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2018 DIGILAW 157 (JK)

Gupta Filling Station v. Union of India

2018-03-14

TASHI RABSTAN

body2018
ORDER : Tashi Rabstan, J. Through the medium of this writ petition, the petitioner is seeking quashing of notice dated 14.01.2016 issued to Ms. Shakun Mahajan, Proprietor M/s. Gupta Filling Station, HPCL Retail Outlet, Sungal Morth Akhnoor, by the Chief Regional Manager & duly constituted attorney, Hindustan Petroleum Corporation Limited, respondent No.2 herein, wherey her dealership for retail sale of petroleum products came to be terminated with immediate effect 2. Petitioner herein, namely, Mukesh Gupta, claimed in this petition that aforementioned Dealership for retail sale of petroleum products was allotted to one Ms. Shakun Mahajan by virtue of Memorandum of Agreement dated 30.06.2006. It is averred that on 18.01.2012 said Shakun Mahajan moved an application before respondent No.2 that she wanted to run the said business in partnership with one Mukesh Gupta, petitioner herein, and that the Company conveyed it's no objections and accepted the proposal. It is averred that thereafter certain disputes were raised by the Company, which were referred to Arbitrator Sh. Dev Raj Sharma, respondent No.4 herein, for adjudication. Further, it is averred that the arbitrator vide his award dated 25.03.2015 allowed the claim of Ms. Shakun Mahajan holding that the notice issued by the Company is bad. It is further averred that during the pendency of application for enforcement of award as a decree, pending in the Court of Additional District Judge, Jammu, Company-respondent No.2 herein issued the impugned notice dated 14,01.2016 terminating the dealership of Ms. Shakun Mahajan with immediate effect. Hence, the present petition. 3. Objections have been filed on behalf of respondent No.2 averring therein that the Dealer Ms Shakun Mahajan by concealment and deceit indulged in trade and business while in Government service as a Lecturer in the Education Department, thus violated Clauses 44 & 45 of the Dealership Agreement, beside guilty of misconduct as defined in Rule 10 of J&K Employees Conduct Rules, 1971. Further, it is averred that Mr. Mukesh Gupta, petitioner herein, was never approved as partner of Gupta Filling Station. Further, it is averred that after termination of the Dealership Agreement, license of pencil pump was revoked and one Manjit Singh, Proprietor M/s. Jhandu Filling Station, Akhnoor has been appointed as ad hoc dealer vide order dated 15.01.2016 and pump site along with super structure and other assets has also been handed over to him, who has been working since then. 4. During the course of arguments, Mr. 4. During the course of arguments, Mr. Jalali, learned senior counsel for petitioner precisely based his argument on doctrine of promissory estoppel or legitimate expectation. He argued that in terms of Memorandum of Agreement, an assurance/promise has been made by the respondent-Corporation to the petitioner herein that there will be no cancellation of contract regarding dealership of Petrol Pump. To buttress his argument, learned senior counsel relied upon various judgment, reported as (2016) 6 SCC 766 : ( AIR 2016 SC 2322 ); (2004) 2 SCC 553 : ( AIR 2004 SC 3173 ); AIR 1990 SC 1031 ; (2003) 2 SCC 107 : ( AIR 2003 SC 2120 ), (2007) 8 SCC 1 ; (2007) 9 SCC 593 : (AIR 2007 SC (Supp) 152) and AIR 2008 SC 2160 . He, thus, argued that the action of respondents in issuing the impugned notice is mala fide, as the same is aimed at overreaching pending court proceedings. 5. On the other hand, Mr. Sharma, learned counsel appearing for respondent-Corporation argued that there is no question of violation of doctrine of promissory estoppel; rather the matter is very simple of contract nature. He argued that since there was an agreement between the parties and the original executant had violated Clauses 44 & 45 of the agreement, therefore, respondent-Corporation was right in taking action against her. He further argued that the original executant, i.e., wife of petitioner herein has already questioned the impugned notice in the proceedings pending before the learned Principal District Judge, Jammu in an arbitration application, in paragraph-15 whereof she has contended that the respondent-Corporation handed over termination order dated 14.01.2006 without affording any opportunity of being heard. He, thus, argued that the petitioner has no locus to again question the same notice in writ jurisdiction. 6. Learned counsel for respondent-Corporation further argued that the impugned notice came to be issued to one Ms. Shakun Mahajan, executant of the agreement; therefore, the petitioner has no locus to file the present petition. 7. Mr. Johal, learned senior counsel appearing for intervener argued that the parties are bound by Clause 22 of the Agreement. He argued that in terms of Clause 66 of the agreement, if any dispute arises between the parties, the same was required to be referred to the arbitrator. 7. Mr. Johal, learned senior counsel appearing for intervener argued that the parties are bound by Clause 22 of the Agreement. He argued that in terms of Clause 66 of the agreement, if any dispute arises between the parties, the same was required to be referred to the arbitrator. He further argued that in terms of section 21 of Specific Relief Act, once the contract is revoked, the Court cannot review the same. In support of his arguments, he has relied upon a judgment of three Judges Bench of the Apex Court in case titled Indian Oil Corpn. Ltd. vs. Amritsar Gas Service (1991) 1 SCC 533 . 8. I have heard learned counsel for the parties, considered their rival contentions and also perused the writ file. 9. While terminating the dealership of Ms. Shakun Mahajan, Proprietor M/s. Gupta Filling Station, for retail sale of petroleum products, it was the specific case of Hindustan Petroleum Corporation Limited, respondent No.2 herein, that she had concealed the fact that she had been in active Government service as a Lecturer in the Education Department, even in the objections filed to the present petition, Hindustan Petroleum Corporation Limited has taken the same stand. However, on perusal of whole writ petition, it reveals that the petitioner has nowhere denied or controverted the fact that Ms. Shakun Mahajan has not been serving as a Lecturer in the Education Department or when the dealership of said petrol pump was granted in her favour, she was not in active Government service; meaning thereby the petitioner herein is admitting that Ms. Shakun Mahajan has been serving as a Lecturer in the Education Department and that is why she has not filed the present petition on her own, rather her husband has filed the same claiming himself to be a partner of said outlet i.e., M/s. Gupta Filling station. If what has been alleged by the Hindustan Petroleum Corporation Limited is correct, then Ms. Shakun Mahajan, Proprietor M/s. Gupta Filling Station, is guilty of misconduct in terms of Employees Conduct Rules, which prohibit a Government employee to carry on private trade or employment during the subsistence of Government employment, that too when Hindustan Petroleum Corporation Limited itself is a Government entity engaged in distribution of essential commodities like petroleum products for the benefit of general public in a fair trade activity. 10. 10. Further, in terms of Condition No.44 of the Memorandum of Agreement, it was the paramount condition that the dealer shall take active part in the management and running of the retail outlet, shall personally supervise the same and shall not under any circumstances do so through any other person, firm or body. Once it has not been denied by the petitioner herein nor by Ms. Shakun Mahajan herself that she has not been serving as a Lecturer in the Education Department, the same itself leads to the conclusion that that the dealer, i.e., Ms. Shakun Mahajan had been violating the conditions of Memorandum of Agreement in toto. Therefore, on this score alone the writ petition deserves to be dismissed. 11. As regards the issue of violation of doctrine of promissory estoppel or legitimate expectation, as argued by Mr. Jalali, learned senior counsel for petitioner, the Supreme Court in A.P. Transco vs. Sai Renewable Power (P) Ltd (2011) 11 SCC 34 : (2011 AIR SCW 2086), while considering the doctrine of legitimate expectation with reference to various communications extending certain incentive to producers of electricity from non-conventional energy resources, held that the parties had voluntarity signed the Power Purchase Agreements, by which they were governed and neither the doctrine of promissory estoppel nor legitimate expectation could, therefore, have any application in regard to the correspondences exchanged between the parties, whereby the Government had extended certain incentives to the producers of electricity from non-conventional energy resources. 12. The same doctrine had been considered by the Supreme Court in Bannari Amman Sugars Ltd. vs. Commercial Tax Officer, (2005) 1 SCC 625 ; State of Himachal Pradesh vs. Ganesh Wood Products, (1995) 6 SCC 363 : ( AIR 1996 SC 149 ); Kasinka Trading vs. Union of India, (1995) 1 SCC 274 : ( AIR 1995 SC 874 ) and Sethi Auto Service Station vs. D.D.A (2009) 1 SCC 180 : ( AIR 2009 SC 904 ). 13. In the present case too, the dealer, i.e., Ms. Shakun Mahajan had voluntarily signed the Memorandum of Agreement, by which the parties were governed. Further, on the basis of a complaint, the respondent-Corporation enquired about the allegations and found that the executant, namely, Ms. Shakun Mahajan, in whose favour the dealership for running the petrol pump-in-question had been accorded, was a Government employee. Shakun Mahajan had voluntarily signed the Memorandum of Agreement, by which the parties were governed. Further, on the basis of a complaint, the respondent-Corporation enquired about the allegations and found that the executant, namely, Ms. Shakun Mahajan, in whose favour the dealership for running the petrol pump-in-question had been accorded, was a Government employee. Thus, the executant had not only suppressed the material facts, but also misled the respondent-Corporation, as such violated Clauses 44 & 45 of the Memorandum of Agreement. 14. What is held by the Apex Court in case Central Airmen Selection Board vs. Surender Kumar Das (2003) 1 SCC 152 : ( AIR 2003 SC 240 ), is relevant to reproduce hereunder: '7. The question, therefore, is whether in a case of this nature the principle of promissory estoppel should be invoked. It is well known that the principle of promissory estoppel is based on equitable principles. A person who has himself misled the authority by making a fake statement, cannot invoke this principle, if his misrepresentation misled the authority into taking a decision which on. discovery of the misrepresentation is sought to be cancelled. The High Court has proceeded on the basis that the petitioner had not made any misrepresentation in his application to the effect that he had passed the Intermediate examination. As we have found above this finding of the High Court is erroneous, contrary to record and therefore must be set aside. In his application, the respondent had claimed that he had passed the Secondary examination as well as the Higher Secondary +2 examination, and it is clear from the counter-affidavit filed on behalf of the appellants that his candidature was considered on the basis that he had passed the Higher Secondary +2 examination, as in that case he was entitled to claim relaxation in the matter of age. However, the mark sheet annexed to the application disclosed that the respondent had failed in the subject Chemistry and therefore, his claim in the application, that he had passed the Higher Secondary +2 examination, was factually incorrect and a clear misrepresentation. In these circumstances we are satisfied that the respondent could not be permitted to invoke the principle of promissory estoppel, and the High Court has clearly erred in law in invoking the said principle in the facts of this case. The judgment and order of the High Court therefore cannot be sustained.' 15. In these circumstances we are satisfied that the respondent could not be permitted to invoke the principle of promissory estoppel, and the High Court has clearly erred in law in invoking the said principle in the facts of this case. The judgment and order of the High Court therefore cannot be sustained.' 15. Further, explaining the nature and scope of doctrine of legitimate expectation, a three-Judge Bench of the Supreme Court in Food Corporation of India vs. M/s. Kamdhenu Cattle Feed Industries (1993) 1 SCC 71 : ( AIR 1993 SC 1601 ), had observed thus: 'The mere reasonable or legitimate expectation of a citizen in such a situation may not by itself be a distinct enforceable right but failure to consider and give due weight to it may render the decision arbitrary and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises it is to be determined not according to the claimants perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.' 16. The concept of legitimate expectation again came up for consideration in Union of India & Ors. vs. Hindustan Development Corporation & Ors. (1993) 3 SCC 499 : (1994 AIR SCW 643). The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.' 16. The concept of legitimate expectation again came up for consideration in Union of India & Ors. vs. Hindustan Development Corporation & Ors. (1993) 3 SCC 499 : (1994 AIR SCW 643). Referring to a large number of foreign and Indian decisions and elaborately explicating concept of legitimate expectation, it was observed: 'If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased gross abuse of power or violation of principles of natural justice the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not unlock the gate which shuts the court out of review on the merits particularly when the element of speculation and uncertainty is inherent in that very concept.' 17. An examination of afore-noted few decisions shows that the doctrine of legitimate expectation is not applicable in the instant case inasmuch as there is no foundation for such a claim. The Court could interfere only if the decision taken by the authority was found to be arbitrary, unreasonable or in gross abuse of power or in violation of principles of natural justice and not taken in public interest, which, as discussed above, is not the case herein. A claim based on mere legitimate expectation cannot ipso facto give a right to invoke these principles. A claim based on mere legitimate expectation cannot ipso facto give a right to invoke these principles. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. Therefore, I am inclined to hold that the doctrine of legitimate expectation or for that matter promissory estoppel, as canvassed on behalf of petitioner, connot be made applicable to this case. As such the decisions cited on behalf of learned counsel for petitioner are not applicable to the present case. 18. Further, the present petition has been filed by Mr. Mukesh Gupta, husband of Ms. Shakun Mahajan, claiming himself to be partner of M/s. Gupta Filling Station. In support of his claim learned counsel representing him produced a copy of communication dated 28.01.2013 when the matter was finally heard. The said communication has been taken on record. It would be appropriate to reproduce hereunder the relevant portion of said communication addressed to Ms. Shakun Mahajan by the Senior Regional Manager, HPCL: 'On the foregoing, we are pleased to inform you that your proposal has been approved in principle by this office. As such, you are hereby advised to get your proposed partnership firm registered with the Registrar of Firms & copy of the registration along with copy of registered partnership agreement be provided to our office within 60 days from the date of this letter so that fresh dealership agreement is signed.' 19. As per this communication, though respondent No.2 had accepted the request of Ms. Shakun Mahajan to induct her husband, namely, Mukesh Gupta, as a partner of M/s. Gupta Filling Station, yet the moot question for consideration is that no such fresh dealership agreement has been entered into between respondent No.2 on one side and Ms. Shakun Mahajan and Mukesh Gupta on the other side nor the petitioner herein has produced any such document, in absence whereof the petitioner cannot claim himself to be a partner of M/s. Gupta Filling Station, the dealership of which had been granted in favour of Ms. Shakun Mahajan alone. Shakun Mahajan and Mukesh Gupta on the other side nor the petitioner herein has produced any such document, in absence whereof the petitioner cannot claim himself to be a partner of M/s. Gupta Filling Station, the dealership of which had been granted in favour of Ms. Shakun Mahajan alone. Otherwise too, the impugned notice has been issued to one Shakun Mahajan, executant of the agreement, therefore, on both counts the petitioner has no locus to file the present petition and the same deserves to be dismissed on this ground too. 20. Insofar as petitioner's contention as to mala fide is concerned, the law regarding pleading and proof of mala fides is indeed settled by a long line of decisions of the Supreme Court and High Courts. The decisions broadly recognize requirement of allegations, suggesting mala fide, to be specific and supported by necessary particulars. Vague and general averments to the effect that the impugned notice has been issued with mala fide intentions would not, therefore, suffice. Equally well settled is the principle that the burden to establish that the action under challenge' was indeed mala fide, rests heavily upon the person making the charge, which is taken as quasi criminal in nature and can lead to adverse consequence for the person who is proved to have acted mala fide. There is in fact a presumption that the public authority acted bona fide and in good faith. That presumption can no doubt be rebutted by the person making the charge albeit only on cogent and satisfactory proof whether direct or circumstantial or on admitted facts that may support an inference that the action lacked bona fides and was for that reason vitiated. The third principle equally sanctified by judicial pronouncements is that the person, against whom the charge is made, must be impleaded as a party to the proceedings and given an opportunity to refute the charge against him. 21. In State of Bihar vs. P.P. Sharma, 1992 (Supp 1) SCC 222 : ( AIR 1991 SC 1260 ) the Supreme Court explained the juristic significance of mala fides and the questions that need to be determined while examining plea based on mala fides. The following passage is apposite in this regard: '50. Mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The following passage is apposite in this regard: '50. Mala fides means want of good faith, personal bias, grudge, oblique or improper motive or ulterior purpose. The administrative action must be said to be done in good faith, if it is in fact done honestly, whether it is done negligently or not. An act done honestly is deemed to have been done in good faith. An administrative authority must, therefore, act in a bona fide manner and should never act for an improper motive or ulterior purposes or contrary to the requirements of the statute, or the basis of the circumstances contemplated by law, or improperly exercised discretion to achieve some ulterior purpose. The determination of a plea of mala fide involves two questions, namely (i) whether there is a personal bias or an oblique motive; and (ii) whether the administrative action is contrary to the objects, requirements and conditions of a valid exercise of administrative power. 51. The action taken must, therefore, be proved to have been made mala fide for such considerations. Mere assertion or a vague or bald statement is not sufficient. It must be demonstrated either by admitted or proved facts and circumstances obtainable in a given case. If it is established that the action has been taken mala fide for any such considerations or by fraud on power or colourable exercise of power, it cannot be allowed to stand.' 22. In the present case, the petitioner has levelled mere allegation of mala fide against the respondent-Corporation without satisfying afore-discussed three principles. Petitioner has not only failed to prove mala fide against the respondent-Corporation, but has also not furnished necessary particulars, material or evidence constituting mala fide. Further, the petitioner has not arrayed the persons, against whom the mala fide is alleged, as party respondents. 23. Therefore, in view of above, I do not find any merit in the writ peition, accordingly, the same is dismissed along with connected miscellaneous petitions. Interim direction shall stand vacated forthwith. 24. In view of dismissal of writ petition, CPOWP No.77/2016 does not survive and the same too is hereby dismissed. Rule, if any issued, shall stand discharged.