Case Note & Summary
The dispute arose out of the cancellation of a Letter of Intent (LOI) for an LPG distributorship by Indian Oil Corporation Limited. The petitioner, an ex-serviceman and semi-literate agriculturist, had responded to an advertisement dated 01.09.2017 and applied on 28.09.2017 from the ex-serviceman quota for a specific location. After following the verification procedure, the Corporation issued an LOI dated 31.12.2018 in the petitioner's individual capacity as an applicant. The LOI was expressly only an offer after selection and not a confirmation of allotment. A separate civil application was filed by the petitioner's elder biological brother, a retired engineer, seeking intervention in the writ petition. The brother alleged that he had entered into certain financial transactions with the petitioner and that partnership agreements were executed on 19.10.2017 and 18.04.2019, followed by another agreement on 08.06.2019 in which the petitioner ousted the brother and inducted his wife as a proposed partner. The brother lodged a complaint with the Chief Area Manager of the Corporation on 24.08.2019 through an advocate. The Corporation issued a show cause notice dated 19.11.2019 to the petitioner. The petitioner replied on 26.11.2019, admitting that his wife was inducted as a partner but alleging that his brother had taken undue advantage of his limited education and had cheated him by making him sign partnership agreements. The Corporation thereafter passed the impugned order dated 15.01.2020 cancelling the LOI dated 31.12.2018 on the ground that clause 5.4 of the LOI had been violated. Clause 5.4 stated that the petitioner was not permitted to induct any person as partner or make any changes in the constitution of the proposed distributorship in a manner other than what was intended at the time of application, without prior approval from the Corporation. The petitioner challenged the cancellation by filing the writ petition. The Court first considered the Civil Application for intervention and rejected it. It held that the dispute between the two brothers was personal and private and had not been officially translated into any change of entity for the LPG distributorship. The official file of the petitioner still rested on his individual application for the ex-serviceman quota, and no application under clause 5.4 had been filed with the Corporation for inducting a partner or reconstituting the proposed distributorship. The Court observed that clause 5.4 did not impose a complete prohibition on changing the constitution; it only required prior approval if the petitioner actually sought to make such a change. Since the petitioner had not officially applied for reconstitution, no violation of clause 5.4 could be said to have occurred. The Court deprecated the Corporation's action in taking cognizance of a personal sibling dispute and held that the Corporation should not be influenced by private bickerings as long as the petitioner continued his status as set out in the application. The Court also referred to an earlier decision of the same High Court in Writ Petition No.4210/2015, where a hyper-technical approach by the Corporation in cancelling an LOI was disapproved. Accordingly, the writ petition was allowed, the impugned order dated 15.01.2020 was quashed and set aside, and Rule was made absolute. The Court clarified that the decision was restricted to the impugned order and that the Corporation retained liberty to follow its policies, guidelines, and rules if any legal or policy impediment arose in future before or after allotment.
Headnote
A) Intervention in Writ Petition - Locus Standi - Private Dispute Not Officially Translated into Change of Entity Does Not Warrant Intervention - Not mentioned - The applicant, a retired engineer and biological brother of the petitioner, sought intervention in the writ petition challenging cancellation of LOI, alleging private financial transactions and partnership agreements. The Court rejected the intervention application on the ground that the dispute was personal and had not been officially translated into any change of entity for LPG distributorship. Held that the applicant had no locus to intervene in the writ proceedings (Paras 2-7). B) Administrative Law - Cancellation of Letter of Intent - Violation of Clause 5.4 Requires Actual Application for Reconstitution - Not mentioned - The Corporation cancelled the LOI citing violation of clause 5.4 due to induction of petitioner's wife and sibling agreements without prior approval. The Court held that clause 5.4 did not impose a complete prohibition; it required prior approval only when the petitioner actually sought to change the constitution. Since no official application for reconstitution was filed, no violation occurred. Held that the impugned order dated 15.01.2020 was quashed and set aside (Paras 9-17). C) Administrative Law - Prior Approval under LOI Clause 5.4 - Private Sibling Bickering Cannot Influence Corporation Decision - Not mentioned - The petitioner's official file still rested on his individual application for the ex-serviceman quota, and no official intimation of reconstitution was given. The Corporation should not have acted on personal bickerings brought by the biological brother. Held that as long as the petitioner continued his status as set out in the application, the sibling dispute should not influence the Corporation; Corporation could consider steps if future legal or policy impediment arises (Paras 11-13, 18). D) Precedent - Reliance on Earlier High Court Decision - Hyper-Technical Approach in Cancelling LOI Deprecated - Not mentioned - The Court referred to Namdev Bhimrao Bhil v. Union of India, Writ Petition No.4210/2015 decided on 16.06.2015, where the High Court held that the Corporation had adopted a hyper-technical approach in cancelling an LOI. In the present case, the Court similarly found no violation of clause 5.4 and deprecated the Corporation's action based on private dispute. Held that the petition was allowed (Paras 14-16).
Issue of Consideration
Whether the respondent Corporation was justified in cancelling the Letter of Intent dated 31.12.2018 by order dated 15.01.2020 for alleged violation of clause 5.4 of LOI when the petitioner had not officially applied for reconstitution of the proposed distributorship; whether the applicant should be allowed to intervene in the writ petition.
Final Decision
Civil Application No.3040 of 2020 rejected; Writ Petition No.1445 of 2020 allowed; impugned order dated 15.01.2020 quashed and set aside; Rule made absolute; Corporation at liberty to take appropriate steps if any legal or policy impediment arises in future before or after allotment.
Law Points
- Clause 5.4 of LOI requires prior approval only when actual change in constitution is sought
- private sibling dispute not officially translated into change of entity cannot justify cancellation
- Corporation should not act on personal bickerings
- hyper-technical approach deprecated
