IN THE HIGH COURT AT CALCUTTA

(Constitutional Writ Jurisdiction)

APPELLATE SIDE

Present:

The Hon’ble Justice Krishna Rao

W.P.A. No. 19200 of 2022

With

CAN No. 1 of 2026

Mamta Singh

-Versus-

Indian Oil Corporation Limited & Ors.

Mr. Abhrajit Roy Chowdhury

....For the petitioner.

Mr. Swapan Kr. Dutta, Ld. GP

Mr. Nilotpal Chatterjee

Mr. Suddhadev Adak

…. For the State.

Mr. Amit Kumar Nag

Mr. Partha Banerjee

Ms. Rishita Sarkar

…. For the IOCL.

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Hearing Concluded On : 16.04.2026

Judgment on : 22.04.2026

Krishna Rao, J.:

1. The petitioner has filed the present writ petition challenging the

communication dated 21

st July, 2022, issued by the DLSH, Kolkata by

withdrawing the Letter of Intent, herein after referred to as “LOI” being

reference No. 2019/IN000164/WB/000051/2111/00014 dated 2

nd

August, 2019 with immediate effect and the amount of Rs. 50,000/-

deposited by the petitioner is forfeited and also withdrawn the intended

Sheheri Vitrak distributorship under the name and style of New Alipore

Indane Gas Service at New Alipore, District- Kolkata.

2. The respondents have filed an application being CAN No. 1 of 2026

praying for vacating the interim order passed by this Court dated 7

th

November, 2022 or for modification of the interim order.

3. When the matter is taken up for hearing, this Court finds that the

pleadings with respect to writ petition is completed with the consent of

both the parties, the writ petition along with CAN is taken up for final

hearing.

4. Three (3) Oil Companies, namely, Bharat Petroleum Corporation

Limited, hereinafter referred to as “BPCL”, Hindusthan Petroleum

Corporation Ltd. herein after referred to as “HPCL” and Indian Oil

Corporation Limited, hereinafter referred to as “IOCL” jointly published

an advertisement on 16

th October, 2018, for appointment of LPG

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Distributorship in different places of the State of West Bengal. The

petitioner has applied for appointment of Sheheri LPG Distributor at

New Alipore under Block-KMC, District-Kolkata for Open Category has

been declared by the IOCL Authority. On receipt of the application of

the petitioner, it was informed to the petitioner by a memo dated 20

th

December, 2018, that the petitioner has qualified for online

computerized draw of lots for selection of LPG Distributorship at New

Alipore, District- Kolkata under Open Category. Online computerized

draw of lots was held on 28

th December, 2018 and on 29

th December,

2018, the IOCL informed the petitioner that the petitioner had been

declared as successful candidate in the draw of lots and instructed the

petitioner to deposit an amount of Rs. 50,000/- within seven working

days. The petitioner has deposited an amount of Rs.50,000/- on 4

th

January, 2019.

5. On 21

st February, 2019, Field Verification of Credential herein after

referred to as “FVC” was conducted by the IOCL. After FVC, it was

found by the IOCL that the land offered by the petitioner, is having

some discrepancies by a Memo dated 23

rd February, 2019, instructed

the petitioner to offer an alternative land for showroom and godown as

per requirement provided in the advertisement at the advertised

location. On 2

nd August, 2019, the IOCL has issued Letter of Intent in

favour of the petitioner. The petitioner has informed the IOCL that the

name of the Distributorship will be “M/s. New Alipore Indane Gas

Service”. On 2

nd December, 2019, the petitioner has made request to

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the IOCL for extension of time period of four months i.e. up to 2

nd April,

2020 to purchase or to take on lease as an alternative land for

showroom.

6. Mr. Abhrajit Roy Chowdhury, Learned Advocate representing the

petitioner submits that the petitioner has tried her level best to

purchase or take on lease an alternative land for showroom but in the

mean time on 2

nd January, 2020, the IOCL has issued show cause

notice for withdrawal of LOI. He submits that in the meantime in the

month of March, 2020, due to pandemic COVID-19, lockdown was

declared, due to which the petitioner was unable to arrange alternative

land for showroom and was also unable to submit reply to the show

cause notice. On 26

th June, 2020, a Deed of Lease was executed by the

petitioner with some third party for providing alternative land for

showroom which was registered on 29

th June, 2020. After registration

of lease deed, the petitioner has submitted reply on 18

th July, 2020

with the request for approval for alternative land for showroom and

godown. On 21

st July, 2020, the IOCL has issued explosive licence in

favour of the petitioner with respect to the land for godown.

7. On receipt of reply submitted by the petitioner, the IOCL has granted

approval to the petitioner for alternative land and directed the

petitioner to start construction work of godown and showroom. The

petitioner failed to start construction work due to pendency of an

application for conversion of land before the District Land and Land

Reforms Officer. On 10

th November, 2020, the IOCL has issued show

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cause notice to the petitioner informing the petitioner that even after

more than one year from the date of issuance LOI, the petitioner has

not informed about the status of progress of the commissioning of

distributorship and directed the petitioner to submit explanation within

7 days, failing which appropriate action will be taken for withdrawal of

the LOI. The IOCL has again issued a show cause notice to the

petitioner on 11

th May, 2021, requesting the petitioner to explain the

progress of the work within 7 days from receipt of notice, failing which

the IOCL will take appropriate decision for withdrawal of the LOI.

8. Mr. Chowdhury submits that the petitioner was engaged in procuring

documents from the concern authority for conversion of the land and in

the mean time the petitioner has completed construction of show room

but on 21

st July, 2022, the IOCL has issued the impugned notice by

withdrawing the LOI issued in favour of the petitioner dated 2

nd August,

2019 and also forfeited an amount of Rs. 50,000/-.

9. Mr. Amit Kumar Nag, Learned Advocate representing the IOCL submits

that as per the conditions of the Letter of Intent as well as the selection

guidelines, the petitioner is under obligation to commission the LPG

Distributorship within four (4) months from the date of the Letter of

Intent but the petitioner failed to commission the LPG Distributorship

within four (4) months and violated the terms of the LOI as well as

selection guidelines.

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10. Mr. Nag submits that as per the request made by the petitioner, the

IOCL granted two months’ time i.e. till 2

nd February, 2020, to complete

the commissioning of the LPG Distributorship but even after granting

extension, the petitioner failed to make any progress for commissioning

the LPG Distributorship. He submits that the IOCL has issued show

cause notice to the petitioner on 2

nd January, 2020 but the petitioner

has not submitted any reply and on 18

th July, 2020, the petitioner

informed the IOCL that the petitioner unable to construct LPG godown

on the plot offered by the petitioner for construction of showroom and

is not suitable to run her business and requested for grant of

permission to construct LPG showroom and godown at the alternative

plots. The petitioner also submitted an undertaking by way of an

affidavit declaring that the petitioner will complete all the work and

obtain permissions to commission the LPG Distributorship within 31

st

October, 2020.

11. Mr. Nag submits that as per the request of the petitioner, the

respondents have inspected two plots identified by the petitioner and

found to be suitable, the IOCL has allowed the petitioner to construct

the LPG godown and showroom at the alternate plots. He submits that

even in the alternative plots also the petitioner was unable to construct

showroom and godown for the purpose of LPG Distributorship within

31

st October, 2020. The IOCL has again issued a show cause notice to

the petitioner on 10

th November, 2020 but the petitioner failed to give

any reply to the said notice within the stipulated time. On 28

th

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December, 2020, the petitioner by a letter dated 19

th November, 2020,

informed the respondents that the petitioner has arranged a fund of Rs.

6,00,000/- to complete the construction and 55% of the construction

work of godown is completed and construction of showroom is totally

completed and ready for use. The petitioner also informed that the

formalities for obtaining other documents are under process and

prayed for extension of time till 28

th February, 2021.

12. Mr. Nag submits that inspite of undertaking submitted by the petitioner

and extension of time granted to the petitioner, the petitioner failed to

take necessary steps to commission the LPG Distributorship and again

for the third time, the IOCL has issued show cause notice to the

petitioner on 11

th May, 2021, to explain why the LOI shall not be

withdrawn. The petitioner has neither submitted any reply nor

completed the construction for commissioning the LPG Distributorship.

The IOCL has again issued a show cause notice to the petitioner on 14

th

March, 2022, calling upon the petitioner to explain why the LOI shall

not be withdrawn but the petitioner has not submitted any reply to the

show cause notice nor has complied with the undertaking by

commissioning the LPG Distributorship. On 6

th June, 2022, again a

notice was issued to the petitioner for inspection of the plots on 9

th

June, 2022. The plots were inspected in the presence of the brother of

the petitioner and found that the ground floor work where the

showroom is to be constructed is on hold and no progress has been

seen from the last inspection. It is further noticed that no construction

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of godown was started. As the petitioner failed to complete the work

and commenced LPG Distributorship and failed to comply with the

terms and conditions of the LOI and the guidelines, the respondents

have withdrawn the Letter of Intent.

13. Mr. Nag submits that after issuance of the notice of withdrawal, the

petitioner has filed the present writ application and obtained an order

of stay and since then the petitioner is enjoying the interim order even

this time also the petitioner has not completed the construction of show

room and godown for commissioning of LPG Distributorship.

14. The Special Revenue Officer-I and the Sub-Divisional Land and Land

Reforms Officer has filed report by disclosing the order passed by the

Sub-Divisional Land and Land Officer dated 7

th September, 2022,

wherein it reveals that the applicant who has applied for conversion of

the land is not in possession of the said plots and as per the

documents, the applicant who has applied for conversion already sold

the land by way of sale deed dated 12

th October, 2006.

15. The respondent no.1 along with other two Oil Companies i.e. Bharat

Petroleum Corporation Limited and Hindusthan Petroleum Corporation

Ltd. invited online application for appointment of LPG Distributorships

at different locations. The selection process for appointment of LPG

Distributorship is governed by the provisions of Unified Guidelines for

Selection of LPG Distributorships, 2017. For the purpose of decision of

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the present writ application, relevant provisions of the said guidelines

reads as follows:

“7.1 Showroom facility

For Sheheri Vitrak, Rurban Vitrak and Gramin

Vitrak the Letter of Intent (LOI) holder shall

construct or provide a readily constructed LPG

Showroom of minimum outer dimensions 3 M X 4.5

M as per the standard layout and colour scheme

within the time period mentioned in the Letter of

intent (LOI). The showroom should be easily

accessible to general public through a suitable

approach road.

For Durgam Kshetriya Vitrak (DKV), provision of

land for Showroom or provision of ready built

showroom is not an eligibility criteria, the Letter Of

Intent (LOI) holder may provide a showroom of

dimensions 2.6 M x 3.0 M constructed at the

Godown or in an nearby existing shop or in the

village. The showroom should be easily accessible

to general public through a suitable approach road.

7.3 Godown for Storage of LPG in Cylinders

The LOI holder should construct or provide a

readily constructed LPG godown to store LPG of the

stipulated capacity and obtain necessary

approvals from all statutory bodies including

Petroleum & Safety Organization (PESO) within the

time period mentioned in the LOI.

LPG Distributor should have a Godown duly

approved and licensed by Chief Controller of

Explosives of Petroleum and Explosives Safety

Organisation (PESO) with dimensions and storage

capacity as per Table 7.1.

12.12 During the FVC process, in case the land

mentioned by the applicant for godown/showroom

in his application is found not meeting the eligibility

conditions/requirements as stipulated in the

advertisement/brochure/application and if the

applicant is having any alternate land in his

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name/member(s) of the Family Unit of the applicant

with date of registration on or before the last date

for submission of application as specified either in

the advertisement or corrigendum (if any), the same

can be considered. However, the same if

considered has to be duly verified for its suitability

during the FVC. In case at the time of FVC, the

candidate expresses inability to make available an

all weather motorable approach road upto the

godown in future, then the selected candidate can

also offer an alternate land for godown as per

above criteria. Such alternate land if considered

has to be duly verified during the FVC for its

suitability for providing LPG godown and

showroom facility as mentioned hereinabove.

12.13 In case the land mentioned in the application

is suitable as per the criteria given in the text of

advertisement/application and the candidate has

an alternate plot of land which is more suitable for

construction of godown/showroom, then the

selected candidate can be allowed to construct the

facilities at alternate plot of land. However, the

same if considered has to be duly verified for its

suitability during the FVC.

12.23 Letter of Intent (LOI):

On receipt of the approval to issue LOI from the

State LPG Head Regional/Zonal Office, the Head of

Area/Territory/Regional office will issue the LOI as

per formats given in Appendix-Q for LPG

distributorship reserved under SC/ST category

opting for Financial Assistance Scheme. LOI format

as per Appendix-Q1 will be issued to other than

SC/ST category individuals. The distributor select,

after receipt of LOI should fulfil the conditions

specified in the LOI within a period of four months

from the date of LOI failing which, the concerned

OMC can withdraw the LOI and proceed with

conducting a Online computerized draw from the

balance eligible applicants.

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12.24 Extension of LOI:

a. Field Officer should maintain a constant follow

up with the selected applicant for timely

commissioning of the LPG Distributorship and

provide guidance to complete the formalities as

stipulated in the LOI.

b. If no progress is made by the distributor select

within the period of 4 months, action should be

taken to withdraw the LOI as per procedure.

c. In case where the Distributor select has made

sufficient progress but due to certain genuine

difficulties it has not been possible for him/her to

fulfil the conditions laid down in the LOI within 4

months, in such cases Area/Territory/Regional

Manager can give initial extension of 2 months.

d. For further extension, Area/Territory/Regional

office should send proposal for taking approval of

the Head of State/Regional Zonal Office for

extending the validity of the time limit of the LOI.

Head of State/Regional/Zonal Office may extend

the time limit as deemed fit.

While forwarding the proposal to the Head of

State/ Regional/ Zonal Office, the proposal should

contain the following:

a. A letter from the LOI holder indicating the

progress made and assurance that the facilities

would be arranged within a specified time.

b. A report from the Area /Territory/Regional Office

indicating the progress made by the party and their

assessment whether the party would be able to

arrange the facilities as mentioned in the LOI

within the recommended extended time.

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12.25 Withdrawal of LOI

In cases selected candidate is unable to develop

facilities within the specified time or due to

nonfulfillment of terms & conditions of LOI by the

LOI holder, or is not available or not responding,

then Head of Area/Territory/Regional Office should

send letter (in the form of show cause notice) by

Regd. AD/Speed Post to the selected candidate

calling for explanation within 7 days from receipt of

letter. Based on the reply from the selected

candidate, if any, the Head of Area/

Territory/Regional Office should put up a note for

withdrawal of LOI or extension of LOI to Head of

State / Regional/Zonal Office for approval.

12.28 Commissioning of LPG Distributorship

A candidate who has been given the 'Letter of

Intent (LOI) would be required to fulfil the terms

and conditions as contained therein, so as to

commission the distributorship within the

stipulated time period (four months from the date of

issuance).

13.13 In case the selection of the candidate is

rejected after the FVC or after issuance of LOI but

before issue of Letter of Appointment, then the 10%

of the security deposit deposited by the selected

candidate before FVC should be forfeited.”

16. The IOCL has issued LOI to the petitioner on 2

nd August, 2019 for the

purpose of LPG Storage godown. As per the LOI, the petitioner has to

provide LPG godown for storage of 8000 Kg (minimum) of LPG filled in

cylinders at the suitable plot of land and the LPG Storage godown

should be approved and licenced by Petroleum and Explosives Safety

Organization.

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17. As per Clause 5.1 of the LOI, the petitioner has to make all out efforts

to commission the LPG Distributorship within four months from the

issuance of LOI. Clause 5.2 also clarifies that if the progress being

made by the petitioner is not satisfactory, the LOI is liable to be

withdrawn.

18. Before issuance of LOI, the suggested plots of the petitioner was

inspected on 21

st February, 2019 and the Oil Company finds certain

discrepancies and advised the petitioner to submits documents

clarifying the discrepancies. The petitioner instead of rectifying the

discrepancies, offered for alternative plots of land for construction of

showroom and godown. After acceptance of the alternative plots

suggested by the petitioner, the petitioner failed to construct either

showroom or godown.

19. The IOCL has issued several notices to the petitioner to complete the

construction work of the showroom and godown and also directed the

petitioner to explain why the petitioner has not started LPG

Distributorship but inspite of receipt of notice, the petitioner failed to

complete construction and commissioned LPG Distributorship.

20. In the LOI, the time period is four month to commission of LPG

distributorship but till date the petitioner failed to commence the same.

Clause 7.3 of the guidelines provides that the LOI holder shall obtain

necessary approvals from all statutory bodies including Petroleum and

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Safety Organization but the petitioner also failed to obtain approvals

from the concern authorities.

21. The report submitted by the State authorities i.e. respondent no.17

wherein it reveals that for conversion of the land in question, the

authorities have made an enquiry and found that the original owner of

the property has already sold the said land by way of registered sale

deed on 12

th October, 2006, much prior to the LOI issued by the IOCL

to the petitioner and the request for conversion of the land is rejected

by the competent authority.

22. This Court by an order dated 7

th November, 2022, directed the IOCL

not to create any third party interest until the matter is finally heard

out and the State authorities were directed to communicate their final

decision on the application for conversion by 11

th November, 2022. The

State authorities have already communicated the order of rejection to

the petitioner on 9

th November, 2022 but the petitioner has not taken

any further steps against the order of rejection for conversion of the

plots and nothing has brought on record to establish that the petitioner

has got the land converted or the petitioner has completed construction

of showroom and godown even after the interim order passed by this

Court.

23. The IOCL has issued LOI to the petitioner on 2

nd August, 2019. The

IOCL time and again requested the petitioner to complete construction

work and to commence LPG Distributorship. Several show cause

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notices were also issued to the petitioner for completion of the work and

commissioning of LPG Distributorship. The petitioner failed to complete

the construction work. On the other hand, the documents disclosed by

the State authorities, the request of conversion of land is rejected.

Without conversion of land, the petitioner cannot construct either

godown or showroom. The petitioner obtained interim order on 7

th

November, 2022 but till date, the petitioner has not made endeavor to

complete the work to commence distributorship as per LOI issued by

IOCL.

24. This Court finds that the respondents have rightly withdrawn the LOI

issued to the petitioner for noncompliance of the terms and conditions

of the LOI and the guidelines.

25. In view of the above, this Court did not find any merit in the present

writ petition. The writ petition being WPA No. 19200 of 2022 is

dismissed. Interim order dated 7

th November, 2022, is hereby vacated.

CAN No. 1 of 2026 is allowed.

Parties shall be entitled to act on the basis of a server copy of the

Judgment placed on the official website of the Court.

Urgent Xerox certified photocopies of this judgment, if applied for,

be given to the parties upon compliance of the requisite formalities.

(Krishna Rao, J.)