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2007 DIGILAW 1346 (DEL)

POONAM GARG v. UNION OF INDIA

2007-07-10

BADAR DURREZ AHMED

body2007
BADAR DURREZ AHMED, J. ( 1 ) IN all these petitions, the prayers sought are virtually identical. In the first instance, the petitioners have sought the quashing of notification no. P-19011/9/2001-IOC dated 06. 09. 2006 on the ground that the same is not applicable to the petitioners' retail outlets / petrol pumps because the petitioners / petitioners' nominees had been given the retail outlets under the land owner category pursuant to the Policy / MDPM No. 319/2002 dated 08. 10. 2002. The petitioners have also sought the issuance of an appropriate writ, order or direction to restrain the respective oil companies from enforcing / implementing the said notification dated 06. 09. 2006. Alternatively, the petitioners have also prayed that, if, for any reason, the reliefs sought for above are not granted by this court, the respondent oil companies be directed to surrender to the petitioners and the petitioners be put in actual and physical possession of the lands belonging to them within a time frame to be fixed by this court. This alternative prayer has been made on the ground that if the object of taking the land on lease for allotment of retail outlets for the petitioners and / or their nominees would have been frustrated, the the lands ought to be returned to the petitioners, who are the owners thereof. ( 2 ) IN these petitions, there are four oil companies, namely, IBP Company ltd (IBP), Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), against whom the reliefs have been claimed. It was pointed out by all the petroleum companies other than IBP that the policy dated 08. 10. 2002 upon which the petitioners seek reliance was only in respect of IBP and there is no such policy with regard to the other petroleum companies. In any event, it was submitted on behalf of the petroleum companies that the petitioners had not, in any of the petitions herein, been granted retail outlets or petrol pumps by any of the petroleum companies. ( 3 ) THEY submit that what the petitioners are calling retail outlets / petrol pumps are nothing but lease agreements / deeds in respect of lands and maintenance and Handling Contracts. The two agreements are with separate petitioners, but even if they are taken conjunctively, they do not constitute a retail outlet / petrol pump. ( 3 ) THEY submit that what the petitioners are calling retail outlets / petrol pumps are nothing but lease agreements / deeds in respect of lands and maintenance and Handling Contracts. The two agreements are with separate petitioners, but even if they are taken conjunctively, they do not constitute a retail outlet / petrol pump. The notification of 06. 09. 2006 issued by the government of India, Ministry of Petroleum and Natural Gas pertains to the subject of operation of retail outlets of oil marketing companies on company- owned-company-operated (COCO) basis. It was submitted on behalf of the petroleum companies as well as the UNION OF INDIA that the retail outlets in question were essentially company-owned-company-operated outlets. The lands for these outlets had been taken on lease from the petitioners with the right to sub-let. The oil companies invested huge sums of money to set up their retail outlets on the lands so taken on lease. By and large, in respect of all these retail outlets, Maintenance and Handling Contracts have been entered into with parties other than the petitioners who leased out the lands to them. Such persons are also petitioners alongwith the land owner petitioners. On behalf of the petitioners, it was contended that the Maintenance and Handling Contracts were given to the nominees of the land owners. ( 4 ) BY virtue of the said notification dated 06. 09. 2006, it was pointed out that in respect of the permanent COCO retail outlets, the oil marketing companies may operate the same by their own officers without job contractors or ad hoc dealers and the existing temporary COCO retail outlets should be phased out within a time frame preferably within a year. The notification dated 06. 09. 2006 also provides that the temporary COCOs which are to be phased out, may be first offered and handed over, subject to suitability, to the pending letter of Intent (Loi)-holders under the following categories which inter alia includes the Special Scheme (Operation Vijay " Kargil) allottees; Discretionary quota Scheme; Corpus Fund Scheme (SC/st category of dealerships, widows and women above 40 years of age without earning parents); and other categories as prescribed in the marketing plans. ( 5 ) THE petitioners are aggrieved by the fact that it has been decided to phase out the temporary COCO retail outlets and also to stop job contractorship or ad hoc dealership in respect of permanent COCO retail outlets. The result of this is that the Maintenance and Handling Contracts would cease to operate, whereas the leases would continue to be operational. This means that the land- owning petitioners would continue to own the land, but that their lands would now be handed over by the oil companies to third parties to run the retail outlets. According to the petitioners, the land leases and the Maintenance and handling Contracts (Mandh Contracts) were to run conjunctively and were not to be separated. The petitioners' legitimate expectation was that ultimately the land leases and the Mandh Contracts would translate into full-fledged retail outlets. ( 6 ) THE contention on behalf of the oil companies, on the other hand, is that the lands were taken on lease on market value. The duration of the leases were 30 years and included the right of the lessees (oil companies) to sub-let the same. The Mandh Contracts were not linked with the leases and, in any event, no retail outlets had been allotted to the petitioners. It was also contended that there are several leases which contain arbitration clauses and there are others which specifically permit the granting of retail outlets to others. ( 7 ) IN the context of these broad arguments, the respondents have raised specific issues, the first being of territorial jurisdiction of this court. According to the respondents, which includes the Union of India, all the leases in the present petitions are in respect of lands outside Delh. The Mandh contracts have also been executed and are to be worked out outside Delh. It was, therefore, contended that no part of cause of action arose in Delh. In the context of the challenge to the policy / notification dated 06. 09. 2006, it was submitted by the counsel for the respondents that the petitioners have not really challenged the same and whatever pretence of challenge is there in these petitions, is merely to create a cause of action or impart a semblance of territorial jurisdiction of this court. It was contended that there is no challenge to the policy itself and the prayer itself indicates that the notification dated 06. 09. It was contended that there is no challenge to the policy itself and the prayer itself indicates that the notification dated 06. 09. 2006 ought to be quashed "as the same is not applicable" to the petitioners' purported retail outlets. There being no lis with the policy and the question being only of an applicability of the policy / notification, the situs for territorial jurisdiction would shift to where the lands are located. None of them are located in Delhi and, therefore, according to the respondents, this court would not have territorial jurisdiction to entertain these petitions. It was also contended that even if there was a dispute with the policy, the same being a policy matter, this court would not interfere in exercise of its writ jurisdiction unless an illegality, irrationality or procedural impropriety were to be pointed out. There is none. Therefore, this court ought not to interfere. It was also pointed out that there is no question of any legitimate expectation arising in favour of the petitioners. ( 8 ) THE learned counsel for the respondent / HPCL pointed out that the leases have been executed by the petitioners pursuant to advertisements issued by the HPCL. The last line of the advertisements made it abundantly clear that:- "this advertisement is for purchase / lease of site only and not for allotment of dealership. " ( 9 ) IT was submitted that in view of this disclaimer, there was no question of any expectation arising on behalf of the petitioners, who responded to the same, legitimate or otherwise. It was also contended that the lease rents were fixed after proper valuation of the properties and it is not as if the lease was a part of a larger transaction. It was contended that the lease constituted a complete transaction for which the petitioners were entitled to the agreed rent. The leases executed in respect of the lands in question did not contain anything with regard to allotment or grant of dealership. On the contrary, there were clauses in the lease which permitted the lessees (oil companies) to sublet and part with possession for all or any of the purposes mentioned in the lease and that, too, without the consent of the lessor. It was a regular lease of land and was not limited to a retail outlet. On the contrary, there were clauses in the lease which permitted the lessees (oil companies) to sublet and part with possession for all or any of the purposes mentioned in the lease and that, too, without the consent of the lessor. It was a regular lease of land and was not limited to a retail outlet. Some of the lease agreements also contained clauses which restricted jurisdiction to specifically mentioned places. Apart from this, many leases contained arbitration clauses also. ( 10 ) AS regards the Mandh Contracts, all the oil companies contended that they were regular labour contracts and only as a temporary arrangement. There were clauses in these Contracts which specified that no claim on dealership on the sole basis of the said agreements could be made. The learned counsel for all the oil companies also submitted that it was never held out by the oil companies that the leases would later be converted into dealerships. On the other hand, there were sufficient indications in the advertisements as well as in the leases and also in the Mandh Contracts, to the contrary. ( 11 ) MR Valmiki Mehta, the learned senior counsel who appeared on behalf of the petitioners, sought to counter the arguments on territorial jurisdiction as well as on merits. In order to do so, he explained that the challenge to the notification of 06. 09. 2006 is two-fold. Firstly, it was contended on behalf of the petitioners that they are not covered under the expression "temporary COCO retail Outlets" and, therefore, do not fall within the ambit of the said notification dated 06. 09. 2006. Secondly, it was contended that if it is held that the petitioners are covered by the notification of 06. 09. 2006, then the policy of phasing out is liable to be declared to be bad. This is so because there has been no breach of agreements on the part of the petitioners nor have they been found to be guilty of any misconduct or impropriety. On the other hand, they had a legitimate expectation that they would be granted full-fledged retail outlets. This expectation, according to Mr Mehta, was borne out from the fact that the Mandh Contracts were given to nominees / family members of the lessors and that the lease rents were commensurate with the Mandh Contracts. On the other hand, they had a legitimate expectation that they would be granted full-fledged retail outlets. This expectation, according to Mr Mehta, was borne out from the fact that the Mandh Contracts were given to nominees / family members of the lessors and that the lease rents were commensurate with the Mandh Contracts. ( 12 ) IT was next contended by Mr Mehta that, in any event, the issue had also been decided by a learned single Judge (Sanjay Kishan Kaul, J) in the case of Nand Kishore Bajpai and Another v Union of India and Another: WP (C) 358/2007 decided on 16. 01. 2007 and the same was binding on this court though, he submitted that the issue of territorial jurisdiction was not discussed in that decision. Because, Mr Mehta has referred to the decision in Nand Kishore Bajpai (supra) as having binding effect on this court, it would be appropriate to examine the same. Since it is a brief judgment, the same can be set out in its entirety as under:- "wp (C) 358/07 and CM 625/07 the only question to be considered is as to whether the petrol pump located on the land of petitioner no. 1 and being run by petitioner no. 2 can be assigned or transferred to any third party by the Oil company on the land of petitioner no. 1 without the consent of petitioner no. 1. Indisputably the answer to this question would be in the negative. The Oil companies are free to deal with their contract in accordance with law but cannot assign the running of the petrol pump to a third party on the land of petitioner no. 1 without the consent of petitioner no. 1. This is so as the land of a citizen cannot be taken away except in accordance with law. Petition stands disposed of. " 12. I am informed by the learned counsel for the parties that WP (C) 358/2007 was in respect of a lease of land on the Rae Bareli " Lucknow Road, bachrawan Town, U. P. The oil company concerned was IBP. I am also informed that a Letters Patent Appeal (LPA No. 158/2007) has been filed against the said decision dated 16. 01. 2007 and the same is pending before a Division Bench of this court. I am also informed that a Letters Patent Appeal (LPA No. 158/2007) has been filed against the said decision dated 16. 01. 2007 and the same is pending before a Division Bench of this court. It is true that in the decision in Nand Kishore Bajpai (supra), the very issue which arises in the present case was considered. However, the various intricacies that have been raised in the course of arguments by the learned counsel appearing on both sides before me were, perhaps, not raised at all before the learned single Judge in Nand Kishore Bajpai (supra ). Considering the arguments to which I have referred to in some detail above, I have serious doubts with regard to the question of territorial jurisdiction as also on merits. The nature of the leases and the surrounding circumstances, in my view, create serious doubts with regard to the claim of the petitioners. In the decision in Nand Kishore Bajpai (supra) though the petitioner No. 2 therein is described as the person running the petrol pump, I am informed by the learned counsel that he was an Mandh Contractor as explained above. I have difficulty in accepting the general observation / finding that "the Oil companies are free to deal with their contract in accordance with law but cannot assign the running of the petrol pump to a third party on the land of petitioner No. 1 without the consent of petitioner No. 1. " This , in my respectful view, would not hold good where the leases themselves permit sub-letting on the part of the lessees (. e. , oil companies ). There would have been no difficulty if I had found myself to be in complete agreement with the decision rendered by the learned single Judge in nand Kishore Bajpai (supra), but unfortunately that is not the case. In Vijay laxmi Sadho (Dr) v. Jagdish: 2001 (2) SCC 247 , the Supreme Court held as under:- "it is well settled that if a Bench of coordinate jurisdiction disagrees with another Bench of coordinate jurisdiction whether on the basis of ``different arguments'` or otherwise, on a question of law, it is appropriate that the matter be referred to a larger Bench for resolution of the issue rather than to leave two conflicting judgments to operate creating confusion. It is not proper to sacrifice certainty of law. It is not proper to sacrifice certainty of law. Judicial decorum, no less than legal propriety forms the basis of judicial procedure and it must be respected at all costs. " ( 13 ) ACCORDINGLY, it would be appropriate if these matters are referred to a larger Bench for resolution of the issues at hand. For this purpose, all these matters be placed before Hon'ble the Chief Justice for assigning the same to an appropriate larger Bench.