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Judgment
Date : 07-08-2026
The petitioner has filed the instant application for the following reliefs:
“I) Issuance of a direction/ Writ or order including Writ in the nature of Writ of mandamus/certiorari to quash the letter dt.- 31.08.2018 issued by one Sajeev Kumar Jha, Chief Regional Manager asking the petitioner to submit show cause within 15 days from the date received letter as to why his dealership PLRO/BK/LPG be not withdraw/cancelled in view of the fact that one Smt. Asha Sharma in her letter dt. 30.08.2018 addressed this office, has alleged that the partnership deed submitted this office by you has been prepared illegally without permission of their office. The office in his letter also made reference the letter No.-PLRO/BK/LPG dt. 15.02.2018.
II) Issuance of a direction/order/ Writ or Writ including Writ in the nature of Writ of mandamus directing the respondents to issue dealerships of LPG Gas in view of the fact that after all the formalities the letter was issued dealerships.
III) Issuance of other direction(s)/ order(s)/ Writ(s) to which the petitioner may be found entitled to in the facts and circumstances of the case.”
The brief facts culled out of the Writ petition are that the respondents issued an advertisement published in the newspapers Hindustan Times and Dainik Jagran on 18.06.2017 inviting applications for appointment of LPG distributorship under the Scheduled Caste/Scheduled Tribe category. The petitioner, being a member of the Scheduled Caste category and possessing the requisite educational qualification, submitted his application along with all the documents as required under the advertisement. Upon scrutiny of the applications, the petitioner was found eligible and was accordingly selected and allotted the LPG distributorship by the respondent-Corporation.
Thereafter, the petitioner proceeded to establish the distributorship and, in that process, invested more than Rs.30 lakhs towards construction of the godown and other necessary infrastructure.
It is the case of the petitioner that subsequently one of the unsuccessful applicants, namely, Smt. Asha Sharma, submitted a complaint before the respondent authorities alleging that the petitioner had inducted a third party as a partner in the LPG dealership, which was contrary to the terms and conditions governing the distributorship. On the basis of the said complaint, the respondent authorities issued a show cause notice to the petitioner proposing cancellation of the allotment.
The petitioner asserts that the alleged violation was neither deliberate nor intentional. According to the Writ petition, if any mistake was committed, the same occurred due to ignorance and not with any mala fide intention. The petitioner has expressed his willingness to rectify the alleged defect and submitted his representation before the respondent authorities. However, the authorities failed to consider the same and proceeded with the proposed action. Aggrieved thereby, the petitioner has preferred the present Writ petition, contending that the impugned action is arbitrary and violative of his right to livelihood guaranteed under Article 21 of the Constitution of India.
The Learned counsel for the petitioner submits that the petitioner was duly selected for the LPG distributorship after satisfying all the eligibility conditions and after due scrutiny by the respondent authorities. It is submitted that acting upon the allotment, the petitioner invested more than Rs.30 lakhs in creating the necessary infrastructure and, therefore, had acquired a legitimate expectation that the allotment would not be cancelled on account of a curable defect.
The Learned counsel for the petitioner further submits that the complaint was made by an unsuccessful applicant and the alleged violation, if any, was neither wilful nor intentional. It is argued that the petitioner was always ready and willing to rectify the alleged mistake. Therefore, the respondent authorities ought to have considered his explanation fairly and reasonably instead of taking the extreme step of cancelling the distributorship.
The Learned counsel for the petitioner lastly submits that the impugned action is arbitrary, disproportionate and contrary to the principles of natural justice. It is contended that cancellation of the distributorship, after the petitioner had made substantial investment and arranged his livelihood on the basis of the allotment, would seriously affect his right to livelihood guaranteed under Article 21 of the Constitution of India. Accordingly, it is prayed that the impugned action of the respondents be quashed and the petitioner be allowed to continue with the LPG distributorship in accordance with law.
In support of the case of the petitioner, the Learned counsel has relied on paragraph 5 of the judgment of Hon'ble Supreme Court passed in Special Leave Petition (Civil) No. 104 of 2009 (M/s Hindustan Petroleum Corp. Ltd. & Vs M/s Super Highway Services & Anr). Paragraph 5 of the judgment is quoted hereinbelow:
“5.On 15-10-2008 the learned Single Judge allowed Respondent 1's Writ petition, upon holding, inter alia, that mere statement on affidavit that an unsuccessful attempt had been made to serve Respondent 1, was insufficient for taking such a drastic step such as termination of the dealership agreement. The learned Single Judge held that even if Respondent 1 had refused to acknowledge the letter, the same could have been sent to it by registered post and the testing could have been delayed, as there was no urgency involved, as, in any event, the pump of Respondent 1 had been sealed. Apart from the above, the learned Single Judge took note of the fact that as per the version of Respondent 1, no information had been given to it about the testing to be conducted at Barauni Terminal on 29-5-2008. What also weighed with the learned Single Judge was that on behalf of Respondent 1 it was asserted that the person who is supposed to have served the letter on Respondent 1, was not in Barauni on 29-5-2008, when the same is supposed to have been refused by the representative of Respondent 1. The learned Single Judge was of the view that since the retesting had been done without proper notice to Respondent 1, as per the marketing discipline guidelines, the same had caused severe prejudice to Respondent 1 and the order of termination of the dealership agreement dated 9-9-2008, could not, therefore, be sustained."
A counter affidavit was filed on behalf of the respondents. The Learned counsel for the respondents submits that the Writ petition is wholly misconceived and devoid of merit. It is submitted that the respondent-Corporation has acted strictly in accordance with the Unified Guidelines for Selection of LPG Distributors and the terms and conditions governing the grant of LPG distributorship. The entire selection process, right from advertisement, scrutiny of applications, draw of lots, field verification of credentials and issuance of the Letter of Intent (LOI), was conducted in a transparent and fair manner.
The Learned counsel for the respondents further submits that the petitioner was initially declared successful in the draw of lots and, after completion of the Field Verification of Credentials, a Letter of Intent was issued in his favour. However, before commissioning of the distributorship, it came to the notice of the Corporation, on the basis of a complaint, that the petitioner had executed a registered partnership deed with one Asim Kumar, in respect of the proposed distributorship without obtaining the prior approval or consent of the Corporation.
The Learned counsel for the respondents submits that Clause 5.3 of the Letter of Intent specifically prohibits the selected candidate from inducting any person as a partner or making any change in the constitution of the distributorship without prior approval of the Corporation. According to the respondents, the execution of the partnership deed constituted a clear violation of the conditions of the Letter of Intent and the applicable guidelines.
The Learned counsel for the respondents further submits that after receiving the complaint, a show cause notice was issued to the petitioner and he was afforded adequate opportunity, to explain his conduct. In his reply, the petitioner admitted that he had executed the partnership deed and it was later cancelled. It is submitted that the subsequent cancellation of the partnership deed does not wipe out the admitted breach already committed by the petitioner. The violation had already occurred and could not be cured by executing a deed of cancellation at a later stage.
The Learned counsel for the respondents further contends that the respondents have followed the prescribed procedure and complied with the principles of fairness and transparency at every stage. It is submitted that the impugned action is neither arbitrary nor illegal since, the petitioner has admittedly violated a fundamental condition of the Letter of Intent, and he is not entitled to any equitable relief under Article 226 of the Constitution of India.
The Learned counsel for the respondents therefore submits that the Writ petition is devoid of merit and is liable to be dismissed.
Heard the Learned counsel for the petitioner as well as the Learned counsel appearing for the respondents and perused the materials available on record.
Upon consideration of the rival submissions and the pleadings of the parties, this Court finds that there is no dispute that the petitioner was initially selected for the LPG distributorship and a Letter of Intent (LOI) was issued in his favour after completion of the prescribed process. However, the dispute arose when the respondent-Corporation received a complaint alleging that the petitioner had entered into a registered partnership with a third person in respect of the proposed distributorship.
From paragraph 10.02 of the counter affidavit, it appears that on receipt of the complaint, the respondent-Corporation issued a show cause notice to the petitioner alleging violation of Clause 5.3 of the Letter of Intent, which specifically prohibits the allottee from inducting any person as a partner or making any change in the constitution of the distributorship without prior approval of the Corporation. The materials on record further disclose that the respondents acted in accordance with the Brochure and the applicable Guidelines and followed the prescribed procedure before taking the decision.
This Court further finds from paragraph 15 of the counter affidavit that, in reply to the show cause notice, the petitioner admitted that he had executed a registered partnership deed with a third person. The petitioner further stated that the partnership deed was later cancelled through a registered deed of cancellation. The admitted execution of the partnership deed itself amounts to breach of Clause 5.3 of the Letter of Intent. The subsequent cancellation of the partnership deed does not cure the violation already committed. Once the petitioner entered into the partnership without obtaining prior approval of the Corporation, the breach was completed and cannot be treated as a curable defect merely because the partnership was later dissolved.
This Court is of the considered opinion that Clause 5.3 of the Letter of Intent is mandatory condition and is intended to ensure that the distributorship remains with the selected candidate unless prior approval of the Corporation is obtained. Admittedly, the petitioner acted in contravention of the said condition. Therefore, respondent-Corporation cannot be faulted for taking action in accordance with the terms of the Letter of Intent and the applicable Guidelines.
This Court also finds no material to show that the respondents acted arbitrarily or violated the principles of natural justice. The petitioner was issued a show cause notice, which disclose an opportunity ws given to him for explanation and the same was duly considered before the impugned action was taken. Merely because the petitioner had invested money in establishing the distributorship does not give him any right to continue in violation of the conditions governing the allotment. Furthermore, the counter affidavit disclosed that cancellation of LPG ws done prior to the commission of the distributorship.
In view of the admitted violation of Clause 5.3 of the Letter of Intent and in the absence of any arbitrariness or procedural illegality on the part of the respondent-Corporation, this Court finds no ground to exercise its extraordinary Writ jurisdiction under Article 226 of the Constitution of India.
The judgments relied upon by the Learned counsel for the petitioner are distinguishable on facts and, therefore, do not apply the facts and circumstances of the present case
Accordingly, the Writ Petition, being devoid of merit, is dismissed.
Interlocutory Application(s), if any, shall stand disposed of.