Karnataka High Court
Vipul Gundappa Tharthare vs Bharat Petroleum Corporation Ltd on 20 August, 2024
Author: Krishna S.Dixit
Bench: Krishna S.Dixit
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NC: 2024:KHC-D:11795-DB
WA No. 100246 of 2021
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 20TH DAY OF AUGUST, 2024
PRESENT
THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL
WRIT APPEAL NO. 100246 OF 2021 (GM-RES)
BETWEEN:
VIPUL GUNDAPPA THARTHARE,
AGE 26 YEARS, R/O. B/10, NAGAR PALIKA QUARTERS,
KHANJIRE MALA ICHALKARANJI, TQ. HATKANAGALA,
DIST. KOLHAPUR,(MAHARASTRA STATE)-416115.
...APPELLANT
(BY SRI. SHARAD V. MAGADUM, ADVOCATE)
AND:
1. BHARAT PETROLEUM CORPORATION LTD,
TERRITORY CO-ORDINATORY (RETAIL), NEAR DESUR
RAILWAY STATION, AT POST. DESUR ZAADSHAHAPUR
BELAGAVI, REPRESENTED BY ITS TERRITORY
CO-ORDINATOR (RETAIL)-590.
2. BHARAT PETROLEUM CORPORATION LTD,
BELAGAVI TERRITORY OFFICE, DESUR- GOA ROAD,
Digitally signed DESUR BELAGAVI, REPRESENTED BY ITS SALES
by JAGADISH T
R OFFICER (RETAIL)-590014.
Location: High
Court of 3. SRI. ASHUTOSH RAJESH PATIL,
Karnataka,
Dharwad Bench. AGE 28 YRS, OCC. BUSINESS,
R/O. NEMINATH NIVAS SANGALI NAAKA PARIJAT
SOCIETY, ICHALKARNJI-416115, TQ: HATAKANAGLE,
DIST: KOLHAPUR, MAHARASTRA STATE.
...RESPONDENTS
(BY SRI. C. V. ANGADI, ADV. FOR R1 & R2;
SRI. C. S. NAGASHATTI, ADV. FOR R3)
THIS WRIT APPEAL IS FILED U/S.4 OF KARNATAKA HIGH COURT
ACT, 1961, PRAYING TO SET ASIDE THE IMPUGNED ORDER IN
WP.NO.148541/2020 PASSED BY THE LEARNED SINGLE JUDGE ON
15/09/2021 AND FURTHER ALLOW THE SAID WRIT PETITION, IN THE
INTEREST OF JUSTICE AND EQUITY.
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NC: 2024:KHC-D:11795-DB
WA No. 100246 of 2021
THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL
ORAL JUDGMENT
(PER: THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL) This intra-Court appeal is filed by the petitioner challenging the order dated 15.9.2021 passes in WP No.148541/2020 (GM-RES), wherein the learned Single Judge has declined to grant relief sought in the writ petition; however, liberty is reserved in favour of the petitioner to take recourse to such remedies as available in law. Being aggrieved by the same, the petitioner is in appeal.
2. The appellant/petitioner filed the aforesaid writ petition assailing the Selection List at Annexure-C pursuant to Advertisement/Notification dated 25.11.2018 issued by respondent No.1/Corporation and sought mandamus to respondent No.1 and 2 to cancel the proposed retail outlet (petrol pump) dealership granted in favour of respondent No.3 at Sy.No.21/G6 (old Sy.No.21G/1A/2B) pursuant to said Selection List; further, he had made prayer to issue mandamus -3- NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 to respondent No.1 and 2 to take action against respondent No.3 for playing fraud.
3. It is the case of the appellant that respondents No.1 and 2 have issued subject Notification calling for appointment of regular/rural retail outlet (petrol pump) dealership at various places including dealership at Boragaon village, Boragaon- Sadalaga road, which is found at Sl.No.1185. However, contrary to the said Notification, these respondents have considered and allotted the petrol pump to respondent No.3 at different location i.e., Boragaon village, Boragaon-Ichalakaranji road. It is averred that the appellant is having a land at Boragaon-Ichalakaranji road and he has been deprived of opportunity to apply for allotment of petrol pump. It is further averred that there is no advertisement for retail outlet for Boragaon village on Boragaon-Ichalakaranji road, hence, he has not applied for allotment. It is also averred that the entire selection is contrary to the subject Notification, and therefore, needs to be voided.
4. The respondents No.1 and 2 filed statement of objections denying the averments of writ petition. It is -4- NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 averred that the respondent No.3 is selected through draw of lots conducted on 15.2.2019 and the land afforded by respondent No.3 is within the limits of Boragaon village. It is further averred that paper notification was published in two newspapers and also on the website of the respondent/Corporation; however, no objections or enquiry have been received from the petitioner, which evidences that he is not qualified for allotment. It is also averred that as per the guidelines of the Corporation, draw of lots conducted and allotment was made in favour of respondent No.3, which is strictly in consonance with the guidelines of the Corporation. It is contended that respondent No.3 has commenced the business, hence, sought for dismissal of writ petition. Respondent No.3 filed separate statement of objections contending that the allotment made in his favour is as per subject Notification and guidelines of the Corporation and he has already commenced the business. Thus, sought for dismissal of the writ petition.
5. Learned Single Judge considering the rival contentions and the material on record has come to a conclusion that the appellant had not applied for retail outlet -5- NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 (petrol pump) dealership pursuant to Notification/Advertisement dated 25.11.2018 and the appellant claims to be the owner in respect of land situated on Boragaon- Ichalakaranji road, which was not notified. Learned Single Judge has granted liberty in favour of the petitioner to avail remedies in law including the filing of Public Interest Litigation (PIL) in respect of alleged illegal outlet. Being aggrieved, the petitioner is in appeal.
6. Sri. Sharad V Magadum, learned counsel for the appellant submits that the learned Single Judge has committed a grave error in refusing to interfere with the decsion of respondents No.1 and 2 in allotting retail outlet (petrol pump) dealership in favour of respondent No.3, which is contrary to subject Notification issued by respondents No.1 and 2. It is submitted that the Notification indicates the area i.e., Boragaon village, Boragaon-Sadalaga road, however, the allotment is made in favour of respondent No.3 at Boragaon village, Boragaon-Ichalakaranji road. Hence, the very allotment is contrary to the subject Notification issued by respondents No.1 and 2 and if the respondent/Corporation intends to allot retail outlet (petrol pump) dealership on Boragaon village, Boragaon- -6-
NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 Ichalakaranji road, the appellant would have applied for allotment, as he owns the land at said place. Thus, he seeks to allow the appeal.
7. Sri. C.V. Angadi, learned counsel for respondents No1 and 2 and Sri. C.S. Nagashetty, learned counsel for respondent No.3 support the impugned order of learned Single Judge and submit that respondents No.1 and 2 have allotted retail outlet (petrol pump) dealership in favour of respondent No.3 at Boragaon village. The respondents No.1 and 2 taking into account the commercial viability allotted the dealership in favour of respondent No.3 by drawing the lots. It is further submitted that the respondents No.1 and 2 have strictly adhered to the subject Notification and guidelines for allotment of dealership. It is also submitted that respondent No.3 has already commenced business, hence, they seek to dismiss the appeal.
8. We have heard the arguments of learned counsel for the appellant and learned counsel for respondents and perused the material available on record. -7-
NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021
9. The pleadings and the documents annexed to the petition and statement of objections indicate that the respondents No.1 and 2 have issued notification dated 25.11.2018 for appointment of regular/rural retail outlet (petrol pump) dealership at various places including the subject place i.e., "Boragaon village on Boragaon-Sadalaga road" found at Sl.No.1185 of the Location List-BPCL notice for appointment of regular/retail rural outlet (petrol pump) dealership in the State of Karnataka. The parties to the proceedings do not dispute that the intended allotment of dealership was Boragaon village on Boragaon-Sadalaga road. It is also not in dispute that the allotment is made in favour of respondent No.3 on Boragaon village on Boragaon-Ichalakaranji road. It is a specific case of the petitioner that he would have applied for allotment of dealership, if the notification indicated the location as Boragaon village on Boragaon-Ichalakaranji road and contrary to the subject notification, the allotment is made in favour of respondent No.3. The respondent/Corporation has also not disputed the fact that the present allotment made in favour of respondent No.3 is not as per subject Notification at Annexures-A and A1. In other words, the allotment is made in -8- NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 favour of respondent No.3 on Boragaon village on Boragaon- Ichalakaranji road and not on Boragaon village on Boragaon- Sadalaga road. When things stood thus, the observation of the learned Single Judge that the petitioner to avail other remedy including filing of PIL may not be correct.
10. The petitioner may not have any fundamental right to seek allotment of dealership at the hands of respondents No.1 and 2. However, he has every right to participate in the process of allotment. When the petitioner has specifically pleaded and produced the documents that he owns the land on Boragaon village on Boragaon-Ichalakaranji road, we are of the considered view that he has every right to maintain present writ petition under Article 226 of the Constitution of India, when the action of respondents No.1 and 2 is contrary to their own Notification at Annexure-A and A1. The action of said respondents in allotting the retail outlet (petrol pump) dealership in favour of respondent No.3 is patently illegal, as the said respondent is not having any land on Boragaon village on Boragaon-Sadalaga road for which Notification was issued. Admittedly, the allotment made in favour of respondent No.3 is in Boragaon village on Boragaon-Ichalakaranji road. Hence, -9- NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 the action of respondents No.1 and 2 is arbitrary and illegal, as the very allotment made in favour of respondent No.3 is in violation of subject Notification at Annexure-A and A1. The establishment or commencement of business by respondent No.3 in wrongly allotted place cannot have any bearing, when there is a challenge to the said allotment. The commencement of business by him during the pendency of writ petition would be at his risk and cost. Thus, we are of the considered view that the respondents No.1 and 2 in gross violation of Notification have made allotment of retail outlet (petrol pump) dealership in favour of respondent No.3, which is not only arbitrary action but also illegal and therefore, the same is unsustainable.
11. It would be useful to refer to the decision of Hon'ble Supreme Court in the case of Ramana Dayaram Shetty Vs. International Airport Authority of India & Others1, wherein paragraphs-20, 21, 33 & 34 read thus:
"20. Now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, be subject to the same constitutional or public law limitations as 1 AIR 1979 SC 1628
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 Government. The rule inhibiting arbitrary action by Government which we have discussed above must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance.
21. This rule also flows directly from the doctrine of equality embodied in Art. 14. It is now well settled as a result of the decisions of this Court in E. P. Rayappa v. State of Tamil Nadu, (1974) 2 SCR 348: (AIR 1974 SC
555) and Maneka Gandhi v. Union of India, (1978) 1 SCC 248: (AIR 1978 SC 597) that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non- discriminatory: it must not be guided by any extraneous or irrelevant considerations, because that would be denial of equality.
The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is protected by Article 14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. This principle was recognised and applied by a Bench of this Court presided over by Ray, C.J., in Erusian Equipment and Chemicals v. State of West Bengal (supra) where the learned Chief Justice pointed out that "the State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person The Government cannot choose to exclude persons by discrimination. The order of black-
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of black-listing-A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling-It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods." It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground.
33. lt will be seen from these provisions that there are certain features of the 1st respondent which are eloquent and throw considerable light on the true nature of the 1st respondent. In the first place, the chairman and members of the 1st respondent are all persons nominated by the Central Government and the Central Government has also the power to terminate their appointment as also to remove them in certain specified circumstances. The Central Government is also vested with the power to take away the management of any airport from the 1st respondent and to entrust it to any other person or authority and for certain special reasons, the Central Government can also supersede the Ist respondent. The Central Government has also power to give directions in writing,, from time to time on questions of policy and these directions are declared binding on the 1st respondent. The 1st respondent has no share capital but the capital needed by it for carrying out its functions is provided wholly by the Central Government. The balance of the not profit made by the Ist respondent after making provision for various charges, such as reserve funds, had and doubtful debts
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 depreciation in assets etc. does not remain with the 1st respondent and is required to be paid over lo the Central Government. The 1st respondent is also required to submit to the Central Government for its approval a statement of the programmes of its activities as also the financial estimate and it must follow as a necessary corollary that the 1st respondent can carry out only such activities and incur only such expenditure as is approved by the Central Government. The audited accounts of the 1st respondent together with the audit report have to be forwarded to the Central Government and they are required to be laid before both Houses of Parliament. So far as the functions of the 1st respondent are concerned, the entire department of the Central Government relating to the administration of airports and air nevigation services together with its properties and assets, debts, obligations and liabilities, contracts, causes A of action and pending litigation is transferred to the 1st respondent and the 1st respondent is charged with carrying out the same functions which were, until the appointed date, being carried out by the Central Government. The employees and officers on the 1st respondent are also deemed to be public servants and the 1st respondent as well as its members, officers and employees are given immunity for anything which is in good faith done or intended to be done in pursuance of the Act or any rule or regulation made under it. The 1st respondent is also given power to frame Regulations and to provide that contravention of certain specified Regulations shall entail penal consequence. These provisions clearly show that every test discussed above is satisfied in the case of the 1st respondent and they leave no doubt that the 1st respondent is an instrumentality or agency of the Central Government and falls within the definition of 'State' both on the 'narrow view taken by the majority in Sukhdev v. Bhagat Ram (AIR 1975 SC 1331) as also on the broader view of Mathew, J., adopted by us.
34. It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the standard or norm laid down in paragraph 1 of the notice inviting tenders which required
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 that only a person running a registered IInd Class hotel or restaurant and having at least S years' experience as such should be eligible to tender. It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was discriminatory having no just or reasonable relation to the object of inviting tenders namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a IInd class restaurant at the airport. Admittedly the standard or norm was reasonable and non-discriminatory and once such a standard or norm for running a IInd Class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm. If there was no acceptable tender from a person who satisfied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbitrarily accept the tender of the 4th respondents. When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years' experience of running a IInd Class restaurant or hotel, denied equality of opportunity to others similarly situate in the matter of tendering for the contract. There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years' experience of running a IInd Class restaurant, but who were otherwise competent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the contract, but they were precluded from doing so by the condition of eligibility requiring five years' experience. The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the prescribed condition of eligibility, was clearly discriminatory, since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason. The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action."
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021
12. Keeping in mind the enunciation of law laid down by the Hon'ble Supreme Court in the aforesaid judgment, we are of the considered view that the respondents No.1 and 2 have flouted the stipulations of Notification at Annexure-A and A1. The action of respondents No.1 and 2/Corporation is manifestly illegal and arbitrary, as is evident from the pleadings and evidence on record. The petitioner has every right to seek equal treatment in the matter of allotment of dealership of retail outlet (petrol pump), if the authority intends to allot the same on Boragaon village on Boragaon-Ichalakaranji road. The action of respondent No.1 and 2 in allotting the dealership in favour of respondent No.3 is not only contrary to the subject Notification, but also depriving an opportunity to the similarly placed person, who intends to seek allotment of dealership on Boragaon village on Boragaon-Ichalakaranji road. The action of respondents No.1 and 2 does not withstand the scrutiny under Article 14 of the Constitution of India. The respondent/Corporation being instrumentality of the State is required to act fairly by providing equal opportunity to the intended applicants, when it intended to dispose off the largesse of the State. At the cost of repetition, it needs to be
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 observed that the petitioner may not have any vested right of getting dealership at the hands of respondents No.1 and 2. However, he has every right to ask for equal treatment in participation of process of allotment of dealership. This view again gains support from the decision Ramana Dayaram Shetty supra. Hence, on this ground also, the action of respondents No.1 and 2 is required to be interfered with.
13. For the aforementioned reasons, we proceed to pass the following:
ORDER
1. Writ Appeal is allowed.
2. The impugned order of learned Single Judge is herby set-aside. Consequently, writ petition filed by the petitioner in WP No.148541/2020 is allowed by setting aside the selection of respondent No.3 for a retail outlet (petrol pump) dealership.3. It is open for the respondents No.1 and 2
to call for separate application for
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NC: 2024:KHC-D:11795-DB WA No. 100246 of 2021 allotment of retail outlet (petrol pump) dealership at Boragaon village.
4. No order as to costs.
Pending applications, if any, do not survive for consideration and accordingly, they are disposed off.
Sd/-
(KRISHNA S.DIXIT) JUDGE Sd/-
(VIJAYKUMAR A.PATIL) JUDGE JTR/ct-an List No.: 1 Sl No.: 19