VINOD KUMAR MITTAL Vs. UNION OF INDIA

JUDGEMENT

(1.) 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of the Deputy General Manager (L.P.G.) of the Indian Oil Corporation Limited, Annexure 14, whereby he has cancelled/ withdrawn the letter of intent dated 30/08/1986, Annexure 4, offering the petitioner distributorship of Liquified Petroleum Gas at Aminabad, Lucknow. The petition has arisen in the circumstances hereinafter indicated.

(2.) On 25/07/1984 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 12/12/1985 by the Oil Selection Board at Lucknow. Thereafter the petitioner received letter dated 30/08/1986 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:-

(3.) The petitioner states that on receipt of this letter he took various steps to comply with the requirements specified in the letter. He accordingly acquired land at Mohni Purwa for construction of godown. This land was situate about 4 K.M. from Aminabad, Lucknow, where the petitioner was required to have his showroom. On 31/10/1986 the Senior Divisional Manager of the Indian Oil Corporation Ltd. wrote to the Deputy Chief Controller of Explosives for grant of provisional licence to the petitioner for Construction of L.P.G. godown. In view of this recommendation the Deputy Chief Controller, Explosives granted approval to the plan submitted by the petitioner for construction of godown for storage of L.P.G. cylinders. The godown was inspected by the officers of the Corporation and thereafter the Deputy Chief Controller, Explosives, North Circle, Agra granted licence to the petitioner on 20/10/1987 for storage of L.P.G. cylinders at the said godown. For the purpose of showroom the petitioner acquired a premises at 25 Old Nazirabad Lucknow at a monthly rent of Rs.700.00. The petitioner took loan of Rs.50,000.00 from the State Bank of India Hazaratganj Branch, Lucknow. He also obtained the phone connection, paying Rupees 500/- per month as rent for the apparatus. He got the godown insured for Rs. 5 lakhs and the showroom for Rs. 50,000.00, paying the premium of Rs. 2783.00 and Rs. 255.00 on the insurance policies respectively. The business name of M/s. Aminabad Gas Service suggested by the petitioner was approved by the Manger (LPG) of the Corporation through his letter dated 29/04/1987. The Senior Area Manager, Indian Oil Corporation Ltd., (Marketing Division), Northern Region required the petitioner through telegram dated 26/10/1987 to attend a training course at Delhi. The petitioner successfully completed the course. Earlier the petitioner's Mechanic and Deliverymen were also given relevant training at the cost of the petitioner. The petitioner got himself registered with the Sales Tax authorities for purpose of Sales Tax assessment for the year 1987-88. The petitioner asserts that on 18/01/1988 Sri S.K. Singh, Senior Area Manager (LPG), Indian Oil Corporation Ltd. Lucknow sent a completion report to the Deputy General Manager (LPG), New Delhi stating therein that the petitioner has completed all the formalities for the commissioning of the distributorship. According to the petitioner in view of the completion report sent by the Senior Area Manager he was eagerly waiting for the formal grant of distributorship but instead of getting the same he received the impugned order letter dated 6/06/1988 from the Deputy General Manager (LPG). The impugned letter gives only one reason for withdrawing/ cancelling the letter of intent. It mentions -