Lack of standing to complain against the setting up of a rival retail outlet promoting competition and benefiting consumers

Markandey Katju, C.J.

1. This writ appeal has been filed against the order dated 2.11.2004, passed by he learned single judge, rejecting the interlocutory application for interim injunction filed by the appellant herein.

2. The appellant, who is running a petroleum retail-outlet in Pondicherry, filed the writ petition, challenging the grant of dealership to the fourth respondent herein by the second respondent. In the said writ petition, the appellant filed an interlocutory application for grant of interim injunction, restraining the respondents 2 and 4 from starting a retail outlet within one kilometer’s radius of his retail outlet. The learned single Judge dismissed the injunction application against which, the present appeal has been filed.

3. The Supreme Court in Mithilesh Garg v. Union of India , AIR 1992 SC 443, held that a rival businessman cannot file a writ petition, challenging the setting-up of a similar unit by another businessman, on the ground that establishing a rival business close to his business-place would adversely affect his business interest, even if the setting-up of the new unit is in violation of law. In Mithilesh case , cited supra, the Supreme Court followed its own decision in Rice and Flour Mills v. N.T. Gowda , AIR 1971 SC 246, wherein it was held that a rice mill-owner has no locus standi to challenge under Art. 226, the setting up of a new rice-mill by another even if such setting up be in contravention of S.8(3)(c) of the Rice Milling Industry (Regulation) Act, 1958 because no right vested in such an applicant is infringed.

4. In the present case, the only grievance of the appellant is that if the fourth respondent is permitted to set up her retail outlet within one kilometer radius of the appellant’s outlet, his business interest would be adversely affected. In our opinion, the appellant has no locus standi at all to complain against the setting up of a rival retail outlet by the fourth respondent, near his place of business, on the ground that would affect his business interest, inasmuch as the damage, if any, suffered thereby was damnum sine injuria - damage without infringement of legal right. In our opinion, this will only result in promoting competition among the traders, which is good for the consumers. Merely because some of the customers may switch over to the rival retail outlet does not mean that public interest will suffer rather, in our opinion, it will benefit the consumers because, when there is competition, the businessmen are compelled to provide better quality products at reasonable rates.

5. For the reasons given above, we see no merit in the appeal. The appeal is dismissed. Connected WAMP No. 7646 of 2004 is closed.