HASSAN M. Vs. UNION OF INDIA

JUDGEMENT

(1.) In all these writ petitions the challenge is against sanctioning of new petroleum outlets by the Oil Marketing Companies (OMC) in a manner causing prejudice to the quantum of sale in the existing outlets situated nearby to the proposed sites. In some of the cases notifications calling for allotment and consequent steps taken by the OMCs are under challenge. In some other cases challenge is against grant of NOC by the District Collectors under Rule 144 of the Petroleum Rules, 2002. Grounds raised are many folded. In most of the cases it is contested that the OMCs have published notifications inviting applications for allotment of new outlets without conducting any study about the feasibility or necessity for new outlets in the area in question. It is also contended that the decision to have new outlets in such areas are taken without compliance of the guidelines and circulars issued by Government of India. In some other cases contentions are that, the existing outlets of the petitioners were allotted under reserved categories for Scheduled Castes and Scheduled Tribes and in such cases the allotment of outlets were made on the basis of priority. Oil Marketing Companies are at an obligation to ensure minimum targeted sale in such cases and no new outlets can be allotted in detrimental to the business interests of such persons. In some of the cases it is also contended that while issuing NOCs, the District Collectors have not considered compliance of different criteria stipulated in the circulars and therefore there are violations of the statutory provisions. Identical issue came up for consideration in a batch of writ petitions disposed of by this Court through a common judgment, reported as Mary Ulahannan v. Union of India, 2011 3 ILR(Ker) 56. In those cases the allegation was that the NOCs were granted in violation of the circular issued by the State Government prescribing norms, which was introduced in consideration of public interest and public safety. While dealing with the issue involved the OMCs raised contention that the State Government have no jurisdiction to issue any such circular in exercise of their executive power, because legislative competence on the subject vests with the Union Government, under the relevant provisions of the Constitution. It was also contended that the petitioners therein have no locus standi because they cannot raise any challenge based on fundamental rights guaranteed under the Constitution. The companies took a stand that there cannot be any monopoly claim in the matter of retail outlets of petroleum products. In support of such contention they have pointed out various judicial precedents which will indicate that no writ petitions will lie by any business rivals, as there is no violation of any fundamental rights. This Court found that if a person is entitled to have a retail outlet on the basis of NOC issued by the Central Government, the eligibility is not liable to be watered down by the State Government or by any authority under the State. The very fact that the Rules do not contemplate any stipulations of 'distance rule' or 'quantum rule', no such stipulation can be prescribed or implemented virtually effecting the business prospects of others, who has vested rights under Article 19(1)(g) and other relevant provisions of the Constitution. It was further observed that absence of any such provisions in the relevant Acts or Rules as well as absence of any norms to that effect would suggest that the legislative wisdom of the Union Government has not found it necessary to impose any restrictions/conditions with regard to the trading rights of citizens. This Court also found that contentions based on the claim of some of the petitioners as allottees under the category of SC & ST also cannot be sustained, mainly because of the fact that there is no agreement or contract of dealership executed by them with the companies so as to suggest that the companies are restrained from issuing any further outlets within the same locality. Even though much reliance was placed by the petitioners on the letters issued by the Hon'ble Minister of Petroleum and Natural Gases addressed to another Minister with respect to the scheme for starting of new outlets, this Court observed that, it is not an order nor does it has any binding force. It was observed that no distance norms have been specified in the policy guidelines as on date and it will indicate that the Union Government has not given any commitment with respect to starting of new retail outlets. The finding of this Court is that, in the absence of any Rules/orders/norms stipulated by the appropriate Government, which is the Central Government, this Court can consider the matter only in accordance with law as it stands as on the date. On the question of locus standi of the petitioners to challenge the grant of similar licences to business rivals in the locality, this Court placed reliance on various decisions of the Hon'ble Supreme Court, The Nagar Rice and Flour Mills and Others v. N. Teekappa Gowda & Bros. and Others, 1971 AIR(SC) 246 and Simbhaoli Sugar Mills Ltd. v. Union of India, 1993 AIR(Del) 219 and many other cases. This Court expressed the opinion that the existing licences of retail outlets have no locus standi to challenge the allotment of new outlets. For arriving at such a conclusion the learned Judge had placed much reliance on a decision of this Court in M/s. Reliance Industries Ltd. v. Commissioner of Land Revenue,2007 2 ILR(Ker) 193 and on a decision of the Madras High Court in Nataraja Agencies v. The Secretary, Ministry of Petroleum and Natural Gas, 2005 1 CTC 394. Discarding a decision to be contrary rendered by the Orissa High Court it was categorically found that the writ petitions will not survive on the question of locus standi.

(2.) The decision in Mary Ulahannan's case , was taken up in appeal before the Division Bench. In the decision in Basheer M.M. and Another v. State of Kerala and Others, 2011 4 KerLJ 457 the said judgment was reversed to the extent of directing the Government to constitute the high level joint committee to hear objections of existing operators. It was held by the Division Bench that the OMCs should keep in mind the viability of new retail outlets on the basis of the minimum quantity of business stipulated. It was also held that, interest of members belonging to Scheduled Caste/Scheduled Tribes, war injured, war widows, unemployed educated youth etc. should also be protected as they have a legal right to oppose indiscriminate and indiscrete opening of the new Petroleum outlets near to their existing outlets. Further this Court observed that, the competition among OMCs in sale of petrol and diesel will not promote consumer interest and will lead to escalation of price. Hence this Court directed to formulate guidelines imposing restrictions on establishment of new petroleum outlets.

(3.) The above decision in Basheer's case was taken up in challenge before the Hon'ble Supreme Court by the Petroleum companies. Civil appeals filed by the OMCs Nos. 2784/2013 to 2792/2013 was disposed of by the Hon'ble Supreme Court through an order dated 2nd April, 2013. True extract of the order is reproduced hereunder.