Judgment :- Jawahar Lal Gupta, C.J. Are the directions given by the Government of India vide letter dated October 10, 2001 for the transfer of L. P. G. connections from one distributor to another on the basis of viability norms arbitrary and illegal? . This is the primary question that arises for consideration in these cases. 2. The petitions in O.P.Nos. 37638/2001 and 15397/2003 contend that the instructions contained in the letter dated October 10, 2001 and the consequential directions given by the Oil Marketing Companies vide letter dated April 28, 2003 are arbitrary and illegal. Copies of these letters have been produced as Exts.P6 and P7. As against this, the petitioners in three cases viz. O.P.Nos.22271 of 2002, 4637 and 8269 of 2003 claim that the instructions are legal and valid. They pray that these instructions should be implemented forthwith so that the newly appointed distributors who have invested substantial amounts are able to sell gas and make a living. 3. There is yet another case viz. O.P.No.9289 of 2003. This has been filed by an Association of consumers, who are being supplied gas by the 2nd respondent. They pray that they should not be transferred to any other newly appointed distributor. Apparently, this petition has been filed at the instance of the distributor so as to ensure that the instructions issued by the Government of India are not implemented. 4. Learned counsel for the parties have referred to the facts in O.P.N0. 15397 of 2003. These may be briefly noticed. 5. The petitions are distributors of Liquefied Petroleum Gas. They were appointed as distributors by the Indian Oil Corporation. At the time of appointment, an agreement was executed. A copy of the agreement as executed on June 28, 1990 by the first petitioner has been produced as Ext.P1. The petitioners allege that vide letters dated October 29, 1985, APRIL 29, 1995, May 14, 1997 and February 26, 2000 the respondent-corporation had been periodically revising the ceiling limits on the sale of L.P.G. refills by each distributor. The copies of these letters have been produced as Exts.P2 to P5. To illustrate: in the letter dated October 29, 1985 the number of refills in a city with a population of below 50,000 had been fixed at 4000. This was prior to the date on which the petitioners had been appointed as distributors. The copies of these letters have been produced as Exts.P2 to P5. To illustrate: in the letter dated October 29, 1985 the number of refills in a city with a population of below 50,000 had been fixed at 4000. This was prior to the date on which the petitioners had been appointed as distributors. In the revision made more than 10 years later, vide letter dated April 21, 1995, at time of revision in case of towns with a population upto 10 lakhs the ceiling was raised from 4000 to 5000. Vide letter dated May 14, 1997 it was raised to 6000. Finally in February 2000, the limit was raised to 8000. 6. The petitioners allege that in view of the revision in limit they had made arrangements so as to provide better customer service by investing more money. However, on October 10, 2001 the Central Government had issued instructions informing the Oil Marketing Companies of the decision to “transfer LPG connections from the old distributors to the newly commissioned /un-viable LPG distributorships in all the saturated markets” instead of following the “ceiling limit criteria to ensure the viability of newly commissioned / un-viable distributorship within first year of its operation.” The Indian Oil Corporation had written to the petitioners calling upon them to implement the policy decisions of the Government. They had objected. After consideration of the matter, the Corporation had issued letter dated April 28, 2003. In this letter, it was observed that the dealers were bound to transfer the customers. They were further informed that in case of failure to comply with the directions the Corporation may be constrained to take action in accordance with the agreement and the marketing discipline guidelines. Aggrieved by these two orders, copies of which are at Exts.P6 and P7, the petitioners in O.P.Nos. 37638 of 2001 and 15397 of 2003 have approached this Court. 7. Mr. Gopakumaran Nair learned counsel for the petitioners in these cases has contended that the instructions issued by the Central Government and the Corporation through the impugned letters are contrary to the provisions in the orders of revision of the ceiling limits issued by the Corporation from time to time. Secondly, the counsel has submitted that the directions for transfer of customers are violative of the terms of the agreement, Exts.P1. Secondly, the counsel has submitted that the directions for transfer of customers are violative of the terms of the agreement, Exts.P1. Lastly, it has been urged that the action is violative of the principles of natural justice as no opportunity was ever afforded. 8. Mr. Varghese appearing for the petitioners in O.P.No. 9289 of 2003 claims that even the consumers who are sought to be transferred from one distributor to another have a right to be heard. He submits that the members of the petitioner association are registered with respondent No. 2. They are likely to be transferred to some other dealer. This may put to them inconvenience. Thus, they cannot be transferred without hearing them. 9. On the other hand, learned counsel for the petitioners in the three petitions viz. O.P.Nos. 22271/02, 4637/03 and 8269/03 have contended that the instructions issued by the Government are just and fair. These should be implemented forthwith. It has been specifically urged by them that after their appointment as distributors they have invested substantial amounts of money by setting up godowns and other infra- structure for the supply of LPG to the customers. However, since the orders have not been implemented they are suffering heavy recurring loss. 10. Learned counsel for the Corporations viz. Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum have opposed the challenge to the instructions issued by the Government and the directions for the transfer of customers. They have contended that the action is in conformity with the terms of the agreement. The orders for revision of ceiling limit did not confer any indefeasible right on the dealers to supply gas to a particular number of customer or to contend that they were not liable to surrender the customers registered with them. In fact, the Corporation was entitled to order their transfer. Mr. Dominic, learned counsel for the Indian Oil Corporation Ltd. and the Hindustan Petroleum Corporation Ltd. has contended that the action is in strict conformity with the terms of the agreement. The dealers are bound by any directions that may be issued by the Corporation from time to time. Mr. Sugunapalan, learned counsel for the Bharat Petroleum Corporation Ltd. has submitted that a committee has been constituted which considers the matter before ordering the transfer of the customers. So, there is no room for any kind of compliant on the part of the dealers. Mr. Sugunapalan, learned counsel for the Bharat Petroleum Corporation Ltd. has submitted that a committee has been constituted which considers the matter before ordering the transfer of the customers. So, there is no room for any kind of compliant on the part of the dealers. Learned counsel for the Oil companies have has supported the claim made by the petitioners in O.P.No.22271/02 and the connected matters for the implementation of the instructions issued by the respondents. 11. Admittedly, an agreement had been executed at the time of appointment of the petitioners as distributors. A perusal of the terms of the agreement shows that the Corporation had specifically reserved the right to “appoint one or more additional distributors in the same territory…….” This could be done “without any reference to or consent of the distributor.” Still further it was also provided that the distributor shall be liable to “confine himself to effect the sales in the area or territory specified hereinabove but the Corporation shall be entitled without the consent of the Distributor to enlarge, reduce, increase or modify such area or territory to such other place as may from time to time be authorized by the Corporation in writing.” Thus, it is clear that under the agreement the Corporation was entitled to appoint additional distributors for the area which had been allotted initially to any dealer including the present petitioners. Still further, the Corporation was also entitled to unilaterally reduce the area which may have been initially allotted to a dealer. Another fact which deserves mention is that in clause 11 of the agreement the distributors had specifically undertaken to “faithfully and diligently observe and carry out all directions, orders, terms and conditions as may be issued from time to time……” In clause 23 also a similar provision had been made. 12. In view of the terms of the agreement it is manifest that the distributors like the petitioners did not have an indefeasible right to effect sales within the area allotted to them. The area of their operation could be unilaterally reduced. New distributors could be appointed for the same area. This is precisely what has happened in the present set of cases. 13. Mr. Gopakumaran Nair submits that the petitioners have no objection to the appointment of new distributors. However, the Corporation is now trying to take away the customers registered with them. New distributors could be appointed for the same area. This is precisely what has happened in the present set of cases. 13. Mr. Gopakumaran Nair submits that the petitioners have no objection to the appointment of new distributors. However, the Corporation is now trying to take away the customers registered with them. So far as this aspect of the matter is concerned, Mr. Dominic has produced before us a photocopy of the letter of intent issued by the Corporation to petitioners No.1 in O.P.No.15897 of 2000. In this letter, it was specifically mentioned that the petitioners’ area of operation” will cover Quilon. This is, however, subject to change as may be considered necessary by the Corporation at a later date, even after the distributorship is commissioned. Further, from time time, you may be required to take over some existing customers also of other distributors in area of operation. Similarly, you may be required to surrender some customers to other distributors.” This letter is taken on record as Mark ‘A’. 14. A perusal of the letter, particularly the portion as quoted above, clearly shows that the Corporation had informed the prospective distributors at the threshold that the number of customers could be altered at any stage. Thus, it is not that the petitioners are being taken by surprise. In fact, they had been warned about it even before the execution of the agreement. 15. Mr. Gopakumaran Nair submits that such a condition had not been stipulated in the terms of the agreement. He, thus, contends that the Corporation cannot reduce the number of customers. 16. We are unable to accept the contention. Admittedly, the Corporation has reserved the right to reduce the area of operation. It has also reserved the right to appoint additional distributors for the area initially allotted to them. The reduction in the area of operation would automatically result in the number of consumers registered with the dealer. Equally, the appointment of new dealers for the area carved out of the operational limits of an existing dealer would automatically result in the reduction of the number of customers. Thus, it cannot be said that the action of the Corporation or the Government of India violates the terms of the agreement. 17. Learned counsel for the petitioners contends that the orders violate the circulars regarding revision of ceiling limits issued by the Corporation from time to time. Thus, it cannot be said that the action of the Corporation or the Government of India violates the terms of the agreement. 17. Learned counsel for the petitioners contends that the orders violate the circulars regarding revision of ceiling limits issued by the Corporation from time to time. Reference has been made to the four circulars, copies of which have been produced as Exts. P2 to P5. 18. So far as the circular at Ext.P2 is concerned, it had been issued in the year 1985. That was well before the allotment of distributorship to the petitioners. Even otherwise all the four circulars merely change the ceiling limit. While in the year 1985, a ceiling limit of 4000 had been fixed in respect of towns with a population upto 50,000 it was revised and raised to 5000 in cases of cities with population upto 10 lakhs. This revision did not confer any right on the distributor to sell gas to the particular number mentioned in the circulars. The Circular only made the revision of the ceiling limit so that in a case where the distributor is not available another distributor may be able to sell gas or register customers upto the limit fixed in the circular. 19. Another fact which deserves mention is that in none of the cases, the petitioners have placed any material on record which may even remotely show as to how the impugned orders would result in reducing the number of customers below the limit as mentioned in the circulars. Nothing has been pointed out from the record by the petitioners to show that the number of customers would be reduced to anything below the limit as fixed in the four circulars viz. Exts. P2 to P5. Thus, the contention that the impugned orders are contrary to the circulars cannot be sustained. 20. It was then contended that the action is violative of the principles of natural justice. The petitioners had a right to be heard. 21. The contention is misconceived. The terms of the agreement clearly show that the Corporation had reserved the right to unilaterally reduce the area of operation, to vary the terms of the agreement and to appoint new dealers. All this could be done without any reference to the distributors or their consent. The Corporation could have passed such orders unilaterally. 21. The contention is misconceived. The terms of the agreement clearly show that the Corporation had reserved the right to unilaterally reduce the area of operation, to vary the terms of the agreement and to appoint new dealers. All this could be done without any reference to the distributors or their consent. The Corporation could have passed such orders unilaterally. Still more, the distributors like the petitioners had undertaken to carry out the instructions issued by the Corporation from time to time. This is precisely what the Corporations are asking them to do. 22. It is undoubtedly true that no public authority can act arbitrarily. It has to act fairly. Its directions must be just and reasonable. However, in the present case not even an iota of evidence has been placed on record to show that the action of the respondent authorities is arbitrary or unfair. In fact, there is no evidence on record to show that the petitioners had invested even a penny after initial allotment of distributorship merely on account of the revision in the ceiling limits revised periodically by the Corporation. In this situation, it is clear that the claim is being made without laying the foundation therefore. 23. Mr. Gopakumaran Nair has referred to the decision of their Lordships of the Supreme Court in Haji Abdul Shakoor & Co. v. Union of India and Others, (2002) 9 SCC 760, to contend that the petitioners were entitled to an opportunity of hearing. In this case, the contract-carrying capacity of the appellant had been reduced by the Western Command from Rs.6.50 crores to 3.50 crores without assigning any reason. As a result of the order, the appellant had been reduced from a class ‘A’ Contractor to a Class ‘B’ Contractor. The order was passed without giving any reason or affording any opportunity. In such a situation, it was held that the action was arbitrary and violative of the principles of natural justice. This decision has no application to the facts of the present case. The petitioners had not been classified as Class ‘A’ or Class ‘B’ contractors. There had been no revision in the classification. In fact, the Corporation has merely appointed new dealers and the action is in total conformity with the terms of the agreement. Thus, no advantage can be derived from this decision. 24. Mr. The petitioners had not been classified as Class ‘A’ or Class ‘B’ contractors. There had been no revision in the classification. In fact, the Corporation has merely appointed new dealers and the action is in total conformity with the terms of the agreement. Thus, no advantage can be derived from this decision. 24. Mr. GopaKumaran Nair has also referred to the decision in Kailash Chand Sharma v. State of Rajasthan (2002) 6 SCC 562. This was a service case. It was held by their Lordships of the Supreme Court that the administrative action must conform to the rights guaranteed under Article 14 of the Constitution. The administrative decision should not be arbitrary. There is no quarrel with the proposition. However, as already observed, we find no element of arbitrariness in the present case. 25. Mr. Dominic, on the other hand, has pointed out that in almost identical circumstances, the claim made by the All India LPG Distributors Federation had been rejected by a Bench of the Punjab and Haryana High Court in CWP No. 16628 of 2001. The Division Bench after consideration of the matter had upheld the action of the Union Government and the Corporation. It was held that the action was legal and valid. In particular, reference has been made to the following conclusions which had been recorded by the Bench. These are as follows: “(i) The members of the petitioner-Federation had been allotted distributorship for specific areas. The area was clearly defined in the respective letters of appointment; (ii) The area and the number of consumers with each dealer could be varied by the Oil Marketing Company. Even the right to transfer ‘consumers’ from one distributor to another had been duly reserved; (iii) During the period from 1994 to 1998, the Selection Boards were not functioning. The new distributors could not be appointed. Thus, the existing distributors were permitted to open extension counters. However, it was only a temporary arrangement. There was no promise of continuity. The expectation, if any, was wholly illegitimate and not legitimate; (iv) In the year 2000, a large number of new connections were released. A figure of 1.30 crores has been given. Thus, the ceiling limits had lost relevance. Viability of each distributorship has become the dominant consideration for the government; (v) New distributors had been selected and appointed. They had created the necessary infrastructure. A figure of 1.30 crores has been given. Thus, the ceiling limits had lost relevance. Viability of each distributorship has become the dominant consideration for the government; (v) New distributors had been selected and appointed. They had created the necessary infrastructure. In this situation, continuance of extension counters would have resulted in loss to the newly appointed dealers. It was thus, directed that the extension counters be closed so that the consumers may be available to the new dealers and their agencies could become viable; (vi) The instructions issued by the government ensure equitable distribution. These are not arbitrary, unfair or unjust. In fact, the instructions promote equality. These are founded on consideration of equity and fair-play. The instructions conform to the terms of appointment. These are not illegal or violative of Article 14 of the Constitution. In fact, the directions are calculated to promote public interest; (vii) The Respondents had the right to terminate the agency or vary the area of operation. No hearing was required to be given. In this situation, the principles of natural justice were not attracted; (viii) The newly-appointed dealers have not been impleaded as parties. No order can be passed to their prejudice without hearing them. The counsel further pointed out that a Petition for Special Leave to Appeal (c) No.4962/2002 filed against this judgment was dismissed by their Lordships of the Supreme Court vide order dated March 11, 2002. The counsel submits that the relevant facts and circumstances as noticed in the judgment are fully applicable to the facts of the present case. The counsel appears to be right. On a perusal of the judgment, it is clear that the petitioners in that case had, in fact, opened extension counters at places other than their normal places of business. They had registered new customers. Yet, their claim was rejected. The pleas as raised in the present set of cases had also been put forward before the Bench. But these were rejected. The pleas of violation of Agreement, Article 14 and the principles of natural justice were not sustained. The present cases are in no way different. 26. Another fact which may be mentioned here is that the petitioners impugn the orders of the Corporation issued vide letter dated April 28, 2003. But these were rejected. The pleas of violation of Agreement, Article 14 and the principles of natural justice were not sustained. The present cases are in no way different. 26. Another fact which may be mentioned here is that the petitioners impugn the orders of the Corporation issued vide letter dated April 28, 2003. In this letter a specific direction has been given to petitioner No.1 that it must transfer “all the customers within the area of M/s. Sneha Indane Services and M/s. Keerthi Indane Services.” These are the two new dealers which have been appointed in the area of operation of petitioner No.1. We are informed that the position in respect of the other petitioners is also similar. Thus, the petitioners are aware of the dealers who have been appointed within their areas. Their particulars have been given to them. Yet, these dealers have not been impleaded as parties. In the absence of these dealers, the petitioners are not entitled to challenge the validity of the order to the prejudice of these persons can be passed in their absence. 27. No other point has been raised in these petitions. 28. Thus, O.P.Nos.37638 of 2001 and 15397 of 2003 are dismissed. 29. So far as O.P.No. 9289 of 2003 is concerned, it has been filed by an Association of consumers. They claim to be registered with respondent No.2. None of the numbers is shown to have been transferred to any other dealer. They have no cause for grievance. In fact, it appears to us that they have been inspired by the 2nd respondent to file this petition. We find that the petitioners have no cause of action to approach this Court. In any case, it has been shown that transfer would affect them adversely. The petition is wholly lacking in merit. It is consequently dismissed. 30. The prayer in O.P.Nos. 22271 of 2002, 4637 of 2003 and 8269 of 2003 is for a direction that the instructions issued by the Government and the Corporation for transfer of customers be implemented. Learned counsel for the respondent-Corporation submits that it was only on account of the pendency of the matter before this Court that the instructions had not been implemented. It is also submitted that initially interim orders were granted by this Court. However, in view of the decision of the Punjab and Haryana High Court the interim orders were vacated. Learned counsel for the respondent-Corporation submits that it was only on account of the pendency of the matter before this Court that the instructions had not been implemented. It is also submitted that initially interim orders were granted by this Court. However, in view of the decision of the Punjab and Haryana High Court the interim orders were vacated. Still further, Special Leave petition viz. SLP (c) No.16854/2002 against the orders passed by this Court was dismissed by a Bench consisting of Hon’ble Mr. Justice S.N. Vairava and Hon’ble Mr. Justice B.N.Agarwal vide order dated December 13, 2002. He submits that the validity of the instructions having been upheld, the orders shall be implemented forthwith. 31. Since the instructions have been found to be valid, these petitions are allowed. Respondents are directed to implement the instructions without any further delay. Resultantly, O.P.Nos. 37638 of 2001, 9289 of 2003 and 15397 of 2003 are dismissed. O.P.Nos. 22271 of 2002, 4637 of 2003 and 8269 of 2003 are allowed. No costs.