VINOD KUMAR MITTAL Vs. UNION OF INDIA

JUDGEMENT

(1.) S. C. Mathur, J. This petition is directed against the order of the Deputy General Manager (L. P. G.) of the Indian Oil Corporation Limited, Annexure 14, whereby he has cancelled/ withdrawn the letter of intent dated 30th August 1986, Annexure 4, offering the petitioner distributorship of Liquified Petroleum Gas at Aminabad, Lucknow. The petition has arisen in the circumstances hereinafter indicated.

(2.) ON 25th July, 1984 the Indian Oil Corporation issued advertisement inviting applications for the distributorship in question. It was mentioned in the advertisement that the applicant should not be a near relation of an existing dealer or distributor of any oil company. The near relations were not specified on the advertisement itself but the advertisement indicates that they are mentioned in the pro forma on which application was to be submitted. In response to this advertisement the petitioner applied for the distributorship in question. Apart from the petitioner others had also made applications. The candidates were interviewed on 12th December, 1985 by the Oil Selection Board at Lucknow. Thereafter the petitioner received letter dated 30th August, 1986 Annexure 4 from the Chief L. P. G. Manager of the Corporation offering the distributorship in question to the petitioner. This letter has been described as letter of intent. The letter required the petitioner to do certain things in order to entitle him to get the distributorship. The first requirement was to procure a suitable plot of land measuring 32m 29m either by purchase or lease. In the event of procurement of the plot on lease the initial period of lease was required to be ten years with renewal option thereafter for a minimum period of five years. The land was to be procured for construction of godown and showroom. The petitioner was also required to obtain telephone connection. This the petitioner was required to do within four months from the date of the letter. The godown site and the showroom were required to be cleared by the Lucknow Divisional Office of the Corporation. The godown site was required to be as close to the showroom as possible. Within the same period of four months the petitioner was required to make all financial and other arrangements for operating the distributorship. The petitioner was enjoined to make all efforts to commission the distributorship within six months from the date of the letter. The petitioner was warned that in case the progress made by him was not found to be satisfactory the offer was liable to be withdrawn. This warning was repeated in paragraph 4 of the letter in following terms:- "4. This letter is merely a letter of intent and is not to be construed as a firm offer of distributorship to you. If we find that the progress being made by you towards the above is not to our satisfaction, this offer is liable to be withdrawn. " Paragraph 3 of this letter also bears reproduction. It reads as follows:- "3. The distributorship to you will, on your complying with the conditions spelt out hereinbefore, be confirmed/ formalised by an appointment letter followed by the signing by both you and us of our standard Distributorship Agreement. From this it would appear that a Distributorship Agreement was to be entered into between the parties after the formalities mentioned in the letter of intent had been completed.

(3.) IN the writ petition the petitioner has denied the allegation of close relations having dealership/ distributorship of Oil Companies. He has specifically stated that none of his close relations as mentioned in the printed pro forma has dealership/distributorship of Oil Companies. The petitioner has further made the grievance that the statement of relationship is bald as neither the name of the alleged relation has been disclosed nor his relationship with the petitioner. The action of withdrawal/cancellation of the intent has been described as arbitrary. Principle of Promissory Estoppel has also been invoked on the ground that the petitioner acted upon the assurance contained in the letter of intent and altered his position by making substantial financial investments.