Madhya Pradesh High Court
Bs Sharma vs Hindustan Petroleum Corporation ... on 20 November, 2019
Author: Chief Justice
Bench: Ajay Kumar Mittal, Vijay Kumar Shukla, Chief Justice
WA-882-2019 & Linked matters
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THE HIGH COURT OF MADHYA PRADESH : JABALPUR
(DIVISION BENCH)
W.A. No. 882/2019
(B.S. Sharma & others v. Hindustan Petroleum Corporation Ltd. & Another)
With
W.A. No. 568/2019
(M/s Jawa Indane Gramin Vitrak v. Union of India & Another)
W.A. No. 579/2019
(M/s Indra Bharat Gas Gramin Vitrak v. Union of India & Another)
W.A. No. 589/2019
(Rajendra Kumar Kuderia v. Bharat Petroleum Corpn. Ltd. & Another)
W.A. No. 591/2019
(Shailendra Kumar Jain v. Indian Oil Corporation Ltd. & Another)
W.A. No.592/2019
(M/s Agroha Indane v. Indian Oil Corporation Ltd. & Another)
W.A. No. 646/2019
(M/s Harshit Bharat Gas Gramin Vitarak v. Indian Oil Corpn. Ltd. & Anr)
W.A. No. 647/2019
(M/s Pandey Gas Agency v. Union of India & others)
W.A. No. 667/2019
(M/s Mansi Gas v. Bharat Petroleum Corporation Ltd.)
W.A. No. 686/2019
(M/s Gaurihar Indane v. Union of India & others)
And
W.A. No. 706/2019
(LPG Cooking Gas Distributors Association v. Union of India & others)
WA-882-2019 & Linked matters
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CORAM: Hon'ble Shri Justice Ajay Kumar Mittal, Chief Justice
Hon'ble Shri Justice Vijay Kumar Shukla, Judge
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Present:
For the Appellants:
In WA-882-2019 : Shri K.C. Ghildiyal, Advocate
In WA-568-2019, WA-579-2019,
WA-646-2019, WA-647-2019, Shri Achyut G. Tiwari, Advocate
WA-667-2019, WA-706-2019
In WA-589-2019, WA-591-2019, &
WA-592-2019, Shri Sankalp Kochar, Advocate
In WA-686-2019 : Shri Rohit Pegwar, Advocate
For the Respondents:
For the Union of India : Shri J.K. Jain, Asst. Solicitor General
For Hindustan Petroleum Corpn. Ltd. : Shri Anoop Nair, Advocate
For Bharat Petroleum Corpn. Ltd. : Shri Kapil Jain, Advocate
For Indian Oil Corpn. Ltd. : Shri Satish C. Chaturvedi, Advocate
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ORDER (Oral)
[ 20.11.2019 ] Per: Ajay Kumar Mittal, Chief Justice:
This order shall govern the disposal of this batch of intra-court appeals bearing Writ Appeal Nos.882/2019, 568/2019, 579/2019, 589/2019, 591/2019, 592/2019, 646/2019, 647/2019, 667/2019, 686/2019 and 706/2019, as according to the learned counsel for the parties, the issues involved therein are identical. However, for the sake of convenience, the facts are extracted from Writ Appeal No.882/2019 (B.S. Sharma & others v.
Hindustan Petroleum Corporation Ltd. & Another).
WA-882-2019 & Linked matters 3
2. Challenge in W.A. No.882/2019 (supra) preferred under Section 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyay Peeth Ko Appeal) Adhiniyam, 2005 is to an order dated 07.03.2019 passed by the learned Single Judge in W.P. No.17809/2017 (B.S. Sharma & others vs. M/s Hindustan Petroleum Corporation Ltd. & Another) whereby a bunch of writ petitions relatable to the present appeals have been dismissed.
3. The facts of the case, in brief, are that the appellants-writ petitioners are engaged in the field of distributorship of Liquefied Petroleum Gas allotted by the respondent No.1 - Hindustan Petroleum Corporation Ltd. The appellant No.1 - Proprietor of M/s Nainika Enterprises, Arera Colony, Bhopal and appellant No.2 - Proprietor of M/s Vinayak Gas King, Narayan Nagar, Hoshangabad Road, Bhopal were allotted the LPG distributorship in the month of March, 2004 vide separate allotment letters whereas, the appellant No.3 - Partner, M/s Sunil General Store (HP Gas), M.P. Nagar, Bhopal was initially allotted LPG Distributorship by erstwhile KOSAN Gas in the year 1972 but after creation of Hindustan Petroleum Corporation Ltd. in the year 1982, appellant No.3 became their distributor for M.P. Nagar and a part of Arera colony E-1, E-2 and E-3. They have entered into separate distributorship agreements with the respondent-company and are carrying out their business activity in different areas of operation within their peripheral limit which has been defined by the respondent-Company subsequent to commissioning of the agency by them. The Government of India, Ministry of Petroleum and Natural Gas has issued Unified Guidelines for Selection of LPG Distributorship, 2016 (for short "the Guidelines"), which have been circulated to all the Oil Companies vide their letter dated WA-882-2019 & Linked matters 4 23.06.2016 (Annexure P/3 appended to writ petition). As per clause 2.4.1.1.1 of the said guidelines, which provides for Market Ceiling, for the Firm having urban distributorship, refill ceiling limit is defined as 15,000 per month for the cities having population between 20 to 40 Lakh whereas; the refill sale per month for feasibility limit has been fixed as 7,500. The refill ceiling limits for LPG Distributors is applicable for all the LPG Distributorships. According to the appellants-petitioners, it conveys that if the refill sale at any distributorship is less than 7500 per month then it may not be feasible to establish and run such distributorship. Similarly, a distributor shall not be entitled to have the refill sale more than the prescribed ceiling limit. As submitted, presently, the appellants No.1 and 2 are having about 14000 active consumers with refill sales of about 7500 per month and appellant No.3 claims to have average refill sales of about 7000 per month. An advertisement has been issued by the respondent No.2 - Deputy General Manager (LPG), Hindustan Petroleum Corporation Ltd. published in the local newspaper dated 29.08.2017 inviting applications for allotment of LPG Distributorship in Arera Colony (E-3 to E-6), Bhopal.
4. The appellants-petitioners have assailed the said advertisement by filing a writ petition, inter alia, on the ground that if a new distributorship is allotted in the said area, the number of consumers and refill number available to the appellants will be reduced. Moreover, in the proposed area the refill ceiling limit and the feasibility limit could hardly be achieved. At the worst, new LPG distributorship could be allotted in the area of other distributors, who have got more than 12000 number of refill sale per month. The allotment of new distributorship is contrary to the guidelines issued by WA-882-2019 & Linked matters 5 the Government of India inasmuch as it could be proposed only when the refill sale per month has reached about 75% of the refill ceiling limit. Earlier, in similar circumstances, the Indian Oil Corporation Ltd. And Bharat Petroleum Corporation Ltd. proposed to establish new LPG Distributorship in the area of operation of appellant No.1 but in pursuance to an order dated 8.8.2005 passed by this Court in W.P. No.2481/2004, the Director Marketing, Ministry of Petroleum and Natural Gas, Government of India, vide communication dated 4.1.2006 clarified that inter-company transfer of consumers is not allowed and accordingly, the extension counter in the trading area of the appellant No.1 were directed to be closed down.
5. The learned single Judge vide order impugned herein has dismissed the writ petition relying upon the judgment of the Supreme Court in the case of Jasbhai Motibhai Desai v. Roshan Kumar, Haji Bashir Ahmed, (1976) 1 SCC 671 and observed, thus:
"11. So far as the entitlement of the petitioner to challenge the appointment of another distributor in his area is concerned, the Hon'ble Apex Court in the case of Jasbhai Motibhai Desai (supra) in paragraphs 47 and 48 held as under:-
"47. Thus, in substance, the appellant's stand is that the setting up of a rival cinema house in the town will adversely affect his monopolistic commercial interest, causing pecuniary harm and loss of business from competition. Such harm or loss is not wrongful in the eye of law, because it does not result in injury to a legal right or a legally protected interest, the business competition causing it being a lawful activity. Juridically, harm of this description is called demnum sine injuria, the term injuria being here used in its true sense of an act contrary to law. The reason why the law suffers a person knowingly to inflict harm of this description on another, without holding him WA-882-2019 & Linked matters 6 accountable for it, is that such harm done to an individual is a gain to society at large.
48. In the light of the above discussion, it is demonstrably clear that the appellant has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongfully affect his title to something. He has not been subjected to a legal wrong. He has suffered no legal grievance. He has no legal peg for a justiciable claim to hang on. Therefore he is not a 'person aggrieved' and has no locus standi to challenge the grant of the No-objection Certificate."
(emphasis supplied) In the circumstances, this Court find force in the contentions raised by Shri Aditya Adhikari, learned senior counsel that the petitioner has no locus to file this petition to challenge the appointment of a rivay distributorship in his own area.
12. So far as the judgment relied upon by the learned counsel for the petitioner in the case of Ambica Charan Sinha v. Union of India, (2005) 3 CHN 468 is concerned, there is no reference of any agreement between the parties in this case and apart from that in para 41 of the said judgment it is conceded by the IOC that if the impugned order is given effect to then the same would contravene the policy guidelines of the Central Government regarding viability norms which is not the situation in the case on hand and above all, the said decision does not take into account the judgment rendered by the Apex Court in the case of Jasbhai Motibhai Desai (supra). Similarly, in the case of Arti Devi Dangi (supra), the appeal was filed by the Indian Oil Corporation and the Apex court observed that the action of the appellant corporation cannot be said to be either arbitrary or unreasonable inasmuch as a uniform standard has been applied to all the applicants. Thus, both the cases are distinguishable and have no application in the facts and circumstances of the case. The judgment passed by the Division Bench of this Court in the case of MP Road Development Corporation Vs. Yusuf Kapadi & others passed in WA No.411/2016 decided on 5.7.2017 is also of no help to the petitioner, as in that case which involved the refusal to grant the NOC by the Road Development WA-882-2019 & Linked matters 7 Corporation to the respondent No.1 for setting up of retail outlet for a petrol pump. The refusal was on the ground that as per the guidelines framed by the Indian Oil Corporation, there should be a minimum required distance between the two outlets, however, this Court after considering the rival submissions and after going through the guidelines came to a conclusion that there is no statutory provision which prohibits the establishment of retail outlet even within the distance 300 meters. This judgment, on the contrary, allows setting up of another retail outlet within 300 meters of another outlet hence is of no avail to the petitioner where their contention is that the no new distributor should be appointed in his area of operation.
13. So far as the contention regarding the Durgam area is concerned, Clause 2 of the Guidelines which refers to the identification of locations, is relevant in which it is nowhere provided that no new distributor shall be appointed in area already having a distributor and the only concern is that it should be seen that the new location shall have sale potential that can sustain economically viable operation of LPG distributorship. On the other hand, in the note no.(iv) appended to Clause 2.4.1.1.1 it is also provided that all existing RGGLV distributorships with monthly refill sale of less than 1500 would be treated as Durgam Kshetiya Vitrak as per the policy.
14. In view of above discussion, in the considered opinion of this Court, the impugned advertisement cannot be said to arbitrary or unreasonable and needs no interference. Accordingly, the writ petition being devoid of merit is liable to be and is hereby dismissed."
6. In this manner, the present intra-court appeal has been filed by the appellants-petitioners.
7. Challenge in the present appeal has been made on the same set of grounds by the learned counsel for the appellants as were urged before the learned single Judge. It has been vehemently argued that the learned single Judge has not considered the issues raised in the writ petition. Inasmuch as, the Government of India, Ministry of Petroleum has issued the unified WA-882-2019 & Linked matters 8 guidelines for selection of LPG Distributorship and in those guidelines, the market ceiling limits have been fixed thereby deciding the viability and feasibility norms for different types of distributorship area but the impugned advertisement offering new LPG distributorships in the same area of business operation of the appellants would make the appellants' distributorship unviable and difficult to achieve the refill ceiling and feasibility limit. The said guidelines are having statutory force and are binding upon the respondents and therefore, the respondents cannot shy away from implementing the same in letter and spirit. Additionally, Shri Sankalp Kochar, learned counsel appearing for the appellants in respective appeals submitted that the aforesaid unified guidelines have already been approved by the Ministry for Petroleum and Natural Gas on 20.06.2016 and therefore, there was no impediment in implementation of the same. It is further urged that the Supreme Court in Indian Oil Corporation Limited and others vs. Arti Devi Dangi and Another, (2016) 15 SCC 480 has set aside the decision of the High Court, which held that the guidelines issued by the Indian Oil Corporation Ltd. are not mandatory, therefore, the said judgment of the Supreme Court ought to have been appreciated in its true perspective.
8. Per contra, the learned counsel appearing for the respondents have defended the impugned order and prayed that the appeal being devoid of merit, deserves to be dismissed. The learned counsel for the respondents have opposed the contentions advanced by the learned counsel for the appellants by inviting our attention to Clause 2(b)(ii) of the dealership agreement appended as Annexure R/3 to the return, which provides that the WA-882-2019 & Linked matters 9 Corporation reserves its right to appoint one or more distributor in the same territory.
9. We have heard learned counsel for the parties at a considerable length and perused the impugned order and find that these appeals deserve to be dismissed.
10. There is no dispute that similar agreement, as has been appended as Annexure R/3 to the return in the present case, has been entered into by all the parties with regard to allotment of LPG Distributorship. Before considering the contentions advanced by learned counsel for the parties, it is necessary to set out the relevant provision of the dealership agreement (Annexure R/3) arrived at between the parties and the Guidelines of 2016, which read, thus:
"HINDUSTAN PETROLEUM CORPORATION LIMITED "H.P. GAS" (LIQUEFIED PETROLEUM GAS) DEALERSHIP (DOMESTIC & COMMERCIAL) AGREEMENT.
1. *** *** ***
2. (a) *** *** ***
(b) The aforesaid appointment is subject to the following:
(i) *** *** *** Provision (ii) The Corporation reserves the right, without any reference to for
or consent of the Dealer, to appoint one or more additional appointment of additional dealers in the same territory referred to in Clause 1(a) above Dealer.
and such additional dealer or dealers shall be entitled to make sales of H.P. Gas in the same territory without any objection from the Dealer and the Dealer shall not be entitled to claim any over-riding remuneration, commission or allowance for the purpose."
*** *** ***
WA-882-2019 & Linked matters
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Unified Guidelines for Selection of LPG Distributorship 2016 2.4.1.1 Existing Market 2.4.1.1.1 Market ceiling The market refill ceiling limit is the maximum number of the domestic refill sales stipulated for LPG Distributorships and based on the market. Market Ceiling Limit and the Feasibility Norm for different types of Distributorship Area is proposed below:
Type of Population as per census 2011 Refill Refill Sale Distributorship Ceiling per month area Limit for per Feasibility month limit Sheheri Cities with population>40 lakh 20,000 10,000 Vitrak Cities with 20 to 40 lakh population 15,000 7,500 Cities with 10 to 20 lakh population 12,000 6,000 Rurban Towns with < 10 lakh population 10,000 5,000 Vitrak Gramin Village/Cluster of villages 5,000 2,500 Vitrak Durgam Village/Cluster of villages 1,500 600 Khetriya Vitrak Restructuring of the LPG Distributorships viz., Sheheri Vitrak, Rurban, Vitrak, Gramin Vitrak and Durgam Kshetriya Vitrak in the existing market will be planned only after the refill sale exceeds by 50% of the refill ceiling limit of the market.
Note:
i) The proposed refill ceiling limits for LPG Distributors will be applicable for all the LPG Distributorships as defined above on prospective basis. However, the restructuring exercise for all the locations advertised prior to these guidelines will continue on the basis of the pre-
revised ceiling limits.
*** *** ***"
11. The appellants have entered into LPG Distributorship agreement with the respondents on certain terms and conditions. In view of the condition envisaged in Clause 2(b)(ii) the agreement to which the appellants are party, WA-882-2019 & Linked matters 11 it is clear that it is the exclusive right of the respondents to appoint one or more additional dealer in the same territory. Therefore, having entered into the aforesaid agreement being aware of the said condition and enjoying the fruits of the agreement for years together without any demur to any of the conditions thereof, the appellants cannot now raise any objection to the condition of appointment of one or more additional distributors in the same territory. The appellants have failed to point out how any of their contractual or legal right has been violated. Nothing has been brought to our notice as to which statutory provision has been violated while inviting applications for appointment of one or more additional dealer in the same territory. So far as the argument with regard to minimum feasibility criteria is concerned, these Guidelines are in the nature of proposed feasibility limit and do not give rise to any legally enforceable right to the appellants by claiming them as mandatory/statutory.
12. Further, the Note (i) appended to the Guidelines specifically provides that the restructuring exercise for all the locations advertised prior to these guidelines will continue on the basis of the pre-revised ceiling limits. The refill ceiling limits fixed for LPG Distributors has been made applicable for all the LPG distributorships on prospective basis. Admittedly, the appellants entered into the dealership agreement with the respondents prior to issuance of the Guidelines of 2016. Thus, otherwise also the ceiling limit, as is apprehended by the appellants, would not affect them. On the contrary, the advertisement has been issued to serve larger public interest and will not have any affect on the distributorship of the appellants. The respondent-
WA-882-2019 & Linked matters 12 Company which is a Public Sector Oil Company is discharging the basic and foremost obligation of ensuring prompt, efficient and sufficient supply of LPG, which is an essential commodity, therefore, the same cannot be given a go-bye merely on the ground that the advertisement would prejudicially affect the appellants' business.
13. Still further, reply filed by the respondents states that the advertisement has been issued to increase the rural penetration of LPG in the State of Madhya Pradesh along with two locations which are against the terminated distributorship and not due to outcome of restructuring exercise. However, it has been clarified that none of the appellants are the replacement of the resigned/terminated dealership i.e. M/s Divya Flame, Bhopal. It is further brought to our notice that earlier also in the year 2013- 14 an advertisement was issued for the location in question but no objection was raised by anyone including the appellants. Since no eligible candidate was found at that point of time, therefore, the location has been again re- advertised. The appellants have filed rejoinder but failed to controvert the aforesaid contentions raised by the respondents.
14. Having regard to the foregoing reasons, in our considered opinion, the findings recorded by the learned single Judge cannot be said to be unsustainable in the eye of law which may warrant interference by this Court. We are in full agreement with the view expressed by the learned Single Judge while deciding the writ petition filed by the petitioners- appellants.
WA-882-2019 & Linked matters 13
15. Resultantly, all the present appeals fail and the same are hereby dismissed. Let a signed order be placed in the file of W.A. No.882/2019 and copy whereof be placed in the file of the connected writ appeals.
( AJAY KUMAR MITTAL ) ( VIJAY KUMAR SHUKLA )
CHIEF JUSTICE JUDGE
S/
Digitally signed by SACHIN
CHAUDHARY
Date: 2019.12.16 10:58:19 +05'30'