WP/10849/2015 of Duliga Pushpalatha, Vs Union of India, on 31 December 2015

ORDER:

Heard.

2. In these cases, petitioners are declared successful candidates forawarding LPG Distributorship but were not given letters of intent. Under theimpugned proceedings dated 21.01.2015, the first respondent revised theselection criteria declaring that it shall, however, not apply to suchcandidates who were already given letters of intent. Consequently, thepetitioners, who are successful candidates but who have not been givenletters of intent, seek a declaration that the said revised criteria, as containedin the impugned letters in these writ petitions, shall not apply to selected candidates irrespective of whether letters of intent are given or not.

3. For the sake of convenience, the facts in W.P.No.8543 of 2015 are setout hereunder and with marginal difference, the facts in each of these casesare similar.

4. M/s. Hindustan Petroleum Corporation Ltd. (HPCL), second respondent, issued a notification for the purpose of awarding LPGDealership at Metpally, Karimnagar District, under advertisement dated15.09.2013. Petitioner applied in response thereto and after scrutiny of theapplications, draws were conducted on 12.12.2014, whereunder petitioneremerged as a successful applicant.

HPCL addressed a letter dated 13.01.2015 informing, accordingly, to the petitioner and directed the petitioner to comply with other conditions inthe advertisement. However, petitioner had not received the letter of intent.The third respondent, Chief Regional Manager-LPG, issued a letter dated 17.03.2015 to the petitioner informing him that in linewith the instructions of Ministry of Petroleum and Natural Gas dated21.01.2015, list of eligible and ineligible candidates is being reviewed on theissue of reckoning of the lease period of 15 years and all the activities, suchas, scrutiny/draw held is being declared as null and void and informed thepetitioner that the fresh draw will be held taking into account the freshguidelines of the Ministry, referred to above, and the amount deposited bythe petitioner was returned.

The said communication, being based on the letter of the Ministry dated21.01.2015, whereunder the conditions of eligibility were revised, is alsoquestioned along with the impugned letter of the second respondent dated17.03.2015.

4. Since the said communication from the Ministry of Petroleum andNatural Gas, New Delhi, dated 21.01.2015, is relied upon by the respectiveOil Companies in this batch of cases, it is appropriate to extract the saidletter, which reads as follows:

“No.R-30015/4/2015-MCGovernment of IndiaMinistry of Petroleum & Natural GasShasi Bhavan new DelhiDated : 21[st] January, 2015Government of IndiaMinistry of Petroleum & Natural GasShasi Bhavan new DelhiDated : 21[st] January, 2015

To

1. The Director (Marketing 0IOCL New Delhi,IOCL New Delhi,

2. The Director (Marking)BPCL/HPCL, MumbaiBPCL/HPCL, Mumbai Subject: reckoning of lease period for considering applicationsfor retail outlets.for retail outlets.

Sir,

I am directed to say that on perusal of a grievance petition the Hon’bleMinister 9P &NG) has observed as under:- Applications are being rejected on the ground that the period of leaser as onthe last date for submission of application is less than 15 years. (in somecases the period is short by a few days only).

The OMCs have been adopting hyper-technical interpretation and have beenrejecting such applications, giving rise to needless litigation.

The guidelines of 2014 provide for reckoning the 15 years lease period fromthe date of advertisement.

2. The Hon’ble Minister (P &NG) has therefore desired that he provision ofreckoning 15 years lease period from the date of advertisement may beextended to the following cases provided Lol have not been issued tosuccessful candidates).

i)Where during the course of scrutiny of applications thecandidatures have been rejected on account of period oflease being less than 15 years.candidatures have been rejected on account of period oflease being less than 15 years.

ii)Where at the time of FVC, the candidatures are being orhave been rejected because tenure of lease being of lessthan 15 years.have been rejected because tenure of lease being of lessthan 15 years.

iii)All court cases relating to the above and pending indifferent judicial courts should be revleved and appropriateaction in accordance with the above direction to besubmitted before the various courts.different judicial courts should be revleved and appropriateaction in accordance with the above direction to besubmitted before the various courts.

3. The OMC are requ4ested to sent a compliance report by 29-01-2015positively.positively.

Yours faithfully,

(UC. Pandey)Under secretary to theGovernment of IndiaTele 011-23386339”

5. To appreciate the controversy, it is appropriate to notice the eligibilitycriteria as per the guidelines for selection of regular LPG Distributors relevantto the Advertisement, in question, in August, 2013. Under clause 6.1,Common Eligibility Criteria for all categories applying as Individual isstipulated and the relevant portion under clause vii is as follows:

“vii. Should own as on the last date for submission of application asspecified in the advertisement or corrigendum (if any)A plot of land of minimum dimensions 25 M X 30 M (within 15 km from municipal/town/village limits to the location offered in the same State) forconstruction of LPG Godown for storage of 8000 Kg of LPG in cylinders.The plot of land for construction of godown not meeting the minimumdimensions of 25 M x 30 M will not be considered.”

The word ‘own’ used in the aforesaid clause is explained in the guidelines as follows:

“Reference vii & viii above:

‘Own’ means having ownership title of the property or registered leaseagreement for minimum 15 yrs in the name of applicant/family member (asdefined in multiple distributorship norm of eligibility criteria) as on the lastdate for submission of application as specified in the advertisement orcorrigendum (if any). In case of ownership/co-ownership by familymember(s) as given above, consent in the form of a Notarized Affidavit fromthe family member(s) will be required.”

6. It would be noticed from the above that the requirement of the word‘own’ means giving ownership and title to the property or registered leaseagreement for minimum 15 years in the name of the applicant/familymember as on the last date for submission of the application is satisfied inthe advertisement or corrigendum if any. That criteria was amended underthe impugned proceedings of the Ministry of Petroleum and Natural Gasunder Communication dated 21.01.2015 wherein under the revised criteria itwas provided that reckoning of 15 years lease period from the date ofadvertisement may be extended to all the cases except where letter of intenthas not been issued to successful candidate.

7. In other words, therefore, the revised criteria was made applicable toall the advertisements hitherto issued and applied to all the prospectivedealers except those who have been issued letters of intent. The impugnedproceedings of the third respondent follows the aforesaid revised guidelinesof the Ministry and have cancelled all the draws held as null and void andintended to conduct fresh draws vide their communication dated 17.03.2015issued to the petitioner.

8. Applying the said revised criteria to the petitioner is accordinglyquestioned inter alia on the ground that such of the candidates who aresuccessful in the lots cannot be subject to fresh selection all over again byapplying the revised criteria adopted by the respondent-oil companies almosttwo years after the advertisement so as to nullify the eligibility of the petitioner, particularly, when petitioner was successful in the draw of lots.Similar contentions are also raised in these writ petitions including that thereis discrimination and violation of Article 14 of the Constitution of India in notapplying the said revised criteria to cases where letter of intent is issued butapplying the same to cases such as petitioners, who are successful in thedraw of lots. Petitioners also claim that after the respective oil companiesinformed them that they are successful in the draw of lots they havedeposited further amounts as required and were expecting the letters ofintent to be issued to them. But suddenly the draws were cancelled and freshselection was envisaged by applying the revised criteria. Petitioners,therefore state that such revised criteria cannot be applied retrospectivelyand in any case, there is hardly any difference between petitioners, whowere successful in the draw of lots and the ones who have been issuedletters of intent.

9. The first respondent has filed counter affidavit and a separate counteraffidavit is filed on behalf of respondent Nos.2 and 3.

In the counter affidavit filed by the first respondent it is stated that as per theprevious guidelines for selection, one should have a registered leaseagreement for a minimum period of 15 years as on the last date ofsubmission of application and after finding that by applying such clause thelease period would be short by few days, the revised criteria was adoptedafter the Ministry received several representations.

The first respondent also justifies the application of revised criteria to all theapplicants except those, who are given letters of intent, by categorising the candidates, who applied for distributorship into fourdifferent categories. The relevant portion of the counter affidavit is appropriate to be extracted hereunder:

“15. I submit that in order to explain better, it is submitted that there are fourclasses of person who apply for distributorship (a) persons who have appliedfor distributorship and where draw itself is not held; (b) persons who haveapplied for distributorship and where draw is held but these candidates areunsuccessful; (c) persons who have applied for distributorship and wheredraw is held and the candidate is successful; and (d) persons who haveapplied for distributorship and where draw is held and the candidate issuccessful and file verification of credentials is over and Lot has beenissued to them. If one were to see carefully, it is only in case (d) above, i.e., where LoI is issued that the persons may have taken somefurther steps to commission the distributorship i.e., altering their position.

They may have invested money, applied for permissions, etc. In all othercases, this is not so. Hence, the case of those persons/candidates to whomLoIs have been issued form a different class of persons. There is also astrong justification in not touching such selections. However, the otherpersons cannot claim the same protection. In case where candidate issuccessful in a draw, the Field Verification of Credentials, to see that all thedetails submitted by the candidate is correct or not, itself is not over. It is only once all checks are performed that LoI is issued to him. Thusthese class of persons cannot claim the same protection.”

10. The counter affidavit filed by the respondent–Oil Company is also onthe similar lines.

11. However, learned counsel for the petitioners would dispute the saidstatement in not equating the cases of petitioners with those candidates whohave been given letters of intent, by contending that after intimation that theyare successful candidates each petitioner has deposited the amount asrequired in the terms of advertisement and as such it cannot be said that thecandidates, who received letter of intent stand on a different footing than thepetitioners.

12. Learned standing counsel for the respondent-Oil Company, while supporting the stand in the counter affidavits of both the respondents,as above, submitted that in this batch of cases the stay of selection havingbeen granted the oil company, they are unable to finalise the selection evenafter two years and on account thereof, learned counsel requested the matters to be heard and disposed of urgently.In that context, this batch of cases was heard on priority.

13. Keeping in view the rival contentions, the point that requiresdetermination is as to whether revised criteria can be applied retrospectively.

14. It would be evident from the events as mentioned above that theadvertisement in accordance with the then existing guidelines of 2013, asextracted above, clearly stipulate the requirement of having a 15 years leaseas on the last of date of submission of application and the same is,undoubtedly, satisfied by each of the petitioner.

Thus, having been eligible under the existing guidelines as on the date ofadvertisement, each of the petitioners has participated in the draw of lots and has emerged successful. At this stage, however,

the Government of India issued directions for revising the guidelines andeligibility criteria, which was altered to stipulate that the period of lease of 15years shall be reckoned from the date of advertisement and not from the lastof the date of submission of application.

The revised criteria normally would apply only to future advertisements.However, it was made applicable to the advertisement, in question, bymodifying the eligibility criteria even under 2013 guidelines whereby entireselection process commenced and completed up to drawing of lots anddeclaration of successful candidates got nullified. Petitioners, who haveemerged as successful candidates are now subjected to fresh selectionprocess all over again on the basis of revised eligibility criteria, which isimpermissible (seeK. MANJUSREE V. STATE OF ANDHRA PRADESH [(2008) 3 SCC512]. To my mind, therefore, the revised criteria per se can apply onlyprospectively and not retrospectively.

Point is accordingly answered.

15. Apart from that, it is not in dispute that all the petitioners were eligibleas on the date of advertisement and their eligibility cannot be affected byrevision of eligibility guidelines after about two years of the advertisement.Further the revised criteria itself was not made applicable to suchcandidates, who were given letters of intent, but applied to all other cases. Apparently, it was not made applicable tocases where letters of intent was issued on the ground that those candidatesmight have altered their position and might have spent further money forsecuring distributorship/dealership based on the letter of intent. I do not seeany marked difference between candidates, who have been given letters ofintent and candidates, who are successful in the draw of lots and intimated accordingly.

In fact, all such petitioners, who were successful in the draw of lots, wererequired to deposit the amount in terms of the advertisement and when theywere on the verge of receiving letters of intent, the eligibility criteria was altered. In my view, therefore, out of the fourcategories of persons, as explained in the counter affidavit of the first respondent, extracted above, the candidates falling under category (c) and(d) are almost on the same footing without there being any marked differencebetween the two.

16. The respondents are not applying the revised criteria to category (d)candidates. But for reasons best known, the said benefit is not extended tocategory (c) candidates. In view of the conclusions above, there is no reasonwhy such of the petitioners, who fall in category (c), as above, are denied equal treatment as candidatesfalling under category (d).

17. In the circumstances, therefore, the impugned proceedings are liableto be declared as inapplicable to the respective petitioners, who have been successful in the draw of lots and their cases deserve to beconsidered for issuance of letter of intent and to proceed further in the matterfrom that stage onwards.

The writ petitions are accordingly allowed by declaring that the revisedguidelines of the Government of India dated 25.01.2015 are inapplicable tothe cases of such candidates, who are successful in the draw of lots andthereby, the consequential proceedings of the Oil Company revising theeligibility criteria and applying the said revised criteria to successfulcandidates in the draw of lots is unsustainable. Consequently, therespondents are directed to consider the cases of each petitioner, who aresuccessful in the draw of lots and complete the selection process by issuingletters of intent to each one of them and to proceed further, thereafter, inaccordance with the terms and conditions of the advertisement.

As a sequel, the miscellaneous applications, if any, shall standclosed. There shall be no order as to costs.

_____________________

VILAS V. AFZULPURKAR, J