M/s. Srishanmuga Enterprises Dealer - Hindustan Petroleum Corporation Ltd. (R.O.) Vs The Secretary to Government of India Ministry of Petroleum and Natural Gas Shastri Bhavan, New Delhi - 110 001, The Chairman Indian Oil Corporation Limited Indian Oil Bhavan G-9, Ali Yuvar Jung Marg Bandhra (West), Mumbai, The Chairman Hindustan Petroleum Corporation Limited 17, Jamshedji Tata Road Mumbai - 400020 and The Chairman Bharat Petroleum Corporation Limited 4, 6 Currimbhoy Road Ballard Estate, Mumbai - 400001

@JUDGMENTTAG-ORDER

Honourable Mr. Justice M.M. Sundresh

1. Even though, the interim applications are listed before me, by consent, the Writ Petitions are taken up for final hearing.

2. Considering the issues involved in all these Writ Petitions, they have been taken up together and a common order is passed.

3. The petitioners in all these Writ Petitions are existing dealers of the respondent-Corporations. The petitioners have been granted the dealership in pursuance to the advertisement made followed by the interview conducted. These petitioners have been granted dealership under the Scheduled Caste/Scheduled Tribe category. As per the dealership and in accordance with the agreement, substantial investment has been done by the respondent-Corporations. The petitioners through their Association and also individually made representations to the respondents contending that by the proposed starting of new outlets, the volume of business in the outlets run by the petitioners would be affected. The petitioners further contended that they are already finding it difficult to meet the quantum fixed under the agreement and therefore, by the proposed new outlets further loss would happen which is neither good in the interest of the petitioners nor for the Corporations, which have spent huge amount of money.

4. The impugned orders are passed by the respondent-Corporations in W.P.Nos.1537 of 2011 and 1539 of 2011 stating that the petitioners request cannot be considered in the teeth of the specific clause contained in the agreement and the decisions have been made in pursuance to the study conducted by taking into relevant materials. Therefore, the petitioners have come forward to file these Writ Petitions.

5. The learned counsel appearing for the petitioners submitted that the petitioners stand on a different footing and that is the reason why the respondent-Corporations themselves have put in sufficient amount of investment to lift the socially backward class people. When the dealers are running at a loss, there is no purpose in having some more outlets resulting in the closure of business. The scope and ambit of Article 14 of the Constitution of India has to be borne in mind by the respondents being the public authorities. The Ministry of Petroleum and Natural Gas has sent a communication to another Ministry by way of a reply by the letter dated 30.10.2008 stating that no new petrol bunks will be sanctioned adjacent to any existing petroleum bunks allotted to Scheduled Caste/Scheduled Tribe dealers, unless there is enough potential for starting the same.

6. The learned counsel for the petitioners has made reliance upon the subsequent communication sent by the Ministry dated 06.04.2011, which was taken note of by the Honourable Division Bench of the Kerala High Court. Therefore, the learned counsel submitted that by taking into consideration of the overall situation, appropriate orders will have to be passed. The learned counsel has also made reliance upon the judgment of the Honourable Division Bench of the Kerala High Court rendered in W.A.No.764 of 2011 dated 19.10.2011 and submitted that there is nothing on record to show that an appropriate study has been made by the respondents before deciding to start the new outlets.

7. Per contra, the learned counsel appearing for the respondents submitted that the issue involved in these Writ Petitions is no longer res integra. Admittedly, the petitioners are rival traders. The Honourable Division Bench in Nataraja Agencies Vs. The Secretary, Ministry of Petroleum and Natural Gas, Government of India and Others, has taken the view that in such an eventuality the Writ Petition is not maintainable. A similar view has also taken by the learned single Judges of this Court in V. Tamilarasi vs. M/S. Hindustan Petroleum Corporation Limited [W.P.(MD)No.11966 of 2010 Dated 09.11.2010], Kanyakumari District Petroleum Dealers Association vs. District Revenue Officer [ (2006) 4 MLJ 1164] and Tamil Nadu Petroleum Dealers Association vs. The Union Of India and Others [W.P.No.27357 of 2010 dated 16.08.2011].

8. The learned counsel appearing for the respondents on merits submitted that the decision has been taken by taking into consideration of the materials available on record, a study has been conducted on the Macro and Micro level. Automobile growth and trends, road infrastructure, urbanisation and growth in Oil Industry have been taken into consideration before selecting the locations. Such a decision made by way of a policy decision and based on empirical data and materials does not warrant any interference. The petitioners are bound by the terms and conditions contained in the agreement signed by them and therefore, the Writ Petitions as filed are not maintainable in law and facts. The clause contained in the agreement entered into between the various Oil Companies and the petitioners would clearly stipulate that the petitioners cannot object to the opening of a new outlet not only by the principal-Corporation but also other Corporations as well.

9. The learned counsel appearing for the respondents has made reliance upon the subsequent communication of the Government of India, Ministry of Petroleum and Natural Gas, dated 25.08.2011 and submitted that the earlier letters dated 06.04.2011 and 25.04.2011 have been kept in abeyance. In so far as the judgment of the Division Bench of the Kerala High Court is concerned, the learned counsel submitted that the said decision was pertaining to the grant of No Objection Certificate by the authorities under the rules and therefore, the same has got no relevance. A further submission has been made that the said decision has not taken into consideration of the subsequent developments. According to the learned counsel the Division Bench of the Kerala High Court has taken into consideration of the materials available on record which is found lacking in the present case on hand. Therefore, the learned counsel submitted that the Writ Petitions will have to be dismissed as devoid of merits.

10. In this connection, it is useful to refer the Microeconomic factors influencing growth of retail business in India:

6. Automobile Growth and Trends:

The sales of automobiles has nearly doubled between the years 2003-04 and 2009-10 (Table V).

Table V: Automobile Domestic Sales Trends

7. Growth in Oil Industry: Retail Sector:

Table VI: Oil Industry Growth in Retail Sector

The Market Vision 2015 of the Oil Industry for ''Consumer Satisfaction and Beyond'' was approved by MOP&NG in a Conclave at Goa on 26th June 2009. Retail group of the industry have met on several occasions to formulate the detailed implementation plan.

8. Summary:

a. GDP would grow at 8% per annum in the decade 2011-20

b. Middle class already 450 million strong

c. By 2020, 540 million would reside in urban areas with 60-70 cities of over 1 million. The two wheeler population would increase from 102 per thousand to 393 per thousand and four wheeler from 14 per thousand to 48 per thousand in the next 20 years.

d. Freight traffic would grow at 10% per annum during the decade 2011-20

e. Oil consumption by transport sector would grow to between 72 - 105 TMT from the 58 TMT level of 2009-10 by the year 2020.

f. Road infrastructure improvement under NHDP, Non-NHDP, State & Rural would be as follows:

i. NHDP: Two laning - 6800 km, six laning - 6500 km, Expressway - 1000 km

ii. Non-NHDP: Double laning 20644 kms in next 20 years iii. State: Improve surface and ride quality of 71500 kms iv. Rural: Construct road length of 1.46 lakh km connecting 66802 unconnected habitations and upgrading 1.93 lakh km.

g. Vehicle sales trend of past decade mentioned below

h. Growth in oil retail sector would be 10% per annum. For rural market to have an RO every 15 km, 4100 ROs are required to be established between the years 2009-2015.

Therefore in the light of the said analysis, this Court cannot act like an appellate authority or an expert body and substitute its views over the location of the outlets.

11. As submitted by the learned counsel appearing for the respondents, this Court is bound by the judgment of the Honourable Division Bench in so far as the locus standi of a rival businessmen to question the opening of a new outlet. Considering the said issue and after taking note of the judgment of the Honourable Apex Court which has been held in Nataraja Agencies Vs. The Secretary, Ministry of Petroleum and Natural Gas, Government of India and Others, in the following manner:

3. The Supreme Court in Mithilesh Garg, Vs. Union of India and others etc. etc., , held that a rival businessman cannot file a writ petition, challenging the setting-up of a similar unit by another businessman, on the ground that establishing a rival business close to his business-place would adversely affect his business interest, even if the setting-up of the new unit is in violation of law. In Mithilesh case, cited supra, the Supreme Court followed its own decision in The Nagar Rice and Flour Mills and Others Vs. N. Teekappa Gowda and Bros. and Others, wherein it was held that a rice mill-owner has no locus standi to challenge under Article 226, the setting up a new rice-mill by another even if such setting up be in contravention of S.8(3)(c) of the Rice Milling Industry (Regulation) Act, 1958 because no right vested in such an applicant is infringed.

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. For the reasons given above, we see no merit in the appeal. The appeal is dismissed. Connected WAMP No.7646 of 2004 is closed.

12. The judgment of the Division Bench was also followed by this Court in the subsequent pronouncements.

13. It is also to be seen that the agreement entered into between the parties namely, the petitioners on the one hand and the principal- Corporation in which they are dealers on the other hand clearly permits the starting of a new outlet. For better appreciation, the agreement between the parties are extracted hereunder:

W.P. No. 1537 of 2011

Clause:12 -Provision for appointment of additional dealer The Corporation reserves the right, without any reference to or consent of the Dealer, to appoint one or more additional dealers in the same trading area and such additional dealer or dealers shall be entitled to make sales of Petrol/Diesel/Lubricants and other products in the same trading area 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. The Dealer hereby expressly agrees not to dispute, object to, or challenge the appointment of other Dealer(s) at the same place or at any other place either by the Corporation or by any other Oil Company or Corporation for the time being operating in India.

W.P. No. 1538 of 2011

Clause:4.... The Dealer hereby expressly further agrees not to dispute, objects to or challenge the appointment of other Dealers at the same place or at any other place either by the Corporation or by any other Oil Company or Corporation for the time being operating in India.

W.P. No. 1539 of 2011

Clause:7. Nothing contained in this Agreement shall be construed to prohibit the Corporation from making direct and/or indirect sales to any person whomsoever or from appointing other dealers for the purpose of direct or indirect sales at such place or place as the Corporation may think fit. The Dealer shall not be entitled to any claim or allowance for such direct or indirect sales.

W.P. No. 1540 of 2011

Clause:12 -Provision for appointment of additional dealer The Corporation reserves the right, without any reference to or consent of the Dealer, to appoint one or more additional dealers in the same trading area and such additional dealer or dealers shall be entitled to make sales of Petrol/Diesel/Lubricants and other products in the same trading area 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. The Dealer hereby expressly agrees not to dispute, object to, or challenge the appointment of other Dealer(s) at the same place or at any other place either by the Corporation or by any other Oil Company or Corporation for the time being operating in India.

W.P. No. 1541 of 2011

Clause:4.... The Dealer hereby expressly further agrees not to dispute, objects to or challenge the appointment of other Dealers at the same place or at any other place either by the Corporation or by any other Oil Company or Corporation for the time being operating in India.

Therefore in the light of the agreement, coupled with the decision rendered by this Court, a rival candidate cannot maintain the writ petition to contend that no other dealership shall be permitted to start an outlet in the nearby place.

14. The decision rendered by the Division Bench of the Kerala High Court cannot be applied a fortiori to the present case on hand. As contended by the learned counsel appearing for the respondents the Division Bench of the Kerala High Court was dealing with a case of granting of a No Objection Certificate. Considering the said issue it was observed that nobody should be allowed to open an outlet contrary to the petroleum rules and Act. There is also no violation of the Petroleum Act and Rules involved in these Writ Petitions. This Court is also aware of the fact that while exercising under Article 226 of the Constitution of India, the disputed questions of facts will not be gone into. Moreover, the Honourable Division Bench has not taken into consideration of the subsequent communication issued by the Government of India, Ministry of Petroleum and Natural Gas, dated 25.08.2011.

15. Coming to the last question raised by the learned counsel for the petitioners, this Court finds considerable force in the said submission. The petitioners stand on a different footing than that of the respondents. It is not in dispute that the petitioners were given subsidy and the substantial amount has been borne out by the respective principal-Corporation. The allotment has been made to the dealers under the Scheduled Caste/Scheduled Tribe category only in order to encourage the weaker sections by way of policy decision. Therefore, it is incumbent on the respondents to see to it that the very policy which has been initiated should not be allowed to be defeated. This Court is of the view that considering the peculiar facts of the case and taking note of the materials, the petitioners will have to be shown some difference as against the normal dealers. It is the case of the petitioners that they would be substantially affected by the proposed outlets. It is no doubt true that they cannot maintain these Writ Petitions as against the other Oil Corporations in the absence of any legal right vis-a-vis corresponding legal duty that would be public in nature. The subsequent communication relied on by the learned counsel for the respondents dated 25.08.2011 deals with the general decision regarding the establishment of outlet. By the subsequent communication, it cannot be said that the respondents can deviate from the stand taken by way of communication sent to the other Ministry in and by its letter dated 30.10.2008. While it can be said that the petitioners may not have a legal right to stop another outlet, certainly it can be stated by the petitioners that the principal-Corporation will have to be taken into consideration of the factual position.

16. Therefore, the petitioners will be at liberty to approach the principal-Corporation, in which, they are dealers to address their grievances by producing their materials available with them to specify their case, within a period of four weeks from the date of receipt of a copy of this order. As and when, the petitioners make such representation, the same will have to be considered by the principal-Corporation by taking into consideration of the entire materials available on record and appropriate orders will have to be passed thereafter. It is made clear that if any such representation is made till appropriate orders are passed, no coercive action will be taken against the petitioners by the principal-Corporation.

17. These Writ Petitions are disposed of accordingly. No costs. Consequently, connected miscellaneous petitions are closed.