Case title – Moga Periphery Pump Association VS Union of India and Ors.
Case no. – CWP-25428-2023
Decision on – March 05, 2024
Quoram – Justice Jagmohan Bansal
Facts of the case
The petitioner is an Association of petrol pump dealers. The members of the Association are having petrol pumps within District Moga. The respondents by impugned advertisement have invited applications for setting up 60 additional petrol pumps in the District Moga. The petitioner has objected the establishment of additional petrol pump in Moga as the existing petrol pumps are sufficient to cater the need of the consumers.
The petitioner, thus, through an instant petition under Article 226 of the Constitution of India seeks to set aside the advertisement whereby the respondents have invited applications for 60 additional petrol pumps in the District Moga.
Submissions on behalf of the Petitioner
The Counsel submitted that according to the contract between the Oil Companies & existing petrol pump dealers, a dealer is required to achieve minimum turnover of 350 KL of MS & HSD. But however, the average turnover of the existing 141 petrol pumps is only 92 KL per month which is much lower than minimum prescribed limit. He contended that if 60 new petrol pumps are set up, the turnover of every dealer would substantially reduce and no petrol pump would be financially viable. Hence, it would lead to malpractices & unethical competition.
He submitted that the setting up of these petrol pumps would be in violation of guidelines of Ministry of Road Transportation & Highways (MORTH) and further guidelines laid down by Central Pollution Control Board (CPCB). Hence, stated that the act of respondents amounts to violation of Articles 14 and 19 (1) (g) of the Constitution of India.
Submissions on behalf of the Respondent
The Counsel submitted that as per the agreement between the Oil Company and Association, the Oil Company may establish any number of petrol pumps and the dealer cannot object to setting up of other petrol pumps. He stated that many no. of applicants have already applied and the respondent has also procured land for the purpose. Hence, contended that the any adverse order by this Court would directly affect rights of those parties.
The Counsel further submitted that the Deputy Commissioner would refuse to provide the NOC if the application to set up petrol pumps violates the guidelines of the Central/State Government and thus, ensured that the action of the Oil Company is strictly regulated and there can be no new establishments if it affects the existing dealers.
Court’s Analysis and Judgement
The Court examining the submissions of both the parties noted that the members of the Association at the time of setting up of the petrol pump have entered into a contract with the Oil Company, in which it was specifically provided that the Corporation shall be free to set up any number of petrol pumps.
The Court further rejecting the argument of the petitioner pointed out that the intent of the petitioner in the instant case was not to stop alleged illegality on the part of the authorities but to avoid the competition. The petitioner is trying to use a judicial forum to halt the setting up of new petrol pumps. But however, the Court stated that judicial process cannot be used to stop healthy competition in the guise of allegation of violation of any instruction issued by Government.
The Court relying upon the decisions in Nagar Rice & Flour Mills & Ors v. N Teekappa Gowda and State of Haryana Versus Lal Chand noted that the argument of petitioner which states that the setting up of new petrol pumps would wipe out financial viability of existing petrol pumps is misconceived and cannot be countenanced by this Court.
Further, quoting the judgement in State of Haryana Versus Lal Chand, the Court that contracts executed between existing petrol pumps and Oil Companies are commercial in nature and hence it is prerogative of the parties to decide question of commission and their viability.
The Hon’ble Justice observed that every Oil Company in the form of Tanks, Dispensers and other equipment has to invest a good amount while setting up a petrol pump. It said that if the Oil Companies have decided to set up new petrol pumps, it is their wisdom and the Court cannot substitute a policy decision of a Corporation especially when the contracts between the parties are commercial in nature.
The Court, therefore, held that the members of the Association have undoubtedly the right of business and trade as guaranteed by Article 19(1)(g) of the Constitution of India, but the same shall not guarantee them the right to restrict others to trade. Consequently, The Court disposed thereby disposed of the plea hoping that the Deputy Commissioner while adjudicating application would take care of statutory provisions and bindings guidelines.
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Judgement Reviewed by – Keerthi K
