Writ Petition No.5232 of 2009

10th January, 2011

Petitioner Counsel: Mr. M. G. BHANGDE,Mr. A. SHELAT
Respondent Counsel: Mr. N. W. SAMBRE

Cases Cited:
Ramana Dayaram Shetty Vs. The International Airport Authority of India, AIR 1979 S.C. 1628 [Para 9]

JUDGMENT

S. A. BOBDE, J.:- Rule returnable forthwith. Heard the learned Counsel for the parties finally by consent.

2. The petitioner has approached this Court against the removal of his name from the panel prepared for selection of distributorship of Liquified Petroleum Gas ("LPG" for short) for Mouda. The petitioner's name has been removed from the panel on the sole ground that the site for showroom proposed by him is not located in the township of Mouda. The setting of this case is in Mouda which is a name used for a small town in the rural area, also for its Gram Panchayat and its Tahsil - all three of which are called Mouda.

3. The Indian Oil Corporation which is a Corporation and which inter alia manufactures and distributes Liquified Petroleum Gas for domestic purposes issued a notice for appointment of a Distributor for LPG along with the other two Corporations, namely, the Bharat Petroleum Corporation and the Hindustan Petroleum Corporation for the location of Mouda. The advertisement gave the location as follows :

Sr. No.	Regional Office/Territory Area Office	District	Location	Category	Marketing Plan	Type of Market	Security Deposit (Amount Rs.Lakhs)
23	Nagpur	Nagpur	Mouda	OP	2004-07	Rural	2.5

Clause 13 reads as follows :

"13. BASIC INFRASTRUCTURE FACILITIES REQUIRED FOR OPERATION OF LPG DISTRIBUTORSHIP :

13.1) GODOWN FOR STORAGE OF FILLED LPG CYLINDERS : Godown approved by Chief Controller of Explosives is required for storage of filled cylinders. Godown/land for construction of Godown will be suitable, if it is located within 15 kms. or in the area of operation (trading area) of the advertised location, freely accessible through all weather motorable approach road. The plot should be plain, in one contiguous lot, free from overhead power transmission or telephone lines. Pipelines/Canals/Drainage/Nallahs/Public Roads should not pass through the plot.

Minimum Dimensions of Plot : 27 m x 26.15 m.

13.2) SHOWROOM : Showroom as per the standard layout can be constructed in a shop/land located in the area of operation (trading area) of the advertised location for LPG distributorship and should be easily accessible to general public through a suitable approach road........."

4. In response to this advertisement and desiring to do business with the Indian Oil Corporation, the petitioner made an application. In that application, the petitioner applied for distributorship at the location Mouda and stated that he had a suitable showroom in Mouda. It is pertinent that along with the application he gave the site plan of the proposed showroom in Survey No.64 at Dahali. The petitioner also annexed a copy of the sale-deed of the said land at Dahali. The Indian Oil Corporation empanelled the petitioner as eligible for selection for the distributorship. However, on field investigations the officers of the Corporation came to the conclusion that the petitioner's showroom was proposed to be located outside Mouda and, therefore, removed his name from the panel. The petitioner has, therefore, approached this Court.

5. This Court, pending this petition granted an opportunity to the respondent Corporation to hear the petitioner which hearing has concluded, with the same result.

6. Mr. M. G. Bhangde, learned Senior Counsel for the petitioner, submitted that the petitioner has all along disclosed that the site for the proposed showroom would be at a village called Dahali, which is admittedly within 3 kms. from the township of Mouda. It is further submitted that in any case, it is permissible under the advertisement to have the showroom located within the area of operation for the purposes of being accessible to the general public through a suitable approach road. Therefore, according to the petitioner, there was no reason to remove his name from the panel.

7. The contention on behalf of the Indian Oil Corporation is that the petitioner has proposed the location of the showroom outside the township of Mouda and there is no reason why he should be considered as eligible for this distributorship particularly since it is open to the Corporation to appoint another distributor for the area of Dahali. We must point out at the outset that this contention is purely speculation. There is no propriety to appoint a distributor for Dahali which is a small village.

8. We have considered the matter and we find that there is no merit in the dis-empanelment of the petitioner. The advertisement clearly stipulated vide Clause 13.2 that there shall be a showroom located in the area of operation "trading area" of the advertised location of the LPG distributorship. This clearly means that it was not necessary for the showroom to be located in the township of Mouda but could be located in the area of operation of the advertised location. Assuming that the location was restricted to the township of Mouda, which does not appear to be so from the fact that the name is used for 3 different geographical areas, what is crucial is the extent of the area of operation. It is pointed out on behalf of the petitioner that the Indian Oil Corporation have themselves replied by letter dated 26.8.2009 to the petitioner under the Right to Information Act that for a market under the rural category, the trading area is within 15 kms. radius of the concerned location where the distributorship is established. It is thus clear that the petitioner cannot be considered ineligible for being considered for the distributorship only on the ground that his proposed showroom is not situated within the township of Mouda. The proposed showroom is located within the area of operation of the concerned location at Dahali located within the area of operation which is within 15 kms. radius from Mouda near the village Dahali.

9. It is a settled law that an Executive Authority must be rigorously held to the standards by which it professes its actions to be judged. In Ramana Dayaram Shetty, Appellant Vs. The International Airport Authority of India and others, Respondents reported in AIR 1979 S.C. 1628, at page 1635 the Supreme Court has observed as follows :

"10. Now, there can be no doubt that what para (1) of the notice prescribed was a condition of eligibility which was required to be satisfied by every person submitting a tender. The condition of eligibility was that the person submitting a tender must be conducting or running a registered IInd Class hotel or restaurant and he must have at least 5 years' experience as such and if he did not satisfy this condition of eligibility, his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by the 1st respondent and since the 4th respondents did not satisfy this standard or norm, it was not competent to the 1st respondent to entertain the tender of the 4th respondents. It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurther in Vitarelli Vs. Seaton, (1959)359 US 535 : 3 L Ed 2d 1012 where the learned Judge said :

"An executive agency must be rigorously held to the standards by which it professes its actions to be judged ....... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed....... This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword."

This Court accepted the rule as valid and applicable in India in A. S. Ahluwalia Vs. State of Punjab, (1975)3 SCR 82 : (AIR 1975 SC 984) and in subsequent decision given in Sukhdev Vs. Bhagatram, (1975)3 SCR 619: (AIR 1975 SC 1331), Mathew, J., quoted the above-referred observations of Mr. Justice Frankfurter with approval. It may be noted that this rule, though supportable also as emanating from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. If we turn to the judgment of Mr. Justice Frankfurter and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution but evolved it purely as a rule of administrative law......"

10. Shri. N. W. Sambre, learned Government Pleader appearing for the Indian Oil Corporation, however, submitted that the petitioner did not disclose the details of the location of the land with sufficient clarity in that he stated that the showroom was located in Mouda. According to the learned Counsel, the petitioner was, therefore, not entitled to be empanelled in the first instance and, therefore, it is not necessary to interfere with the dis-empanelment.

11. We are not in agreement with this submission. Anybody reading the advertisement would understand the requirement as being that of a showroom located in the area of operation of Mouda assuming that the name was restricted to the name of the township. It is, however, well-known that the word 'Mouda' also refers to the Tahsil of Mouda within the jurisdiction of which the showroom is clearly located. Moreover, it is undisputed that the application form was accompanied by details of the site plan which showed the location of the proposed showroom at Dahali. We thus do not find that the petitioner is guilty of misleading the respondent Corporation. Moreover, it is clear that the Corporation has not removed the petitioner from the panel of eligible candidates on the ground of furnishing false or misleading information. We thus have no hesitation in rejecting this contention on behalf of the Corporation. Shri. Sambre further referred to some decision taken by the Oil Marketing Companies at the industry level whereby they have clarified that showroom should be at the location advertised. Whatever be this position, we find that no such restriction was placed by the respondent Corporation in the advertisement. Moreover, it appears that in response to the petitioner's query regarding their policy, the respondent Corporation has replied under Right to Information Act as follows :

"8.2 SHOWROOM :

Showroom as per the standard layout can be made in a shop/land located in the area of operation (trading area) of the advertised location for LPG distributorship and should be easily accessible to general public through a suitable approach road.

Minimum dimension of the showroom 3 meter by 4.5 meter."

We hence have no hesitation in rejecting this contention of the Corporation.

12. In the circumstances, the Writ Petition is allowed. The impugned orders are quashed and set aside. The respondents are directed to restore the petitioner's position on the panel of selected candidates and proceed in accordance with the law. Rule is made absolute in the above terms with no order as to the costs.

Petition allowed.