Case Note & Summary
The dispute arose from a writ petition filed by Pradnya Nitin Patil against Bharat Petroleum Corporation Ltd. challenging the abrupt withdrawal of a Letter of Intent issued to her for establishing a Retail Dealer Outlet at Kaijgaon to Tarwade Kh on Both Sides, District Jalgaon. The petitioner, a woman entrepreneur, alleged that she had complied with all requirements, deposited substantial amounts, and obtained necessary no-objection certificates, but the respondents withdrew the LOI without any fault on her part. The respondents issued an advertisement on 24.11.2018 for establishment of Retail Dealer Outlets, including the subject location at Serial No. 425, which was classified as a Rural Retail Outlet. The petitioner applied, was found eligible, and after spot inspection by the respondents' officers, a Letter of Intent was issued on 22.02.2019. The petitioner deposited Rs.3,60,000 as security deposit, Rs.40,000 online, Rs.5,00,000 as non-refundable deposit, and later Rs.2,10,000 for petroleum products. She obtained no-objection certificates from various departments, including the Public Works Department, Town Planning Department, Gram Panchayat, Maharashtra State Electricity Distribution Company Ltd., and a No-Objection Certificate from the District Magistrate under Rule 144 of the Petroleum Rules. She also submitted a bank guarantee. The tank for the outlet was sent in March 2020 and partially installed, but the respondents took it away claiming it was needed elsewhere and thereafter did not respond to her follow-ups. The petitioner issued a legal notice on 28.11.2022 and filed the writ petition in 2023. The respondents contended that the location was on a State highway and a Rural Retail Outlet could not be established there, relying on Clause 1 and Clause 22 of the Brochure for Selection of Dealers. They argued that the petitioner had offered land that did not satisfy the eligibility criteria and offered to refund the deposited amount. The petitioner argued that the advertisement itself specified the location and category, the respondents' officers inspected and approved the land, and she had not misrepresented any facts. The court found that the respondents' advertisement described the proposed outlet as a Rural Retail Outlet with a specified location, and the Letter of Intent was issued only after spot inspection and satisfaction. The petitioner had completed all formalities and reached an advanced stage of establishing the outlet. The court held that the conduct of the respondents was arbitrary, as they could not penalize the petitioner for a mistake attributable to their own advertisement and inspection. The final operative direction was not included in the extracted portion of the judgment, but the court found the withdrawal of the LOI to be arbitrary.
Headnote
A) Administrative Law - Withdrawal of Letter of Intent - Arbitrary State Action - Not mentioned - The petitioner was issued a Letter of Intent for a Rural Retail Outlet after the respondents' advertisement specified the location and category, and after their officers conducted spot inspection and approved the land. The respondents later withdrew the LOI claiming that the location was on a State highway and therefore not eligible for a Rural Retail Outlet. The High Court held that the advertisement itself recorded the location as Rural Retail Outlet and the petitioner was not at fault; the withdrawal was arbitrary and the petitioner could not be penalized for the respondents' own mistake. (Paras 18-22) B) Administrative Law - Legitimate Expectation - Not mentioned - The petitioner acted on the representation made in the advertisement and the Letter of Intent by depositing substantial amounts, obtaining no-objection certificates, and installing infrastructure including a tank. The court found that the respondents could not go back on their representation after the petitioner had altered her position, and the conduct of the respondents in withdrawing the LOI was arbitrary. (Paras 19-21) C) Petroleum Laws - No-Objection Certificate - Petroleum Rules, 2002, Rule 144 - The petitioner obtained a No-Objection Certificate from the District Magistrate of Jalgaon under Rule 144 of the Petroleum Rules, demonstrating compliance with the relevant regulatory requirements. The court noted this fact while considering that the petitioner had completed all formalities before the LOI was arbitrarily withdrawn. (Paras 5, 10, 20)
Issue of Consideration
Whether the respondents' withdrawal of the Letter of Intent issued to the petitioner for a Rural Retail Outlet was arbitrary and illegal; whether the petitioner misrepresented or suppressed facts; whether the respondents could invoke Clause 22 of the Brochure for Selection of Dealers.
Law Points
- Arbitrary withdrawal of Letter of Intent
- Rural Retail Outlet cannot be on State Highway
- Advertisement representation binds authority
- Spot inspection and approval
- Petitioner not at fault
- Clause 22 false information not applicable
- Legitimate expectation
- Non-refundable deposit
- Rule 144 Petroleum Rules NOC.
