into between the petitioner society and the Civil Supplies Corporation and it was said to be doing so to the entire satisfaction of the residents of Nalagarh. The petitioner-society claims to have made substantial investments in order to carry out its commitments and obligations under the agreement and in carrying out the distribution work and it further claims to have been regularly remitting the royalty due to the Civil Supplies Corporation, without default and worked the scheme diligently and honestly. It is alleged that due to political considerations a threat was advanced in the year 1992 by the Civil Supplies Corporation to cancel the distributorship given to the petitioner-Society and representations were said to have been made by the society to the Minister for Petroleum, Government of Indian on 1.4.1992 praying for direct allotment of the Gas Agency to the petitioner-society in order to eliminate thereby the role of the Civil Supplies Corporation and the then Minister by his note dated 1.4.1992 was said to have directed the maintenance of status quo pending enquiry about the functioning of the Civil Supplies Corporation, vis-a-vis various co-operative societies. Thereupon, it is claimed that the Ministry had sent a telex message dated 3.4.1992 to maintain the status quo. Reference is also made to the request made by the various co-operative societies running the LPG agencies to the Civil Supplies Corporation to recommend to the-IOC for direct allotment of the distributorship scheme to the respective societies in the meeting said to have been taken place on 3.2.1994. Reference is also made to the demand made by the Civil Supplies Corporation in their letter dated 6.12.1994, calling upon the societies to submit their annual balance-sheet duly audited, as also the further communication dated 20.5.1995 about the maintenance of accounts, fidelity guarantee and compliance of the terms and conditions >f agreement. Reference is also made by the petitioner to the decision taken in the meeting held on 30.5.1995 for requesting the State for issue of Letters of Intent in the name of societies and about the periodical continuance by entering into agreement between the Civil Supplies Corporator and the petitioner-society for the years 1995,1996 and 1997. Reference is also made by the petitioner to the decision taken in the meeting held on 30.5.1995 for requesting the State for issue of Letters of Intent in the name of societies and about the periodical continuance by entering into agreement between the Civil Supplies Corporator and the petitioner-society for the years 1995,1996 and 1997. While claiming that the periodical renewal is automatic and can only be refused in case of any serious complaint of any mis-conduct on the part of the society is established. It is stated that periodical renewal by execution of agreement annually is merely a matter of procedure and routine and according to the petitioner, substantive rights of the parties were settled initially in the year 1986 when the first agreement was entered into. Reference is also made to the order dated 14.7.1998 passed by the Civil Supplies Corporation resolving to discontinue the arrangement with the petitioner-society on account of certain objections said to have been raised by the Ministry of Petroleum regarding the management of the distributorship through the petitioner-society and the further decision taken not to renew the agreement beyond 31.7.1998 and to run the agency directly by the Civil Supplies Corporation itself with certain further directions to the petitioner-society to hand over the Gas cylinders, Pressure Regulators, records and Stationery to the Area Manager of the Civil Supplies Corporation on or before 31.7.1998, in addition to handing over the go down and show room too. This order, which is said to have been received by the petitioner-society on 23.7.1998, is being challenged as violative of Articles 14 and 19(1)(g) of the Constitution of India, besides challenging the same on the grounds that it is arbitrary and unreasonable without any ration able behind such a decision, claiming that there had been no complaint against the management of the distributorship by the petitioner-Society. It is also submitted that unguided, unfettered and unbridled powers cannot be vested in the State to negate the fundamental rights of the citizens and the fact that the periodical annual agreements have to be executed cannot be taken advantage of by the Civil Supplies Corporation to act according to their whims and fancies. It is also submitted that unguided, unfettered and unbridled powers cannot be vested in the State to negate the fundamental rights of the citizens and the fact that the periodical annual agreements have to be executed cannot be taken advantage of by the Civil Supplies Corporation to act according to their whims and fancies. The doctrine of promissory estoppel is also pressed into service and it is claimed further that if the scheme is not renewed and the petitioner-society is not permitted to carry on its activities the very object of providing the self-employment opportunities to educated unemployed youth will be frustrated. Failure to give opportunity of hearing before passing the impugned order is also alleged as one of the grounds to challenge the order on the grounds of violation of principles of natural justice. The direction to handover the go down and other properties are said to amount to compulsory acquisition of property without paying the adequate compension and violative of Article 300-A of the Constitution of India. The impugned order also is said t 4. So far as C.W.P. No. 509 of 1998 is concerned, the petitioner therein, the Kumarsain Tehsil Co-operative M&C Union Ltd., Narkanda is said to be a Society registered on 30.6.1955 under the Co-operative Societies Act as a secondary society with 36 primary societies as constituent members and authorised share capital of Rs. 15 lacs. The grand total of the share capital upto 31.3.1997 was Rs. 16,71,910/- of which the contribution by the State of Himachal Pradesh itself is said to be Rs. 16,49,760/- and a move has been initiated for increasing the authorised share capital to Rs. 30 lacs. As in the other writ petition, the circumstances in which the State of Himachal Pradesh as well as Civil Supplies Corporation and the IOC have chosen to formulate the scheme of distribution of LPG products through co-operative societies/tehsil unions, have also been set out in the petition. In addition thereto, it is stated that on 15.12.1988 an application has been made by the petitioner-society for awarding the management of LPG distributorship and the letter of the IOC dated 18.1.1989 calling for particulars about the society and the further letter of the Civil Supplies Corporation dated 29.7.1989 about securing, the approval for entrusting the management of the distributorship at Narkanda to the petitioner-society. Reference is also made to the decision of the Board of Directors of the Civil Supplies Corporation dated 31.5.1989 about the finalisation of the decision and the letter written on 4.1.1990 as also the execution of an agreement by the petitioner with the Civil Supplies Corporation in the year 1992 and the commencement of the business in the month of January 1992 has also been made. In other respects, the factual claims relating to subsequent events and the grounds of challenge urged are one and the same, as in the other writ petition. 5. The second respondent Civil Supplies Corporation has filed a reply traversing the claims and allegations made by the petitioner-Society contending that the matter in controversy relates to the domain of private contract and not justiciable under Article 226 of the Constitution of India of the rights inter se of the parties are settled and enumerated under the agreements executed from time to time and last of such agreement came to an end on 31.7.1998. It is further claimed that as per the terms of the said agreement, if any dispute arise between the parties, the matter has got to be referred to the arbitration of Secretary, Food and Supplies to the Government of Himachal Pradesh and on this ground also the writ petition is liable to the dismissed. While denying the claim of the petitioner that the 2nd respondent had acted arbitrarily and unreasonably, it is stated that the Civil Supplies Corporation is distributing essential commodities to the people of Himachal Pradesh in all areas, including remote and inaccessible areas where no private traders would be working, and that the L.P.G. agency work has been directly taken over by the Civil Supplies Corporation in Rampur from 1993 onwards dispensing with the similar arrangement entered into with Rampur Tehsil Co-operative M and C Union. While asserting that all agreements entered into with similar Societies were annual, it is also stated that from 1998 it has been decided that all gas agencies allotted to it will be managed directly by the Civil Supplies Corporation itself and no agreement and arrangement by it with Co-operative Societies will be renewed, after expiration of the current agreement. While asserting that all agreements entered into with similar Societies were annual, it is also stated that from 1998 it has been decided that all gas agencies allotted to it will be managed directly by the Civil Supplies Corporation itself and no agreement and arrangement by it with Co-operative Societies will be renewed, after expiration of the current agreement. The entire arrangement is said to be an ad hoc one with no rights as such conferred upon the petitioner and every responsibility in all respects is that of the Civil Supplies Corporation only and all licences, approvals, Go downs, stationary and accounting is said to be that of the Civil Supplies Corporation. Neither the correspondence between the parties nor the agreements are said to confer any rights as such in favour of the petitioner Society. While contending that no perpetual rights or assurance of any automatic-renewal were ever given, it is reiterated that on the expiry of the agreement as such the Civil Supplies Corporation is entitled to take over the possession of Go downs, show room, etc. even as per the terms and conditions mutually agreed to between the parties and strong reliance is placed upon those clauses in the agreement. 6. The Civil Supplies Corporation also while reiterating that the petitioner had no vested right to anything, it is also contended that at no point of time the 2nd respondent-Corporation ever agreed to divest itself of the distributorship and give the business to the petitioner or any other Society, and that while what was recorded in the Resolution was only the wishes of the Societies, no follow-up action was ever taken to concretize the same, and the agreements were continued to be executed only annually and periodically. It is also contended that there had been no premature termination of the agreement and since the taking over is after the normal expiry of the agreement by efflux of time, there is nothing wrong in such action proposed and that at any rate neither the 2nd respondent nor the 4th respondent ever found the working of the petitioner-Society in respect of the distribution of LRG. to be in order. In respect of the other Societies also, it is stated that as and when the current agreement is over the Civil Supplies Corporation had decided to take over and operate the distribution agency itself. to be in order. In respect of the other Societies also, it is stated that as and when the current agreement is over the Civil Supplies Corporation had decided to take over and operate the distribution agency itself. There is no right of automatic renewal and being a matter of private contract, it is claimed that the Civil Supplies Corporation had absolute discretion to renew or not to renew, and in view of the decision so taken, there is no right in the petitioner to claim renewal, as a matter of right. The alleged violation of Articles 14 and 19(1)(g) is denied and it is stated that since the Civil Supplies Corporation is not obliged to help or assist the petitioner to carry on its business, it is said to be open to the petitioner to carry on its business, like any other body or individual, as it can do. The plea of arbitrariness and unreasonableness is said to be baseless since the Civil Supplies Corporation is said to be acting in terms of the agreements and strictly in accordance with law and within its legitimate rights. The principles of natural justice are said to have no application to the situation on hand and that the petitioner has no rights to be vindicated in this writ petition. 7. The 3rd respondent, Indian Oil Corporation, in its reply contended that the petitioner has ho locus standi to file the writ to claim any rights, that there is no privity of contract between the petitioner and the Indian Oil Corporation, that the petitioner has no right to claim any renewal of the agreement beyond 31.7.1998 in view of the order dated 14.7.1998 passed by the 2nd respondent, that it is only the Civil Supplies Corporation, which was given preference in the distribution of LRG. Cylinders and that too as per the orders of the 4th respondent-Ministry only, that the same has been given to the Civil Supplies Corporation, that the mere fact that the Indian Oil Corporation gave agency to the 2nd respondent and approved the arrangement, it made with the petitioner does not mean that it conferred any independent right on the petitioner to have the agency itself and in the absence of valid dealership, proper securities and documents executed L.RG. Cylinders which are essential and hazardous commodity cannot be supplied to anyone including the petitioner. Cylinders which are essential and hazardous commodity cannot be supplied to anyone including the petitioner. The 2nd respondents right to take action, as has been done in this case, is also said to be within its rights and the petitioner is said to have no rights whatsoever to be vindicated in this writ petition. The alleged violation of Articles 14, 19 and 21 is also denied. The concept of legitimate expectation or promissory estoppel is said to have no relevance or application to the case on hand. Since the petitioner itself knowingly had entered into year to year agreements with specific terms and conditions, the same is not entitled to the relief claimed in the writ petition, irrespective of whatever rights it may claim to have, under contractual field or for damages. 8. The 4th respondent-Union of India also filed a reply wherein details of the existing policy and uniform procedure laid down for selection of dealers/distributors of Petroleum product have been disclosed and it is stated that normally applications are to be invited and selection has to be made by the Oil Selection Board, that such guidelines were said to have been revised from 1.1.1993, as for which it is stated that there is no scope or provision for any direct allotment of dealership/distributorship to Co-operative Societies and it is only by virtue of the orders of the Government of India dated 28.5.1985, the respective State Civil Supplies Corporations were allowed to be granted distributorship in respect of hilly and remote locations and that it is only on that account, the 2nd respondent Civil Supplies Corporation from time to time in public interest and that too on ad hoc basis was granted the distributorship, and it is also stated that it is the responsibility of the 2nd respondent corporation to follow the Government guidelines and instructions of the Indian Oil Corporation in the operation of distributorship. It is also stated by this respondent that in 1997, during the course of general investigation and Survey conducted by the Vigilance Cell of Oil Co-ordination Committee in connection with the release of new connections in Himachal Pradesh, they came across the fact that the Indian Oil Corporation distributorship awarded to the 2nd respondent at Nalagarh, Sunny, Nurpur, Rohru, Narkanda and Jogindernagar were grabbed by politically influential people and were being operated by them and a report dated 4.10.1997 in this regard was forwarded to the 4th respondent,-which disclosed the irregularities in the operation of^* the L.P.G. distributorship by the petitioner-Society and it is only in this connection the letter dated 26.11.1997 that the Ministry viewed the same, as a serious matter was sent and clarification was also sought as to why the distributorship given to the 2nd respondent may not be cancelled. A reply dated 2.6.1998 was submitted by the 2nd respondent and the . matter is said to being examined and a final decision is yet to be taken. The decision not to renew the agreement with the petitioner was said to have been taken by the 2nd respondent on its own and that the internal communication dated 29.8.1998 was meant to call for a report on a reference made by a VIP and not meant to confer any rights in favour of the petitioner and that no copy was also meant to be or even communicated to the petitioner. As per Annexures R-l and R-ll filed with the reply, it is stated that there is a prohibition in respect of private Co-operative Societies dealing with L.P.G. distributorship in the manner it has been now done and that there has been no condonation of the said wrong. It is also stated that normally dealership/distributorship allotted to a particular organisation is to be operated by themselves and that this respondent is not aware of as to how and under what circumstances the petitioner has been entrusted with the actual working and the basis on which approval has been accorded to the same by Indian Oil Corporation. The petitioner-Society, if desirous of any allotment, have to take their chance under the normal selection procedure, against specific advertisement of the Oil Companies and get selection through Dealer Selection Board and that this was the position in the year 1992 also. The petitioner-Society, if desirous of any allotment, have to take their chance under the normal selection procedure, against specific advertisement of the Oil Companies and get selection through Dealer Selection Board and that this was the position in the year 1992 also. Reference is also made to the move initiated by the 4th respondent to call for information/documents from the 1 st respondent on 21st October, 1994-(1) report on the physical and financial performance for the previous three years of the existing LPG dealership operated by the 2nd respondent and (2) Annual report of the 2nd respondent-Corporation containing the balance-sheet for the previous three years and not from the petitioner and that too in the context of a request received from the State for grant of some more LPG distributorship to HP SCSC and the Indian Oil Corporation also forwarded the reports in respect of HP SCSC only and not of the Co-operative Societies and that as a matter of fact thereafter, 9 more distributorship were said to have been allotted to HP SCSC on 27.1.1995. 9. The petitioner has filed a supplemental affidavit, stating that the petitioner made representation to a Member of Parliament and to the Minister concerned against the decision dated 14.7.1998 and that by a letter dated 29.8.1998, it was ordered that the petitioner should be allowed to continue to operate as sub-agency. Two separate rejoinders, one in respect of the reply filed by the 2nd respondent and another in respect of the reply filed by the 4th respondent have also been filed by the petitioner-Society. Apart from reiterating the stand taken in the writ petition, it is also stated that the State of Himachal Pradesh also has contributed share money in the petitioner-Society to the tune of Rs. 7,61,900/-, that Clause 8 of the agreement is said to be violative of Article 14 of the Constitution of India on account of alleged exercise of undue influence by the 2nd respondent. The petitioner tries to plead that in view of the stand of the 4th respondent in their reply, it meant that the Government of India had no objection with regard to the gas agency being run by the petitioner-Society and that there was no direction as such from the 4th respondent to the contra. The petitioner tries to plead that in view of the stand of the 4th respondent in their reply, it meant that the Government of India had no objection with regard to the gas agency being run by the petitioner-Society and that there was no direction as such from the 4th respondent to the contra. While dealing with the allegation in the report received about the functioning of the Society it is also stated by the petitioner that there are 21 members of the Society and all of them are either petty businessmen or small type of agriculturists including Ex-servicemen and housewives and in the investigation said to have been undertaken by the Vigilance Cell of Oil Co-ordiantion Committee, the petitioner-Society has not been associated with, and that in view of the communication dated 29.8.1998 issued by the Ministry to the Indian Oil Corporation, the position has to be continued with the petitioner. Explanation is also attempted by the petitioner in respect of para 14 of the report and other aspects contained therein. 10. Mr. Rajiv Sharma, learned Counsel appearing for the petitioners while reiterating the stand taken in the pleadings filed on behalf of the petitioners contended that the impugned proceeding dated 14.7.1998 is arbitrary, unreasonable and has been passed without any factual foundation besides the same being also unfair and unjust. The 2nd respondent as also the other respondents, according to the learned Counsel have not given true meaning to the renewal clauses, etc. in the agreement and the manner in which the 2nd respondent acted virtually renders the renewal clause a mere surplus, meaningless and otiose. The impugned communication is claimed to have civil consequences upon the petitioners and, therefore, could not have been passed without giving an opportunity to rebut any cause, which constituted the reason for coming to such a conclusion. The report of the Vigilance Cell of Oil Co-ordination Committee having been rendered without associating the petitioners with the inquiry undertaken therefor according to the learned Counsel for the petitioners, cannot be relied upon to either refuse renewal or to pass an order of the nature under challenge. The report of the Vigilance Cell of Oil Co-ordination Committee having been rendered without associating the petitioners with the inquiry undertaken therefor according to the learned Counsel for the petitioners, cannot be relied upon to either refuse renewal or to pass an order of the nature under challenge. It is also contended that the correspondence between the petitioner-Societies and the Himachal Pradesh Civil Supplies Corporation would disclose a conscious decision arrived at to enter into an arrangement between the parties to permit the petitioner-Societies to carry on the distribution work of the L.P.G. on the basis of which the petitioner-Societies have to invest substantial sum of money for acquiring Godowns, showrooms and other properties, etc. and, therefore, it is contended that the respondents are estopped by the principle of promissory estoppel from cancelling the arrangement between them and exclude them from operation. Argued the learned Counsel further that the petitioners have entered into the arrangement followed up by a written agreement with the 2nd respondent-Corporation in the year 1986 and has been every year allowed to continue by periodical annual renewals and as a consequence thereof, the petitioner-Societies have acquired a legitimate expectation for the continuance periodically of the agreement and the arrangement as per usual past practice and the respondents could not be allowed to retrace their steps to the detriment of the petitioner-Societies. A grievance about the violation of the valuable rights of the petitioners under Article 19(1)(g) has also been attempted to be made out. A grievance about the violation of the valuable rights of the petitioners under Article 19(1)(g) has also been attempted to be made out. In support of the above submissions, apart from inviting our attention to some of the relevant correspondence filed as Annexures, the decisions reported in AIR 1989 SC 1642; AIR 1990 SC 1031; AIR 1991 SC 537; 1995 (5) S.C.C. 482; 1997(9) S.C.C. 377; AIR 1998 Mad 239; AIR 1998 Cal 153; AIR 1981 SC 1681; 1992 (4) SCC 477; 1993 (1) SCC 71; 1993(1) SCC 445; 1995(2) SCC 326; 1998 (7) SCC 66; 1990 (2) SCC 746; AIR 1967 SC 1269; AIR 1981 SC 136; 1993 (9) SCC 259; AIR 1952 SC 16; 1978(1) SCC 405; AIR 1969 SC 707; AIR 1984 Bom 181; 1997 (7) SCC 251; 1994 (6) SCC 651; 1998 (8) Supreme 380; 1998 SCC (L&S) 1635; AJR 1988 S.C. 2060; 1979 (2) SCC 491; 1989 (2) SCC 505; AIR 1988 SC 1301; 1997 (9) SCC 495; 1995 (2) All England Reports 714; 1993 (3) SCC 259; 1985 (2) All England Reports 699 and AIR 1981 SC 1545, have been relied upon. 11. Per contra, the learned Advocate-General appearing for the State contended that having regard to Clauses 6 and 8 of the agreement, which contained an arbitration clause, the writ itself is not maintainable and the remedies, if any, have got to be agitated by resorting to arbitration. It is also contended for the State that the action taken is neither arbitrary nor injust, but is just and a reasonable one. The learned Advocate-General also contended that this is not a case of termination of any contract or arrangement of agreement, but is one of mere non-renewal of an agreement/ arrangement, which automatically expired by efflux of time and, therefore, there is no need or necessity for giving any prior opportunity to show cause and the petitioners cannot seek the relief of enforcement even of a clause in an agreement by means of a writ petition, so as to enforce a clause in a private contractual agreement between the parties. Finally, it has been contended for the State that neither the principle of promissory estoppel nor the doctrine of legitimate expectation has any relevance or application to the case on hand and that the writ petitions are devoid of merit and have to be rejected. Finally, it has been contended for the State that neither the principle of promissory estoppel nor the doctrine of legitimate expectation has any relevance or application to the case on hand and that the writ petitions are devoid of merit and have to be rejected. In support of the said stand taken for the State Government, reliance has been placed on the decisions reported in 1994 (4) SCC 104; 1998 (7) SCC 66; 1997(11) SCC 241; 1996 (10) SCC 742; 1997 (9) SCC 495; AIR 1993 SC 1494; AIR 1986 SC 1370; AIR 1989 SC 1076; 1996 (5) SCC 460; 1980 (4) SCC 556; AIR 1995 SC 409; AIR 1996 Mad 28, 1996 (6) SCC 20; 1993 (3) SCC 499 and 1994 (2) SCC 204. 12. Mr. K.D. Sood, learned Counsel appearing for the Indian Oil Corporation invited my attention to some of the clauses in the agreement also and contended that there has been no privity of contract whatsoever between the petitioners and the Indian Oil Corporation and inasmuch as by the very nature of contract, it was terminable the relief sought for in the writ petitions cannot be granted even if it is sought by means of a Civil Suit having regard to Sections 14 and 41 of the Specific Relief Act. Reliance has been placed on the decisions reported in 1981 Calcutta Weekly Note 646 and ILR 1974 H.R 838. In addition thereto, the learned Counsel adopted the submissions of the other Counsel for the respondents. 13. Mr. D.D. Sood, learned Senior Advocate appearing for the 2nd respondent, HP. Civil Supplies Corporation contended that no writ as such can lie for the relief sought or to espouse any grievance of the nature by the petitioners. It has also been contended that the arbitration clause in the agreement has precluded the petitioners from invoking the writ jurisdiction and the issue as to whether the Civil Supplies Corporation should run the LPG distributorship specifically allowed to it by itself or through any arrangement with the petitioner-Societies or anyone else is a matter of policy and purely within the discretion of the Civil Supplies Corporation and there can be no mandate or compulsion to perpetually enter into any arrangement with the petitioner-Societies and automatically renew arrangement, which was only an ad hoc arrangement entered into at the relevant point of time. It is also contended that being a policy decision, no exception could be taken for the decision now arrived at, as communicated in the impugned proceedings, which was more by way of intimation than by way of any decision in respect of the events to follow as an inevitable consequences of the periodical annual agreement between the parties coming to an end by efflux of time. In other respects, the learned Counsel adopted the submissions of the learned Counsel for other respondents. Reliance has also been placed by the learned Senior Counsel on the decisions reported in AIR 1972 S.C. 843; AIR 1975 SC 1121, AIR 1976 SC 2216; AIR 1977 SC 1496; 1980 (2) SCC 129; AIR 1981 S.C. 1368; 1989 (2) SCC 116; 1996 (6) SCC 22; 1994 (4) SCC 104; 1996 (5) SCC 460 and ILR 1985 H.R 923. 14. Mr. S.S. Thakur, learned Principal Central Government Standing Counsel while adopting the arguments of the learned Counsel appearing on behalf of the other respondents also contended while reiterating the stand taken in the reply filed by the 4th respondent that no writ will lie to give any sub-agency, which pertain to purely an area of contracts and inasmuch as the Civil Supplies Corporation was allowed as a matter of policy directly the distributorship, there can be no justification for them either to part with such rights and privilege conferred as a special case to others including the petitioner-Societies, which could not legitimately get any such direct allotment in view of the policy, guidelines and procedure governing the grant of dealership/distributorship of pertroleum products and if the petitioner-Societies seek to acquires any such privilege, they have to participate in the normal and ordinary procedure whenever any applications are called for by the concerned Oil Companies by submitting the necessary applications therefore and participating in the selection process held by the Oil Selection Board and a relief, which may run, if granted, contrary to such settled guidelines and procedure prescribed for uniform observance cannot be countenanced in law. It cannot also, according to the learned Counsel, be said to be violative of Section 23 of the Contract Act and, therefore, there is no justification to grant any relief of the nature prayed for by them in these writ petitions. It cannot also, according to the learned Counsel, be said to be violative of Section 23 of the Contract Act and, therefore, there is no justification to grant any relief of the nature prayed for by them in these writ petitions. In addition to the decisions already relied upon by the other learned Counsel, reliance was also placed on the decision reported in 1995 (1) SCC 85. 15. We have carefully considered the submissions of the learned Counsel on either side, in the light of the indisputable facts on record disclosed in-the form of documents and papers filed as annexures and the principles laid down in the decisions noticed before us. In our view, many of the decisions relied upon for the petitioners, have no relevance to the case on hand, in the context of the nature of rights sought to be asserted and character of the claims projected. The decisions centering around claims of violation of either fundamental rights or statutorily protected rights and that too by either the Government or any limb of the State or other authority within the meaning of Article 12 of the Constitution can hardly have much bearing to claims projected which partake the field of private contractual rights and attempts made to enforce such contractual rights/obligations flowing out of non statutory contracts. First of all, the petitioner-Societies are admittedly not only societies registered under the co-operative Societies Act in force in the State but it is also admitted that the petitioner in C.W.P. No. 508/98 has a share contribution in a sum of Rs. 7,61,900/- from the State Government and the petitioner in C.W.P. No. 509/98 has such share capital contribution to the tune of Rs. 16,49,760. The Civil Supplies Corporation of the State Government, with Governments approval, has chosen to entrust by way of an arrangement, as a matter of policy, on an ad hoc basis the work of distribution of LPG products which exclusively belonged to the Civil Supplies Corporation of the State-and it has since decided to make a change in such policy and resolved to carry on the distribution work itself, through its own constituent limbs. As a body which has in it so much share capital contribution from the State Government, it is doubtful when such a body answerable to its existence as also proper functioning to the State Government could challenge either the wisdom or legality or propriety of the policy decision taken by the State and its constituent limb the Civil Supplies Corporation to run the distributorship of LPG products itself as the grantee of such distributorship by the IOC in accordance with the policy, scheme and guidelines laid down by the Union of India. Prima facie, we are of the view that it is not permissible for the petitioner-societies to challenge the impugned proceedings they being societies with substantial share capital in them held by the State itself. 16. The plea based upon the alleged violation of fundamental rights and that too those secured under Article 19(1) (g) of the Constitution of India has also to fail on several grounds based on reasons which do not admit of much controversy. The petitioner co-operative societies are not citizen within the meaning of Article 19, they being artificial bodies created by virtue of registration accorded under the State Co-operative Societies Act. Consequently, they are not entitled to claim protection of any of the fundamental rights under Article 19 of the Constitution of India. The entity of the Society is entirely separate and distinct from that of its share-holders or members, bearing its own name and seal, with its assets separate from that of its members/share-holders who have limited liability to the extent of the share capital invested and the fact that such members/ share-holders or some of them are citizen is no ground to treat the bodies themselves as citizen and such extended meaning cannot be given by lifting the veil of the corporate body. Even, otherwise, Article 19(6) enables the State to entrust the carrying on of any trade with and by the State itself or by a corporation owned or controlled by the State and so far as the case on hand is concerned, no exception could be taken or challenge could be made for the proposed running of the distributorship of the LPG products by the H.P. State Civil Supplies Corporation itself. All the more so, when it happens to be the lawful grantee of such distributorship and the petitioner-societies being neither grantees of such rights nor could be granted also with any such rights, it does not lie in their mouth to question or challenge the present move of the respondents. They were all along acting in the shoes of the 2nd respondent by virtue of an internal arrangement almost akin to that of a licensee or sub-agent for limited periods and even for that reasons they have no right to challenge the decision taken by the 2nd respondent to carry on the distributorship on its own excluding the middleman or an entity like the petitioners. For all these reasons, we see no merit whatsoever, in the grievance based upon the alleged violation of fundamental rights. 17. Before even undertaking a consideration of the other grounds of grievance based upon the alleged arbitrariness and unreasonableness as also the one based upon principle of promissory estoppel or doctrine of legitimate expectation, it is appropriate to consider what are the rights, if any, that are sought to be vindicated in these proceedings and also as to the nature, character and source of such rights, purported to be asserted. As indicated earlier, the petitioners are not grantees of the rights/privilege of distributorship of LPG products themselves by any of the Oil Companies, without which they cannot claim to have any such rights to carry on such business merely because they are assumed to be even citizen, as they claim to be, and no such right/privilage could also be granted to them also as per the policy/guidelines/procedure in vogue and which governs such grants, without they applying pursuant to any public call by any of the Oil Companies and participation in the selection process prescribed therefore and get selected in the hands of the Oil Selection Board. Unlike State Governments/the instrumentalities of the State Government or limbs like Civil Supplies Corporation who have been, as per policy approved by the Union of India, rendered eligible for such direct grants the Cooperative Societies cannot get any such direct grant and even a claim in this regard would be opposed to and contrary to the existing and governing procedure in this regard and no such claim could ever be countenanced in law. Therefore, but for the arrangement entered into between the 2nd respondent and the petitioner societies with the concurrence of the IOC and the State Government and supported by a non statutory-private contractual agreement between petitioner societies and the 2nd respondent, neither it would be legal nor proper or possible for the petitioners to claim to carry on the business in the distribution of LPG products and that even under the agreement incorporating the arrangement they were acting for and on behalf of the 2nd respondent in the name and cover of the 2nd respondent and not in their own capacity or independent of the 2nd respondent. As a matter of fact, the very arrangement, in our view, is impermissible in law and the special rights or privilege granted to the 2nd respondent as a department/limb/instrumentality of the State Government could not have been parted with even by or under an arrangement of the nature on ad hoc or trial basis also and whatever may be the infirmities committed in this regard by the 2nd respondent or the IOC in allowing such things to happen, there is no statutorily or legally protected/vested acquired rights whatsoever in the petitioner societies to claim or assert any such rights or seek for the protection of any Courts for carrying on such activities. The activities of the petitioner societies in this regard have no umbrella of any legal protection and what they were doing under a periodical, annual and ad hoc arrangement entered into periodically when the legality and permissibility of itself is doubtful and incredible and therefore, since it is nothing but a matter pertaining to the field of private contracts, if at all, on this ground also these writ petitions have to fail since it is by now well settled that in the absence of infringement of any statutory right or non-performance of any statutorily, cost obligations the essential sine qua non for issue of any writ or direction in the nature of mandamus no writ can be issued at all to renew the so-called agency arrangement entered into between parties in this case. The plea of alleged arbitrariness/unreasonableness as well as unjustness urged may next be considered. The plea of alleged arbitrariness/unreasonableness as well as unjustness urged may next be considered. When State or any limb of the State as instrumentality of the State has entered into a non statutory contract with a third party the rights and inter se obligations between them are governed strictly by the terms and conditions of such contracts only and no sustenance, support or protection can be claimed under any constitutional provisions unless any statute or statutorily protected right intervenes. In such matters, there is no question of any arbitrariness or unreasonableness can be said to be involved and the State or its instrumentality is entitled to act as a private party to have a best of the bargain. The decisions rendered by the Courts while dealing with claims/grievances of arbitrary choosing in the matter of selection, or unreasonable action in unjustly terminating an agreement entered into without opportunity or acting in a manner resulting in hostile discrimination cannot have any relevance to the case on hand in which by virtue of the very terms of the annual contracts periodically entered into itself the licence/privilege granted lapsed on account of the very expiry of the agreement itself by efflux of time and expiry of the very contractual arrangement. In the absence of any inherent or vested rights established, if any, there are no possibilities of the petitioners or for that matter any one else claiming for any protection from Courts of law and the Courts cannot compel the State or its limb or instrumentalities to the doing of a thing which they are not obliged in law to do so or not to change their policy or course of action but stick to the old policy which itself might not have been a legally formulated one, too, as in this case. In the absence of any statutory complexion no contractual rights qua mere contract alone can be compelled to be enforced on mere hypothetical grounds of arbitrariness or unreasonbleness for the mere sake of such assertions alone. In view of the above, there is no scope for applying either the principle of promissory estoppel or the doctrine or legitimate expectation, on the peculiar nature and facts as well as the circumstances of the cases before us. 18. In view of the above, there is no scope for applying either the principle of promissory estoppel or the doctrine or legitimate expectation, on the peculiar nature and facts as well as the circumstances of the cases before us. 18. The very principle of promissory estoppel or doctrine of legitimate expectation gets automatically negated and stood excluded in view of the very terms and conditions of the agreement entered into between parties. In order to appreciate the grievance of challenge to some of the terms relating to renewal, delivery of possession of godowns, showrooms, etc., we have gone through the terms of the contracts and the learned counsel on either side made elaborate submissions on the reasonableness or otherwise of those terms and conditions. In our view, inspite of bestowing our serious as well as sympathetic consideration in the matter, we could find nothing arbitrary or unreasonable or opposed to any public policy in these agreements periodically entered into without any reservation or demur. As a matter of fact, in a contractual arrangement of the nature under consideration such provisions are not only essential but inevitably necessary, for the reason that the very arrangement between parties themselves are not permissible in law—and in the absence of such essential provisions the arrangement itself would suffer serious infirmities involving grave proprieties. The rights of the petitioners, in respect of the properties agreed to be delivered to the 2nd respondent are sufficiently safeguarded by providing for payments ensured to be made periodically for their use and occupation by the 2nd respondent. The petitioners also, having entered into written agreements, agreeing for all such terms, cannot be allowed to wriggle out of their solemn commitments and undertakings after obtaining gains of the contract but for which there was no scope for their having been given such privilege or licence, even on ad hoc annual basis. In view of the above, there is absolutely no scope for invoking or applying the principle of promissory estoppel or doctrine of legitimate expectation to the cases on hand. The petitioners knew very well that the entire arrangement is an annual affair and if renewal is not made in any one year, the consequence which have to follow also and to such a case the plea of legitimate expectation otherwise has no relevance at all. The petitioners knew very well that the entire arrangement is an annual affair and if renewal is not made in any one year, the consequence which have to follow also and to such a case the plea of legitimate expectation otherwise has no relevance at all. There had been no promises made to the petitioners which are sought to be violated and no assurance of any kind has ever been made outside the record or even under the agreements on which they could even claim to have surmised a legitimate expectation, to insist upon the 2nd respondent or other respondents to act in a particular manner and that too favourable to the petitioners. The grievances of the petitioners in these respects are mere invented for the occasion and pure afterthoughts and nothing but mere myths which no substantial rights which could be enforced in courts of law can be claimed. Equally untenable and unsubstantial are the allegations of legal malice. When the 2nd respondent, as a grantee of a privilege had to operate itself the privilege/licence granted in the matter of distribution of LPG products and for reasons best known to them have chosen to utilise the services of the petitioner-societies under periodical arrangements annually entered into, and due to compelling reasons which in our view are also justified in law the 2nd respondent now decided to operate the privilege itself as it is bound to do, we do not find any room or justification for any one to even make such an allegation, leave alone the merits involved in the same. The bogey of alleged violation of principles of natural justice and denial of an opportunity to show cause against the decision taken by the 2nd respondent and communicated in the impugned proceedings also has no substance or merit whatsoever. The principles laid down in cases involving service matters pertaining to those in Government service/ and other instrumentalities of the State or cases where deprivation of statutorily protected or vested rights of parties came up for consideration can have no application to the cases on hand. The principles laid down in cases involving service matters pertaining to those in Government service/ and other instrumentalities of the State or cases where deprivation of statutorily protected or vested rights of parties came up for consideration can have no application to the cases on hand. When the very right/privilege of carrying on a particular activity had its origin only under a contract and that too periodically entered into annually with specific terms and conditions and as per which the question of renewal is only by mutual consent and cannot be claimed or asserted unilaterally or insisted upon automatically or as a matter of right by any one party, it is beyond comprehension as to where the need for any prior opportunity or notice or observing any principles of natural justice, arise at all. The report of the Vigilance Cell of the Oil Co-ordination Committee, was not particularly directed against the petitioners, but related to the general working of the dealership/distributorship by the respective grantees as a whole and meant to bring out an over all assessment arrived at on a subjective process of reasoning based upon confidential enquires the manner of performance by the Distributors, as such. There is no need to either disclose the same to the petitioners earlier or associate them also with any such discreet enquires. Even de hors the report, the petitioners cannot assert any right in them to be given any privilege or assert any right of renewal of the arrangement with the 2nd respondent. With the expiry of the agreement between parties, on the expiry of the arrangement by efflux of time of the contractual period nothing further survives in the petitions for asserting any rights and any consequential direction issued in terms of the said arrangement entered into between parties need not be preceded by any show-cause notice or prior opportunity. The observations of the apex Court in this regard may also be usefully referred to, in the decisions reported in; (1996) 10 SCC 405, (Rajasthan Co-operative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Services Pvt. Ltd. and others and (1997) 11 SCC 241, (M.C.D. v. Delhi Outdoor Advertisers Association and others. The observations of the apex Court in this regard may also be usefully referred to, in the decisions reported in; (1996) 10 SCC 405, (Rajasthan Co-operative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Services Pvt. Ltd. and others and (1997) 11 SCC 241, (M.C.D. v. Delhi Outdoor Advertisers Association and others. Where one of the parties to an agreement acts strictly in accordance with the terms and conditions of the written arrangement, no plea or grievance of any action involving adverse civil consequences can be urged to insist upon a prior hearing or opportunity. The 2nd respondent in taking a decision of the nature which has been communicated to the petitioners on 14.7.1998 has not adjudicated or and was not obliged to decide objectively any rights of the parties and that it is not every intimation or communication that involves, normally any such adjudicatory process calling for any prior notice or opportunity. For all these reasons also, we see no merit in this grievance of the petitioners as well. 19. Apart from the utter lack of any merits in the grievance sought to be espoused in these writ petitions, the petitioners do not deserve any sympathy. The plea initially made that the petitioner in C.W.R No 508 of 1998 is a society of educated unemployed youth itself appears to be falsified by the details in respect of the 21 members only, who constituted the society. Their conduct in moving the authorities for direct grant of the very distributorship in favour of the 2nd respondent under which they were permitted to operate by the 2nd respondent purely on some misplaced sympathies of those responsible for it, overshooting the 2nd respondent itself do not speak well of the petitioners credibility and genuineness of purpose, too. In addition to all these, the Courts of law cannot be a party to perpetuate improper and unethical arrangements entered into between parties opposed to the policy, guidelines and procedure formulated by the Union of India for uniform and universal application, in the matter of grant of distributorship of Petroleum Products. 20. For all the reasons stated above, we have no hesitation to reject these writ petitions as of no merit. These writ petitions, therefore, fail and shall stand dismissed. No costs. 20. For all the reasons stated above, we have no hesitation to reject these writ petitions as of no merit. These writ petitions, therefore, fail and shall stand dismissed. No costs. CMP No. 988/98 in CWP No. 508/98 and CMP No. 991/98 in CWP No. 509/98 In view of the dismissal of the writ petitions, both the applications are also dismissed. Petitions dismissed.