In the High Court at Calcutta

Civil Appellate Jurisdiction

Appellate Side

The Hon’ble Mr. Justice Sabyasachi Bhattacharyya

And

The Hon’ble Mr. Justice Supratim Bhattacharya

F.M.A. No. 686 of 2025

with

IA No: CAN 1 of 2025

And

IA No: CAN 2 of 2025

Prasanta Kumar Bhattacharya and Anr.

Vs.

The Hindustan Petroleum Corporation Limited and Ors.

For the appellants : Mr. Anirban Bose,

Mr. Sourath Dutta,

Mr. Amar Krishna Saha,

Mr. Satyajit Senapati,

Mr. Nayan Chowni.

Ms. Smita Singh

Mr. Rahul Nag

For the respondent No.1 to 4 : Mr. Biswanath Chatterjee,

Ms. Sayonee Bera,

Mr. S.K. Pathak.

` Mr. Soham Krishna Chatterjee

Mr. S. Basu

Heard on : 22.01.2026, 29.01.2026,

12.02.2026, 19.02.2026

Reserved On : 19.02.2026

Judgment on : 02.03.2026

2

Sabyasachi Bhattacharyya, J.:-

1. The present appeal has been preferred against a judgment dated March

13, 2025 passed in WPA No. 2924 of 2025 , dismissing the said writ

petition.

2. The backdrop of the case is as follows:

3. On November 5, 2020, a Letter of Intent was issued by the respondent

no.1/corporation in favour of and writ petitioners/appellants, granting

license to the latter to run a retail petrol pump/dealership outlet.

Pursuant thereto, on November 30, 2025, a formal Letter of

Appointment (LOA) was issued in favour of the appellants for MS/HSD

retail outlet dealership at a location within 5 Km from Kalachara Post

Office towards Arambagh on State Highway 15, in the District of

Hooghly, West Bengal under the „Open Category‟. On the same day, a

dealership agreement was also entered into between the parties in that

regard.

4. On January 31, 2025, an LOA was issued in favour of the respondent

no.6 in respect of another plot of land located on the same State

Highway, between Chanditala -II BDO Office and Bank of India,

Duttapur Branch, on both sides of the State Highway. Consequentially,

a dealership agreement was also entered into between the

respondent/HPCL (Hindustan Petroleum Corporation Limited) and

respondent no.6.

3

5. The appellants challenge such grant dealership to the respondent no.6

primarily on the ground of legitimate expectation and violation of Article

19(1)(g) of the Constitution of India.

6. Learned counsel for the appellants argues that Clause 7 of the

dealership agreement of the appellants, which permits the respondent

no.1/HPCL to appoint any dea ler at any place as they deem fit, is

unconscionable and arbitrary, since it provides unfettered rights to one

of the parties to the contract while saddling the other (appellants) with

numerous terms negating them from conducting any other business.

7. Secondly, the appellants contend that through the execution of the

dealership agreement in favour of the appellants, HPCL has created an

expectation of benefit arising expressly from their administrative

decision to enter into such dealership. Thus, the appellants have a

reasonable cause to have legitimate expectation, based on established

practice, to benefit from the retail dealership, as recognized by the legal

relationship between the parties. It is contended that the grant of

license to respondent no.6 violates such legitimate expectation.

8. In support of his submissions, learned counsel for the appellants cites

Rajeev Suri v. Delhi Developmnt Authority & Ors., reported at (2022) 11

SCC 1.

9. Learned counsel for the appellants further contends that although the

respondent no.1/HPCL seeks to argue that the award of fresh license

was a policy decision, no specific policy has been placed before this

Court, whereas it was well established that any public policy

promulgated has to be reasonable and non-arbitrary. It is contended

4

that the distribution of State largesse, including but not limited to

licenses and dealerships, stands on a different footing than that of a

private individual as they require a higher degree of fairness in action.

Such distribution, it is submitted, cannot be prompted by arbitrary or

irrational policies.

10. In support of the above proposition, learned counsel cites Punjab State

Cooperative Milk Producers Federation Limited & Anr. v. Balbir Kumar

Walia & Anr. reported at (2021) 8 SCC 461 and State of Madhya

Pradesh v. Mala Banerjee reported at (2025) 7 SCC 698.

11. It is next contended alternatively by the appellants that even if the

respondent no.1/HPCL had the power to grant fresh license, the same

is not an unfettered right and has to be exercised reasonably, without

being tainted by any arbitrariness, capriciousness or whims.

12. In the present case, the grant of license to respondent no.6, it is

argued, is arbitrary in nature. In such context, learned counsel cites

B.P. Singhal v. Union of India and Anr. reported at (2010) 6 SCC 331 and

ABL International Ltd and Anr. v. Export credit Guarantee Corporation of

India ltd. and Ors. reported at (2004) 3 SCC 553.

13. Learned counsel for the appellants submits that the administration of

State Highways cannot operate in a vacuum of law. Since there exists

no notification that governs the placement of retail dealerships on State

Highways, it is contended that the respondent no.1 cannot have the

benefit of such absence of law. Even if the provision for making the

such law exists, this Court, it is argued, ought to step in and fashion

remedies in the form of directives or guidelines as it deems appropriate

5

where there is a vacuum in law -making, in order to protect the

fundamental and other Constitutional rights of the appellants.

14. Learned counsel cites Dayaram v. Sudhir Batham & Anr. reported at

(2012) 1 SCC 33 and Chairman, Rajasthan State Road Transport

Corporation and Ors. v. Santosh and Ors. reported at (2013) 7 SCC 94 in

support of the above proposition.

15. Learned counsel for the appellants lastly argues that the impugned

action of the respondent no.1 has violated the right of the appellants to

practise their trade and business. The award of fresh license of the

respondent no.6, it is submitted, deeply impacts the livelihood of the

appellants, which in turn affects their right to life.

16. Learned counsel appearing for the appellants submits that the contract

between the parties is a standard form of contract, the benefit of which

should be afforded to the appellants to safeguard their business. The

appellants cite, in support of such proposition, Olga Tellis & Ors. v.

Bombay Municipal Corporation & Ors. reported at (1985) 3 SCC 485 and

Senior Divisional Commercial Manager, South Central Railways & Ors. v.

S.C.R. Caterers, Dry Fruits, Fruit Juicestalls, Welfare Association & Anr.

reported at (2016) 3 SCC 582.

17. Thus, the appellants argue that the impugned judgment, whereby their

writ petition was dismissed, ought to be set aside.

18. While controverting the submissions of the appellants, the learned

counsel appearing for the respondent nos. 1 to 4 submits that during

pendency of the writ petition before the learned Single Judge, an LOA

and a dealership agreement, both dated January 31, 2025, have been

6

issued and executed respectively by the HPCL in favour of the

respondent no.6.

19. Learned counsel for the respondent no s. 1 to 4 submits that the

Guidelines/Norms dated March 26, 2020, for grant of permission for

construction of access fuel stations, wayside amenities, connecting

roads, other property, rest area complexes and such other facilities,

sought to be relied on by the appellants before the writ court and this

court, is not at all applicable in respect of a State Highway. The HPCL,

it is submitted, only ha s to obtain a „No Objection‟

Certificate from the concerned District Magistrate for grant of

dealership licenses, which has been done in the present case.

20. The dealers who are appointed have to obtain explosive license, fire

license and license under the West Bengal Motors and Spirit and High

Speed Diesel (LRS) Order, 2020 from the respective departments of the

Government of India and the Government of West Bengal, which have

also been obtained by respondent no.6.

21. The appellants‟ case of infringement of Article 19(1)(g) of th e

Constitution, it is argued, has not been substantiated at all. It is

argued that National Highways come under the List I of the Seventh

Schedule of the Constitution of India, whereas State Highways come

under List II of the Seventh Schedule. Under List III (Concurrent List),

State Highways are not enumerated.

22. Thus, it is contended that the Guidelines pertaining to National

Highways, issued by the Central Government or its instrumentalities,

are not binding with regard to State Highways at all.

7

23. Relying on Section 2(c)(ii) of the West Bengal Highways Act, 1964 (for

short, “the State Act”), it is argued that the said Act, governing State

Highways, specifically excludes National Highways from its operation.

Under Section 2(2) of the National Highways Act, 19 56 (hereinafter

referred to as “the Central Act”), on the other hand, the Central

Government may, by notification in the Official Gazette, declare any

other highway to be a National Highway and on the publication of such

Notification, such Highways shall be deemed to be specified in the

Schedule thereof. Thus, no provision relating to National Highways can

be made applicable to State Highways.

24. It is further argued that the dealership agreement dated November 30,

2020, between HPCL and the appellants , has not been challenged in

the present lis; rather, the appellants have been enjoying the full

benefit under such agreement and are generating substantial revenue

therefrom. Thus, the appellants cannot now turn around and challenge

a clause of the said agreement.

25. Learned counsel for the HPCL cites Nataraja Agencies, rep. By its

Proprietor G Natarajan, Dealer, Indian Oil Corporation Ltd,. Pondicherry

vs. The Secretary, Ministry of Petroleum & National Gas, Government of

India, New Delhi Others, reported at 2005 (1) CTC 394, where it was

held that the writ petitioner/appellant therein had no locus standi at all

to complain against setting up of a rival retail outlet by the 4

th

respondent therein near his place of business on the ground that it

could affect the business interest of the writ petitioner/appellant. It was

further held that merely because some of the customers may switch

8

over to the rival retail outlet does not mean that public interest will

suffer; rather, in the opinion of the court, it would benefit th e

customers when there is competition.

26. Learned counsel, in support of the proposition that the court should

not resort to second-guessing in case of Government contracts and

tenders unless there is arbitrariness of mala fides but must defer to the

understanding and appreciation of the tender documents of the

Government, cites the following judgments:

i) Galaxy Transport Agencies Contractors, Traders, Transports &

Suppliers v. New J.K. Roadways, Fleetowners & Transport

Contractors & Others] reported at 2020 SCC OnLine Sc 1035 [=

(2021) 16 SCC 808],

ii) [Agmatel India Pvt. Ltd. v. Resoursys Telecom & Others]. -DB,

Reported at (2022) 5SCC 362,

iii) [N.G. Projects Ltd. v. Vinod Kumar Jain & Ors.]-DB reported at

(2022) 6 SCC 127, and

iv) [Bansidhar Construction Pvt. Ltd v. Bharat Cooking Coal Ltd and

Others]-DB reported at (2024) 10 SCC 273

27. Learned counsel next cites Mithilesh Garg and Ors v. Union of India and

Ors. reported at (1992) 1 SCC 168 where it was held that the right

under Article 19(1)(g) of the Constitution does not extend to shutting

out competition; public interest, it was held, is served by healthy

competition and the legislative policy under the Act cannot be

challenged on such grounds.

9

28. As such, learned counsel submits that the appeal ought to be

dismissed.

Legitimate Expectation

29. The doctrine of legitimate expectation, as discussed in Rajeev Suri

(supra)

1

, cited by the appellants themselves, was opined by the Hon‟ble

Supreme Court not to convey a tangible right but to be a mere

expectation of fair and reasonable treatment. It was held that the

legitimacy of the expectation would strictly depend upon the facts and

circumstances of the case, particularly on whether or not the absence

of a procedural step had l ed to failure of fairness. Legitimate

expectation was held to be a locus-based principle and not meant to

assuage the expectation of those whose interests are unaffected by the

decision. The Hon‟ble Supreme Court observed that it is easy to form an

expectation, but difficult to find a legitimate basis for such expectation.

30. More importantly, in Rajeev Suri (supra)

1

, the Hon‟ble Supreme Court

observed that such expectation gets developed only on the basis of an

established practice in the context of the decision being taken and in

the context of the body taking the decision. In the said case, the

Hon‟ble Supreme Court held that the petitioners had not demonstrated

any practice which has been deviated from.

1

Rajeev Suri v. Delhi Development Authority & Ors., reported at (2022) 11 SCC 1.

10

31. Applying the same tests to the present case, the appellants, with their

eyes wide open, entered into a commercial transaction with the HPCL

by obtaining the license to run a retail fuel outlet/dealership, for the

purpose of earning profits. The terms of the said licence w ere

crystallised in the dealership agreement dated November 30, 2020.

Thereafter, the appellants merrily continued to take full advantage of

the license obtained under such agreement , and to earn revenue

therefrom by operating their fuel business till January 31, 2025, when

an LOA was issued and a dealership agreement entered into between

HPCL and the respondent no.6, a rival dealer of the appellants.

32. Thus, the rights of the appellants, if any, emanate in the present case

exclusively from the dealership agreement entered into between the

parties, of which the appellants took full advantage all along by reaping

benefits therefrom. Hence, there is no scope of applying the doctrine of

legitimate expectation, since the appellants have miserably failed to

show any “established practice” of whatsoever nature (which is a sine

qua non for claiming legitimate expectation) pertaining to restrictions

regarding distance in grant of dealership licenses adjacent to State

Highways in the State of West Bengal.

33. The Notification dated September 25, 2003, issued by the Government

of India, Ministry of Road Transport and Highway, relied on before the

learned Single Judge in the writ petition, was issued by the Central

Authorities entirely in respect of National Highways. Admittedly, there

are no regulations stipulating the minimum distance between fuel retail

outlets adjacent to State Highways, nor do the provisions of the

11

aforesaid Central Notification apply to State Highways. Hence, there is

no “established practice‟‟ restricting opening up of new retail fuel

outlets within any particular distance from the existing outlets in

respect of State Highways. Thus, even going by the ratio of Rajeev Suri

(supra)

2

, the doctrine of legitimate expectation is not applicable to the

present case at all.

Clause 7 of the dealership agreement dated November 30, 2020

between HPCL and the appellants

Clause 7 of the aforesaid dealership agreement is set

out below:

“Nothing contained in this 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. The dealer shall not be entitled to any

claim or allowance for such direct or indirect sales.”

34. Although not referred to in the written notes of arguments of the

appellants, learned counsel for the appellants relied on two decisions

during his oral arguments, which are considered below.

35. In Vijay Bank and Anr. v. Prashant B Narnaware, reported at (2025) AIR

SC 2820, it was held that restrictive covenants in public sector

employment contracts for minimum tenure or liquidated damages upon

2

Rajeev Suri v. Delhi Developmnt Authority & Ors., reported at (2022) 11 SCC 1.

12

premature resignation are valid if reasonable and not unconscionable,

unfair or against public policy.

36. However, the context of the said judgment is entirely different from the

present case, as we are dealing in the case at hand with a commercial

contract between the appellants, who are commercial entities, and the

HPCL/respondent no.1, and not an employment contract. The premise

of the Vijay Bank (supra)

3

judgment was the bar under Section 27 of the

Indian Contract Act, which is set out below:

“27. Agreement in restraint of trade, void .—Every

agreement by which any one is restrained from

exercising a lawful profession, trade or business of any

kind, is to that extent void.

Exception 1.—Saving of agreement not to carry on

business of which good-will is sold.—One who sells the

goodwill of a business may agree with the buyer to refrain

from carrying on a similar business, within specified local

limits, so long as the buyer, or any person deriving title to the

goodwill from him, carries on a like business therein:

provided that such limits appear to the Court reasonable,

regard being had to the nature of the business.”

* * * * *

37. The restraint on the employees of Government instrumentalities in the

public sector, with regard to minimum tenure of service and default

clauses of payment of liquidated damages, was under consideration in

the said judgement. However, the Hon‟ble Supreme Court observed in

the said decision that such restrictive co venant was neither

unconscionable nor unfair or unreasonable and therefore was not in

contravention of public policy. The ratio laid down in the said report

3

Vijay Bank and Anr. v. Prashant B Narnaware, reported at (2025) AIR SC 2820

13

has nothing to do with the context of the present case and, as such, the

reliance on the same by the appellants is misplaced.

38. Again, in Central Inland Water Transport Corporation Limited And Anr. v.

Brojo Nath Ganguly and Anr ., reported at (1986) 3 SCC 156, the

question which fell for consideration before the Hon‟ble Supreme Court

was whether allegedly arbitrary termination rules which violate public

policy and Article 14 would be deemed to be void . The context of

consideration there was a challenge to Rule 9(i) of the Central Inland

Water Transport Corporation Limited‟s Service Rules allowing

termination of permanent employees‟ services with three months‟ notice

or pay in lieu thereof without assigning reasons or holding an enquiry.

The said Rule was held, in the context of gross inequality of bargaining

power between the Corporation and its employee s, to be

unconscionable and opposed to public policy, thus being void under

Section 23 of the Indian Contract Act.

39. However, there is no applicability of Section 23 of the Indian Contract

Act at all in the present case. The dealership agreement between the

parties is a commercial contract and the appellants have taken full

advantage thereof for at least a period of more than four years before

challenging the same. It is not the allegation of the appellants that they

have been restricted in reaping the fruits of the said agreement by retail

sales of fuel in any manner whatsoever by the respondent no.1/HPCL.

Accordingly, the appellants, who took advantages all along of the

provisions of the dealership agreement, cannot now resile and challenge

an essential clause of the said contract. Even otherwise, Clause 7 does

14

not incorporate any restriction whatsoever to the unfettered sale of fuel

from the appellants‟ retail outlet in terms of the dealership agreement

with HPCL. Rather, Clause 7 retains the otherwise-available right of the

HPCL to make direct and/or indirect sales to any person whomsoever

and from appointing other dealers for the purpose of such sales at such

place or places as the Corporation may think fit. A bare reading of the

said clause, thus, only finds a reflection and reiteration of the rights

which were already available to HPCL and no imposition of any fetter

whatsoever on the business being done by the appellants. Thus, there

is nothing “unconscionable” about Clause 7 and , as such, the said

clause cannot be permitted to be challenged by the appellants by

culling out the same from the rest of the dealership agreement,

particularly after the appellants having acted on the same and having

derived the benefit of the dealership agreement all along.

Whether any fundamental right of the appellants ha s been

violated

40. In order to be violated, the appellants had to plead in the first place a

fundamental right of theirs which has been infringed by grant of license

to respondent no.6, furnishing cause of action for a writ petition.

41. By mere grant of dealership to a different entity, the right of the

appellants under Article 19(1)(g) of the Constitution cannot be said to

have been curtailed in any manner whatsoever.

42. Article 19 (g)(1) of the Constitution recognises the fundamental rights to

all citizens to practice, inter alia, any trade or business. However, the

15

right to practice any trade or business does not include the right to

earn more profit, which falls within the domain of laissez faire market

competition. The profits of business are governed by market forces in

commercial matters and do not, per se, form the basis of any

fundamental or legal right of a trader/businessperson to earn more

profits as opposed to other rivals.

43. In such context, a reference to the Division Bench judgment of the

Madras High Court in Nataraja Agencies (supra)

4

would be profitable.

The Madras High Court, by relying on Mithilesh Garg (supra)

5

, held that

a rival businessman cannot file a writ petition challenging the setting

up of a similar unit by another businessman, on the ground that the

establishment of a rival business close to his business place would

adversely affect his business interests, even in the setting up of a new

unit is in violation of law. The Division Bench of the Madras High Court

further considered that in Mithilesh Garg (supra)

6

, the Hon‟ble Supreme

Court followed its earlier decision in The Nagar Rice and Flour Mills and

Ors. v. N.T Gowda and Bros and Ors., reported at 1970 (1) SCC 575,

where it was held that a rice mill owner has not locus standi to

challenge under Article 226 the setting up of a new rice mill by another,

even if such setting up is in contravention of the concerned Act,

because no right vested in such applicant is infringed.

4

Nataraja Agencies rep. By its Proprietor, G Natarjan, Dealer, Indian Oil Corporation

Ltd,. Pondicherry vs. The Secretary, Ministry of Petroleum & National Gas,

Government of India, New Delhi Others reported at 2005 (1) CTC 394,

5

Mithilesh Garg and Ors v. Union of India and Ors. reported at (1992) 1 SCC 168

6

16

44. In Mithilesh Garg (supra), which was relied on by the Division Bench of

the Madras High Court, the Hon‟ble Supreme Court categorically

observed, in a case where stage carriage operators on different routes

holding permits granted by the Regional Transport Authority had

challenged the liberalisation of private sector operations in the route

transport field, that there was no threat of any kind whatsoever from

any authority to the enjoyment of the existing carriage operators‟ right

to carry on their occupation. They were held to be in full enjoyment of

fundamental rights guarantee under Article 19(1)(g) of the Constitution

and it was observed that there was no infringement of such right at all.

45. Again, in The Nagar Rice and Flour Mills (supra)

7

, the challenge to grant

of permits to set up business of rice mills to new entrants in the field by

existing mill owners was turned down on similar lines.

46. Following the above principles, no fundamental or legal rights of the

appellants have been infringed at all by grant of license to respondent

no. 6 and, as such, the contention of the appellants regarding their

perceived infringement of Article 19(1)(g) of the Constitution is illusory

and not tenable.

47. In fact, in the event grant of similar dealership was refused to

respondent no. 6, the latter could have alleged infringement of Article

14 of the Constitution of India by such refusal in an arbitrary and

unreasonable manner.

7

The Nagar Rice and Flour Mills and Ors. v. N.T Gowda and Bros and Ors ., reported

at 1970 (1) SCC 575

17

Applicability of the Notification dated September 25, 2003,

issued by the Government of India, Ministry of Road and

Transport of Highways and the argument of ‘legal vacuum’

48. Section 2 (c) of the State Act clearly excludes National Highways from

the purview of the said Act. The scheme of the State Act clearly

indicates that it is the said statute which governs State Highways.

Admittedly, the infraction of the perceived rights of the appellants,

alleged herein, pertain to a State Highway and, as such, governed by

the said Act.

49. On the other hand, Section 2(2) of the Central Act governs National

Highways. Learned counsel for the HPCL is also justified in pointing out

that whereas National Highways are covered by List I (Union list) of the

Seventh Schedule of the Constitution and State Highway s by List II

(State list), State Highways are not included under List III (Concurrent

List).

50. Thus, there is not an iota of doubt that the Notification issued on

September 25, 2003 by the Ministry of Road Transport and Highways,

Government of India pertains only to National Highways.

51. The “legal vacuum” argument of the appellants is flimsy, since in the

first place there is no vacuum in field of administration of State

Highways. The Courts have traditionally resorted to judicial activism by

filling in gaps and issuing directives/guidelines in order to ensure the

protection and preservation of fundamental rights of citizens where

there is a void in legislation in the concerned field. In the present case,

the lack of any specific rules stipulating the minimum distance between

18

two fuel outlets adjacent to State Highways does not infringe any

fundamental, Constitutional or legal right of fuel outlet dealers or the

public at large. Rather, such lack of restrictions would encourage

competition among similarly-placed dealers, which would ultimately

benefit the public at large by ensuring quality control and better prices.

52. It is a matter of policy of the State as to whether or not to impose

restrictions regarding setting up of rival businesses within particular

zones marked by distance. Courts, it is well-settled, ought not normally

to enter into the domain of exclusive policy decisions of the State

through the device of judicial review, particularly where there is no

infraction or infringement of any legal or Constitutional right and there

is no palpable arbitrariness or u nreasonableness in State

action/inaction.

53. None of the judgments cited by the appellants are relevant at all in the

present context.

54. The reliance of the appellants on Dayaram (supra)

8

is entirely misplaced

in the context. In the said judgment, the Hon‟ble Supreme Court was

considering a legislative vacuum in respect of benefits extended to the

Scheduled Castes and Tribes.

55. In fact, the judgments relied on by the Hon‟ble Supreme Court in

Dayaram (supra)

8

were all in the context of situations where there was a

legal vacuum in respect of enforcement of fundamental rights ,

particularly in respect of the marginalized sections of Society. The

8

Dayaram v. Sudhir Batham & Anr. reported at (2012) 1 SCC 33

19

Hon‟ble Supreme Court had stepped in to fill up the vacuum by issuing

appropriate directions in such cases.

56. In the case of Chairman, Rajasthan State (supra)

9

as well, the Hon‟ble

Supreme Court was considering a legal vacuum regarding complete

liability of providing compensation in a vehicular accident. In the said

context, the Hon‟ble Supreme Court took into account cases where the

courts in India issued certain directions to meet such exigency, some of

them admittedly legislative in nature, only to fill up the existing

vacuum, till the legislature enacts a particular law to deal with the

situations.

57. In the present case, however, the State Legislature has deliberately

chosen, in its wisdom, not to pass any specific law imposing

restrictions on free trade through the grant of dealerships and licenses

to retail fuel outlets to commercial entities, by imposing fetters in

respect of distance between different such outlets. The matter pertains

entirely to the economic policy of the State and there cannot be any

assumption that such policy is tainted by unreasonableness and/or

arbitrariness. In fact, the lack of restrictions in the present case

encourages competition, which has been upheld by the Hon‟ble

Supreme Court in the judgments referred to above.

58. In Olga Tellis (supra)

10

, the Hon‟ble Supreme Court was dealing with the

Constitutional right of the pavement dwellers and inhabitants of slums

9

Chairman, Rajasthan Sta te Road Transport Corporation and Ors. v. Santosh and

Ors. reported at (2013) 7 SCC 94

10

Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors. reported at (1985) 3

SCC 485

20

in the city of Bombay to a life of dignity. The Hon‟ble Supreme Court

observed that men and women who were living in the midst of filth and

squalor had come to the Court to ask for a judgment so that they

cannot be evicted from their squalid shelters without being offered

alternative accommodation. The situation of the petitioners therein

cannot, by any stretch of imagination, be compared with that of the

present appellants, who are fully commercial entities earning profits

from a retail fuel outlet.

59. In the S.C.R. Caterers’ Case (supra)

11

, a catering policy decision of the

Railways in not granting renewal of license was under challenge on the

ground of arbitrariness, unreasonableness and unfairness and

discrimination, invoking Article 14 of the Constitution. In such context,

the Hon‟ble Supreme Court upheld the principle that public property is

to be dealt with for public purpose and public interest.

60. As opposed thereto, in the present case we are looking at the so-called

right of an individual commercial entity to earn more profits from a

retail fuel outlet. The right to carry on such business and earn profits

therefrom is not even affected by the impugned action, but similar right

has been conferred on a business rival of the appellants. There is no

public element involved at all here; rather, the public interest would be

subserved if competition is encouraged by granting licenses to multiple

entities, which would enure to the benefit of the public at large by

11

Senior Divisional Commercial Manager, South Central Railways & Ors. v.

S.C.R. Caterers, Dry Fruits, Fruit Juicestalls, Welfare Association & Anr.

reported at (2016) 3 SCC 582.

21

increasing competition and, thereby, ensuring the standard and quality

of the products sold as well as the reasonableness of the price of such

products.

61. As discussed above, there is no infringement of the fundamental right

of the appellants to do business, as envisioned in Article 19(1)(g) of the

Constitution, since nothing in the impugned act of grant of license to

respondent no.6 infringes the right of the appellants to do business

from their retail outlet/dealership in an unfettered manner.

62. The reliance of the appellants of B.P. Singhal (supra)

12

, is also

misplaced, since there is not arbitrariness or capriciousness in the

grant of license to respondent no. 6 at all.

63. In Punjab State Cooperative Milk Producers Federation (supra)

13

and

State of Madhya Pradesh (supra)

14

, the Hon‟ble Supreme Court was

considering reasonableness and equality in the distribution of the State

largesse. Such distribution, in the present case, is not arbitrary at all.

Mere grant of dealership/license to operate a retail fuel outlet to a rival

businessperson, standing on a similar footing as the appellants, cannot

be said to be so unreasonable or arbitrary as to taint such grant of

license or dealership to respondent no. 6.

64. Thus, there is no scope of legislation by the judiciary, since there is no

vacuum in legislation in the first place, nor there being any

12

B.P. Singhal v. Union of India and Anr. reported at (2010) 6 SCC 331

13

Punjab State Cooperative Milk Producers Federation Limited & Anr. v. Balbir

Kumar Walia & Anr. reported at (2021) 8 SCC 461

14

State of Madhya Pradesh v. Mala Banerjee reported at (2025) 7 SCC 698.

22

arbitrariness or unreasonableness involved. As held above, it would

rather be violative of Article 14 of the Constitution if a licence was

refused to the respondent no. 6, which stands on similar footing as the

appellants.

65. HPCL had relied on several judgments , including Bansidhar

Construction (supa)

15

, N.G. Projects (supra)

16

, Galaxy Transport (supra)

17

as well as Agmatel India Pvt. Ltd. (supra)

18

, which reiterate the well-

settled legal proposition that the State or Government agencies have a

play in the joint in the matter of grant of tenders. Although the

principle that an employer is entitled to decide as to what would be the

proper interpretation of a tender term may not be directly applicable in

the present case, at the same time, the extremely limited scope of

interference by the courts in judicial review with the grant of

dealerships and tenders has been recognized in the said reports.

66. Thus, in the present case, particularly due to the lack of any

arbitrariness or discriminatory attitude on the part of the State or its

instrumentality, the HPCL, there was no scope of interference by the

writ court at all.

15

Bansidhar Construction Pvt. Ltd v. Bharat Cooking Coal Ltd and Others] -DB

reported at (2024) 10 SCC 273

16

N.G. Projects Ltd. v. Vinod Kumar Jain & Ors.]-DB reported at (2022) 6 SCC 127,

17

Galaxy Transport Agencies Contractors, Traders, Transports & Suppliers v. New

J.K. Roadways, Fleetowners & Transport Contractors & Others] - FB reported at

2020 SCC OnLine Sc 1035/ (2021) 16 SCC 808,

18

Agmatel India Pvt. Ltd. v. Resoursys Telecom & Others]. -DB, Reported at (2022)

5SCC 362,

23

Effect of the Notification dated September 25, 2003 issued by the

Government of India, Ministry of Road Transport and Highways

67. As held above, the September 25, 2003 Notification, subsequently

substituted by the Notification dated June 26, 2020, speaks about the

norms for location, layout and access to fuel stations along National

Highways, and does not have any effect on State Highways at all.

68. Even otherwise, Item 6 of Clause 2.2 of the said Notification, discussed

at length by the learned Single Judge, does not altogether prohibit

issuance of dealerships to new entrants within a particular distance

from existing locations of dealerships. What it does is merely to restrict

such grants unless all such fuel stations are provided access through a

common service road of 7.0m width and not directly t hrough the

National Highway. Even access for fuel stations at closer proximity

than the stipulated distance is permitted by the said Clause, provided

entries/exits for both the fuel stations are provided through a service

road of 7.0m width having sufficient length, further additional length of

such service road being constructed at the cost of the latter fuel station

owner/company seeking grant of permission for access to the facility.

69. Thus, apart from the said norms not being applicable to the State

Highways, even the said norms themselves do not impose an unfettered

prohibition on setting up of new fuel stations within any particular

distance but permit such setting up subject to certain restrictions.

70. Hence, from no point of view can the said provisions be invoked at the

behest of the appellants to seek a complete prohibition regarding grant

24

of license to respondent no.6 or other business competitors of the

appellants.

71. Even otherwise, by their conduct, the appellants have not only

acquiesced to, but have relied upon, their dealership agreement with

the HPCL by operating their business in terms of the said agreement all

along, without there being any infringement of their fundamental right

to conduct such business at any point of time.

CONCLUSION

72. In view of the above discussions, this Court does not find any illegality

in the impugned judgment, whereby the writ petition of the appellants

was dismissed.

73. Accordingly, FMA No. 686 of 2025 is dismissed on contest, thereby

affirming the impugned judgment dated March 13, 2025 passed in WPA

No. 2924 of 2025.

74. CAN 1 of 2025 and CAN 2 of 2025 are also disposed of consequentially.

75. There will be no order as to costs.

76. Urgent certified copies, if applied for, be supplied to the parties upon

compliance of due formalities.

(Sabyasachi Bhattacharyya, J.)

I agree.

(Supratim Bhattacharya, J.)