Safiya Malik

The Calcutta High Court has dismissed a petition challenging the selection of a candidate for an LPG distributorship under Bharat Petroleum Corporation Limited (BPCL). The petitioner sought the cancellation of the selection of the private respondent and requested a fresh Letter of Intent (LOI) in their favor. The court held that BPCL’s decision was in accordance with its established guidelines and did not warrant judicial interference.

An advertisement was published in the Bengali newspaper Anandabazar Patrika on August 31, 2017, inviting applications for LPG distributorships at multiple locations in West Bengal. The deadline for submission of applications was October 18, 2017.

The petitioner applied for an LPG distributorship at Sinnibar within Sarishakhola Gram Panchayat, Keshpur Block, District West Medinipur. BPCL authorities informed the petitioner that they qualified for the draw of lots, which was conducted on June 6, 2018. Following the selection process, the private respondent was chosen as the successful candidate for the distributorship at Sinnibar.

On September 20, 2018, BPCL uploaded a list of eligible candidates for a redraw, indicating that the private respondent’s selection had been canceled. However, the redraw did not take place, and BPCL subsequently issued the LOI in favor of the private respondent.

The petitioner challenged this decision, arguing that BPCL had initially canceled the selection of the private respondent due to deficiencies found during field verification. The petitioner contended that BPCL’s decision to allow the private respondent to submit an alternate land proposal was contrary to the selection guidelines and should not have been permitted.

The petitioner relied on Clause 1(W) of BPCL’s Brochure on Unified Guidelines for Selection of LPG Distributors, which defines the requirements for ownership of land for the godown and showroom. The petitioner argued that the private respondent’s alternate land was acquired after the application deadline, making them ineligible for selection.

BPCL defended its decision, stating that it had acted in compliance with the applicable guidelines. The corporation submitted that under its rules, candidates could submit alternate land options both at the time of field verification and after the issuance of an LOI. BPCL further stated that the private respondent had been permitted to submit an alternate land proposal, which was verified and found suitable.

The private respondent also defended their selection, arguing that the selection process had been conducted in accordance with BPCL’s established procedures. They stated that, after receiving the LOI, the location of the godown and showroom was changed for operational reasons. The private respondent contended that since the construction of the LPG facility could not be completed within the stipulated time, an extension was sought and granted by BPCL.

The High Court examined the relevant guidelines governing LPG distributorship selection and noted that the term ownership or own for a godown or showroom is defined as: "Ownership title of the property or a registered lease deed having a minimum of 15 years of valid lease period commencing from the date of advertisement up to the last date of submission of the application."

The court further examined Clause 2(b) and 2(e) of the Brochure, which permits candidates to submit alternate land under specific conditions. The court recorded: "If the land offered by the candidate in the application or alternate land offered at the time of field verification meets all specifications, the LOI holder can offer an alternate/new land for construction of the godown, provided it meets criteria such as better security, enhanced safety, better title (owned instead of leased), convenient location, or lower operating costs."

The court also examined BPCL’s Field Verification of Credentials (FVC) process, which determines whether the land submitted by the candidate meets the eligibility criteria. If the original land does not meet the requirements, the candidate may submit an alternate plot, provided the new land was owned before the last date of submission of applications.

In assessing BPCL’s decision, the court stated: "The private respondent became the successful candidate in the draw of lots. The land originally submitted was found ineligible during field verification, and the candidature was canceled. However, BPCL permitted the private respondent to submit an alternate land proposal, which was verified and found suitable."

Regarding the petitioner’s contention that BPCL’s issuance of a public notice for a redraw created a legal right for other candidates, the court held: "The issuance of a list for redraw does not automatically confer any right upon the petitioner to participate in a fresh selection process. The decision to allow the private respondent to submit an alternate land proposal was within the authority’s discretion and was not arbitrary."

The court also referred to previous judicial decisions, including Supreme Court rulings in Jagdish Mandal v. State of Orissa and Caretel Infotech Ltd. v. Hindustan Petroleum Corporation Ltd. The court recorded: "Mere disagreement with the decision-making process or some defect in procedure does not justify interference under Article 226 of the Constitution, particularly in commercial matters."

The court found that BPCL’s decision was neither illegal nor irrational and that the petitioner had failed to demonstrate that public interest had been adversely affected.

Based on the findings, the Calcutta High Court issued the following directives:

1. The petition challenging BPCL’s selection process was dismissed, as the court found no procedural irregularity in awarding the LPG distributorship.

2. The court reiterated that unless a selection process is arbitrary or contrary to public interest, judicial intervention is not warranted.

3. BPCL’s guidelines for allowing an LOI holder to submit alternate land were upheld as valid and consistent with its selection criteria.

4. The court rejected the petitioner’s claim that BPCL’s initial announcement of a redraw created a vested right for other candidates.

5. BPCL’s selection of the private respondent as the LPG distributor shall remain final and binding.

6. The court did not impose any costs on either party, holding that the petition was filed in pursuit of a legal right, albeit unsuccessfully.

Case Title: Sk. Nazir Hossain v. Bharat Petroleum Corporation Limited & Ors.
Case Number: WPA 18293 of 2019
Bench: Justice Hiranmay Bhattacharyya

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