Nagendra Rai, J.
1. Both the writ applications are connected matters and as such with the consent of the parties they were heard together at the stage of an admission itself and arc being disposed of by this
common order. In C.W.J.C. No. 2401 of 1994 Mahcshwar Prasad Singh has prayed for a direction to the respondents Hindustan Petroleum Corporation Limited, the Oil Selection Board (East) and the Officers of the Hindustan Petroleum Corporation Limited to appoint him a dealer of retail outlet of petroleum products at the place mentioned in the advertisement and to cancel the appointment of Rakesh Kumar (Respondent No. 5) as a dealer of the retail outlet.
2. C.W.J.C. No. 7503 of 1994 has been filed by Rakesh Kumar for quashing the order of the District Magistrate, Begusarai dated 16-8-1994 by which he has ordered that grant of 'no objection certificate' shall be considered after disposal of case by the High Cour.t and has stopped construction of retail outlet by him and for a direction to the District Magistrate not to cause unnecessary harassment and obstruction to him in construction and running of the retail outlet. A copy of the said order has been annexed as Annexure-32. He has also made a prayer for restraining the officers of the Hindustan Petroleum Corporation Limited from acting upon the aforesaid letter dated 16-8-1994 and for a direction to the employees of the Hindustan Petroleum Corporation Limited not to remove the equipments from the premises as he has been prevented from selling M.S./H.S.D. due to obstruction put by the District Magistrate, Begusarai.
3. For the sake of convenience MAahesh-war Prasad Singh will be referred as the petitioner, Rakesh Kumar as respondent and the Hindustan Petroleum Corporation Limited as the Corporation.
4. The Corporation on 17th March, 1989 issued an advertisement in the newspapers for appointment of a dealer owning retail outlet at Begusarai Zero Mile Junction of N.H. 28/N.H. 31 under general category. The eligibility for applying for the dealership was given in the advertisement. It was also stated therein that the details of the eligibility criteria and conditions as mentioned in the application form will be applicable. A copy of the advertisement has been annexed as Annexure-1 in both the writ applications.
5. The petitioner, the respondent and others, filed applications for the dealership. All the applications were sent to the old Selection Board (East) and interview letter was issued to the petitioner and the respondent and in pursuance of which they appeared before the Selection Board. The Selection Board selected the respondent. In pursuance of which on 7-5-1993 the Hindustan Petroleum Corporation wrote a letter to the respondent offering him for the dealership of retail outlet under the terms and conditions mentioned therein. A copy of the same has been annexed as Annexure-3 to the Writ Application No. 7503/94. It was clearly stated in the said letter that the respondent should procure a suitable plot of land either purchased or leased within a period of four months from the date of the issue of the letter after getting suitable clearance from the Corporation in writing for a particular plot of land. It was also mentioned therein that the respondent should resign from service if he is employed. The respondent after receiving the aforesaid letter tendered his resignation from the post of Lecturer on 14-6-1993 the Corporation wrote a letter to the petitioner for the site plan of the suitable site to enable it for making the layout plan. The respondent complied with the aforesaid directions and offered plot Nos. 143, 144 and 145 (Parts) under khata No. 89 at Begusarai for opening the retail out-let as mentioned in the said application. On 7-8-1993 the Corporation wrote a letter requesting the District Magistrate to issue no objection certificate to commission a retail outlet on the aforesaid plots and on 7-10-1993 the District Magistrate issued a no objection certificate, a copy of which has been annexed as Annexure-7 to the Writ Application No. 7503/94. Thereafter, the Corporation took a licence for Explosive substance Act. The respondent proceeded with the construction work and completed the same by 25-11-1993. The retail outlet was named and styled as M/s. Sriyam Fuel Centre.
6. The Corporation on 26-11-1993 appointed the respondent as dealer in Petrol/ High Speed Diesel Oil, a copy of which has been annexed as Annexure 18 to the Writ
Application No. 7503/94. The respondent firm was granted licence from the District Transport Officer under the provision of the Bihar MS/HSD Diesel Licencing Order. On 13-12-1993 the District Magistrate wrote a letter to the Sr. Regional Manager of the Corporation directing him to obtain no objection certificate from the National High way 31 Division and Forest Department and further stated that in the absence of no objection certificate from the aforesaid departments no construction of the retail outlet should be started. A copy of the said letter has been annexed as Annexure-20 to the Writ Application No. 7503/94. The respondent represented before the District Magistrate against the aforesaid direction. In the meantime, on 30th May, 1994 another order was issued from the office of the District Magistrate recalling the earlier direction to the respondent, contained in letter dated 13-12-1993, not to proceed with the construction work without obtaining permission from the Forest Department and the National High Way Department. If was clarified therein that as 'no objection certificate' has already been given to the firm of the respondent, the District Administration has no role in the matter and the respondent or the Corporation may take appropriate steps for taking 'no objection Certificate.' from the appropriate authorities. A copy of the said letter has been annexed as Annexure-29 of the Writ Application No. 7503/94. Thereafter, on 16-8-1994 the impugned order has been passed.
7. The case of the petitioner is that according to the ad vertisement the location of the retail outlet was at Barauni Zero Mile (Junction of N.H. 28/N. H.31). He has a plot at Zero Mile at the junction of the aforesaid two National High ways. He fulfilled all the requirements mentioned in the advertisement but his case has been arbitrarily rejected for grant of dealership and respondent has been wrongly given dealership of the retail outlet though he has no land at the junction of the aforesaid two High ways, on the other hand the land offered by the respondent is at a distance of 9 Kms. in the town of Begusarai. He represented the matter to the Corporation but the Corporation did not pay heed hence
the writ application.
8. A counter affidavit has been filed by the Corporation in C.W.J.C. No. 2401/94 and the same has been treated as counter affidavit in both the cases. The Corporation's stand in the Counter affidavit is that the application of the petitioner, the respondent and other application were sent to the oil Selection Board (East). The Board being independent body considered the relevant papers filed by the applicants, interviewed them and prepared a panel of eligible candidates for appointment of the dealer of the retail outlet in question. On the basis of the panel, Corporation appointed the respondent as dealer as his name was on the top of the panel. The location of the sites for retail outlet indicated in the advertisement was made in general terms to mean a place in the vicinity and at a close proximity within the limits of the trading area approved by the members of the Oil Industry. The Selection of site is made after the selection of the dealer. The petitioner cannot claim for dealreship only on the ground that he possesses a piece of land at the junction as mentioned in the advertisement, as the Board-considers further aspects before selecting person for appointment of dealer. The site is not one of the criteria of the eligibility. The Corporation has not acted arbitrarily. It has acted according to the terms of the advertisement and the conditions mentioned in the application form.
9. The respondent's case as apparent from his writ application as well as the counter affidavit filed in reply to the writ application is that he was appointed as a dealer of retail outlet. After obtaining no objection certificate from the District Magistrate he proceeded with the construction work of the buildings and completed the same and started sales since 26-11-1993. He has spent Rs. 10 lacs. However, he could not sell the required quantity of petroleum products because of the hindrance put by the District Magistrate from time to time. Once the District Magistrate has granted no objection certificate under Section 144 of the Petroleum Act, he has no jurisdiction under the law to restrain the petitioner from making construe-
tions or proceed with the sale of the petroleum and as such the direction contained in Annexure-32 to his writ application is wholly illegal and without jurisdiction.
10. It is also asserted on his behalf that the site offered by him is near the location mentioned in the advertisement and the selection Board after having considered all the relevant factors selected him for giving the dealership of the retail outlet. The site is not one of the eligibility criteria mentioned in the advertisement. A slight deviation of site found suitable by the Corporation cannot be said to be either arbitrary or irrational.
11. Before adverting to the question to be decided in this writ application it is apt to state the procedure which is being followed by the Corporation in appointing the dealer for the dealer owned retail outlet. The Corporation is a Government company carrying on business of Petroleum Products. The Corporation Hindustan Petroleum Corporation Ltd. Bharat Petroleum Corporation Ltd. and Indo Burma Petroleum Corporation Ltd. are members of the Oil Industries. A market survey is conducted by the members through their officers to identify potential location for commissioning the new dealership. After the location is finalised then the proposals for new site are scrutinised in a meeting held at the Head Office level of the Oil Office for commissioning new dealership of various products. The location was finalised or allocated to the different categories which includes general category, schedule caste and schedule tribe categories. Thereafter, these locations are shared amongst four Oil Companies on a fixed hundred point share out formula by draw of lots and are thereafter allotted to the concerned Oil Company for the purpose of marketing petroleum product in different parts of the country. The concerned Oil Company publishes advertisement in local newspapers inviting applications for Retail outlet Dealership of petroleum products from eligible candidates of a particular area or locality. The applications filed by the eligible candidates are scrutinised by the officers of the Corporation of the different Oil Companies and thereafter these applications
are sent to the Oil Selection Board of the concerned region for taking necessary steps for selection of candidates for the purpose of retail outlet.
12. The Oil Selection Board in an independent body constituted by the Ministry of Petroleum and Natural Gas, Government of India, consisting of a retired judge of the High Court as a Chairman and two members. The Board is entrusted with the work of selection of candidates for selecting dealer, distributor etc. for the public sector Oil Companies. The Board after scrutinising all the papers asks the eligible candidates to appear for interview and after taking interview of candidates the Selection Board prepares a panel of eligible candidates for appointment to the proposed new dealership of the concerned Oil Companies with a direction to issue letter of.intent to such selected candidates. Thereafter, the concerned Oil Company issues a letter of appointment.
13. In the present case the first question to be considered is as to whether the appointment of respondent as a dealer of retail outlet is arbitrary and should be cancelled. If this question is answered against respondent then. it is not necessary to go into question as to whether the respondent District Magistrate wasjustified in issuing letter dated 16-8-1994 restraining respondent from proceeding with the construction work of the retail outlet.
14. It is well settled by catena of decisions of the apex Court that the State and its instrumentalities, which are the State within the meaning of Article 12 of the Constitution, while awarding contract or conferring benefits such as dealership etc. in respect of the properties belonging to the State, have to act in a fair and reasonable manner and their action or the procedure followed by them must meet the requirement of Article 14 of the Constitution of India. The Government or its instrumentalities are not as free as an individual in selecting recipients for its largese. It cannot act arbitrarily or capriciously. Their activities have a public element and as such there should be fairness and equality for the simple reason that there is no unfettered discretion in public law. There is no
compulsion that the Government or its instrumentalities must enter into contract with any one but one but once a decision is taken to award the contract or to confer the benefit then it must act fairly without discrimination and without any unfair procedure. Their act must be in conformity with some standards or norms, which are not arbitrary, irrational or irrelevant. However. the Executive Authroities while dealing with the matters of contract or conferring benefit such as dealership etc. have freedom of 'play in the joints' and they can deviate from standards and norms on some valid principle which in itself should not be irrational unreasonable or discriminatory.
15. However, the power of the Court to review the administrative action is well defined. It cannot act as an appellate auth- ority nor it can put itself in the place of the administrative authority exercising the power vested in law. This Court has to see primarily as to whether there has been any infirmity in the decision making process.
16. In the light of the aforesaid legal position it has to be considered as to whether the Corporation has acted arbitrarily in the matter of selection of respondent as dealer in this case or not. The only ground of challenge against the appointment of respondent is that the site offered by him is not at a place mentioned in the advertisement. The question is as to whether the site is one of the criteria of eligibility or not. From perusal of paragraph 2 of the advertisement it appears that the location or site does not fall under the eligibility criteria. However, it is mentioned in the advertisement that the details of the eligibility criteria and conditions as mentioned in the application form shall be applicable.
Paragraph 12 of the application runs as follows:--
Do you have a suitable site readily available or may arrange in area advertised within four months?
If, yes, please give details.
17. Thus, so far as the advertisement is concerned ihe location is not the essential condition and the application form provides that the site can be made available within four months from the date of selection for appointment of dealer of retail outlet of Petroleum Products. According to the Corporation the location at a parlicular place is not one of the criteria of eligibility. The location of retail outlet indicated in the advertisement is made in general terms to mean a place in the vicinity and at a close proximity within the limits of the trade area approved by the members of the Oil Industries. The Corporation can change the site within the limits of the approved trading area. The selection of the site is made after the selection of the dealer. A dealership cannot be given to a person only on the ground that he possesses a piece of land exactly at the place mentioned in the advertisement. Thus, there is nothing on the record to show that the site or location of a retail outlet is one of the essential criteria of eligibility.
18. From the counter affidavit of the Corporation it is clear that the present site given by the respondent is located on the National High Way 31 and it falls well within the limits as given in the advertisement and the Corporation gave the permission to open retail outlet on the said site after taking into consideration the relevant factors including the volume, distance, norms of the Oil Industries with regard to the location of the retail outlets and the commercial prospects of the outlets based on traffic pattern.
19. It is to be noticed that the selection is made by the Board and the respondent has not made any complaint against the Board in the sense that the Board while selecting respondent No. 5 has acted arbitrarily. The Board selects for appointment after taking into consideration the relevant facts such as personality, business acumen, sales ability, capacity to provide facilities, extra curricular activities and the view performance. In view of the aforesaid facts the action taken by the Corporation cannot be said to be arbitrary or illegal only because some deviation has been made in the selection of site. We cannot lose sight of the fact that the Corporation is
engaged in commercial activities and as such some amount of flexibility has to be permitted while selecting a site.
20. In the present case the requirement as mentioned in the advertisement can be classified into two categories. First contains the eligibility clause and there is no allegation that the respondent does not fulfill any of the requirments falling under eligibility condition or clause. The other one is with regard to location etc. Selection of site at some distance from the site mentioned in the advertisement after taking into consideration the relevant considerations as mentioned above cannot be said to be arbitrary, illegal and discriminatory. Nor it can be said the selection of site has been done to bestow a,favour to respondent. Accordingly, there is no valid ground to cancel the appointment of respondent as dealer of retail outlet of petroleum products. Accordingly, the writ application filed by the petitioner is dismissed.
21. So far as the prayer made on behalf of the respondent in his writ application is concerned, from the facts it is clear that the District Magistrate has given 'no objection certificate' under Section 144 of the Petroleum Product Act by letter dated 7-10-1993. No provision has been brought to our notice by the counsel appearing for the State which empowers the District Magistrate to restrain the petitioner from constructing the retail outlet or running the retail outlet after he has granted 'no objection certificate' under aforesaid section. After having granted the 'no objection certficate' the District Magistrate again by the impugned order restrained the respondent from constructing the retail outlet and ordered that question of grant of 'no objection certificate' shall be considered after the disposal of the writ petition in this Court.
22. In our view the respondent District Magistrate has acted arbitrarily in passing the impugned order. The grounds for passing the impugned order dated 16-8-1994 are non est and show non-application of mind and arbitrary exercise of power by the District Magistrate. In the Writ application filed by the petitioner no order of stay was passed and
on the other hand a specific order was passed that any construction made by respondent shall be subject to the result of the application. Filing of the writ application by some stranger cannot be a ground to restrain the respondent from proceeding with the construction of the retail outlet after appointment order is Issued by the Corporation nor the same could be ground to reconsider the question of grant of 'No objection -- Certificate'. The District Magistrate has to act in a reasonable and fair manner. In this case once 'no objection certificate' was granted by the District Magistrate he can review or recall the said order only if 'No objection certificate' was obtained by suppression of some material facts or some other relevant grounds. Even in such situation he has to afford an opportunity of hearing to the respondent before passing the order. From the impugned order it appears that the said order has been passed without hearing the respondent and there is nothing in the order to show that 'no objection certificate' was obtained by either suppressing any material facts or by playing fraud. In that view of the matter, we have no hesitation in coming to the conclusion that the order contained in Annexure-32 to the writ application of the respondent is against the law and accordingly the aforesaid anne-xure is quashed.
23. It appears from the record that after appointment of respondent as dealer he has invested huge money (Rs. 10 lacs) and has started the sale of the petroleum product. In that view of the matter it is not proper for a district administration to create unnecessary impediment in the way of respondents to run the retail outlet. Learned Counsel for the State has not brought to our notice any provision which requires further permission from the authorities of the State. However, if 'No objection Certificate' is required under any provision of law from any authority then the respondent should file an application before the concerned authority and the authority should take a final decision within one month from the date of filing of the application.
24. In the result, the application filed by
the petitioner (Maheshwar Pd. Singh) is dismissed and the application filed by the respondent (Rakesh Kumar) is allowed. In the facts and circumstances, there shall be no order as to costs.
Ashish N. Trivedi, J.
25. I agree.