Dahadaya Samabay Krishi Unnayan Samity Ltd. vs Union of India and Others

Sattabrata Sinha, J.—The petitioner has filed the aforementioned writ application claiming, inter alia, the following reliefs :

(a) A Writ of Mandamus, or a writ in the nature thereof commanding the respondents to act and proceed in accordance with law directing the respondent authority to allot dealership of Retail outlet at Digha in favour of the petitioner-society by giving preference to the petitioner ion relation to Unemployed Graduate individual person as per conditions and promises made in the advertisement published in the Ananda Bazar Patrika on 30-10-1995 by Marketing Division. Eastern Region, within a specified period as may be specified by this Hon''ble Count;

(b) A Writ of Certiorari or a writ in the nature thereof requiring the respondents to certify and transmit all records of the instant case so that conscionable Justice may be rendered by cancelling the proposal for allotment of Dealership for the establishment of Retail-outlet of Indian Oil Corporation Ltd. at Digha in favour of the respondent No. 6 as per the advertisement published by the said Company in Ananda Bazar Patrika dated 30th October, 1995.

The fact of the matter is not much in dispute. Pursuant to an advertisement the petitioner as also the respondent No. 5 submitted tenders for allotment of Retail-outlet dealership within P.S. Digha. As per the notice inviting tender all things been equal, preference was to be given to a Consumer Co-operative Society. The petitioner contends as it was the only Consumer Co-operative Society, the Oil Selection Board committed a mistake in preparing a panel consisting of the respondent No. 5 and the petitioner.

Admittedly the land which was offered by the respondent No. 5 for installation of the petrol pump was not approved by the Indian Oil Corporation. Indian Oil Corporation, however, obtained lands from Digha Development Authority in terms of an indenture dated 25-2-1997. It has further been stated that the site of the said proposed pump is violative of clause 41 of the recommendations issued by the Indian Roads Congress entitled Recommended Practice for Location and Lay out of Roadside Mostor Fuel Filling and Motor Fuel Filling cum Service stations; in terms whereof a clear distance between two adjacent fuelling stations of not less than 300 meters should be maintained.

Mr. Sircar, Learned Counsel appearing on behalf of the private respondent, however, submitted that the petitioner is not a Consumer Co-operative Society and, thus, it has not locus standii to file the impugned writ application. The Learned Counsel submits that the question of selection of a person fit to be granted a Retail-outlet dealership having been entrusted to the Oil Selection Board, this Court should not interfere in the matter. The Learned Counsel appearing on behalf of the Indian Oil Corporation and the Oil Selection Board submitted that the petitioner has merely a right to a preferential treatment only when both the parties are found equal in all other respects. It was submitted that in the Manual for Selection of Dealers and Distributors published by the Respondent-Corporation it has been laid down that extension of the time limit relating to offer of site for installation of fuel filling station may be allowed by the competent authority in suitable cases, i.e. beyond a period of 9 months. The respondent No. 5 arranged, and gave inspection of site to the Indian Oil Corporation was not approved whereafter, for the benefit of the consumers, the private respondent was advised to provide a suitable site at New Digha area. As no private land was available at New Digha, the Indian Oil Corporation approached the Digha Development Authority and a plot of land was arranged for the respondent No. 5 and extension of time for the said purpose was also allowed.

The notice inviting tender as contained in Annexure "B" to the writ application which was published in Ananda Bazar Patrika on 30.10.1995 clearly states that the proposal for the appointment of dealership for Retail-outlet by the Indian Oil Corporation was to be considered in respect of a land situated in the areas stated therein under the ownership of the dealer.

The respondent Corporation, thus, could not have acted beyond the aforementioned notice inviting tender. It is not disputed that Oil Selection Board prepared a plan wherein the name of the respondent No. 5 was at serial No. 1 and that of the petitioner was at serial No. 2. The Manual for Selection of Dealers and Distributors provides :

i) Procure a suitable plot of land either purchased or leased initially for a period of 10 years with renewal option thereafter for a minimum period of 5 years for providing storage/dispensing facilities. The same has to be got cleared from the Division/Regional/Area Office in writing.

ii) Procure all financial/other arrangements for operating the dealership.

A constant follow up should be maintained by the field force to ensure that the dealer/distribution-select is given all possible assistance to complete the formalities as stipulated in the LOI within 4 months. If no progress is made by the dealer/distributor-select within the period of 4 months immediate action should be taken to withdraw the LOI and issue a fresh LOI to the second candidate empanelled, if any, after taking approval of the competent authority.

In case where the dealer/distributor-select has made sufficient progress but due to certain genuine difficulties it has not been possible for him/her to fulfil the conditions laid down in the LOI within 4 months, such cases should be taken up at the Divisional level for taking approval of the competent authority for extending the validity of the time limit of the LOI. The competent authority may extend the time limit by another 2 months.

In case even after a period of 6 months (initial 4 months extended 2 months) the dealer/distributor-select due to genuine problems fails to fulfil the conditions laid down in the LOI, the same should be reviewed at the Divisional/Regional/Area Office level. Thereafter, if felt necessary, such cases should be forwarded to the Competent Authority for grant of further extension, for this purpose, while forwarding such cases to the Competent Authority following procedure should be strictly adhered to by Divisional/Regional/Area Office.

a) A letter from the party indicating the progress made and assuring that the facilities would fee arranged as mentioned in the LOI, Should be taken.

b) A report from the Divisional/Regional/Area Office indicating the progress made by the party and their assessment whether the party would be able to arrange the facilities as mentioned in the LOI within the extended time, should be attached. Extension of time should be recommended by Divisional/Regional/Area Office, with full justification.

In respect of the sites for Retail-outlet/2/3 Wheeler Retail-outlet/SKO-LDO dealerships and LPG distributorships and show room (for LPG) by the dealer/distributor-select, the same has to be inspected by the concerned officials of the Divisional/Regional/Area Office upon suitable communication. Thereafter, a letter should be given to the dealer/distributor-select about its suitability or otherwise under Registered A/D.

A bare perusal of the aforementioned manual for selection of dealers and distributors together with the notice inviting tender dated 30.10.1995 does not leave any room for doubt that a petrol pump could be installed only upon a land belonging to the dealer. In the instant case, as the land offered by the respondent was not approved by the Indian Oil Corporation it could not have considered his candidature despite the fact that it was selected by the Oil Selection Board. The respondent Corporation could not have also changed the site from Digha to New Digha, which is a separate township and the lands situate therein being to the Digha Development Authority. The petitioner in its affidavit-in-reply categorically stated that the plot shown by the respondent was out of Digha and thus the said respondent was incapable of furnishing a suitable plot at Digha. It is realty a matter of great surprise as to why the Indian Oil Corporation which is a ''State'' within the meaning of Article 12 of the Constitution of India went out of its way when the dealer failed to fulfil the essential conditions of notice inviting tender by procuring a piece of land from the Digha Development Authority. It is'' not part of the Job of the Indian Oil Corporation to procure a land on behalf of the dealer which caused drainage of its own fund, inasmuch as it has got settlement of the said land on payment of a sum of Rs. 32,81,250/- by way of Salami and by doing so, the respondent Corporation has not only gone beyond the notice inviting tender but has travelled beyond its own policy decision namely manual for selection of dealers and distributors.

The respondent Corporation has not produced any record show as to how the matter was dealt with. In view of policy decision upon which the Learned Counsel for the respondents, heavily relied upon, it was for the respondent to satisfy this Court as to how and in what manner they took steps for implementation thereof. It is not disputed that there had been a flagrant violation of the provisions of the said manual. Had it been known to the persons who did not have suitable lands that they also would have been entitled to be considered pursuant to the said notice inviting tender, as Indian Oil Corporation may also procure suitable land on their behalf they would have also offered their own candidature. Such a deviation or departure in respect of an essential condition of the notice inviting tender is violative of Article 14 of the Constitution of India. Reference in this connection may be made to Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, The conduct of the respondent Corporation by obtaining settlement of the land for the petitioner is also against its own policy decision, although, it could not have made any deviation or departure therefrom, inasmuch as the same would attract Article 14 of the Constitution of India. Reference in this connection may be made to State of Mysore and Another Vs. H. Srinivasmurthy, . The contract, therefore suffers from malice in law as the power of the respondent Company had been used for unauthorised purposes. A finding of mala fide on the part of the respondents can be arrived at from a cumulative effect of various conduct on its part. In the instant case, the mala fide on the part of the respondent Corporation is apparent on the fact of its own records. In Akhileshwar Mishra Vs. State of Bihar and Others relied upon a decision of the Bombay High Court (4) Bal Kalyani and others Vs. State of Maharashtra and others, it was held :

While evaluating a plea of mala fide, quite often, the Government files would give helpful clues, about objective facts. A party, totally strange to the notings in the file and the processing of the papers, would not be in a position effectively to mention with precision the events which twisted a given trend of opinion. The files, therefore, would throw such light when the Court is confronted with allegations of one party and denial of the other. The Supreme Court has indicated that while moving along the track of Government''s decision making process, the Court should not be unduly swayed either by a feature like excessive speed or a flash pointed expeditious action.

It was further held :

While evaluating a plea of mala fide. Court has to bear in mind that all the allegations are to be taken together and an inference to be drawn (see observations in Hem Lall Bhandari Vs. State of Sikkim and Others, Deepak Sibal Vs. Punjab University and Another, and Express Newspapers Pvt. Ltd. and Others Vs. Union of India (UOI) and Others,

In F.M.A.T. No. 3158 of 1985(8) Shri J.L. Mukhopadhayay v. State of West Bengal disposed of on 15.3.1996, a Division Bench of this Court has followed the said decision.

Any action by a State for unauthorised purpose would constitute malice in law. Reference in this connection may be made in the Manager.

In State of U.P. and Others Vs. Hindustan Aluminium Corpn. and Others, it is stated that malice in law is another aspect of the doctrine of ultra vires, for an offending act can be condemned simply for the reason that it is unauthorised. Bad faith has often been treated as interchangeable with unreasonableness and taking a decision on extraneous considerations. In that sense, it is not really a ground of invalidity. It is well settled that if a discretionary power has been exercised for Unauthorised Purpose" that it is enough the Court''s review, as has been said quite widely but properly by Rand, J. in Roncerelli v. Duplessis, 1959 SCR 121, 141 (Canada Law Report) malice is "acting for a reason and purpose knowingly foreign to the administration."

In this view of the matter the award of the contract in favour of the respondent No. 5 cannot be sustained. In view of the findings aforementioned, it is not necessary to consider as to whether the recommendations made by the Indian Road Congress for maintenance of a clear distance of 300 metres between two petrol pumps is mandatory or not.

So far as the contention of the Learned Counsel for the respondent to the effect that the petitioner is not a Consumer Co-operative Society is concerned, the same is not required to be decided, inasmuch as it was for the Oil Selection Board to consider the same. Only in the affidavit-in-opposition the Oil Selection Board as well as the Indian Oil Corporation had echoed the statements of the private respondent to the effect that the petitioner is not a Consumer Co-operative Society and although the petitioner has produced all the relevant records before them, no such finding was arrived at against the petition during the selection process. Even if the petitioner was not a Consumer Co-operative Society, it did not lack the essential qualifications to participate in the tender, inasmuch as in that event it would not have only been able to get a preference over the unemployed graduates.

The contention of the Indian Oil Corporation to the effect that Digha Development Authority does not settle land in favour of private persons cannot be accepted in absence of any proof" to the effect inasmuch as no document to prove the same has been shown to this Court.

In fact a writ petition has been filed by one of the persons who has questioned the grant of Retail-outlet dealership at New Digha by the Indian Oil Corporation in violation of the recommendations of the Indian Oil Corporation appears to have stated that he had taken settlement of the land from the Digha Development Authority. In fact the pendency of the said writ application has also been mentioned in the written submissions of the petitioner. In this view of the matter the writ application has to be allowed. There cannot be any doubt whatsoever that in the instant case the respondents are guilty of violation their own policy decision and thus they have committed an illegality in the decision making process. This case, thus, squarely comes within the purview of judicial review. The decision cited on behalf of the Oil Selection Board in Chinmoy Sarkar and etc. Vs. Md. Shaniat Hossain and etc., and B.K. Bose v. S.P. Bhagat in F.M.A.T. No. 946 of 1987 dated 14.5.1986 are not relevant to this case and this Court is not concerned with the selections made by the Oil Selection Board.

This application is, therefore, allowed and the respondents are directed not to give effect to the agreement entered into by and between itself and the private respondent. The respondent Corporation may proceed to act in accordance with law in respect of grant of dealership of Retail-outlet at Digha. In the facts and circumstances of the case the petitioners are also entitled to costs to be borne by the Indian Oil Corporation. Advocates fee assessed at 200 G. Ms.