Page 1 Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4909 OF 2015

(@ SLP(C) NO. 14256 OF 2014)

Rahul Yadav & Anr. ... Appellants

Versus

M/s. Indian Oil Corporation Ltd.

and Others ... Respondents

J U D G M E N T

Dipak Misra, J.

Leave granted.

2.The appellant is the owner in possession of the

premises being land measuring 2571 sq. yards on

Rewari-Palwal-Delhi Road, Rewari and Khewat No.

1139/941, Khatauni no. 1380, Rectangle No. 117, Kila No.

2412/2 (2-0), Khewat No. 1125/930 mm, Khautani No. 136

mm, Rectangle No. 117, Kila No. 24/211 (1-9), Rectangle N.

150, 6/80 share Le. 6 maria out of Kila No. 411 (4-0) total

measuring Kanal 5 marla in 3 kittas thereabouts. The

Page 2 respondent no.1, namely, Indian Oil Corporation (for short,

the ‘Corporation’) issued an advertisement in the newspaper

on 6.10.2000 for retail outlet dealership in the state of Delhi

and Haryana for which the appellant applied and was

selected. Letter of intent was issued in his favour on

6.7.2001. It was stipulated in the said letter of intent that

the appellant was required to own a suitable plot of land

and entered into a long-term lease with the Corporation at

the rate acceptable to the respondent. To meet the mandate

of the letter of intent, the appellant bought the land in

question for the purpose of getting dealership agreement.

On 23.10.2001, the appellant executed a long-term lease of

30 years in accordance with the terms of the advertisement

and the letter of intent in favour of the Corporation at the

monthly rent of Rs.10,000/-. After completion of

formalities, a dealership agreement was entered into

between the appellant and the Corporation on 14.5.2002.

Be it noted, as per the letter of intent, the Corporation was

to provide certain facilities and develop the land as an outlet

with an office building, storage tank and pump, etc. for

2

Page 3 operating the dealership and it was to charge the appellant

a licence fee for the said facilities.

3.The allotment of such petrol pumps by the competent

authorities became a front page news item in Indian

Express mentioning that there had been grant of retail

outlets of petrol pumps to the near and dear ones of the

political functionaries on account of political consideration.

Number of cases were filed in various courts and all of them

were transferred to this Court and a two-Judge Bench in

Onkar Lal Bajaj v. Union of India

1

, after referring to such

earlier event that was the subject matter of Common

Cause, a Registered Society v. Union of India

2

, wherein it

had been observed that for these kind of allotments, a

transparent and objective criteria/procedure has to be

evolved based on reason, fair play and non-arbitrariness,

adverted to many a facet, namely, the criteria evolved for

grant of dealership, the concept of probity in governance

and the concept of public interest, the role of the executive

and the right of the public to know the circumstance under

1

(2003) 2 SCC 673

2

(1996) 6 SCC 530

3

Page 4 which their elected representatives get the outlets and/or

dealerships/distributorships, and directed as follows:-

“In view of the aforesaid:

I. We appoint a committee comprising Mr Justice

S.C. Agrawal, a retired Judge of this Court and

Mr Justice P.K. Bahri, a retired Judge of the

Delhi High Court, to examine the aforesaid 413

cases. We request the Committee to submit the

report to this Court within a period of three

months.

II. The Committee would devise its own procedure

for undertaking the examination of these cases. If

considered necessary, the Committee may

appoint any person to assist it.

III. We direct the Ministry of Petroleum and

Natural Gas, Government of India and the four

oil companies to render full, complete and

meaningful assistance and cooperation to the

Committee. The relevant records are directed to

be produced before the Committee within five

days.

IV. We direct the Ministry to appoint a nodal

officer not below the rank of a Joint Secretary for

effective working of the Committee.

V. The Central Government, State

Government/Union Territories and all others are

directed to render such assistance to the

Committee as may be directed by it.

VI. The oil companies are directed to provide as

per the Committee’s directions, the requisite

infrastructure, staff, transport and make

necessary arrangements, whenever so directed,

for travel, stay, payments and other facilities etc.

VII. In respect of any case if the Committee, on

preliminary examination of the facts and records,

forms an opinion that the allotment was made on

merits and not as a result of political connections

or patronage or other extraneous considerations,

4

Page 5 it would be open to the Committee not to proceed

with the probe in detail.”

4.It is necessary to state here that certain transferred

cases were finally disposed of and certain transferred cases

were directed to be listed after receipt of the report. After

reports were received, certain interim applications were filed

by the persons who were aggrieved by the report of the

committee appointed by this Court. In Mukund Swarup

Mishra v. Union of India

3

, the Court referred to Onkar Lal

Bajaj (supra) and while dealing with the plea of promissory

estoppel opined thus:-

“We are also not impressed by the argument of

the petitioners that the doctrine of promissory or

equitable estoppel would apply. May be that the

petitioners have spent some amount. But once

the allotment itself was found to be vitiated,

obviously they cannot claim any benefit as

allotment was contrary to law. Moreover, such

allotment has been made in remote past and

even though an order of cancellation had been

passed by the Central Government as early as in

August 2002, the allottees have been protected

by interim order passed by this Court. Even after

the decision in Onkar Lal Bajaj1, interim order

was continued. In the circumstances, for more

than four years interim order is in favour of

allottees even though the allotment was found to

be illegal or contrary to law. In our opinion,

therefore, it is not open to the allottees whose

3

(2007) 2 SCC 536

5

Page 6 allotments have been found to be vitiated to plead

equity.”

After so stating, the Court proceeded to delve into the

justifiability of the report and in that regard observed that:-

“In our opinion, the learned amicus curiae is

right that the Committee had considered in detail

individual cases and submitted the report. This

Court, therefore, would consider a complaint of

an allottee who can successfully put forward his

complaint and may satisfy this Court that in the

facts and circumstances of the case, the finding

of the Committee that the allotment was not on

merits was not correct. But only in those

individual cases, the Court would consider and

may grant relief to such applicants. It, however,

cannot be said that the report of the Committee

was without power, authority or jurisdiction or

was uncalled for and liable to be ignored.”

5.It is apt to note here that the Court proceeded to

scrutinize the report State-wise where grants were made

and as far as the States of Punjab and Haryana are

concerned, it has been held thus:-

“State of Punjab

36. In respect of the State of Punjab, the

Committee considered thirty-seven cases referred

to it. It found that seven allotments were on merit

and twenty-nine allotments were not in

consonance with the guidelines. Out of them,

twenty-six have filed applications. We have been

taken through the reasoning recorded by the

Committee. So far as cases of Shri Surinder

Singh, Chander Kant Bhatia, Gurpreet Singh,

6

Page 7 Smt Kavita Rani, Smt Suman Lata, Ms Ruby

Sekhri, Mr Manmohan Singh, Mr Rajesh Madan

and Mr Tejinder Singh are concerned, they

appear to be borderline cases. In our view, it may

not be appropriate to cancel the allotment in

favour of these nine persons. Their applications

are allowed. Rest of the cases do not call for

interference and the applications are rejected.

There are six applications by non-allottees. They

are also rejected as we are not concerned with

non-allottees.

State of Haryana

37. In regard to the State of Haryana, the

Committee considered twenty-one cases referred

to it. It found no irregularity in allotment in seven

cases. It disapproved allotments in fourteen

cases. Out of them, twelve have filed applications.

We find no infirmity in the conclusions arrived at

or reasons recorded by the Committee and no

interference is called for. The other applications

are rejected.”

6.There is no cavil over the fact that the grant of

dealership in favour of the appellant was cancelled by the

Committee and that received the stamp of approval of this

Court. After the decision of this Court, the Corporation

terminated the dealership and intended to take back the

possession from the dealer with a view to appoint another

dealer as specifically permitted in the lease deed as well as

in the dealership agreement. The appellant built a wall to

stop the functioning of the retail outlet and refused to hand

7

Page 8 over the possession which constrained the Corporation to

initiate a proceeding for eviction under the Public Premises

(Eviction of Unauthorised Occupants) Act, 1971 (for short,

“the 1971 Act”) as a valid lease deed existed between the

appellant and the respondent, a public sector undertaking.

The appellant participated in the proceeding and after

hearing commenced, he sought to go for arbitration, but the

said prayer was not accepted by the Estate Officer on the

ground that the same was not permissible under the

provisions of the 1971 Act. After six years of participation

in the said proceeding, he initiated a civil suit alleging

illegality in termination of the lease and prayed that the

proceedings under the 1971 Act to be kept in abeyance

which was not accepted. The competent authority, that is,

the Estate Officer passed an order of eviction in exercise of

powers conferred on him under sub-section 1 of Section 5 of

the 1971 Act, after rejecting all the contentions raised by

the appellant.

7.Being aggrieved by the aforesaid order, the appellant

preferred Civil Appeal No. 92 of 2013 before the learned

District Judge, Rewari under Section 9 of the 1971 Act. It

8

Page 9 was contended before the learned District Judge by the

appellant that the order passed by the Estate Officer was

passed on surmises and conjectures; that the Estate Officer

had failed to appreciate that the lease deed and the

dealership agreement were interlinked and hence, the lease

deed could not survive after the cancellation of dealership

agreement; that the 1971 Act was not applicable to him as

he was not in unauthorized occupation, but is the owner of

the premises; that the competent authority had directed

order of eviction to circumvent the eventual result of the

pending suit; and that there had been violation of the

principles of natural justice.

8.The learned appellate Judge, on the basis of the

material brought on record, came to hold that the

respondent is a government company and the premises

were taken on lease by it and hence, the premises fell within

the meaning and ambit of “public premises”, as defined

under Section 2(e) of the 1971 Act; that the submission that

the lease was contingent upon the appointment of the

appellant as a dealer and upon his ceasing to be such the

lease agreement became extinct was sans substance, for the

9

Page 10 document granting dealership and the lease agreement were

different documents and they were neither interlinked nor

interdependent; that the fact that the dealership agreement

and the lease agreement had been executed separately

would leave no room for doubt that they were independent

and it could not be inferred from any one of the covenants

agreed to between the parties that one agreement was to

come to an end on the termination of the other; that it could

not be construed that once the dealership stood terminated

pursuant to the order passed by this Court, the lease

agreement also stood terminated; that the submission to the

effect that the proceeding under the 1971 Act had been

initiated to circumvent the suit instituted by the appellant

was too spacious to be accepted. Being of this view, the

learned appellate Judge recorded the conclusion thus:-

“As an upshot of the discussion foregoing, it can

be safely concluded that the appellant was

running a retail outlet only on a leave and licence

basis and the moment his dealership licence was

terminated, he was bound to vacate the premises

which, for all intents and purposes, are public

premises. Needless to say that by virtue of lease

agreement the respondent is at liberty to run the

outlet/petrol pump even through third and

outside party without any restriction and

objection from the appellant. So long as the lease

agreement is intact and the civil court does not

10

Page 11 order eviction, the respondent has right not only

to remain in possession but to oust any

licencee/trespasser. The appellant may be the

owner of the premises, but by virtue of the lease

deed, it is the respondent who has the right to

occupy premises.”

9.Being aggrieved by the aforesaid order passed by the

appellate court, the appellant preferred CWP No. 26287 of

2013 in the High Court of Punjab and Haryana and the

learned Single Judge, after referring to the authority in

Mukund Swarup Mishra (supra), came to hold that the

Committee had considered 21 cases and it had disapproved

allotments in 14 cases and the dealership of the writ

petitioner was one of them and, therefore, proceeding under

the 1971 Act was a sequitur of the conclusions arrived at by

the judgment of this Court, and hence, the orders passed by

the forums below did not warrant any interference. Being of

this view, the writ petition was dismissed by the learned

Single Judge.

10.The non-success in the writ petition compelled the

appellant to prefer LPA No. 665 of 2014 and the Division

Bench concurred with the view expressed by the learned

Single Judge and declined to interfere in intra-court appeal.

11

Page 12 11.We have heard Mr. Kapil Sibal, learned senior counsel

for the appellant and Ms. Meenakshi Arora, learned senior

counsel for the Corporation, the first respondent herein.

12.The controversy, as we perceive, raises two issues

though an attempt had been made by the appellant to

create an imbroglio before the appellate court wherein the

order of the Estate Officer was in assail. The thrust of the

matter is whether the interpretation of the clauses of the

agreement would anyway suggest any kind of inextricable

connection to place a construction on them to the effect that

once the dealership is cancelled, the land owner who had

parted with the land by way of a long-term lease for a period

of thirty years, can be allowed to retain possession over the

land; and only the super structure which had been affixed

on the land by the Corporation, can only be removed.

13.Mr. Sibal, learned senior counsel for the appellant has

taken us through the advertisement issued on 6.10.2000. It

is urged by him that the appellant was compelled to

purchase the land as it was the basic requirement to meet

the eligibility criteria to get the allotment of dealership. It is

his proponement that there has to be a conjoint reading of

12

Page 13 the advertisement issued by the respondent, the letter of

intent and the lease deed and that would clearly establish

that the appellant was to make available a suitable plot of

land and transfer the land on a long-term lease to the

Corporation for the sole and exclusive purpose of running a

retail outlet dealership of respondent-Corporation and

hence, the said lease deed cannot be looked at as a singular

or solitary document, more so, when the appellant had

agreed to give such highly valuable land to the Corporation

on a nominal monthly rent of Rs.10,000/-. Emphasis is

laid on the intention of creating the documents. To

appreciate the said submission, we have carefully perused

the advertisement and other documents. Relevant part of

the advertisement reads as follows:

“For locations for Retail Outlet Dealership and

LPG Distributorship. The applicant should

furnish, along with the application, details of

land/land for godown which he/she may make

available for the dealership/distributorship

considering the location of the land from the

point of view of commercial and applicants willing

to transfer the land on ownership/long lease to

the Oil Company at the rates acceptable to the

Oil Company would be given preference if an

applicant, after selection, is unable to provide the

land indicated by him/her earlier, within a period

of 2 months the allotment of the

13

Page 14 dealership/distributorship made to him/her

would be cancelled.”

14.In this context, we have to scrutinize the letter of

intent dated 6.7.2001. The relevant paragraphs of letter of

intent read as follows:-

1.1For enabling you to operate the dealership

said above, we will develop the Retail Outlet at

Rewari, and provide the same to you with certain

facilities such as suitable plot of land duly

developed as an outlet with an office building,

storage tank and pump etc. for operating your

dealership.

xxx xxx xxx

1.7This letter is merely a letter of intent and is

not to be constructed as a firm offer of dealership

to you. The dealership to you will, on your

complying with the condition spelt out herein

above, be confirmed/formalised by an

Appointment Letter followed by the signing of our

standard dealership Agreement.

xxx xxx xxx

2.You have stated in your application

form/during the interview that you are willing to

transfer the land on ownership/long lease to the

Indian Oil corporation Ltd. at the rates

acceptable to Indian Oil Corporation Ltd.

Accordingly, you will make available a suitable

plot of land as indicated by you within a period of

TWO months from the date of this letter, after

getting suitable clearance from us in writing for

the particular plot of land. You are required to

transfer the land on ownership/long lease for a

minimum period of 15 years with one renewal

14

Page 15 option for next 5 years under such term and

conditions as may be agreed upon between you

and Indian Oil Corporation Ltd. In case you fail

to make available the suitable land within 2

months, this offer is liable to be withdrawn.

However, there is no commitment from India Oil

Corporation Ltd. for taking the said land from

you.”

15.Keeping in view the aforesaid documents, it is

necessary to look at the lease agreement dated 23.10.2001.

The relevant clauses of the lease deed are extracted below:-

“..the Lessor/s do and each of them doth hereby

demise unto the Lessee All that the said land and

premises situated at Rewari, Tehsil & District

Rewari in the Registration Sub District of Rewari

District and more particularly described in the

Schedule hereunder written TOGETHER WITH

structure that may hereafter be erected thereon

by the Lessee to hold the premises hereby

demised hereafter for brevity’s sake referred to as

“the demised premises” unto the lessee for a term

of 30 years commencing from the date of lease

signed, renewable and determinable as

hereinafter provided yielding and paying therefore

during the said term the monthly and the

proportionately for any part of the month the rent

of Rs.10,000/- per month (Rupees Ten Thousand

only) to be paid on or before the 5

th

day of each

and every calendar month, the first of such

monthly rent to be paid from the date of

commencement of lease deed proportionately and

the subsequent rent to be paid on or before the

5

th

day of every succeeding month regularly (with

increase in rent by 10% after every three year).

xxxxx xxxxx xxxxx

15

Page 16 (d)The Lessee shall be free to use and the

Lessor shall permit the use of demised premises

by the Lessee for itself and for all its associated

concerns. The Lessee shall also be entitled to

use the demised premises by their agents, sales

representatives, distributors, local dealers, other

licensees or representatives, customers and all

other authorised persons.

(e)The Lessee shall be entitled to assign,

transfer, sublet, under let, or part with

possession of the demised premises or any part

thereof to any person abovenamed whomsoever it

chooses without the consent of the Lessor.

(f)The Lessee shall be entitled to appoint remove,

re-appoint change and substitute any dealers,

agents, licensees and other authorised

representatives on and in respect of the demised

premises without the consent of the Lessor.

xxx xxx xxx

(i)The Lessee shall be entitled to excavate, dig or

break open the surface of any part of the demised

premises at any time, during or after the

expiration of the term hereby granted and to

remove any stone, sand, gravel, clay, earth or

other material therefrom for the purpose of

erecting, laying, maintaining and/or removing

storage tanks, containers, receptacles and other

erections or installations for the purpose of the

business of the Lessee or any other person.

(j)The Lessee for the purpose of the

construction and erection mentioned in any of

the preceding sub-clause shall be entitled to

allow any, sub lessee, dealer, sub dealer, agent,

person or other authorised representative or

person to enter upon the demised premises and

to build and erect according to the Lessee’s

specifications requisite items herein mentioned

without any let hindrance or obstruction from the

16

Page 17 Lessor/s or any other person claiming by,

through or under him/her/them.”

16.We have referred to the clauses in extenso to highlight

that the lessee had entered into an agreement of lease with

the appellant with immense liberty and the lease deed does

lay down that the lessee has the freedom to sublet and

appoint another dealer. The lease would remain in force till

the dealership of the appellant continued and the licence

remained in vogue. At this juncture, it is pertinent to

reproduce certain clauses of the dealership agreement

which would clearly spell out the purpose. They read as

follows:-

“2.The Corporation do hereby grant to the

Dealer leave and licence and permission for the

duration of this Agreement to enter on the said

premises and to use the premises and outfit for

the sole and exclusive purpose of storing, selling

and handling the products purchased by the

Dealer from the Corporation, Save as aforesaid,

the Dealer shall have no right, title or interest in

the said premises or outfit and shall not be

entitled to claim the right of lessee, sub-lessee,

tenant or any other interest in the premises or

outfit, is being specifically agreed and declared in

particular that the Dealer shall not be deemed to

be in exclusive possession of the premises.

3.This Agreement shall remain in force for five

years from 14

th

day of May, 2002 and continue

thereafter for successive periods of one year each

17

Page 18 until determined by either party by giving three

months notice in writing to the other of its

intention to terminate this Agreement, and upon

the expiration of any such notice this Agreement

and the Licence granted as aforesaid shall stand

cancelled and revoked but without prejudice to

the rights of either party against the other in

respect of any matter or thing antecedent to such

termination provided that nothing contained in

this clause shall prejudice the rights of the

corporation to terminate this Agreement earlier

on the happening of the events mentioned in

clause 56 of this Agreement.

xxx xxx xxx

7.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

places as the Corporation may think fit. The

dealer shall not be entitled to any claim or

allowance for such direct or indirect sales.”

17.It is appropriate to mention here that clause 56 of the

said agreement stipulates that notwithstanding anything to

the contrary containing before the said clause, the

Corporation would be at liberty to terminate the agreement

forthwith upon any time after happening of certain events.

The conditions are manifold. We may, for the sake of

completeness, reproduce two conditions:-

“(h)If the Dealer does not adhere to the

instructions issued from time to time by the

18

Page 19 Corporation in connection with safe practices to

be followed by him in the supply/storage of the

Corporation’s products or otherwise.

(i)If the Dealer shall deliberately contaminate

of temper with the quality of any of the

Corporation’s products.”

18.On a plain reading of the aforesaid agreement, it is

clear as noon day that it has no connection whatsoever with

the lease agreement. Both the agreements are independent

of each other. The appellant was a dealer under the lessee,

that is, the Corporation. The dealership is liable to be

cancelled on many a ground. In case there is a termination,

dealership is bound to be cancelled and at that juncture, if

the lease deed is treated to have been terminated along with

the dealership, it will lead to a situation which does not flow

from the interpretation of the instruments. The dealership

agreement has been terminated because of the decision

rendered by this Court in Mukund Swarup Mishra (supra).

The consequence of cancellation of the dealership is a

sequitur of the judgment. The inevitable consequence of

that is the appellant has to vacate the premises and the

Corporation has the liberty to operate either independently

or through another dealer. The appellant cannot be allowed

19

Page 20 to cause obstruction or create an impediment. The

submission that the appellant entered into the lease

agreement at a monthly rent of Rs.10,000/- as it was given

the dealership is a mercurial plea, only to be noted to be

rejected. The dealership was availed of as has been held by

this Court in an inapposite manner. In such a situation,

consequences are to be faced by the appellant.

19.The second issue which has been feebly raised by the

learned senior counsel for the appellant that the 1971 Act

would not be applicable has really no force. Admittedly, the

respondent is a public sector undertaking. The appellant

whose dealership has been cancelled, cannot claim

possession to retain possession on the basis of ownership of

the land as the lease is in continuance. Therefore, he is a

trespasser. Thus, the provisions of the 1971 Act apply on

all fours and accordingly we repel the said submission.

20.We will be failing in our duty if we do not take note of

another submission which has been alternatively and

assiduously canvassed by Mr. Sibal, learned senior counsel

for the appellant. It is urged by him as the termination was

directed by the Corporation by virtue of the judgment of this

20

Page 21 Court and not because of any wrong committed by the

appellant and hence, his case should be reconsidered for

grant of dealership under the new policy. Ms. Meenakshi

Arora, learned senior counsel for the Corporation has filed

the prevalent policy. We do not intend to allude to the same

and issue any direction. Once there is a policy and any

candidate fits in, needless to say, when there is an

advertisement; he is at liberty to apply. We are not disposed

to advert to the policy at this juncture. If the policy permits,

as we have said, the appellant is at liberty to apply.

However, we must clarify that our grant of liberty does not

mean that the appellant shall create an impediment for the

Corporation to enter into and take possession and run the

petrol pump on its own or appoint a dealer.

21.In view of the aforesaid analysis, it is directed that the

appellant shall hand over the peaceful possession of the

land and the structure and other fixtures standing thereon

to the Corporation after demolishing the wall on his own

within four weeks hence, failing which he shall be liable for

contempt of this Court.

21

Page 22 22.In view of the aforesaid premises, the appeal, being

sans substratum, stands dismissed with the directions

recorded in the preceding paragraph. Ordinarily, we would

have thought of imposing costs but we have refrained from

doing so as we have directed the appellant to vacate the

premises within four weeks so the first

respondent-Corporation can operate either on its own or

through any agent or dealer.

.............................J.

[Dipak Misra]

..........................., J.

[Uday Umesh Lalit]

New Delhi

July 1, 2015

22