High Court of Calcutta
Sanjib Banerjee, J.
Anand Narayan Singh – Appellant
Versus
Union of India – Respondent
W.P. No. 1077 (W) of 2010 with C.A.N. No. 638 of 2010; with W.P. No. 6403 (W) of 2009
Decided On: Feb 18, 2010
LAND DISPUTE - RESCISSION OF AGREEMENT - LICENCE FOR PETROL PUMP - CIVIL SUIT FOR SPECIFIC PERFORMANCE - STATUS QUO ORDER IN APPEAL - LICENSING AUTHORITY'S RELIANCE ON STATUS QUO ORDER - VALIDITY - JUDICIAL REVIEW.
Fact of the Case:
The petitioner entered into an agreement with BPCL to sell a land for operating a petrol pump. The agreement provided a right to rescind the agreement if due steps were not taken within the stipulated time. The petitioner rescinded the agreement and applied for cancellation of BPCL's licence. The licensing authority cancelled the licence but the appellate authority set aside the order. The petitioner filed a writ petition which was disposed of on the ground that the petitioner was not given an opportunity to present its case. BPCL filed a civil suit for specific performance of the agreement and obtained an ad interim order restraining the petitioner from selling the property or interfering with BPCL's possession. The appellate authority directed the licensing authority to issue a provisional licence to BPCL. The licensing authority renewed the licence on the basis of the status quo order passed by the High Court in the appeal from the interlocutory order in the civil suit. The petitioner filed another writ petition challenging the licensing authority's order.
Finding of the Court:
The Court held that the licensing authority erred in relying solely on the status quo order passed in the civil suit, as the scope of the suit did not encompass BPCL's right to carry on business at the relevant premises. The Court also held that the licensing authority failed to independently apply its mind to the matter and consider other relevant factors.
Issues: Whether the licensing authority erred in relying solely on the status quo order passed in the civil suit to renew BPCL's licence.
Ratio Decidendi: The Court held that the licensing authority's decision-making process was flawed as it failed to consider relevant factors and relied solely on an order passed in a suit where BPCL's right to carry on business at the site was not in issue. The Court stated that the licensing authority has to independently apply its mind to the matter and take into account all relevant considerations before granting or renewing a licence.
Final Decision: The Court allowed the writ petition and set aside the licensing authority's order of December 31, 2009 and the subsequent extension of the provisional licence till February 28, 2010. The Court also clarified that the licensing authority is free to consider the relevant factors and take a decision on the application for grant or renewal of licence in accordance with law.
1. THE two petitions involve common questions. It is also submitted by the common petitioner that the subsequent petition is the more exhaustive and an order made on the subsequent petition will govern the previous matter.
2. THE writ petitioner entered into an agreement with Bharat Petroleum Corporation Limited (BPCL) on January 14, 2006 for selling a land in Hooghly district. THE agreement envisaged that certain payments were to be made by BPCL to the petitioner within a stipulated time. Clause 6 of the agreement gave the would be vendor a right to rescind the agreement in the event due steps were not taken within the time stipulated. It is the petitioner's case that by April 30, 2007 meaningful steps had not been taken by BPCL whereupon the petitioner issued a letter rescinding the agreement. THE petitioner says that notwithstanding the agreement having been rescinded, BPCL has continued to be in illegal possession of the land and has unfairly obtained permission from the licensing authority for operating a petrol pump at the site.
There is a history to the matter. Shortly after the petitioner rescinded the agreement of January 14, 2006, the petitioner applied to the licensing authority, the Additional District Magistrate (Development), Hooghly, for cancellation of the licence issued in favour of BPCL for operating a petrol pump at the site. By an order of December 29, 2008 the licensing authority annulled the licence. BPCL carried such order in appeal and the appellate authority set aside the licensing authority's order on January 27, 2009.
3. THEN followed the first writ petition before this Court. The petitioner herein challenged the appellate authority's (Commissioner) order in W.P. 1712 (W) of 2009. Such petition was disposed of on February 11, 2009 on the ground that the petitioner had not been afforded an opportunity of presenting the petitioner's version of things before the order was made. The order of February 11, 2009 made it clear that the merits of the matter had not been gone into. Before the appellate authority could reconsider the matter in terms of the High Court order of February 11, 2009, BPCL had instituted a civil suit seeking specific performance of the agreement of January 14, 2006. An ad interim order was made therein. The writ petitioner herein, as the defendant in the suit, also applied for an interlocutory injunction. Both the plaintiff's and the defendant's applications were finally disposed of by a common judgment and order of March 4, 2009. The Civil Court restrained the writ petitioner herein from selling the suit property to any third person and further restrained the writ petitioner from interfering with BPCL's possession of the properly till the disposal of the suit.
4. IN point of time, the appellate authority's order came next. Pursuant to the remand of the matter before the appellate authority in terms of the High Court order of February 11, 2009, such authority heard the appeal from the order dated December 29, 2008 and directed on March 24, 2009 that a provisional licence be issued in favour of BPCL for operating the petrol pump. IN terms of the appellate order, the licensing authority issued a licence on March 26, 2009 upto December 31, 2009. The order of the appellate authority came to be challenged in the second writ petition filed before this Court. On receiving W.P. 6403 (W) of 2009, no interim order was made on August 27, 2009.
The Civil Court's order of March 4, 2009 was carried in appeal before this Court on its appellate side and by an order dated May 21, 2009 the Appellate Court required the parties to maintain status quo as on that date,
"As regards possession, nature and character of the disputed property and the order of injunction granted by the Trial Court, as regards transfer, alienation or encumbrance of the suit property shall remain operative."
5. THE order impugned in the present proceedings is one that has been passed by the licensing authority on December
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