Facts
The petitioner was selected for a "Sheheri Vitrak" LPG distributorship at New Alipore following an advertisement published on October 16, 2018
Source reference: p. 2A Letter of Intent (LOI) was issued to her on August 2, 2019
Source reference: p. 3Under the LOI and Unified Guidelines, the petitioner was required to commission the distributorship within four months
Source reference: p. 5, 12The petitioner repeatedly requested extensions and offered alternative land for the showroom and godown after discrepancies were found in the original plot
Source reference: p. 3-4Despite multiple show-cause notices issued by the Indian Oil Corporation Limited (IOCL) between 2020 and 2022 regarding the lack of progress, the petitioner failed to complete construction
Source reference: p. 5-7Inspection in June 2022 revealed no progress on the godown and stalled work on the showroom
Source reference: p. 7Consequently, the IOCL withdrawn the LOI and forfeited the deposit on July 21, 2022
Source reference: p. 1The petitioner challenged this withdrawal via a writ petition
Source reference: p. 1Issues
1. Whether the IOCL was justified in withdrawing the Letter of Intent (LOI) due to the petitioner’s failure to commission the distributorship within the stipulated or extended timeframes.
Source reference: p. 13-152. Whether the petitioner’s inability to obtain land conversion and complete construction constituted a breach of the Unified Guidelines and LOI terms.
Source reference: p. 15Law Applied
Unified Guidelines for Selection of LPG Distributorships, 2017, specifically Clause 7.1 (Showroom requirements), Clause 7.3 (Godown approvals from PESO), Clause 12.23 (LOI validity of four months), Clause 12.24 (strict conditions for extensions), and Clause 12.25 (Procedure for withdrawal of LOI)
Source reference: p. 9-12Terms of the Letter of Intent (LOI), specifically Clauses 5.1 and 5.2, which mandate commissioning within four months and empower the OMC to withdraw the LOI if progress is unsatisfactory
Source reference: p. 13Reasoning
The court found that approximately three years had passed since the issuance of the LOI in August 2019, yet the petitioner had failed to commission the distributorship
Source reference: p. 14-15Although the IOCL granted extensions and permitted alternative land, the petitioner did not fulfill the mandatory requirements of constructing a showroom and godown or obtaining statutory approvals
Source reference: p. 13-14The court noted that the petitioner’s application for land conversion was rejected by State authorities because the purported land was already sold by the original owner in 2006, rendering the petitioner unable to establish legal possession or suitability for construction
Source reference: p. 14-15The court reasoned that the petitioner had been given ample opportunity through multiple show-cause notices but failed to demonstrate significant progress even while protected by a court-ordered stay
Source reference: p. 15Holding
The court held that the IOCL’s decision to withdraw the LOI and forfeit the deposit was valid due to the petitioner’s non-compliance with the LOI terms and the Unified Guidelines
The court dismissed the writ petition (WPA No. 19200 of 2022), vacated the interim stay order dated November 7, 2022, and allowed the IOCL's application (CAN No. 1 of 2026) to proceed
Source reference: p. 15Original Court PDF
MAMTA SINGHvsINDIAN OIL CORPORATION LTD AND ORS
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