1. The captioned writ petitions are materially connected in respect of the resolution of the Oil Companies for establishment of nearly 1,750 numbers of retail Petroleum outlets in the State of Kerala. The 1st petitioner in W.P.(C) No.5876 of 2019 is a registered Association represented by its Chairman and the 2nd and 3rd petitioners are the Chairman and General Secretary of the 1st petitioner. It is admitted that the members of the 1st petitioner Association are Petroleum outlet dealers of various companies. Petitioners in W.P.(C) No.10646 of 2019 are dealers of the different Oil Marketing Companies (hereinafter referred to as 'OMCs'), belonging to Scheduled Caste and Scheduled Tribe communities. Therefore, I heard them together and propose to deliver this common judgment. Facts and documents available from W.P.(C) No. 5876 of 2019 and counter affidavit filed by the 6th respondent are relied upon for disposal of the writ petitions.
2. Basic material facts put forth by the petitioners are as follows:
3. The respondent Oil Companies have taken a decision to invite dealers for supplying petroleum products within the State of Kerala through 1,750 outlets. According to the petitioners, there are at present 2,200 retail outlet dealers in petrol and diesel within the State and within the country, there are nearly 65,000 retail outlets. In spite of sufficient number of retail outlets, without making any assessment, feasibility and viability study, the invitation for dealers are made and thereby affecting the environment, public safety, impact on existing market, rights of workers, welfare of the public at large and in violation of existing rules. It is pointed out that, in one of the decisions, the apex court has held that, if the policy or laws of the Government or Public Sector Undertaking is patently unfair to the extent it falls foul of the fairness required under Article 14 of the Constitution of India, the Court is competent to strike down the notification issued by the Oil Companies.
4. It is also pointed out that, from Ext.P4, it is evident from the answer given to a question, by the Hon'ble Minister with respect to the setting up of the retail outlets, that the Oil companies set up retail outlets at identified locations based on field survey and feasibility studies. The case of the petitioners is that, from Exts.P1 to P3 advertisements issued for the purpose, it is quite clear and evident that there was no identification of the locations based on field survey and feasibility studies. So also, it is submitted that, if such huge number of retail outlets are established, the same shall degrade the environment and will cause severe adverse impact on the land which will cause its degradation, deforestation, fuel emission and air, water and noise pollution. That apart, it is submitted that, the locations now advertised are lands which cannot be converted for any commercial activities, as it would be violative of the various enactments operating within the State of Kerala. So also, it is submitted that, the Central Government is taking steps to introduce electric vehicles, by the year 2020, which will grossly reduce the sale of petroleum products.
5. It is also submitted that, similar writ petitions are submitted before the Rajasthan High Court and the Madras High Court and interim orders are passed, which are produced along with the writ petition. With the above background facts, it is contended that, the administrative decision is taken without considering the factual circumstances, which could only be termed as an arbitrary decision, violative of Article 14 of the Constitution of India, and therefore, Exts.P1 to P3 advertisements are without jurisdiction, and arbitrary and illegal, and vitiated by errors apparent on the face of the record, and therefore, petitioners seek to quash Exts.P1 to P3.
6. Very detailed counter affidavits are filed by 4th, 5th and 6th respondent Oil Companies, refuting the allegations and claims and demands raised by the petitioners. Primarily it is contended that, there is no public law element involved in the writ petition, and therefore, the writ petition is not maintainable under Article 226 of the Constitution of India. Such a contention is raised alleging that none of the rights of the petitioners, let alone fundamental rights, have been violated, and therefore, the petitioners have no locus standi to file the writ petition. It is also evident that, 1st petitioner is an Association of retail outlet dealers of Oil Marketing Companies, i.e., Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and Hindustan Petroleum Corporation Ltd. Therefore, it is settled law that rivals in trade, which includes existing retail outlet dealers cannot be heard to challenge the permission granted to start new businesses, such as selection of new retail outlet dealers in the present case. Other contentions are also raised with respect to the maintainability question.
7. That apart, it is stated that the respondents have already opened the bids submitted pursuant to the advertisements and the selection has reached various stages even prior to the filing of the writ petition, and the selection is already completed at various locations, and as on the date of moving the writ petition, i.e., 27.02.2019, 51 Letters of Intent are issued. So much so, it is contended that, advertisements were published as early as on 25.11.2018 and the last date for receipt of applications was 25.12.2018, which is challenged only on 23.02.2019, and absolutely no explanations are offered for approaching this Court at a belated stage, which demonstrates the malafides of the petitioners. It is submitted, the 1st petitioner Society was formed only on 26.12.2018, i.e., after the last date for submission of applications pursuant to the advertisement, and therefore, it is obvious that the sole intention of the petitioners is to engage in speculative litigation aimed at stalling the selection of new retail outlets for securing the business interest of the existing retail outlet dealers.
8. Again, it is contended that, 1st petitioner has more than 100 members, who are existing retail outlet dealers, and each of them have entered into dealership agreement with the respective OMC, evident from Ext.R6(a) executed by and between one Smt. Suchitra Rajan with the 6th respondent company, and Clause 7 of the agreement stipulates that, nothing contained in the agreement shall be construed to prohibit the Corporation from making direct and/or indirect sales to any person whomsoever, or from appointing other dealers for the purpose of direct or indirect sales at such place or places as the Corporation may think fit, and the dealers shall not be entitled to any claim or allowance for such direct or indirect sales. In sum and substance, the contention advanced by 6th respondent is that, the existing retail outlet dealers having agreed and understood the right of the OMCs to set up new retail outlets, they cannot turn around and challenge the advertisements issued by the OMCs.
9. It is also pointed out that, the OMCs have conducted necessary feasibility studies and found the locations advertised suitable, and it is on the basis of a policy decision taken by the OMCs and approved by the Ministry of Petroleum and Natural Gas, which policy decision cannot be made subject matter of a litigation, especially due to the fact that the decision of the Ministry has been upheld by this Court in its common judgment dated 20.12.2017, evident from Ext.R6(b). That apart, it is stated that, the OMCs have a detailed and extensive procedure in place for identification of new locations for setting up of new retail outlets, and it was only after following the said procedure for identification of locations and conducting the necessary feasibility studies they went ahead by advertisements inviting applications from the public for the said locations. It is also pin-pointedly contended that the feasibility studies were conducted for each of the locations advertised as per Exts.P1 to P3, and the feasibility study carried out by the OMCs includes a very detailed and scientific analysis of identifying the trading area potential on the basis of the sales performance of all the existing retail outlets in the area including that of the competitors, and in that process of analysis, the past trends of growth and expected growth in vehicular traffic on the Roads which will be fed by the proposed retail outlets is also taken into account. It is thus taking into account the expected growth in traffic, the locations are identified, and on the basis of the same, the estimated sales of the proposed retail outlets on a monthly basis is evaluated and accordingly the potential of the proposed Retail Outlets is identified, and thereafter published the advertisements calling for applications from interested candidates.
10. That apart, other steps are also taken including preparation of a lay out sketch of the proposed location, and thus it is evident that the allegations contrary to the same are only unfounded, baseless and unsubstantiated, and liable to be rejected. It is further contended that the litigation is instituted with the vested interest of protecting personal interest of the petitioners to retain the sales of petroleum products in their retail outlets.
11. Yet another vital contention advanced is that, the OMCs have decided to start more Petroleum outlets in Kerala, since it was found that the sale of petrol and diesel is growing at the rate of 8% and 4% respectively. Moreover, setting up of such retail outlets will create more employment and business generation opportunities, which will automatically boost the economic development of the country, and now the advertisements are issued after a period of five years from the last advertisement in the year 2014, and the Government is permitting other private operators to open up retail outlets across India, and therefore, the contention advanced by the petitioners with respect to lack of study and analysis before issuing the advertisements cannot be sustained.
12. Regarding the submissions with regard to the alternative mode of fuel, it is submitted, the technology is still in its experimental stage/infancy. So far, the technology has not been developed reliably for a long distance travel/transport and to replace the petrol and diesel, and currently the electric/battery operated vehicles are used for short distance travel or domestic purposes. Therefore, the big chunk of the public demand still remains to be in petrol and diesel, which is an established technology in the market. It is also pointed out that, the growth of vehicles on road is increasing day-by-day and the availability of more outlets will help the public to have access to the dealers which will in turn conserve oil, envisioned by the Government of India.
13. That apart, it is submitted that, the issue with respect to the Circular issued by the State Government, stipulating norms laying down minimum viability limits and distance was considered by a learned Single Judge of this Court and has rendered Ext.R6(d) judgment, holding that rival dealers have no locus standi to maintain the writ petitions and the State cannot lay down any norms regulating the grant of No Objection Certificates by the District Authority as per the provisions of the Petroleum Rules, and therefore, held that the norms laid down by the State Government are illegal and unenforceable. Though the said judgment was reversed by this Court, the apex court in the Special Leave Petitions filed by the OMCs allowed the appeals and restored the judgment of the learned Single Judge. Therefore, it is contended that, there are no material and established circumstances put forth by the petitioners in order to interfere with the advertisements issued by the OMCs.
14. The counter affidavits filed by the 4th and 5th respondents are also typical in nature, and therefore, they are not separately discussed for disposal of the writ petitions.
15. A reply affidavit is filed by the petitioners reiterating the stand adopted in the writ petition and also allege that there are certain misleading statements in the counter affidavits filed. Petitioner has also produced Ext.P10 advertisement issued in a vernacular daily dated 28.01.2018, inviting the property owners for lease arrangements for a period of 15 years, in order to substantiate that the statement made by the OMCs in their counter affidavits that they have not invited dealership after 2014 is not true.
16. I have heard Sri. M.Ramesh Chander, learned Senior Counsel for the petitioner, assisted by Advocate Sanjeetha K.A., and Sri. Siraj Karoly for the writ petitioners in W.P.(C) No.10646 of 2019, Sri. P. Gopinath Menon, learned Senior Counsel for the Oil Marketing Companies, Sri. Krishnadas P. Nair, learned CGC for the Central Government and Smt. Vinitha B. appearing for the State Government. Perused the pleadings and the documents on record.
17. The elaborate discussion of facts made above would make it clear that, the basic challenge in the writ petition is against Exts.P1 to P3 advertisements issued by the respondent OMCs, inviting 1,750 retail dealers to start petroleum outlets at various locations within the State of Kerala. It is admitted that the members of the 1st petitioner Association are already existing retail outlet dealers of various OMCs. However, the basic contention advanced by the petitioners is that, the advertisements are issued without conducting any proper feasibility study and analysis so as to start new dealerships in a profitable manner by the dealers appointed by these companies, consequent to which, there is every likelihood of loss of public money on account of the investment to be made by OMCs. It is also submitted that, the issue with respect to the guidelines of the Division Bench of the High Court to be followed on account of the directives issued by the apex court, while taking a decision by the Central Government was not taken into account, and accordingly, the advertisements issued by OMCs are violative of the directions issued by the apex court in Civil Appeal Nos.2784 to 2792 of 2013, which read thus:
“We find no justification for the Division Bench to upturn the judgment and order of the single bench dismissing the writ petition. Accordingly, the impugned judgment is set aside. However, it is observed that the guidelines framed by the High Court may be kept in view by the Central Government if there is need to frame guidelines with regard to establishment of retail outlets of the oil marketing companies.”
18. However, on a reading of the judgment of the apex court, it is clear that the judgment rendered by the learned Single Judge in 'Mary Ulahannan v. Union of India' [2011 (3) KLT 570] produced as Ext.R6(d) was absolutely and wholly upheld by the apex court by overruling the judgment of the Division Bench. Therefore, the contentions advanced by the petitioners on the guidelines, and Circular issued by the State Government in the matter of issuance of No Objection Certificates, cannot be sustained, especially due to the fact that the Central Government has not issued any norms/guidelines with respect to the appointment of retail dealers throughout the country.
19. The sole question remains to be considered is, with respect to the contentions advanced by the petitioners that there was no feasibility study conducted by the OMCs. The OMCs have categorically stated in their counter affidavits that the advertisements were issued after conducting detailed study in accordance with the procedure constituted for the purpose and evaluated the trade potential of each and every advertised location, taking into account the rapid growth of the petroleum products and also the enormous growth of vehicular traffic on the road and other activities undertaken with petroleum products as the fuel.
20. In the facts discussion above, the nature of feasibility study carried out by the OMCs are elaborated, and therefore, it is not required to be repeated. Moreover, OMCs are the stake-holders with respect to the business potential of petrol as well as diesel. It is also clear and evident that, in order to establish the retail outlets, substantial investments are to be made by the OMCs, and therefore, it cannot be believed that the OMCs will not carry out any feasibility study before advertising such retail outlets for sale of petroleum products. Moreover, a decent and fair competition in the market is the requirement of the day, since the public is entitled to get best services from the retail dealers and only through effective and healthy competition, such services can be attained. Further, there is no doubt that the establishment of such retail outlets will create large number of employment to the unemployed youth within the State, which is a problem faced by the Government in spite of the presence of large number of public and private establishments. Therefore, when there is scope for employment to the public and livelihood for unemployed persons by granting dealerships, it cannot be said that the endeavour made by the OMCs to establish new retail outlets is in any manner interfering with the interest of the public. If there are any environmental issues consequent to establishment of such retail outlets, it is for the OMCs to ensure appropriate modern techniques to eliminate the same. Mere apprehension of the petitioners that there is every likelihood of causing environmental problems by setting up retail outlets cannot be a reason or ground to hold that the retail outlets cannot be advertised and allotted by the OMCs, since there are various modern technologies to eliminate the environmental issues and to protect the environment and the mother earth from such degradation. Moreover, consequent to the introduction of Petroleum Outlets, substantial revenue will be generated to the OMCs, which can again be pumped into the public market and ensure more and more endeavours from the side of the OMCs, to provide more employment to the unemployed youth.
21. So much so, revenue is generated to the Government through that process from various indirect taxes. Necessarily, when more and more vehicles are manufactured and sold, there will be substantial increase on sales of petroleum products and thereby generate more income to the OMCs and the respective Governments. Apart from all these aspects, by introducing more retail outlets at specific and strategic locations, there will be conservation of oil, since the people of the locality will have more easy access to the outlets, and therefore, due to such availability, the vehicle owners are at liberty to approach the nearby dealer when necessitated. Moreover, the subject issue is a policy decision taken by the OMCs and approved by the Central Government and unless and until established circumstances are put forth that there is patent arbitrariness in the policy decision taken, it will not be appropriate and legal for the constitutional courts to interfere in such matters, disturbing the fair administration of the OMCs and the Government of India, who are the masters to identify their best interests and to protect larger public interests.
22. Petitioners have also raised a contention basically relying upon Ext.P10 advertisement in a vernacular daily dated 28.01.2018, that in the year 2018, advertisements were issued for starting retail outlets, and therefore, the contention advanced by the OMCs that last advertisement was made in the year 2014 is not correct. On a reading of the said advertisement, it is clear that the said advertisement is issued for the purpose of securing lease arrangements with owners of properties in order to start retail outlets of diesel and petrol, and therefore, the said advertisement cannot be treated as an invitation for submitting application for any retail dealership. On the other hand, it can only be treated as a preparation made by the Indian Oil Corporation in order to invite applications for the purpose of starting the dealership. Learned Senior Counsel appearing for the OMCs has submitted that the said advertisement was issued for the purpose of offering plots for members belonging to Scheduled Castes and Scheduled Tribes communities to start retail outlets. I find force in the said contention and there are no circumstances established from the said advertisement that any retail outlets were allotted by the Indian Oil Corporation pursuant to the said advertisement.
23. So also, with regard to the consideration of guidelines ordered by the apex court contained in the Division Bench judgment of this Court against Ext.R6(d) judgment, it is clear that the Central Government has not issued any norms or guidelines to the manner in which the retail outlets are to be started, and therefore, the Central Government may not have been liable to consider the guidelines issued by the Division Bench of this Court, directed to be taken into consideration only in the event of the Central Government carrying out any norms for establishment of retail outlets.
24. Moreover, the State and the public Corporations have a constitutional duty to address the issue of unemployment faced by the country, and bear in mind the large chunk of population living beyond poverty line. Therefore, the State and its instrumentalities are duty bound and responsible to open up new avenues, and identify ways and means to eliminate or rather reduce the larger issue of unemployment and poverty. In this context, Article 39(a) to (c) of Part IV of the Constitution of India dealing with Directive Principles are relevant, which read thus:
“39. Certain principles of policy to be followed by the State.--The State shall, in particular, direct its policy towards securing—
(a) that the citizens, men and women equally, have the right to an adequate means of livelihood;
(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
x x x x x x x x x
x x x x x x x x x.”
25. On an analysis of the afore-provisions, it is clear that, the endeavour of the OMCs is not only to develop their business but also to provide livelihood to large number of people. So also, clause (c) prohibits the operation of economic system resulting in the concentration of wealth. Therefore, ensuring the fair distribution of publ
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ic largesse in a fair and proper manner is vital facet to be undertaken by the State, and in that view of the matter, the contention advanced by the petitioners, that, allotting new retail outlets will interfere with their business interests and coffer cannot be sustained at all under law. 26. To put it differently, a constitutional court dealing with such issues shall consider them with a broader and futuristic outlook, taking into account justice, economic, social and political, solemnly undertaken in the preamble of the Constitution of India by “We, the People”. Moreover, this Court is not expected to sit over the wisdom and evaluation of the business potential and other consequential aspects arrived at by the companies, on mere apprehensions put forth by third persons. Which thus means, this Court only need to find out whether any patent illegality, perversity or arbitrariness are employed by the State in its actions. 27.Taking into account all these aspects, I am of the considered opinion that, petitioners have not made out any ground justifying interference of this Court under Article 226 of the Constitution of India, there being no illegality, arbitrariness, unfairness or violation of any of the fundamental rights guaranteed to the petitioners under the Constitution of India. Therefore, the said writ petition will stand dismissed. 28. As I have pointed out in the beginning, W.P. (C) No.10646 of 2019 is also filed under similar circumstances and challenging the advertisements in question. However, the ground raised is that, they are members of Scheduled Castes and if new petroleum/diesel outlets are established near to their outlets, it will seriously prejudice their rights and interests protected under Articles 15 and 46 of the Constitution of India. However, in my considered view, they are given special treatment by allotting dealerships by inviting applications from members of such communities, in order to ensure their livelihood. Merely because their interests are protected under Articles 15 and 46 of the Constitution, that will not in any manner enable them to secure protection by inhibiting the OMCs establishing retail outlets to suit the convenience of the larger public to meet their requirements. It cannot also be said that companies are not at liberty to put forth healthy competition, and therefore, the contentions so advanced by the petitioners in the said writ petition also cannot be sustained under law. Accordingly, the said writ petition is also dismissed.