Full Judgment Text
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 20.02.2019
+ W.P.(C) 580/2015
SATISH AHUJA ..... Petitioner
Versus
UNION OF INDIA & ORS. ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr Pranav Sachdeva and Mr Jatin Bhardwaj
For the Respondents: Ms Mrinalini Sen, Ms Nidhi Raman and Mr
Tanmay Yadav for UOI.
Ms Sonali Kumar for R-2/IOCL.
CORAM
HON’BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. The petitioner was operating a retail outlet for petroleum
products in Ghaziabad, which was shut down as the Ghaziabad
Development Authority (GDA) did not renew the lease on terms as
acceptable to respondent no. 2 (IOCL). The petitioner has filed the
present petition, inter alia , praying that directions be issued to
respondent no. 2 (IOCL) to grant revival of the dealership or
resitement of a retail outlet. Further, the petitioner prays that IOCL be
directed to compensate the petitioner for the alleged losses suffered by
him for maintaining the retail outlet while it was closed.
W.P. (C) 580/2015 Page 1 of 10
2. The petitioner contends that the action of the IOCL to terminate
the dealership agreement with the petitioner is contrary to the De-
Leasing policy issued by the Ministry of Petroleum and Natural Gas
issued on 28.04.2010 (hereafter ‘the Policy’). The petitioner submits
that as per Clause 1.3 of the Policy, the IOCL is obliged to explore the
possibility of a negotiated settlement for renewal of a lease agreement
This is disputed by the IOCL, which contends that in line with the
Policy, it made earnest efforts to obtain the land upon which the
dealership was located. Further, it even made a representation to the
Ghaziabad Development Authority (GDA), the lessor of the said land,
to purchase the said land. However, the reserve price of the said land
was commercially unviable for the IOCL.
3. It is the petitioner’s case that under the guidelines for
Reconstitution, Resitement and Revival of Retail Outlets issued on
17.11.2005 (hereafter ‘the Guidelines’), the petitioner is entitiled for
resitement, as his dealership was closed for reasons not attributable to
him. IOCL disputes the aforesaid claim and contends that the
petitioner had tendered his resignation voluntarily and, therefore, the
petitioner is not entitled to resitement of the dealership. It further
claims that in terms of the guidelines, resitement can be done only if
the dealer arranges the land for the same.
Factual Background
4. The petitioner’s father was an erstwhile officer of IOCL and
after his superannuation, had entered into a Dealership Agreement
with IOCL on 26.04.1974 (hereafter ‘the Agreement’) for running an
W.P. (C) 580/2015 Page 2 of 10
‘A’ category retail outlet located on land leased by the GDA to the
IOCL. The Agreement was renewed on 20.03.1983.
5. After the death of the petitioner’s father, the Agreement was
renewed in the name of the petitioner on 06.03.1992. The lease
agreement entered into between the IOCL and the GDA expired on
12.08.2008, and the GDA thereafter refused to renew the lease.
6. The petitioner contends that he approached IOCL on various
occasions requesting the IOCL to renew the lease, however, IOCL
failed to take timely steps to negotiate with the GDA. On 22.10.2012,
the GDA directed the petitioner to vacate the premises and shut the
operation of the petrol pump within a period of fifteen days. On
22.10.2008, the GDA directed the petitioner to vacate the premises.
7. IOCL submits that considering the GDA was not inclined to
renew the lease of the premises, IOCL also considered the option to
purchase the premises from the GDA, but the circle rate as demanded
by the GDA was not acceptable to IOCL for commercial reasons.
Alternatively, IOCL requested the GDA to grant an alternate site,
however, this was also not acceded to by the GDA.
8. On 10.11.2012, the petitioner requested IOCL to allot a
Company Owned Company Operated (COCO) Outlet to him, on a
temporary basis. However, the petitioner submits that various
representations made to IOCL by him were not responded to.
9. On 20.06.2013, the IOCL intimated the petitioner that it was
currently negotiating with the GDA to sell the premises to IOCL,
however, as the price demanded by the GDA was high, IOCL would
not be able to do so.
W.P. (C) 580/2015 Page 3 of 10
10. On 25.09.2013, the petitioner tendered his resignation as he was
unable to continue to bear the expenses of the closed outlet. In view of
the above, IOCL terminated the Agreement on 17.12.2013. On
22.08.2014, the petitioner requested resitement from IOCL. However,
the petitioner submits that he did not receive a reply in this regard.
Reasons and Conclusion
11. The first and foremost question to be addressed is whether the
petitioner is entitled for resitement of the retail outlet dealership, given
that he had tendered his resignation to act as a dealer on 25.09.2013
and the dealership agreement with IOCL was thereafter terminated. In
this regard, it is admitted that the petitioner had tendered his
resignation owing to the prolonged closure of the retail outlet in
question. Admittedly, the GDA had directed the closure of the retail
outlet pursuant to which it was closed in November, 2012.
Notwithstanding the closure, the petitioner had continued to bear the
expenses of the staff and other utilities till the termination of the
dealership pursuant to the petitioner’s resignation. It is obvious that
the petitioner had no other recourse but to request for termination of
the dealership since he could not be expected to continue with the
same, even after the retail outlet had been closed.
12. In the counter affidavit filed on behalf of the IOCL, it is averred
that a hearing was afforded to the petitioner after submission of his
resignation, and it was specifically inquired from him whether he had
submitted his resignation under any duress or pressure. The petitioner
W.P. (C) 580/2015 Page 4 of 10
had repeatedly confirmed that he had resigned out of his own free will
and, not under any coercion or pressure. It is, thus, contended on
behalf of the IOCL that the petitioner cannot now claim any benefit of
resitement. This contention is unpersuasive, as there is no controversy
as to the reasons which compelled the petitioner to submit his
resignation and seek closure of the dealership agreement.
13. The record is also replete with communications sent by the
petitioner calling upon the IOCL to take the necessary steps for
securing extension of the lease for the retail outlet from the GDA.
More importantly, the petitioner had also sent various letters seeking
allotment of an alternative site, prior to the termination of the
dealership. The learned counsel appearing for the petitioner has also
drawn the attention of this Court to the letters dated 10.11.2012,
17.11.2012 and 24.11.2012, sent by the petitioner requesting the IOCL
for allotment of a COCO retail outlet.
14. In the circumstances, this Court is of the view that the
petitioner’s request for resitement cannot be rejected on the ground
that he had submitted his resignation and had sought termination of
the dealership agreement.
15. The next question to be addressed is whether the petitioner is
entitled to resitement in terms of the policies as framed by the IOCL.
The petitioner has relied on the circular dated 03.08.2002 (Circular
No. 39/07-02), which sets out the guidelines for resitement of retail
outlet dealership. Clause (e) of Article 1 of the said guidelines is
relevant and, is set out below:-
“ 1 Conditions for Resitement :
W.P. (C) 580/2015 Page 5 of 10
Resitement of Retail Outlet can be carried out to
the following illegible:
(a)
(b)
(c ) *
(d ) *
(e) Dealer is forced to vacate existing site by the
lessor or any authority after exhausting all legal
remedies.”
16. Similarly, in terms of the Circular issued pursuant to a letter
dated 17.11.2005 by the Ministry of Petroleum and Natural Gas
(MoP&NG), the resitement of a commissioned dealership could be
considered on various grounds, including, in cases where a dealer is
forced to vacate existing site by the lessor or any other authority.
Clause (f) of Sub-Paragraph 3.2.1 of the said circular is set out
below:-
3.2 Resitement of a commissioned dealership
3.2.1 Resitement of a commissioned
dealership may be considered on the
following grounds :
(a) *
(b)*
(c )
(d)
(e)
(f) Dealer is forced to vacate existing
site by the lessor or any authority after
the dealer has exhausted all legal
W.P. (C) 580/2015 Page 6 of 10
remedies upto High Court.
17. In view of the above, there can be little dispute that the
petitioner is eligible for resitement as the retail outlet had been shut
down due to the lessor (GDA) not renewing the lease. However, it
does not necessarily follow that the IOCL must allot a fresh site to the
petitioner. Plainly, such allotment would also be subject to availability
and other conditions. The aforesaid guidelines and policy merely
indicate the eligibility of a dealer for seeking resitement. This,
undoubtedly, is established in the case of the petitioner.
18. In the present case, the IOCL has stated that it has been unable
to accede to the petitioner’s request since the petitioner has not
provided any land for the retail outlet. It has been stated that the
current policy requires a dealer to also make available the land either
on a lease or on an outright sale basis.
19. Ms Kumar, learned counsel appearing for IOCL, had also
referred to a policy circular dated 04.10.2012 (Circular No. 205-
10/2012). The learned counsel appearing for the petitioner had drawn
the attention of this Court to Sub-Clause (2) of Clause 1.4 of the said
circular which stipulated that the onus to provide land will be on
dealer. Clauses 1.2, 1.3 and 1.4 of the said Circular are set out below:-
“ 1.2 Resitement has to be with the same dealer .
1.3 The resitement will be permitted in the same class
of market within the sameState except for cases
covered in para.1.4 & 1.5.
W.P. (C) 580/2015 Page 7 of 10
1.4 Resitement within State/UT boundaries ( in any
class of market ) can be allowedin following
cases:
i. For ROs meeting current resitement norms
w.r.t. road relateddevelopments at the site,
acquisition of RO site / being forced to
vacate /surrender the site, will be allowed
resitement in any class of marketwithin the
Statel UT boundaries
ii. In all such cases, onus to provide land will
be on dealer.
iii. In case of Corporation owned / leased sites,
where Companies have tovacate / surrender
the site, resitement will be carried out only
afterobtaining. approval for surrendering
the site from Board / Sub Committeeof the
Board.
iv, In other words, resitement on account of
reasons not covered in para (i)above will
continue to be governed by the norm of
being within “sameclass/ state”.”
20. A plain reading of Clause 1.3 indicates that the resitement in the
same class of market within the same State would be permitted.
Clause 1.4 of aforesaid Circular pertains to resitement within the
State/UT boundaries in any class of market. Mr Sachdeva, learned
counsel appearing for the petitioner, contended that a plain reading of
the aforesaid clauses indicates that the stipulation, that a dealer would
provide the land for the retail outlet, is not applicable to resitement
within the same class of market within the same State. This is clearly
W.P. (C) 580/2015 Page 8 of 10
a contentious issue. The interpretation of Clauses 1.3 and 1.4 as
canvassed by Mr Sachdeva, appears plausible. However, it is
necessary to bear in mind that the said clauses set out the policy
adopted by the IOCL, and it would be necessary to accept the
interpretation of IOCL regarding its own policy. So long as the IOCL
uniformly follows the same, the petitioner’s grievance would be
unjustified. In this case, IOCL has unequivocally stated that it is not
providing resitement to any dealer, unless, the dealer is able to arrange
for the land. A plain reading of Clause 1.4 of the said policy also
indicates the same.
21. Having stated the above, even if the petitioner’s contention that
in terms of Clause 1.3 of the said policy resitement in the same class
of market is permitted without the necessity of arranging for the land
is accepted, the same cannot lead to the conclusion that the IOCL is
obliged to resite the petitioner’s dealership. As noticed above, the
same would necessarily have to be subject to availability of sites and
compliance of other conditions.
22. In the present case, the petitioner is seeking resitement in sites
located in Delhi. Clearly, the same does not fall under Clause 1.3 of
the said policy, which only permits resitement in the same class of
market within the said State.
23. It is affirmed on behalf of the IOCL that a site is not available
within the State or the same market, being offered for resitement. In
this view, IOCL’s decision to not to accede to the petitioner’s request,
cannot be faulted.
W.P. (C) 580/2015 Page 9 of 10
24. It was contented on behalf of the petitioner that the petitioner
could be allotted COCO retail outlet. The petitioner’s request in this
regard also cannot be accepted as the petitioner’s case does not fall
within the COCO divestment guidelines as approved by the Ministry
of Petroleum and Natural Gas. IOCL has placed on record the
amended guidelines for COCO divestment as approved by the
MoP&NG by a letter dated 03.08.2016. In terms of the said
guidelines, COCO sites are available to the persons as specified
therein. Dealers belonging to SC/ST Category whose retail outlet site
is acquired by Government/Government Agencies are entitled for
being granted a COCO site. However, there is no provision for
allotment of a COCO site for resitement of dealers from the general
category.
25. IOCL has filed an affidavit unequivocally affirming that there is
no site available with IOCL in the National Capital Region and in
terms of the policy being followed land has to be arranged by the
dealer as IOCL cannot find and finance such land.
26. In view of this unequivocal statement, the petitioner’s claim for
resitement without arranging of any land cannot be accepted. Thus, the
reliefs as prayed for by the petitioner cannot be granted.
27. The petition is, accordingly, dismissed.
VIBHU BAKHRU, J
FEBRUARY 20, 2019 /pkv
W.P. (C) 580/2015 Page 10 of 10