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1994 Supreme(Pat) 421
PATNA HIGH COURT
Nagendra Rai and A.N.Trivedi JJ.
Maheshwar Prasad Singh
Versus
Hindustan Petroleum Corporation Limited
Civil Writ Jurisdiction Case No. 2401 of 1994 ;
Decided On : DECEMBER 21, 1994
The State and its instrumentalities must act fairly and reasonably in awarding contracts or conferring benefits, and their actions must meet the requirements of Article 14 of the Constitution of India. However, the Executive Authorities have freedom of "play in the joints" and can deviate from standards and norms on some valid principle which in itself should not be irrational unreasonable or discriminatory.
Headnote:
PETROLEUM PRODUCTS DEALERSHIP - APPOINTMENT OF DEALER - SELECTION PROCESS - ARBITRARINESS - SITE LOCATION - ELIGIBILITY CRITERIA - REVIEW OF ADMINISTRATIVE ACTION - POWER OF COURT - FAIRNESS AND EQUALITY - PUBLIC ELEMENT - STANDARDS AND NORMS - DEVIATION FROM STANDARDS - VALID PRINCIPLE - SITE SELECTION AFTER DEALER SELECTION - COMMERCIAL ACTIVITIES - FLEXIBILITY - CANCELLATION OF APPOINTMENT - NO OBJECTION CERTIFICATE - GRANT AND RECONSIDERATION - FAIR AND REASONABLE ACTION - HEARING OPPORTUNITY - INVESTMENT PROTECTION - FURTHER PERMISSION REQUIREMENT - TIMELY DECISION.
Fact of the Case:
The petitioner challenged the appointment of the respondent as a dealer of a retail outlet for petroleum products, claiming that the respondent's site was not at the location specified in the advertisement and that his own site was at the exact location. The respondent, on the other hand, argued that the site was not an eligibility criterion and that the selection board had considered all relevant factors before appointing him.
Finding of the Court:
The court held that the site was not an essential criterion of eligibility for the dealership and that the Corporation had the discretion to select a site within the limits of the approved trading area. The court also found that the selection board had acted fairly and reasonably in selecting the respondent and that there was no evidence of arbitrariness or discrimination. The court further held that the District Magistrate had acted arbitrarily in issuing an order restraining the respondent from constructing the retail outlet after having granted a no-objection certificate under Section 144 of the Petroleum Product Act.
Issues: 1. Whether the appointment of the respondent as a dealer of a retail outlet for petroleum products was arbitrary and should be cancelled. 2. Whether the District Magistrate was justified in issuing an order restraining the respondent from proceeding with the construction of the retail outlet.
Ratio Decidendi: 1. The court held that the site was not an essential criterion of eligibility for the dealership and that the Corporation had the discretion to select a site within the limits of the approved trading area. The court also found that the selection board had acted fairly and reasonably in selecting the respondent and that there was no evidence of arbitrariness or discrimination. 2. The court held that the District Magistrate had acted arbitrarily in issuing an order restraining the respondent from constructing the retail outlet after having granted a no-objection certificate under Section 144 of the Petroleum Product Act.
Final Decision: The court dismissed the petitioner's writ application and allowed the respondent's writ application. The court also quashed the order issued by the District Magistrate restraining the respondent from constructing the retail outlet.
NAGENDRA RAI, J.
1. Both the writ applications are connected matters and as such with the consent of the parties they were heard together at the stage of an admission itself and are being disposed of by this common order. In C.W.J.C. No. 2401 of 1994 Maheshwar Prasad Singh has prayed for a direction to the respondents Hindustan Petroleum Corporation Limited, the Oil Selection Board (East) and the Officers of the Hindustan Petroleum Corporation Limited to appoint him a dealer of retail outlet of petroleum products at the place mentioned in the advertisement and to cancel the appointment of Rakesh Kumar (Respondent No. 5) as a dealer of the retail outlet.
2. C.W.J.C. No. 7503 of 1994 has been filed by Rakesh Kumar for quashing the order of the District Magistrate, Begusarai dated 16-8-1994 by which he has ordered that grant of "no objection certificate" shall be considered after disposal of case by the High Court and has stopped construction of retail outlet by him and for a direction to the District Magistrate not to cause unnecessary harassment and obstruction to him in construction and running of the retail outlet. A copy of the said order has been annexed as Annexure-32. He has also made a prayer for restraining the officers of the Hindustan Petroleum Corporation Limited from acting upon the aforesaid letter dated 16-8-1994 and for a direction to the employees of the Hindustan Petroleum Corporation Limited not to remove the equipments from the premises as he has been prevented from selling M.S. / H.S.D. due to obstruction put by the District Magistrate, Begusarai.
3. For the sake of convenience Maheshwar Prasad Singh will be referred as the petitioner, Rakesh Kumar as respondent and the Hindustan Petroleum Corporation Limited as the Corporation.
4. The Corporation on 17th March, 1989 issued an advertisement in the newspapers for appointment of a dealer owning retail outlet at Begusarai Zero Mile Junction of N.H. 28/N.H. 31 under general category. The eligibility for applying for the dealership was given in the advertisement. It was also stated therein that the details of the eligibility criteria and conditions as mentioned in the application form will be applicable. A copy of the advertisement has been annexed as Annexure- I in both the writ applications.
5. The petitioner, the respondent and others, filed applications for the dealership. All the applications were sent to the old Selection Board (East) and interview letter was issued to the petitioner and the respondent and in pursuance of which they appeared before the Selection Board. The Selection Board selected the respondent. In pursuance of which on 7-5-1993 the Hindustan Petroleum Corporation wrote a letter to the respondent offering him for the dealership of retail outlet under the terms and conditions mentioned therein. A copy of the same has been annexed as Annexure-3 to the Writ Application No. 7503/94. It was clearly stated in the said letter that the respondent should procure a suitable plot of land either purchased or leased within a period of four months from the date of the issue of the letter after getting suitable clearance from the Corporation in writing for a particular plot of land. It was also mentioned therein that the respondent should resign from service if he is employed. "The respondent after receiving the aforesaid letter tendered his resignation from the post of Lecturer on 14-6-1993 the Corporation wrote a letter to the petitioner for the site plan of the suitable site to enable it for making the layout plan. The respondent complied with the aforesaid directions and offered plot Nos. 143, 144 and 145 (Parts) under khata No. 89 at Begusarai for opening the retail out-let as mentioned in the said application. On 7-8-1993 the Corporation wrote a letter requesting the District Magistrate to issue no objection certificate to commission a retail outlet on the aforesaid plots and on 7-10-1993 the District Magistrate issued a no objection certif
