# MOHD. JAMAL v. UNION OF INDIA & ANR

- **Citation:** [2013] 7 S.C.R. 469
- **Court:** Supreme Court of India
- **Decided:** 2013-07-08
- **Case number:** Civil Appeal No. 5228 of 2013
- **Bench:** Altamas Kabir, J. Chelameswar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mohd-jamal-v-union-of-india-anr-29234
- **Pages:** 36

## Headnote

ADMINISTRATIVE LAW:
A
B
Policy regarding retail outlets of petroleum products -
c
Earlier Policy recognizing land-owners as one of the
categories to be offered dealership - Applications of landowners processed - Meanwhile policy suspended, lease
deeds for definite terms entered into and by subsequent
Policy, offering of dealership to land owners of Company 0
Owned and Company Operated (COCO) outlets abandoned
- Claim of landowners for dealership - Held: Concept of a
dealership in respect of a retail outlet is completely alien to
concept of a COCO unit - While the former deals with the right
of dealer to independently operate the retail outlet, in the case
E
of a COCO unit, the entire set up of retail outlet is owned by
Oil Companies and only day-to-day operation thereof is
outsourced to Maintenance and Handling Contractor - With
the discontinuance of the earlier policy of granting dealerships
in respect of retail outlets and the introduction of a new policy
of awarding M&H Contracts in respect of the COCO outlets,
F
the land owners who had entered into fresh lease agreements
after the policy to grant dealerships had been suspended,
cannot claim any right on the basis of the earlier policy in the
absence of any Letter of Intent having been issued thereunder
- Doctrines of promissory estoppel and legitimate expectation
G
are not applicable - Claims of appellants/petitioners have to
be treated on the basis of agreements subsequently entered
into by Oil Companies - It will be open to appellants/
petitioners to approach the proper forum in the event they
469
H
470
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A have suffered any damages and Joss, which they are entitled
to recover in accordance with law - Promissory estoppel -
Doctrine of legitimate expectation.
The case of the appellant in CA No. 5228 of 2013 was
8 that in terms of the advertisement as per Policy/MDPM
No.319/02 dated 8.10.2002, he applied for a retail outlet
dealership for his land in the 'land owner's category'.
Based on the recommendation dated 15.1.2003, made by
the Dealer Selection Committee, the General Manager
(ER) of the respondent No.2 Company recommended, on
C 25th January, 2003, that the dealership be given to the
appellant and directed that a Letter of Intent be issued in
his favour on receipt of the explosive licence. Meanwhile,
as claimed by the appellant, it was mutually agreed that
till the issuance of the Letter of Intent, as an interim
D arrangement, a nominee of the appellant would be
appointed as the Maintenance and Handling Contractor
to run the petrol pump. The appellant offered his land on
lease to the Oil Company on 14.3.2003, and on 29.3.2003,
a contract for Maintenance and Handling was executed
E between the Oil Company and the brother and nominee
of the appellant, for running the said petrol pump.
Rs.25,00,000/- were spent in setting up the infrastructure.
On 31.3.2003, the petrol pump was commissioned and
started operating. The appellant executed a lease deed
F in favour of the Oil Company at Rs. 21,000/- per month
for a period of 15 years. However, by a policy circular No.
05/0405 dated 30.3.2005, introduced by the Oil Company,
existing land owners of the Jubilee Retail Outlets and the
Company Owned and Company Operated Outlets were
G disqualified from being appointed as dealers. It was the
case of the appellant that on 6.9.2006, the Oil Company
formulated a new policy whereby the concept of offering
dealership to land owners was abandoned to the
prejudice of the land owners whose Letters of Intent for
H dealership were pending and where lands had also been
MOHD. JAMAL v. UNION OF INDIA & ANR.
471
taken on long term lease by the Oil Company at low rates
A
of rent, on the assurance that dealership under the 'land
owners category' would be given to them. By virtue of the
new policy, the Oil Company proposed to run outlets on
their own and/or through Labour Contractors, in
supersession of all earlier policy guidelines. The
B
appellant challenged

## Text

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[2013] 7 S.C.R. 469
MOHD. JAMAL
v.
UNION OF INDIA & ANR.
(Civil Appeal No. 5228 of 2013 etc.)
JULY 8, 2013.
[ALTAMAS KABIR, CJI AND J. CHELAMESWAR, J.]
ADMINISTRATIVE LAW:
A
B
Policy regarding retail outlets of petroleum products -
c
Earlier Policy recognizing land-owners as one of the
categories to be offered dealership - Applications of landowners processed - Meanwhile policy suspended, lease
deeds for definite terms entered into and by subsequent
Policy, offering of dealership to land owners of Company 0
Owned and Company Operated (COCO) outlets abandoned
- Claim of landowners for dealership - Held: Concept of a
dealership in respect of a retail outlet is completely alien to
concept of a COCO unit - While the former deals with the right
of dealer to independently operate the retail outlet, in the case
E
of a COCO unit, the entire set up of retail outlet is owned by
Oil Companies and only day-to-day operation thereof is
outsourced to Maintenance and Handling Contractor - With
the discontinuance of the earlier policy of granting dealerships
in respect of retail outlets and the introduction of a new policy
of awarding M&H Contracts in respect of the COCO outlets,
F
the land owners who had entered into fresh lease agreements
after the policy to grant dealerships had been suspended,
cannot claim any right on the basis of the earlier policy in the
absence of any Letter of Intent having been issued thereunder
- Doctrines of promissory estoppel and legitimate expectation
G
are not applicable - Claims of appellants/petitioners have to
be treated on the basis of agreements subsequently entered
into by Oil Companies - It will be open to appellants/
petitioners to approach the proper forum in the event they
469
H
470
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A have suffered any damages and Joss, which they are entitled
to recover in accordance with law - Promissory estoppel -
Doctrine of legitimate expectation.
The case of the appellant in CA No. 5228 of 2013 was
8 that in terms of the advertisement as per Policy/MDPM
No.319/02 dated 8.10.2002, he applied for a retail outlet
dealership for his land in the 'land owner's category'.
Based on the recommendation dated 15.1.2003, made by
the Dealer Selection Committee, the General Manager
(ER) of the respondent No.2 Company recommended, on
C 25th January, 2003, that the dealership be given to the
appellant and directed that a Letter of Intent be issued in
his favour on receipt of the explosive licence. Meanwhile,
as claimed by the appellant, it was mutually agreed that
till the issuance of the Letter of Intent, as an interim
D arrangement, a nominee of the appellant would be
appointed as the Maintenance and Handling Contractor
to run the petrol pump. The appellant offered his land on
lease to the Oil Company on 14.3.2003, and on 29.3.2003,
a contract for Maintenance and Handling was executed
E between the Oil Company and the brother and nominee
of the appellant, for running the said petrol pump.
Rs.25,00,000/- were spent in setting up the infrastructure.
On 31.3.2003, the petrol pump was commissioned and
started operating. The appellant executed a lease deed
F in favour of the Oil Company at Rs. 21,000/- per month
for a period of 15 years. However, by a policy circular No.
05/0405 dated 30.3.2005, introduced by the Oil Company,
existing land owners of the Jubilee Retail Outlets and the
Company Owned and Company Operated Outlets were
G disqualified from being appointed as dealers. It was the
case of the appellant that on 6.9.2006, the Oil Company
formulated a new policy whereby the concept of offering
dealership to land owners was abandoned to the
prejudice of the land owners whose Letters of Intent for
H dealership were pending and where lands had also been
MOHD. JAMAL v. UNION OF INDIA & ANR.
471
taken on long term lease by the Oil Company at low rates
A
of rent, on the assurance that dealership under the 'land
owners category' would be given to them. By virtue of the
new policy, the Oil Company proposed to run outlets on
their own and/or through Labour Contractors, in
supersession of all earlier policy guidelines. The
B
appellant challenged the Notification dated 6.9.2006 in a
writ petition, which was dismissed by the High Court. The
other appeals, writ petitions and transferred cases
involved the similar issues.
It was, inter alia, contended on behalf of the landC
holders that having acted on the basis of a policy by
which the respondent Oil Companies had offered fut!
dealership to land owners and having caused such land
owners to alter their position to their disadvantage, the
Oil Companies were estopped from going back on their D
promise.
Disposing of the matters, the Court
HELD: 1.1 Upon deregularisation of the distribution
of petroleum products, the Oil Companies issued
guidelines dealing with the procedure for locations
outside the marketing plans. The said guidelines referred ·
to grant of dealership, which is completely different from
the grant of long-term leases by the land owners to the
Oil Companies upon the condition that the same could
be used by the lessees in any way they liked, which
included the right to sublet the demised plot. The concept
E
F
of Company Owned and Company Operated (COCO)
outlets was sought to be introduced on 6.9.2003, in
supersession of Policy No.MDPM-319/02 dated 8.10.2002
G
and the two cannot be co-related unless a link can be
established by the appellants that they had entered into
the leas e agreements with the Oil Companies upon the
understanding that once the earlier policy was restored,
the land owners would be given the option of having the
H
472
SUPREME COURT REPORTS
[2013) 7 S.C.R.
A COCO units converted into regular retail outlets. [para 5657) [502-B-C, 0-F]
1.2 The concept of a dealership in respect of a retail
outlet is completely alien to the concept of a COCO unit.
8 While the former deals with the right of the dealer to
independently operate the retail outlet, in the case of a
COCO unit, the entire set up of the retail outlet is owned
by the Oil Companies and only the day-to-day operation
thereof is outsourced to an M&H Contractor. With the
discontinuance of the earlier policy of granting
C dealerships in respect of retail outlets and the
introduction of a new policy awarding M&H Contracts in
respect of the COCO outlets, the land owners who had
entered into fresh lease agreements after the policy to
grant dealerships had been suspended, cannot now
D claim any right on the basis of the earlier policy in the
absence of any Letter of Intent having been issued
thereunder. [para 58) [502-G-H; 503-A-B)
1.3 The doctrine of promissory estoppel and
E legitimate expectation cannot be made applicable to
these cases where the leases have been granted by the
land owners on definite terms and conditions, without any
indication that the same were being entered into on a
mutual understanding between the parties that these
F would be temporary arrangements, till the earlier policy
was restored and the claim of the land owners for grant
of dealership could be considered afresh. On the other
hand, although, the nominees of the lessors were almost
in all cases appointed as the M&H Contractors, that in
G itself cannot convert any claim of the land owner for grant
of a permanent dealership. Even the M&H Contractor had
to submit an affidavit to the effect that he did not have·
and would not have any claim to the dealership of the
retail outlet and that he would not also obstruct the
making over possession of the retail outlet to the Oil
H
MOHD. JAMAL v. UNION OF INDIA & ANR.
473
Company, as and when called upon to do so. [para 59]
A
[503-E-H; 504-A]
A.P. Transco Vs. Sai Renewable Power (P) Ltd. 2010 (8)
SCR 636 = (2011) 11 SCC 34; Bannari Amman Sugars Ltd.
Vs. Commercial Tax Officer 2004 (6) Suppl. SCR 264 = 8
(2005) 1 SCC 625; State of Himachal Pradesh Vs. Ganesh
Wood Products 1995 (3) Suppl. SCR 477 = (1995) 6 SCC
363; Kasinka Trading Vs. Union of India 1994 (4) Suppl. SCR
448 = (1995) 1 SCC 274; and Sethi Auto Service Station Vs.
D.D.A. (2009) 1 SCC 180 - referred to.
Union of India Vs. M/s. lndo-Afghan Agencies Limited
(1968) 2 SCR 366; Motilal Padampat Sugar Mills Co. Ltd.
c
Vs. State of Uttar Pradesh and Others 1979 (2) SCR 641 =
(1979) 2 SCC 409; Jit Ram Shiv Kumar Vs. State of Haryana
1980 (3) SCR 689 = (1981) 1 sec 11; Union of India and
D
Others Vs. Godfrey Philips India Limited 1985 (3) Suppl. SCR
123 = (1985) 4 SCC 369; State of Bihar Vs. Kalyanpur
Cement Limited 2010 (1) SCR 928 = (2010) 3 SCC 274;
Yomeshbhai Pranshankar Bhatt Vs. State of Gujarat 2011 (6)
SCR 958 = (2011) 6 SCC 312; Kumari Shrilekha Vidyarthi
E
Vs. State of U.P. 1990 (1) Suppl. SCR 625 = (1991) 1 SCC
212; Dwarkadas Marfatia and Sons Vs. Board of Trustees of
the Port of Bombay 1989 (2) SCR 751 = (1989) 3 SCC 293;
and Mahabir Auto Stores Vs. Indian Oil Corporation 1990 (1)
SCR 818 = (1990) 3 SCC 752; Ramana Dayaram Shetty Vs.
lntemational Airport Authority of India & Ors. 1979 (3) SCR
1014 = (1979) 3 SCC 489; E.P. Royappa Vs. State of Tamil
Nadu 1974 (2) SCR 348 = (1974) 4 SCC 3; and Maneka
Gandhi Vs. Union of India 1978 (2) SCR 621 = (1978) 1 SCC
248 - held inapplicable.
1.4 Although, the appeals have been filed on account
of the denial to the land owners of the grant of dealership
in respect of the lands demised by them to the Oil
Companies, the entire focus has shifted to COCO outlets
F
G
on account of the fresh lease agreements entered into by
H
474
SUPREME COURT REPORTS
[2013) 7 S.C.R.
A the appellants with the Oil Companies which has had the _
effect of obliterating the claim of the land owners made
separately under earlier lease agreements. The claims of
the appellants/ petitioners in the instant batch of matters
have to be treated on the basis of the agreements
B subsequently entered into by the Oil Companies. [para
59] [504-A-C]
1.5 The land owners cannot claim any relief in these
proceedings and, if any loss or damages have been
suffered by them on ·account of the assurance earlier
C given regarding grant of dealership, particularly, in
making the sites ready therefor, the remedy of such
applicants would lie elsewhere. It will be open to the
appellants and the petitioners to approach the proper
forum in the event they have suffered any damages and
D loss, which they are entitled to recover in accordance
with law. [para 58 and 60] [503-C-D; 504-F]
Case Law Reference:
E
(1968) 2 SCR 366
held inapplicable
para 19
1979 (2) SCR 641
held inapplicable
para 21
1980 (3) SCR 689
held inapplicable
para 22
1985 (3) Suppl. SCR 123 held inapplicable
para 22
F
2010 (1) SCR 928
held inapplicable
para 23
2011 (6) SCR 958
held inapplicable
para 27
1990 (1) Suppl. SCR 625 held inapplicable
para 30
G
1989 (2) SCR 751
held inapplicable
para 31
1990 (1) SCR 818
held inapplicable
para 31
1979 (3) SCR 1014
held inapplicable
para 36
H
1974 (2) SCR 348 ·
held inapplicable
para 36
MOHD. JAMAL v. UNION OF INDIA & ANR.
475
1978 (2) SCR 621
held inapplicable
para 36
A
2010 (8) SCR 636
referred to
para 46
2004 (6) Suppl. SCR 264 referred to
para 46
1995 (3) Suppl. SCR 477 referred to
para 46
B
1994 (4) Suppl. SCR 448 referred to
para 46
(2009) 1 sec 180
referred to
para 46
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5228 of 2013.
C
From the Judgment and Order dated 08.02.2008 of the
High Court of Delhi at New Delhi in WP (C) No. 2392 of 2007.
WITH
C.A. Nos. 5229, 5230 of 2013, W.P. (C) Nos. 459 of 2009, 528
D
of2008, C.ANos. 5231, 5232, 5233, 5234, 5235, 5236, 5237,
5238,5239,5240,5241,5242,5243,5244,5245, 5246,5247,
5248,5249,5250,5251,5252,5253,5254,5255,5256,5257,
5258, 5259 of 2013, T.C. (C) No. 88, 89, 90 of 2013, C.A. Nos.
5260,5261,5262,5263,5264,5265,5266,5267,5268,5269,
E
5270,5271,5272,5273,5274,5275,5276,5277,5278,5279,
5279, 5280, 5281, 5282, 5283, 5284, 5285, 5286, 5287-88,
5289-90, 5291, 5292-93, 5294-95, 5296, 5297, 5298, 5299,
5300 of 2013, T.C. (C) No. 91 of 2013 & C.A. Nos. 5301-02
of 2013.
F
P.P. Malhotra, ASG Pradip K. Ghosh, Sunil Gupta, Jaideep
Gupta, P.K. Ghosh, Harish Chandra, Rana Mukherjee, Jitendra
Kumar Sharma, Abhijit Sengupta, Ajit Singh, Sandeep Singh,
Meenakshi Arora, Goodwill lndeevar, Sandhya Goswami, Jatin
G
Zaveri, Rohit Sthalekar, Neel Kamal Mishra, Ajay Majithia, Dr.
Kailash Chand, Sanat Kumar, Sanjay Sharawat, Anjan
Chakraborty, Shekhar Kumar, Praween Gupta, P.K. Sahoo,
Md. Farman, Uttara Babbar, Neha S. Verma, Deeptakirti
Verma, Shomila Bakshi, Abhijeet Sinha, Rajendra Singhvi,
H
476
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A KKL Gautam, Jitendra Mohan Sharma, Meenakshi Arora, Mala
Narayan, Rahul Narayan, Shalini Kumar, Rachna Joshi lssar,
Raj Kumar Tanwar, Chetan Chawla, 8. Krishna Prasad, Priya
Puri, Amit Pathak, Sagar Singhal, H.K. Puri, E.C. Vidya Sagar,
Arvind Kumar Sharma, Garima Prashad, Chandan
B Ramamurthi, Parijat Sinha, Reshmi Rea Sinha, Vikram Ganguly
for the appearing parties.
The Judgment of the Court was delivered by
ALTAMAS KABIR, CJI. 1. Special Leave Petition (Civil)
C No. 5849 of 2008 filed by one Mohd. Jamal, has been heard
along with several other matters where the same issue has
been raised and the reliefs prayed for are similar.
2. Leave granted in all the matters. During the hearing of
D these matters, Mohd. Jamal's case was taken up as the lead
matter.
3. From the facts as disclosed in the several Special
Leave Petitions (now Appeals), there are three groups of
matters included in these Appeals. The first group relates to
E the State of Karnataka, where the Union of India is the
Petitioner/Appellant. The second group involves matters filed
by the private parties where the jurisdiction is that of Delhi. The
third group deals with the similar question in regard to the
F
States of Gujarat and Madhya Pradesh.
·
4. All the private Appellants were and are aspirants for
dealership in respect of retail outlets of the Indian Oil
Corporation and the IBP, which merged with the Indian Oil
Corporation on 2nd May, 2007. The genesis of the claim for
G dealership arises out of policy guidelines, being Policy/MDPM
No.319/02 dated 8th October, 2002, for selection of retail outlet
dealers, published by the Indian Oil Corporation after the
distribution of petroleum product had been deregulated. The
said guidelines dealt with the procedure for locations outside
H
MOHD. JAMAL v. UNION OF INDIA & ANR.
477
[ALTAMAS KABIR, CJI.]
Marketing Plans and also stipulated that for the purpose of
A
selection, the dealership would be categorised as indicated in
the guidelines and all retail outlets would be developed only on
A/C Sites basis which finds place in clause 2 of the guidelines
dealing with the common guidelines for all categories.
5. Appearing for the Appellant in SLP(C)No.5842/2008
(now appeal), Mr. Pradip Ghosh, learned Senior Advocate,
submitted that after nationalisation of Oil Companies in 1976,
B
the sale and distribution of petroleum and petroleum products
were under the control of the Central Government and regulated
by the provisions of the Essential Commodities Act, 1955. On
C
and from 1978 the Central Government allowed the Public
Sector Oil Companies to set up retail outlets through an Oil
Selection Board, which was subsequently renamed as Dealer
Selection Board. Mr. Ghosh submitted that the Central
Government devised a methodology of setting up of retail
D
outlets, by constituting the Industrial Meeting Committee which
would decide distribution of outlets region-wise in respect of
each petroleum company. Till 1998, the production and
marketing of petroleum and petroleum products were under the
control of the Ministry of Petroleum and Natural Gas and were
E
executed through Public Sector Oil Companies. In 1998, the
Central Government decided to partly deregulate the
production, supply and distribution of petroleum and its prod'ucts
and indicated 2002 as a cut-off year to completely deregulate
F
the production and supply of petroleum and petroleum products.
The Central Government, therefore, again took steps to meet
such objectives and in that connection decided to make certain
changes with regard to the functioning of natural _oil and gas
companies under the Market Oriven Pricing Regime and to
workout the modalities of setting up petrol pumps on National
G
and State Highways.
6. This led to the creation of the concept of Company
Owned Company Operated outlets (COCO) as a means to
enable National Oil Companies to run and operate their own
H
478
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A outlets which were to be run as model retail outlets. Mr. Ghosh
submitted that the scheme thus devised was to extend and
cater to all National and State Highways and has certain salient
features which need to be spelt out in order to appreciate future
developments, which form the subject matter of the various
B appeals being heard by us.
7. One of the more important objectives which the scheme
hoped to achieve was to develop the retail outlets on relatively
large plots of land measuring 5 acres or so on the Highways.
Such land would be under the control of the marketing company
C either by way of purchase or on long-term lease basis. Such
retail outlets would also have facilities and amenities to be
developed by the Dealer in line with the norms laid down by
the Oil Companies on a standardised purchase. Such retail
outlets were to be developed outside the Marketing Plan in a
D transparent manner, subject to observance of ban on multiple
dealership. Mr. Ghosh submitted that the said scheme was to.
be executed in two phases. Phase I would enable the Oil
Companies to launch the scheme on pilot project basis for
setting up COCO outlets which might serve as models for future
E outlets. The second phase would be based on the experience
of the first phase and the rest of the scheme would be taken
up and completed within a period of three years.
8. Mr. Ghosh submitted that apparently a decision had
F been taken by the oil companies to convert the COCO outlets
into regular dealerships. A uniform policy was formulated for
manning and controlling of Jubilee Retail Outlets and, pursuant
to such policy, the Government approved the Indian Oil
Corporation's (IOC) decision to run 83 outlets for which sites
G had been taken over and facilities installed on COCO basis
under certain guidelines. Mr. Ghosh urged that it has
subsequently come to light that in respect of the said 82 outlets,
77 dealers or those holding Letters of Intent, had been allotted
dealership.
H
MOHD. JAMAL v. UNION OF INDIA & ANR.
479
[ALTAMAS KABIR, CJI.]
9. However, on 1st April, 2000, the Government of India
A
notified its policy for operation of COCO outlets through
contractors. In February, 2002, the Indian Oil Corporation
purchased 33.58% of Equity Shares of IBP Ltd. Till 31st March,
2002, no oil company could by itself select its dealers or award
its dealership to them. The Government appointed Dealer
B
Selection Boards, who were entrusted with the task of selection
of dealers for all oil companies. It was only from 1st April, 2002,
that the Administered Price Mechanism was dismantled and
the Dealer Selection Boards were dissolved. The Oil
Companies were, thereafter, given a certain amount of freedom c .
to frame their own policies, relating to the setting up of the retail
outlets by selection of dealers.
10. On 8.10.2002, IBP Ltd. devised and/or formulated its
policy and framed guidelines, inter alia, for selection of retail
outlets in the deregulated scenario. In line with the change in
D
policy formulated by the Government of India, guidelines were
framed which recognised the rights of the land owners as a
category of persons entitled to dealership, subject to conditions.
Clause 3 of the scheme provided that the dealership of such
COCO outlets would first be offered to the landlord, provided
E
he was found suitable. In case the landlord declined to accept
the dealership, it would be offered to Maintenance and Handling
Contractors (M&H). In the event, the Maintenance and Handling
Contractor also declined to accept the dealership, the same
would be offered to the best candidate available.
F
11. Mr. Ghosh submitted that on 14th January, 2003, in line
with the Respondent's policy guidelines for selection· of retail
outlet dealers in the aftermath of deregulation vide Memo
Reference Policy/MDPM No.319/02 dated 8.10.2002, and a
G
subsequent clarification of the General Manager (M), MHO
dated 14.12.2002, the Appellant, Mohd. Jamal, applied for a
·.retail outlet dealership for his land in the land owner's category.
Such application was made pursuant to an advertisement
issued by the oil company and the Appellant was also called
H
480
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A upon by the oil company to obtain Dealership Agreement Form
from the Divisional Office by depositing Rs.1000/-. After
obtaining such Form, the Appellant submitted the same to the
company. Mr. Ghosh submitted that on 15th January, 2003, the
Committee on Dealer Selection found the Appellant's land
B suitable for developing a retail outlet, on National Highway
No.28, Sadatpur PS, Muzaffarpur Road, Bihar. The company
even sought prior approval for the said site from the Joint Chief
Controller of Explosives, East Circle, Calcutta. Based on the
recommendation made by the Dealer Selection Committee
c dated 15.1.2003, on 25th January, 2003, the General Manager
(ER) of the Respondent No.2 Company recommended that the
dealership be given to the Appellant and directed that a Letter
of Intent be issued in his favour on receipt of the explosive
licence. Mr. Ghosh submitted that while the Appellant's matter
D for grant of dealership was at the final stage, on 5th February,
2003, the Policy adopted on 8.10.2002 was suspended. It has,
of course, been claimed on behalf of the Appellant that the
suspension of the policy was never communicated to the land
owners, including the Appellant, Mohd. Jamal.
E
12. It is also the Appellant's case that it was mutually
agreed that till the issuance of the Letter of Intent, as an interim
arrangement, a nominee of the Appellant would be appointed
as the Maintenance and Handling Contractor to run the petrol
pump, provided that an affidavit in the prescribed form would
F be furnished by the Contractor. According to Mr. Ghosh, relying
on such assurance, the Appellant offered his land on lease to
the Oil Company on 14.3.2003, subject to the condition that the
monthly rental of the land would be Rs.27,000/- and would
commence from the date of registration of the documents.
G Further to the said understanding on 29th March, 2003, a
contract for Maintenance and Handling was executed between
the Oil Company and Mohd. lshtiaq Alam, the brother and
nominee of the Appellant, for running the said petrol pump.
Before Mohd. lshtiaq Alam was appointed as M&H Contractor,
H on anticipation of the Oil Company that he would be grahted
MOHD. JAMAL v. UNION OF INDIA & ANR.
481
[ALTAMAS KABIR, CJI.}
dealership, invested a sum of about Rs.25 lakhs to set up
A
infrastructure. Ultimately, on 31st March, 2003, the petrol pump
was commissioned and started operating.
13. Mr. Ghosh submitted that in the above circumstances,
the Appellant executed a lease deed in favour of the Oil
8
Company for a period of 15 years, with a clause for further
periods of renewal.
14. Mr. Ghosh submitted that the aforesaid arrangement
was understood by all the parties to be of temporary duration,
as would be evident from the fact that the rent initially settled
C
at Rs. 27,000/- per month in respect of the Appellant's land at
Sadatpur was reduced to Rs. 21,000/- per month after
negotiation, which upon calculation comes to approximately 50
paise per square feet, which in terms of the valuation made,
was abysmally low.
D
15. Mr. Ghosh submitted that various other decisions were
taken both by the Oil Company as well as the Ministry
concerned by which fresh guidelines were also framed for
selection of retail outlets and SKO-LDO (Super Kerosene Oil
E
- Light Diesel Oil) dealers. Learned counsel submitted that by
a policy circular No. 05/0405 dated 30.3.2005, introduced by
the Oil Company, existing land owners of the concerned Jubilee
Retail Outlets and the Company Owned and Company
Operated Outlets were disqualified from being appointed as
dealers, although, the same was never communicated to the
Appellant. Mr. Ghosh submitted that, in the meantime, the
temporary arrangement which had been arrived at in the case
F
of the Appellant, Mohd. Jamal, has been continuing on the
strength of orders passed by this Court. Mr. Ghosh also urged
that on 6th September, 2006, the Oil Company formulated a
G
new policy whereby the concept of offering dealership to land
owners was abandoned to the prejudice of the land owners
whose Letters of Intent for dealership were pending and where
lands had also been taken on long term lease by the Oil
Company at low rates of rent; on the assurance that dealership
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482
SUPREME COURT REPORTS
[2013) 7 S.C.R.
A under the land owners category would be given to them. By
virtue of the new policy, the Oil Company proposed to run outlets
on their own and/or through Labour Contractors, in
supersession of all earlier policy guidelines.
B
16. Mr. Ghosh submitted that one of such land owners filed
Writ Petition No. 358 of 2006 -· N.K. Bajpai Vs. Union of India
and Others, challenging the changed policy. While disposing
of the Writ Petition, the learned Single Judge of the Delhi High
Court, inter alia, held that Oil Companies cannot assign the
running of petrol pumps on the land of the writ petitioners
C without their consent. Mr. Ghosh submitted that aggrieved by
the said Notification dated 6.9.2006, the Appellant also filed
Writ Petition No. 2392 of 2007, before the Delhi High Court for
quashing of the said Notification and to restrain the respondents
from terminating/cancelling the arrangement arrived at
D regarding the running of the retail outlet on the Appellant's land
through his nominee, or in the alternative, to return the land to
the Appellant if the dealership was not granted to the Appellant.
Mr. Ghosh submitted that the learned Single Judge of the Delhi
High Court referred the matter to a Division Bench for hearing
E and on 8.2.2008, the Delhi High Court disposed of a bunch of
Writ Petitions, while retaining 11 such Writ Petitions, which, it
felt needed further consideration since the said Writ Petitions
projected an implied promise and/or understanding having
been reached between the land owners and the Oil Companies
F concerned having regard to the low lease rentals for the lands
offered by the land owners to the companies for establishing
their retail outlets. Learned counsel submitted that the
Appellant's Writ Petition was among those bunch of petitions,
which were dismissed by the High Court, although, the
G Appellant's case was the same as that of the 11 Petitioners,
whose matters had been retained by the High Court for further
consideration. Mr. Ghosh submitted that it is at that stage that
this Court admitted the Appellant's Special Leave Petition (Civil)
No. 5849 of 2008, on 31st July, 2008, and passed an order
H whereby the parties were directed to maintain status-quo as
MOHD. JAMAL v. UNION OF INDIA & ANR.
483
[ALTAMAS KABIR, CJI.]
I
on that day, with liberty to the respondents to apply for variation
A
and/or modification of the order, if so advised.
17. The main ground of challenge .canvassed by Mr.
Ghosh on behalf of the Appellant, Mr. Jamal, and other similarly
placed Appellants, was that having acted on the basis of a
policy by which the Respondent Oil Companies had offered full
dealership to land owners and having caused such land owners _
B
to alter their position to their disadvantage, the Oil Companies
were now estopped from going back on their promise. Mr.
Ghosh urged that the decision to discontinue the grant of C
dealership and to introduce the new concept of COCO outlets,
to be run by the Maintenance and Handling contractors, could
not be used to the disadvantage of those land owners in whose
favour a decision had already been taken to issue Letters of
Intent for grant of dealership. Mr. Ghosh submitted that these
D
cases were clearly covered by the doctrine of promissory
estoppel, inasmuch as, in these cases the land owners had
altered their positions to their detriment in several ways. Mr.
Ghosh submitted that in most cases the rates of rents at which
the lands were offered to the Oil Companies were extremely
low and did not reflect the market rental of such lands, which is
E
one of the indications that a promise had been made to the
land owners that they would be granted dealerships in respect.
of the said lands, which was in tune with the policy, which had
been declared by the Oil Companies earlier.
18. Mr. Ghosh submitted that in other cases the landlords
F
had invested large sums of money, as in the case of Mohd.
Jamal, in preparing the land offered for operating the retail
outlets of petroleum and petroleum products, ostensibly on the
promise that they would be granted dealership for running the
G
said outlets. Mr. Ghosh submitted that acting on such promise
the Appellant, Mohd. Jamal, spent more than Rs.27 lakhs to
prepare the site for running the retail outlet and it would not be
unreasonable to accept the case made out on his .behalf that
such expenditure was incurred in lieu of such promise. l_n
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SUPREME COURT REPORTS
[2013] 7 S.C.R.
A certain other cases, the land owners had been persuaded to
enter into long term lease agreements, again at nominal rents,
on the assurance that their nominees would be appointed as
Maintenance and Handling Contractors of the different COCO
units, pending the decision to grant full dealership in respect
B of such retail outlets, in keeping with the earlier policy of
reducing the number of COCO units and retaining a few to be
run by the Oil Companies as model outlets.
19. Mr. Ghosh submitted that in these circumstances, the
Oil Companies and the Union of India are estopped by the
C promises made by them to grant dealerships to the land-owners
on the basis of the policy existing prior to 5th February, 2003
and 6th September, 2006.
20. Mr. Ghosh submitted that one of the earliest decisions
D of this Court regarding the doctrine of promissory estoppel was
in Union of India Vs. Mis. Inda-Afghan Agencies Limited
[(1968) 2 SCR 366], wherein it was held that even though the
case did not fall within the scope of Section 115 of the
Evidence Act, it was still open to a party who had acted on a
E representation made by the Government to claim that the
Government should be bound to carry out the promise made
by it, though not recorded in the form of a formal contract.
21. Reference was then made to the celebrated decision
in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar
F Pradesh and Others [(1979) 2 sec 409], commonly known as
the "M.P. Sugar Mills case", wherein a Bench of Two Judges
went into a detailed enquiry regarding the doctrine of
promissory estoppel and equitable estoppel and observed that
the doctrine of promissory estoppel is not really based on the
G principle of estoppel, but is a doctrine evolved by equity in order
to prevent injustice. It has also been observed that there is no
reason as to why it should be given a limited applieation by way
of defence and that it could also be the basis of a cause of
action and all that was necessary for attracting the said doctrine
H was that the promisee should have altered his position in relying
MOHD. JAMAL v. UNION OF INDIA & ANR.
485
[ALTAMAS KABIR, CJI.]
on the promise. It was emphasized that it was not necessary
A
that the promise should suffer any detriment as well.
22. Mr. Ghosh submitted that a somewhat different view
had been taken also by a Bench of Two Judges in Jit Ram Shiv
Kumar Vs. State of Haryana [(1981) 1 SCC 11), but the
B
differing view expressed in the said case was overruled by a
Bench of Three Judges in Union of India and Others Vs.
Godfrey Philips India Limited [(1985) 4 SCC 369), wherein the
decision in the M.P. Sugar Mills case (supra) was pronounced
as being the correct law.
c
23. Various other decisions have also been cited in
support of the aforesaid doctrine of promissory estoppal or
equitable estoppel, but it will suffice to refer to one of the latest
decisions in this regard in State of Bihar Vs. Kalyanpur
Cement Limited [(2010) 3 SCC 274), wherein it was D
emphasized that in order to invoke the aforesaid doctrine, it has
to be established that a party had made an unequivocal
promise or representation by word or conduct, to the other party,
which was intended to create legal relations or affect the legal
relationship to arise in the future, and that the party invoking the
E
doctrine has altered its position relying on the promise.
24. Mr. Ghosh submitted that having held out a promise
to grant a dealership to the Appellant and the other Appellants
in the connected matters, in respect of the lands offered by them
F
for setting up retail outlets for the sale of petroleum and
petroleum products and having acted thereupon just prior to the
stage of grant of Letters of Intent, it was no longer available to
the Oil Companies to renege on their promise, particularly when
the aspirants for dealership had altered their position and had
spent enormous sums of money to make the sites ready for G
setting up the retail outlets. As was observed in the M.P. Sugar
Mills case (supra), it was not even necessary for the land
owners to have suffered any prejudice on account of such '
alteration. It was sufficient that, pursuant to the promise made ·
of grant of dealership, they had altered their position and haa
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SUPREME COURT REPORTS
[2013] 7 S.C.R.
A spent large sums of money to make the sites ready for·
occupation.
25. To bolster his submissions, Mr. Ghosh referred to the
Single Bench decision of the Karnataka High Court dated 28th
B July, 2009, in Writ Petition No. 1016 of 2007, filed by one Shri
Y. T. Narendra Babu and other connected Writ Petitions, wherein
the facts identical to the facts in these cases were in issue. In
fact, SLP(C) No. 9655 of 2010 (now Appeal) has been filed by
the Indian Oil Corporation Limited against Y.T. Narendra Babu,
C against the appellate order of the Karnataka High Court dated
19.11.2009, in Writ Appeal No. 3248 of 2009, endorsing the
judgment of the learned Single Judge in the Writ Petition. In the
same set of facts, where lands had been taken on lease on the
assurance that the land owners would be appointed as dealers
in due course and that till then the retail outlet would be treated
D as a COCO unit to be run by a nominee of the land owner, the
learned Single Judge was of the view that in view of the
assurance given to the land owners and notwithstanding the
change in policy guidelines regarding the allotment of
dealership in favour of the land owners, the doctrine of
E promissory estoppel and of legitimate expectation would apply
to the case. The learned Single Judge, therefore, allowed the
Writ Petition and directed the Respondents to process the
applications filed by the Petitioners or their nominees for grant
of dealership on a co-terminus basis with the period of the lease
F of the land on which the retail outlets are established. As
indicated hereinbefore, the said views were approved by the
Division Bench, which did not interfere with the decision or the
directions given consequent thereto by the learned Single
Judge.
G
26. Mr. Ghosh then turned to another aspect, which had
been considered in the cases heard and determined by the
Gujarat High Court, namely, the issuance of Comfort Letters in
several cases where the lease deed had been executed prior
H to 8th October, 2012, assuring the land owners of the demised
MOHD. JAMAL v. UNION OF INDIA & ANR.
487
[ALTAMAS KABIR, CJI.]
plots that they would enjoy the right of first refusal if COCO
A
outlets set up on their lands were to be converted into
dealerships. Mr. Ghosh pointed out that some of the Comfort
Letters addressed to the land owners issued on behalf of the
IBP Company Limited, by its Divisional Manager, have been
annexed to the Special Leave Petitions (now Appeals), filed
by those aggrieved by the judgment of the Division Bench of
B
the Gujarat High Court, setting aside the orders of the learned
Single Judge. Upon holding that the Comfort Letters issued to
individual land owners could not be relied upon, as being a
policy decision of the Company, the Division Bench•came to
C
the conclusion that the learned Single Judge was in error in
giving a finding of fact in a Writ Petition under Article 226 of
the Constitutio9, particularly when the facts were disputed and
the entire evidence was yet to be disctosed. Mr. Ghosh
submitted that, while allowing the Writ App~als filed by the Oil
D
Companies, the Division Bench of the Gujarat High Court had
misconstrued the submissions made with regard to the doctrine
of promissory estoppel, which would be available from the
surrounding facts and circumstances, even if the same had not
been explicitly spelt out.
27. In support of his submissions, Mr. Ghosh referred to
the decision of this Court in Yomeshbhai Pranshankar Bhatt
Vs. State of Gujarat [(2011) 6 SCC 312), wherein the learn~ct
Judges, while considering the scope of the Supreme Court'$
jurisdiction under Article 142 of the Constitution, held that even
during a final hearing the Supreme Court was not precluded
from considering the controversy in its entire perspective and
that the power under Article 142 was to do complete justice,
unless there was an express provision of law to the contrary.
E
F
Mr. Ghosh urged that this Court had always held that technical
G
objections should not come in the way of the Supreme Gou.rt
doing complete justice to the parties. ·
28. Mr. Ghosh submitted that in the light of the above, the
Oil Companies should either be directed to act in terms of the
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488
SUPREME COURT REPORTS
[2013] 7 S.C.R.
A promise made to grant dealerships or in the event of their
unwillingness to do so, they may be directed to restore
possession of the lands leased out to them in accordance with
the doctrine of restitution.
8
29. Mr. Rana Mukherjee, who appeared for some of the
Petitioners (now Appellants) in this batch of cases and had also
assisted Mr. Pradip Ghosh, while reiterating the submissions
made by Mr. Ghosh, referred to some of the factual differences
in the individual Writ Petitions and urged that, being in a
·c
dominant position, the Government cannot act arbitrarily. Having
made a promise to grant dealership licences to some of the
land owners, who had on the basis of such assurances
demised their lands to the Oil Companies for rents which were
markedly lower than the existing rents in the area and had also
spent large amounts in making such sites ready, the Oil
D Companies could not go back on such assurances on the plea
that there had been a change in the policy for grant of
dealership. Mr. Rana Mukherjee submitted that the window
period, which had been identified by this Court, between 8th
October, 2002 and 5th February, 2013, was a period when the
E policy to grant dealerships was in full force and the applications
received and processed during the said period would have to
be treated differently from the applications made thereafter,
after the change in the policy. Mr. Mukherjee, in fact, contended
that in some of the cases, where applications had been made
F for grant of dealership pursuant to advertisements published in
the Press, but in whose cases the decision to issue Letters of
Intent had been kept in abeyance prior to 8th October, 2002,
were also entitled to the same benefits in keeping with the
doctrine of promissory equity.
G
H
30. Mr. Mukherjee, who also appeared in SLP(C} No.
5756 of 2008 (now Appeal), filed by one Khurshid Ahmed
Chippa, submitted that this Court in Kumari Shrilekha
Vidyarthi Vs. State of U.P.