Madras High Court
A.Velusamy vs Union Of India on 24 February, 2012
Author: V. Dhanapalan
Bench: V. Dhanapalan
IN THE HIGH COURT OF JUDICATE AT MADRAS DATED: 24.02.2012 CORAM: THE HONOURABLE MR. JUSTICE V. DHANAPALAN W.P.No.5892 of 2011 A.Velusamy ... Petitioner vs. 1. Union of India rep. by Secretary to Government, Ministry of Petroleum and Natural Gas, New Delhi. 2. Indian Oil Corporation rep. by Chief General Manager, Coimbatore. 3. Indian Oil Corporation rep. by General Manager, Southern Region, Thalamuthu Natarajan Maligai, (4th Floor), No.1, Gandhi Irwin Road, Chennai. 4. Hindustan Petroleum Corporation Ltd., rep. by its Senior Regional Manager, Big Bazaar Street, Coimbatore, Tamil Nadu 641 001. ... Respondents Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of certiorarified mandamus, calling for the entire records in connection with the impugned notification of the 3rd respondent, quash the same so far as it relates to the calling for the appointment of retail outlet dealers in Ponnampalayam Village, Puliampatti-Bhavanisagar Road, Sathi Taluk, Erode District (Sl.No.90 in Notification Advertisement) published by the 3rd respondent in Tamil Daily Dinakaran, Coimbatore edition dated 01.11.2010 and consequently forbear the respondents from appointing any new retail outlet dealers in the above said place near the retail outlet of the petitioner. For Petitioner : Mr.D.Shivakumaran For R1 : Mr.R.Mahadevan For R2 : M/s.Anand, Abdul & Vinoth Associates For R3 & R4 : Mr.O.R.Santhanakrishnan O R D E R
Seeking to quash the impugned notification of the 3rd respondent in so far as it relates to the calling for the appointment of retail outlet dealers in Ponnampalayam Village, Puliampatti-Bhavanisagar Road, Sathi Taluk, Erode District (Sl.No.90 in Notification Advertisement) published by the 3rd respondent in Tamil Daily Dinakaran, Coimbatore edition dated 01.11.2010 and consequently forbear the respondents from appointing any new retail outlet dealers in the above said place near the retail outlet of the petitioner, this Writ Petition is filed.
2. Brief facts of the case as put forth in the affidavit would run thus:
2.1. The petitioner made an application to the 2nd respondent for the proposed outlet dealership of petroleum products to the 2nd respondent at Nallur Village, Sathi Taluk, Erode District under the open category. After screening and interview, by a letter of intent dated 01.03.2010, the 2nd respondent offered the petitioner the retail outlet dealership of Hindustan Petroleum Corporation Ltd. for the above said location. Though the retail operations began in October 2010, the contract is yet to be signed. The 2nd respondent imposed terms and conditions while offering the letter of intent. Accordingly, the petitioner is expected to make available a suitable plot for situating the retail outlet, in which the respondent is to develop sales room, building storage tank, drive way, compound wall, stores, toilets, generator and compressor room yard, lighting, etc. besides service station for the Corporation. The petitioner has invested more than Rs.10 lakhs and the retail outlet is yet to be commissioned.
2.2. It is his further submission that in his retail outlet situated at Nallur Village in the road leading from Puliampatti to Sathiamangalam in Puliampatti area, he has commenced his operation and besides the said retail outlet, there are four other retail outlets. According to the petitioner, even with the existing level of competition and availability of retail outlets, he will have to strive very hard to create a market to satisfy the minimum off-take quota that is stringently fixed by the 2nd respondent.
2.3. Oil Companies in India call for dealerships based on the demand and supply equation and also by taking into consideration the viability of a Dealership, with reasonable profit. The Union of India has established four Oil Companies for the purpose of distribution of oil, motor spirit and allied products and has control over their administration only as a public welfare measure. There are nearly 38,000 petrol bunks across the country. The indiscriminate opening of new petrol bunks without taking into consideration the growth rate, existing sales figure and the future growth rate of the retail outlets has led to a situation, where even many of the dealership agencies in operation are now in doldrums and are already reeling under revenue loss and financial crisis.
2.4. In a meeting headed by the Hon'ble Minister for Petroleum and Natural Gas and the representatives of Federation of All India Petroleum Traders held in September 2010, a decision was taken for setting right the infirmities and to look into the demands of the Federation of All India Petroleum Traders by setting up a Committee to arrive at a set of guidelines on the basis of which the Public Sector OMCs will proceed while planning and operationalising new retail outlets.
2.5. The cause of action for the petitioner to file the present Writ Petition arose because of the proposal by the 3rd respondent to offer licences for retail outlets in Ponnampalayam Village, which is very close to the retail outlet of the petitioner, where he has just commenced the operations. The petitioner submits that without waiting for the guidelines to be framed by the Committee, which appears to have been constituted already, with a specific focus to check the need for the new outlets, the conduct of calling for appointment of more than 1000 Dealerships within the State of Tamil Nadu is contrary to public interest and with utter disregard to the move to frame guidelines.
2.6. In this regard, the petitioner has already sent a representation to the respondents 3 and 4, highlighting the tragedies and prejudice that would be caused to him because of the proposal to offer a retail outlet very close to his retail outlet. Being aggrieved by the proposal of respondents 1, 3 and 4 to start a Dealership very close to his retail outlet, having no other alternative or efficacious remedy, the petitioner is before this Court under Article 226 of the Constitution of India.
3. The 4th respondent has filed counter affidavit. According to him, the Writ Petition is not maintainable in law in as much as the petitioner is his rival trader and as such, he is not entitled to seek the stalling of the establishment of new Retail Outlet, thereby denying opportunity to a new Dealer. He would contend that the Writ Petition is liable to be dismissed on the preliminary ground that the Courts of Law have consistently held that trade rivals are not 'persons aggrieved' capable of maintaining an action in law against the entry of a new competitor in the market.
4. Today, when the matter is taken up for hearing, learned counsel on either side produced a copy of a Division Bench judgment of this Court made in W.A.No.4057 of 2004, dated 07.12.2004 in the case of Nataraja Agencies, Dealer, IOC Ltd., Pondicherry vs. The Secretary, Ministry of Petroleum and Natural Gas, Government of India, New Delhi and others reported in 2005 (1) CTC 394, wherein, the plea of the appellant, complaining against the setting up of a rival retail outlet by the respondent therein, near his place of business on the ground that it would affect his business interest, was negatived, holding that setting up of a rival outlet near the appellant's place of business will only result in promoting competition among the traders, which is good for the consumers. For better understanding, the relevant paragraph of the said judgment is extracted hereunder :
"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. In the light of the above Division Bench decision of this Court, learned Counsel on either side submits that the ratio laid down therein would apply to the facts of this case also.
6. In view of the same, applying the ratio laid down in the said decision to the case on hand, this Court is of the opinion that this Writ Petition deserves no merit consideration and is liable to be dismissed.
Accordingly, this Writ Petition is dismissed. No costs. Consequently, connected M.P.No.2 of 2011 is closed.
abe To :
1. The Secretary to Government, Union of India Ministry of Petroleum and Natural Gas, New Delhi.
2. The Chief General Manager, Indian Oil Corporation Coimbatore.
3. The General Manager, Indian Oil Corporation Southern Region, Thalamuthu Natarajan Maligai, (4th Floor), No.1, Gandhi Irwin Road, Chennai.
4. The Senior Regional Manager, Hindustan Petroleum Corporation Ltd., Big Bazaar Street, Coimbatore, Tamil Nadu 641 001