RAHUL YADAV & ANR. Vs. M/S. INDIAN OIL CORPORATION LTD. & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 4909 of 2015, Judgment Date: Jul 01, 2015
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4909 OF 2015
(@ SLP(C) NO. 14256 OF 2014)
Rahul Yadav & Anr. ... Appellants
Versus
M/s. Indian Oil Corporation Ltd.
and Others ... Respondents
J U D G M E N T
Dipak Misra, J.
Leave granted.
2. The appellant is the owner in possession of the premises being land
measuring 2571 sq. yards on Rewari-Palwal-Delhi Road, Rewari and Khewat No.
1139/941, Khatauni no. 1380, Rectangle No. 117, Kila No. 2412/2 (2-0),
Khewat No. 1125/930 mm, Khautani No. 136 mm, Rectangle No. 117, Kila No.
24/211 (1-9), Rectangle N. 150, 6/80 share Le. 6 maria out of Kila No. 411
(4-0) total measuring Kanal 5 marla in 3 kittas thereabouts. The
respondent no.1, namely, Indian Oil Corporation (for short, the
‘Corporation’) issued an advertisement in the newspaper on 6.10.2000 for
retail outlet dealership in the state of Delhi and Haryana for which the
appellant applied and was selected. Letter of intent was issued in his
favour on 6.7.2001. It was stipulated in the said letter of intent that
the appellant was required to own a suitable plot of land and entered into
a long-term lease with the Corporation at the rate acceptable to the
respondent. To meet the mandate of the letter of intent, the appellant
bought the land in question for the purpose of getting dealership
agreement. On 23.10.2001, the appellant executed a long-term lease of 30
years in accordance with the terms of the advertisement and the letter of
intent in favour of the Corporation at the monthly rent of Rs.10,000/-.
After completion of formalities, a dealership agreement was entered into
between the appellant and the Corporation on 14.5.2002. Be it noted, as
per the letter of intent, the Corporation was to provide certain facilities
and develop the land as an outlet with an office building, storage tank and
pump, etc. for operating the dealership and it was to charge the appellant
a licence fee for the said facilities.
3. The allotment of such petrol pumps by the competent authorities
became a front page news item in Indian Express mentioning that there had
been grant of retail outlets of petrol pumps to the near and dear ones of
the political functionaries on account of political consideration. Number
of cases were filed in various courts and all of them were transferred to
this Court and a two-Judge Bench in Onkar Lal Bajaj v. Union of India[1],
after referring to such earlier event that was the subject matter of Common
Cause, a Registered Society v. Union of India[2], wherein it had been
observed that for these kind of allotments, a transparent and objective
criteria/procedure has to be evolved based on reason, fair play and non-
arbitrariness, adverted to many a facet, namely, the criteria evolved for
grant of dealership, the concept of probity in governance and the concept
of public interest, the role of the executive and the right of the public
to know the circumstance under which their elected representatives get the
outlets and/or dealerships/distributorships, and directed as follows:-
“In view of the aforesaid:
I. We appoint a committee comprising Mr Justice S.C. Agrawal, a retired
Judge of this Court and Mr Justice P.K. Bahri, a retired Judge of the Delhi
High Court, to examine the aforesaid 413 cases. We request the Committee to
submit the report to this Court within a period of three months.
II. The Committee would devise its own procedure for undertaking the
examination of these cases. If considered necessary, the Committee may
appoint any person to assist it.
III. We direct the Ministry of Petroleum and Natural Gas, Government of
India and the four oil companies to render full, complete and meaningful
assistance and cooperation to the Committee. The relevant records are
directed to be produced before the Committee within five days.
IV. We direct the Ministry to appoint a nodal officer not below the rank of
a Joint Secretary for effective working of the Committee.
V. The Central Government, State Government/Union Territories and all
others are directed to render such assistance to the Committee as may be
directed by it.
VI. The oil companies are directed to provide as per the Committee’s
directions, the requisite infrastructure, staff, transport and make
necessary arrangements, whenever so directed, for travel, stay, payments
and other facilities etc.
VII. In respect of any case if the Committee, on preliminary examination of
the facts and records, forms an opinion that the allotment was made on
merits and not as a result of political connections or patronage or other
extraneous considerations, it would be open to the Committee not to proceed
with the probe in detail.”
4. It is necessary to state here that certain transferred cases were
finally disposed of and certain transferred cases were directed to be
listed after receipt of the report. After reports were received, certain
interim applications were filed by the persons who were aggrieved by the
report of the committee appointed by this Court. In Mukund Swarup Mishra
v. Union of India[3], the Court referred to Onkar Lal Bajaj (supra) and
while dealing with the plea of promissory estoppel opined thus:-
“We are also not impressed by the argument of the petitioners that the
doctrine of promissory or equitable estoppel would apply. May be that the
petitioners have spent some amount. But once the allotment itself was found
to be vitiated, obviously they cannot claim any benefit as allotment was
contrary to law. Moreover, such allotment has been made in remote past and
even though an order of cancellation had been passed by the Central
Government as early as in August 2002, the allottees have been protected by
interim order passed by this Court. Even after the decision in Onkar Lal
Bajaj1, interim order was continued. In the circumstances, for more than
four years interim order is in favour of allottees even though the
allotment was found to be illegal or contrary to law. In our opinion,
therefore, it is not open to the allottees whose allotments have been found
to be vitiated to plead equity.”
After so stating, the Court proceeded to delve into the
justifiability of the report and in that regard observed that:-
“In our opinion, the learned amicus curiae is right that the Committee had
considered in detail individual cases and submitted the report. This Court,
therefore, would consider a complaint of an allottee who can successfully
put forward his complaint and may satisfy this Court that in the facts and
circumstances of the case, the finding of the Committee that the allotment
was not on merits was not correct. But only in those individual cases, the
Court would consider and may grant relief to such applicants. It, however,
cannot be said that the report of the Committee was without power,
authority or jurisdiction or was uncalled for and liable to be ignored.”
5. It is apt to note here that the Court proceeded to scrutinize the
report State-wise where grants were made and as far as the States of Punjab
and Haryana are concerned, it has been held thus:-
“State of Punjab
36. In respect of the State of Punjab, the Committee considered thirty-
seven cases referred to it. It found that seven allotments were on merit
and twenty-nine allotments were not in consonance with the guidelines. Out
of them, twenty-six have filed applications. We have been taken through the
reasoning recorded by the Committee. So far as cases of Shri Surinder
Singh, Chander Kant Bhatia, Gurpreet Singh, Smt Kavita Rani, Smt Suman
Lata, Ms Ruby Sekhri, Mr Manmohan Singh, Mr Rajesh Madan and Mr Tejinder
Singh are concerned, they appear to be borderline cases. In our view, it
may not be appropriate to cancel the allotment in favour of these nine
persons. Their applications are allowed. Rest of the cases do not call for
interference and the applications are rejected. There are six applications
by non-allottees. They are also rejected as we are not concerned with non-
allottees.
State of Haryana
37. In regard to the State of Haryana, the Committee considered twenty-one
cases referred to it. It found no irregularity in allotment in seven cases.
It disapproved allotments in fourteen cases. Out of them, twelve have filed
applications. We find no infirmity in the conclusions arrived at or reasons
recorded by the Committee and no interference is called for. The other
applications are rejected.”
6. There is no cavil over the fact that the grant of dealership in
favour of the appellant was cancelled by the Committee and that received
the stamp of approval of this Court. After the decision of this Court, the
Corporation terminated the dealership and intended to take back the
possession from the dealer with a view to appoint another dealer as
specifically permitted in the lease deed as well as in the dealership
agreement. The appellant built a wall to stop the functioning of the
retail outlet and refused to hand over the possession which constrained the
Corporation to initiate a proceeding for eviction under the Public Premises
(Eviction of Unauthorised Occupants) Act, 1971 (for short, “the 1971 Act”)
as a valid lease deed existed between the appellant and the respondent, a
public sector undertaking. The appellant participated in the proceeding
and after hearing commenced, he sought to go for arbitration, but the said
prayer was not accepted by the Estate Officer on the ground that the same
was not permissible under the provisions of the 1971 Act. After six years
of participation in the said proceeding, he initiated a civil suit alleging
illegality in termination of the lease and prayed that the proceedings
under the 1971 Act to be kept in abeyance which was not accepted. The
competent authority, that is, the Estate Officer passed an order of
eviction in exercise of powers conferred on him under sub-section 1 of
Section 5 of the 1971 Act, after rejecting all the contentions raised by
the appellant.
7. Being aggrieved by the aforesaid order, the appellant preferred Civil
Appeal No. 92 of 2013 before the learned District Judge, Rewari under
Section 9 of the 1971 Act. It was contended before the learned District
Judge by the appellant that the order passed by the Estate Officer was
passed on surmises and conjectures; that the Estate Officer had failed to
appreciate that the lease deed and the dealership agreement were
interlinked and hence, the lease deed could not survive after the
cancellation of dealership agreement; that the 1971 Act was not applicable
to him as he was not in unauthorized occupation, but is the owner of the
premises; that the competent authority had directed order of eviction to
circumvent the eventual result of the pending suit; and that there had been
violation of the principles of natural justice.
8. The learned appellate Judge, on the basis of the material brought on
record, came to hold that the respondent is a government company and the
premises were taken on lease by it and hence, the premises fell within the
meaning and ambit of “public premises”, as defined under Section 2(e) of
the 1971 Act; that the submission that the lease was contingent upon the
appointment of the appellant as a dealer and upon his ceasing to be such
the lease agreement became extinct was sans substance, for the document
granting dealership and the lease agreement were different documents and
they were neither interlinked nor interdependent; that the fact that the
dealership agreement and the lease agreement had been executed separately
would leave no room for doubt that they were independent and it could not
be inferred from any one of the covenants agreed to between the parties
that one agreement was to come to an end on the termination of the other;
that it could not be construed that once the dealership stood terminated
pursuant to the order passed by this Court, the lease agreement also stood
terminated; that the submission to the effect that the proceeding under the
1971 Act had been initiated to circumvent the suit instituted by the
appellant was too spacious to be accepted. Being of this view, the
learned appellate Judge recorded the conclusion thus:-
“As an upshot of the discussion foregoing, it can be safely concluded that
the appellant was running a retail outlet only on a leave and licence basis
and the moment his dealership licence was terminated, he was bound to
vacate the premises which, for all intents and purposes, are public
premises. Needless to say that by virtue of lease agreement the respondent
is at liberty to run the outlet/petrol pump even through third and outside
party without any restriction and objection from the appellant. So long as
the lease agreement is intact and the civil court does not order eviction,
the respondent has right not only to remain in possession but to oust any
licencee/trespasser. The appellant may be the owner of the premises, but
by virtue of the lease deed, it is the respondent who has the right to
occupy premises.”
9. Being aggrieved by the aforesaid order passed by the appellate court,
the appellant preferred CWP No. 26287 of 2013 in the High Court of Punjab
and Haryana and the learned Single Judge, after referring to the authority
in Mukund Swarup Mishra (supra), came to hold that the Committee had
considered 21 cases and it had disapproved allotments in 14 cases and the
dealership of the writ petitioner was one of them and, therefore,
proceeding under the 1971 Act was a sequitur of the conclusions arrived at
by the judgment of this Court, and hence, the orders passed by the forums
below did not warrant any interference. Being of this view, the writ
petition was dismissed by the learned Single Judge.
10. The non-success in the writ petition compelled the appellant to
prefer LPA No. 665 of 2014 and the Division Bench concurred with the view
expressed by the learned Single Judge and declined to interfere in intra-
court appeal.
11. We have heard Mr. Kapil Sibal, learned senior counsel for the
appellant and Ms. Meenakshi Arora, learned senior counsel for the
Corporation, the first respondent herein.
12. The controversy, as we perceive, raises two issues though an attempt
had been made by the appellant to create an imbroglio before the appellate
court wherein the order of the Estate Officer was in assail. The thrust of
the matter is whether the interpretation of the clauses of the agreement
would anyway suggest any kind of inextricable connection to place a
construction on them to the effect that once the dealership is cancelled,
the land owner who had parted with the land by way of a long-term lease for
a period of thirty years, can be allowed to retain possession over the
land; and only the super structure which had been affixed on the land by
the Corporation, can only be removed.
13. Mr. Sibal, learned senior counsel for the appellant has taken us
through the advertisement issued on 6.10.2000. It is urged by him that the
appellant was compelled to purchase the land as it was the basic
requirement to meet the eligibility criteria to get the allotment of
dealership. It is his proponement that there has to be a conjoint reading
of the advertisement issued by the respondent, the letter of intent and the
lease deed and that would clearly establish that the appellant was to make
available a suitable plot of land and transfer the land on a long-term
lease to the Corporation for the sole and exclusive purpose of running a
retail outlet dealership of respondent-Corporation and hence, the said
lease deed cannot be looked at as a singular or solitary document, more so,
when the appellant had agreed to give such highly valuable land to the
Corporation on a nominal monthly rent of Rs.10,000/-. Emphasis is laid on
the intention of creating the documents. To appreciate the said
submission, we have carefully perused the advertisement and other
documents. Relevant part of the advertisement reads as follows:
“For locations for Retail Outlet Dealership and LPG Distributorship. The
applicant should furnish, along with the application, details of land/land
for godown which he/she may make available for the
dealership/distributorship considering the location of the land from the
point of view of commercial and applicants willing to transfer the land on
ownership/long lease to the Oil Company at the rates acceptable to the Oil
Company would be given preference if an applicant, after selection, is
unable to provide the land indicated by him/her earlier, within a period of
2 months the allotment of the dealership/distributorship made to him/her
would be cancelled.”
14. In this context, we have to scrutinize the letter of intent dated
6.7.2001. The relevant paragraphs of letter of intent read as follows:-
For enabling you to operate the dealership said above, we will develop the
Retail Outlet at Rewari, and provide the same to you with certain
facilities such as suitable plot of land duly developed as an outlet with
an office building, storage tank and pump etc. for operating your
dealership.
xxx xxx xxx
This letter is merely a letter of intent and is not to be constructed as a
firm offer of dealership to you. The dealership to you will, on your
complying with the condition spelt out herein above, be
confirmed/formalised by an Appointment Letter followed by the signing of
our standard dealership Agreement.
xxx xxx xxx
2. You have stated in your application form/during the interview that
you are willing to transfer the land on ownership/long lease to the Indian
Oil corporation Ltd. at the rates acceptable to Indian Oil Corporation Ltd.
Accordingly, you will make available a suitable plot of land as indicated
by you within a period of TWO months from the date of this letter, after
getting suitable clearance from us in writing for the particular plot of
land. You are required to transfer the land on ownership/long lease for a
minimum period of 15 years with one renewal option for next 5 years under
such term and conditions as may be agreed upon between you and Indian Oil
Corporation Ltd. In case you fail to make available the suitable land
within 2 months, this offer is liable to be withdrawn. However, there is
no commitment from India Oil Corporation Ltd. for taking the said land from
you.”
15. Keeping in view the aforesaid documents, it is necessary to look at
the lease agreement dated 23.10.2001. The relevant clauses of the lease
deed are extracted below:-
“..the Lessor/s do and each of them doth hereby demise unto the Lessee All
that the said land and premises situated at Rewari, Tehsil & District
Rewari in the Registration Sub District of Rewari District and more
particularly described in the Schedule hereunder written TOGETHER WITH
structure that may hereafter be erected thereon by the Lessee to hold the
premises hereby demised hereafter for brevity’s sake referred to as “the
demised premises” unto the lessee for a term of 30 years commencing from
the date of lease signed, renewable and determinable as hereinafter
provided yielding and paying therefore during the said term the monthly and
the proportionately for any part of the month the rent of Rs.10,000/- per
month (Rupees Ten Thousand only) to be paid on or before the 5th day of
each and every calendar month, the first of such monthly rent to be paid
from the date of commencement of lease deed proportionately and the
subsequent rent to be paid on or before the 5th day of every succeeding
month regularly (with increase in rent by 10% after every three year).
xxxxx xxxxx xxxxx
The Lessee shall be free to use and the Lessor shall permit the use of
demised premises by the Lessee for itself and for all its associated
concerns. The Lessee shall also be entitled to use the demised premises
by their agents, sales representatives, distributors, local dealers, other
licensees or representatives, customers and all other authorised persons.
The Lessee shall be entitled to assign, transfer, sublet, under let, or
part with possession of the demised premises or any part thereof to any
person abovenamed whomsoever it chooses without the consent of the Lessor.
The Lessee shall be entitled to appoint remove, re-appoint change and
substitute any dealers, agents, licensees and other authorised
representatives on and in respect of the demised premises without the
consent of the Lessor.
xxx xxx xxx
The Lessee shall be entitled to excavate, dig or break open the surface of
any part of the demised premises at any time, during or after the
expiration of the term hereby granted and to remove any stone, sand,
gravel, clay, earth or other material therefrom for the purpose of
erecting, laying, maintaining and/or removing storage tanks, containers,
receptacles and other erections or installations for the purpose of the
business of the Lessee or any other person.
(j) The Lessee for the purpose of the construction and erection mentioned
in any of the preceding sub-clause shall be entitled to allow any, sub
lessee, dealer, sub dealer, agent, person or other authorised
representative or person to enter upon the demised premises and to build
and erect according to the Lessee’s specifications requisite items herein
mentioned without any let hindrance or obstruction from the Lessor/s or any
other person claiming by, through or under him/her/them.”
16. We have referred to the clauses in extenso to highlight that the
lessee had entered into an agreement of lease with the appellant with
immense liberty and the lease deed does lay down that the lessee has the
freedom to sublet and appoint another dealer. The lease would remain in
force till the dealership of the appellant continued and the licence
remained in vogue. At this juncture, it is pertinent to reproduce certain
clauses of the dealership agreement which would clearly spell out the
purpose. They read as follows:-
“2. The Corporation do hereby grant to the Dealer leave and licence and
permission for the duration of this Agreement to enter on the said premises
and to use the premises and outfit for the sole and exclusive purpose of
storing, selling and handling the products purchased by the Dealer from the
Corporation, Save as aforesaid, the Dealer shall have no right, title or
interest in the said premises or outfit and shall not be entitled to claim
the right of lessee, sub-lessee, tenant or any other interest in the
premises or outfit, is being specifically agreed and declared in particular
that the Dealer shall not be deemed to be in exclusive possession of the
premises.
3. This Agreement shall remain in force for five years from 14th day of
May, 2002 and continue thereafter for successive periods of one year each
until determined by either party by giving three months notice in writing
to the other of its intention to terminate this Agreement, and upon the
expiration of any such notice this Agreement and the Licence granted as
aforesaid shall stand cancelled and revoked but without prejudice to the
rights of either party against the other in respect of any matter or thing
antecedent to such termination provided that nothing contained in this
clause shall prejudice the rights of the corporation to terminate this
Agreement earlier on the happening of the events mentioned in clause 56 of
this Agreement.
xxx xxx xxx
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 places as the Corporation may think fit. The dealer
shall not be entitled to any claim or allowance for such direct or indirect
sales.”
17. It is appropriate to mention here that clause 56 of the said
agreement stipulates that notwithstanding anything to the contrary
containing before the said clause, the Corporation would be at liberty to
terminate the agreement forthwith upon any time after happening of certain
events. The conditions are manifold. We may, for the sake of
completeness, reproduce two conditions:-
“(h) If the Dealer does not adhere to the instructions issued from time to
time by the Corporation in connection with safe practices to be followed by
him in the supply/storage of the Corporation’s products or otherwise.
(i) If the Dealer shall deliberately contaminate of temper with the
quality of any of the Corporation’s products.”
18. On a plain reading of the aforesaid agreement, it is clear as noon
day that it has no connection whatsoever with the lease agreement. Both
the agreements are independent of each other. The appellant was a dealer
under the lessee, that is, the Corporation. The dealership is liable to be
cancelled on many a ground. In case there is a termination, dealership is
bound to be cancelled and at that juncture, if the lease deed is treated to
have been terminated along with the dealership, it will lead to a situation
which does not flow from the interpretation of the instruments. The
dealership agreement has been terminated because of the decision rendered
by this Court in Mukund Swarup Mishra (supra). The consequence of
cancellation of the dealership is a sequitur of the judgment. The
inevitable consequence of that is the appellant has to vacate the premises
and the Corporation has the liberty to operate either independently or
through another dealer. The appellant cannot be allowed to cause
obstruction or create an impediment. The submission that the appellant
entered into the lease agreement at a monthly rent of Rs.10,000/- as it was
given the dealership is a mercurial plea, only to be noted to be rejected.
The dealership was availed of as has been held by this Court in an
inapposite manner. In such a situation, consequences are to be faced by
the appellant.
19. The second issue which has been feebly raised by the learned senior
counsel for the appellant that the 1971 Act would not be applicable has
really no force. Admittedly, the respondent is a public sector
undertaking. The appellant whose dealership has been cancelled, cannot
claim possession to retain possession on the basis of ownership of the land
as the lease is in continuance. Therefore, he is a trespasser. Thus, the
provisions of the 1971 Act apply on all fours and accordingly we repel the
said submission.
20. We will be failing in our duty if we do not take note of another
submission which has been alternatively and assiduously canvassed by Mr.
Sibal, learned senior counsel for the appellant. It is urged by him as the
termination was directed by the Corporation by virtue of the judgment of
this Court and not because of any wrong committed by the appellant and
hence, his case should be reconsidered for grant of dealership under the
new policy. Ms. Meenakshi Arora, learned senior counsel for the
Corporation has filed the prevalent policy. We do not intend to allude to
the same and issue any direction. Once there is a policy and any candidate
fits in, needless to say, when there is an advertisement; he is at liberty
to apply. We are not disposed to advert to the policy at this juncture.
If the policy permits, as we have said, the appellant is at liberty to
apply. However, we must clarify that our grant of liberty does not mean
that the appellant shall create an impediment for the Corporation to enter
into and take possession and run the petrol pump on its own or appoint a
dealer.
21. In view of the aforesaid analysis, it is directed that the appellant
shall hand over the peaceful possession of the land and the structure and
other fixtures standing thereon to the Corporation after demolishing the
wall on his own within four weeks hence, failing which he shall be liable
for contempt of this Court.
22. In view of the aforesaid premises, the appeal, being sans substratum,
stands dismissed with the directions recorded in the preceding paragraph.
Ordinarily, we would have thought of imposing costs but we have refrained
from doing so as we have directed the appellant to vacate the premises
within four weeks so the first respondent-Corporation can operate either on
its own or through any agent or dealer.
.............................J.
[Dipak Misra]
..........................., J.
[Uday Umesh Lalit]
New Delhi
July 1, 2015
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[1] (2003) 2 SCC 673
[2] (1996) 6 SCC 530
[3] (2007) 2 SCC 536
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