S.D. Pandit, J.
1. These two appeals are preferred against the judgment of the learned single Judge in S.C.A. No. 1921 of 1996 decided on 8-8-1996. As the respondent in both these appeals is one and the same and as the respondent-petitioner has sought relief jointly against both the appellants before This Court and as both the appeals are preferred against one and the same judgment, we are disposing of both these appeals by this common judgment. The respondent Parmar Jadavji Dhanaji (hereinafter referred to as respondent-Parmar) is an unemployed citizen of India and is holding a diploma in Mechanical Engineering and T.V. Engineering. He applied for retail dealership in petroleum products of the Indian Oil Corporation ('I.O.C.' for short) the appellant in L.P.A. No. 1056 of 1996 in pursuance of its advertisement dated 24-8-1976. The appellant I.O.C. on 15-11-1976 selected the petitioner for putting up a retail outlet by its letter dated 15-11-1976 for putting up a retail outlet at Kotharia-Rajkot. As per the letter dated 15-11-1976, the respondent-petitioner was required to obtain No Objection Certificate (N.O.C.) from the District Magistrate and other documents including a certificate to be issued under the Explosives Act. It seems that there was some dispute regarding obtaining N.O.C. under the Explosives Act as well as from the District Magistrate. The appellant wanted the said certificates to be in favour of the I.O.C.; whereas the respondent-petitioner wanted them to be in his personal name and at one time on account of his failure to obtain necessary documents the offer was revoked on 17-7-1979 Bui it was again revived. The District Magistrate had also refused to grant the N.O.C Therefore, the petitioner had come before This Court by filing S.C.A. No. 622 of 1983. In that petition, besides revocation of the outlet dealership of the present appellant, the I.O.C. the action of the appellant, in L.P.A. No. 1321 of 1996 of canceling lease which was granted in favour of the petitioner for 7 years on 22-7-1978 which was subsequently raised to 15 years was also an issue. In the earlier petition being S.C.A. No. 622 of 1983, the learned single Judge of This Court was pleased to pass an order in favour of the present respondent as under:
In the above view of the matter, 1 allow this petition by directing the District Magistrate, Rajkot to deal with the case of the petitioner for No Objection Certificate under the Explosives Act and also by quashing the order cancelling the grant of land to the petitioner. 1 also direct the respondent No. 3-Corporation to deal with the case of the petitioner's dealership within one month from today without being in any way inhibited by their new policy decision and also keeping in mind that there was no reason for them not to extend the period of earlier agreement because of the requirement of law, namely, the No Objection Certificate to be obtained by the petitioner. Rule is accordingly made absolute with no order as to costs.
2. The appellant-I.O.C. had preferred an appeal against the judgment of the learned single Judge on 22-12-1983 being L.P.A. No. 69 of 1984. It seems that at the time of hearing of the said appeal, the appellant's Advocate made a statement before the Division Bench that the appellant will deal with the claim of the dealership of the respondent No. 1 within 3 months without in any way inhibited by the new policy decisions and the respondent will be given liberty to represent his case before the appellant to take appropriate decisions within 3 months. That suggestion made by the learned Advocate for the appellant was accepted by the respondent No. 1 -original petitioner. Therefore, by consent the following order was passed on 6-12-1990:
The appellant will deal with the claim of the respondent for dealership within three months without being in any way inhibited by the new policy decision. Respondent No. 1 will be given an opportunity to represent his case before the appellant who will take appropriate decision on merits on or before 7th March 1991.
3. It seems that thereafter the appellant had given opportunity to the present respondent to represent his case and his claim for getting dealership. Ultimately on 22-7-1991 the present respondent was informed that his claim was not tenable and that the same was unjustified and therefore, the same was rejected.
4. Being aggrieved by the said decision, the respondent No. 1 wrote a letter to the Chief Justice of India and copy of the same was endorsed to the Chief Justice of This Court and that letter of him was treated as a suo motu petition as a Public Interest Litigation. Said petition was heard by the learned single Judge and he came to the conclusion that the order passed on 22-7-1979 rejecting the petitioner's application was to be quashed and set aside and that the action of the appellant in L.P.A. No. 1321 of 1996 of rejecting the original petitioner's application for grant of land was also to be quashed. He allowed the respondent's claim by passing the following order:
In these circumstances, I allow this petition, quash the order contained in letter dated 22-7-1979 rejecting the petitioner's application on the ground for want of supportive land document as well as quash the order of the State Government in rejecting the petitioner's application for grant of land on the supposed ground of rejection of the petitioner's application for grant of dealership and make fresh orders within a period of three weeks from today by taking into consideration the finding recorded in Special Civil Application No. 622 of 1983 to the extent they have not been modified by the Division Bench in Letters Patent Appeal and this order. The respondent-State as well as Corporation both shall pay costs to the petitioner of this petition which 1 quantify Rs. 10,000/- each. In case the respondents consider it proper and are able to fix the liability on the officer concerned in creating this situation, the costs may be recovered from them.
5. Being aggrieved by the aforesaid decision the original respondents have preferred these two L.P.A.s On behalf of the appellant-I.O.C. it is submitted that the I.O.C. has given full opportunity of being heard to the present respondent-petitioner and as the respondent-petitioner was not having necessary rights in the land where the outlet for the petroleum products was to be created. It is contended that the order of rejection passed by the appellant-l.O.C. was quite valid and legal and there was no justification for the learned single Judge in interfering with the same. It is contended that what the original petitioner as well as the learned single Judge wants the I.O.C. to do is to give specific performance of the contract which was offered by them. It is contended that the Court cannot order the specific performance of such a contract and such a contract is not enforceable in law in view of the provisions of Section 16(c) of the Specific Relief Act. It is contended that as a matter of fact there was only an offer as per the terms of the offer made by the I.O.C. It was open for the I.O.C. to withdraw the said offer and I.O.C. could not be forced to continue the said offer to conclude a contract.
6. On behalf of the appellant in L.P.A. No. 1321 of 1996 it is contended that the Government need not be forced to give a lease of the Government land in favour of any private individual. Such a direction could not be said to be in the interest of public policy or public at large. Even original lease offered to the petitioner was for a stipulated period and therefore, could not be a policy of the Government to create a lease for an unlimited period. Thus, it is contended that the directions given by the learned single Judge are not tenable in law.
7. As against the said submission on behalf of both the appellants, Mr. Dave learned Advocate for the respondent-petitioner vehemently urged before us that there are no grounds made out to interfere with the order passed by the learned single Judge. The relief which the original petitioner has claimed and sought against the appellants is tenable in law. He thus contended that both the appeals be dismissed with costs.
8. It is an admitted fact that present respondent Parmar had applied for retail dealership in petroleum products and his application was considered favourably by the I.O.C. as per its letter dated 15-11-1976. It is not in dispute that the I.O.C. had withdrawn its offer and therefore, the appellant had filed S.C.A. No. 622 of 19X1 Admittedly said writ petition filed by the respondent-petitioner was allowed by the learned single Judge of This Court on 22-12-1983 by directing the appellant IOC to deal with the original petitioner's dealership claim without being in any way inhibited by the new policy. Admittedly against the decision of the learned single Judge, L.P.A. No. 69 of 1984 was preferred by the I.O.C. but the said appeal was disposed of with the consent of the parties on 6-12-1990 by passing the following order:
The appellant will deal with the claim of the respondent No. 1 for dealership within three months without being in any way inhibited by the new policy decision Respondent No. 1 will be given an opportunity to represent his case before the appellant who will take appropriate decision on merits on or before 7th March 1991.
9. After the said decision which took place on 6-12-1990 the respondent Parmar was given personal hearing on 4-3-1991, after the respondent-petitioner had made his representation to the I.O.C. On 5-2-1991 the I.O.C. by its letter dated 22-7- 1991 informed the respondent-petitioner is under:
Please note since your representation was not supported by land documents, further opportunity was given to you. In fact, though in your letter of 11-3-1991 you have mentioned that you will be producing the fresh relevant documents, the same have not been received by us till date.
Kindly be advised that we have considered your written representation and the documents attached. We have also considered the various submissions you made during your discussion with us at Bombay on 4-3-1991. The matter has also been examined from all the angles. Finally, we have come to the conclusion that your claim for the Retail Outlet dealership at the above location does not deserve any consideration, the same being untenable and unjustified. In view of the above, the case stands finally closed, which kindly note.
Said decision taken by the appellant I.O.C. resulting in respondent Parmar making representation to the Chief Justice of India by endorsing a copy of the same to the Chief Justice of This Court and said representation was treated as original writ petition.
10. In view of the above admitted fact it would be quite clear that the appellant I.O.C. has ultimately taken a decision not to give dealership outlet in petroleum products to the respondent Parmar. The offer made by the appellant-I.O.C. to the present respondent Parmar was admittedly by its letter dated 15-12-1976. In the beginning of the said letter it has been mentioned as under:
We refer to your application dated 24th August 1976 regarding the proposal for putting up a retail outlet at the above location.
We now write to record the terms and conditions on which we are prepared to consider installing MS/HSD Pump at your site Kotharia.
(emphasis supplied)
Term No. 5 of the said terms is reproduced below:This agreement can be terminated by either party without notice at any time before construction of the pump is taken in hand.
11. Now admittedly, in this case the construction of the pump has not been taken on hand at any time. Admittedly, the land where said outlet was to be located was not of the ownership of the present respondent-Parmar nor was there any lease of the land standing in favour of the present respondent on 24-8-1976 the date on which he had applied for the said dealership as well as on the date on which he had received the letter dated 15-11-1976. No doubt subsequently present respondent Parmar had obtained a lease of the land out of Survey Number 352 from the State Government on 22-2-1978. Said lease was for a period of 15 years from 22-2-1978. In view of the controversy between the respondent-Parmar and the appellant-I.O.C, said lease of 22-2-1978 which was initially for 7 years and was extended upto 15 years was cancelled by the Collector, Rajkot District, Rajkot. But in view of the decision given in the earlier petition in S.C.A. No. 622 of 1983, said order of canceling grant of land passed in the year 1983 stood quashed. Therefore, in view of the said decision and on account of the lease deed on 22-2-1978 the lease of the land would remain in force for 15 years from 22-2-1978, i.e., upto 21-2-1993 because of the revival of the lease deed on account of the decision in the earlier S.C.A. No. 622 of 1983. The learned single Judge has held that the appellant-I.O.C. was not justified in rejecting the petitioner's application on the ground of want of supportive land document. That would be quite clear from the observations made in para 18 of his judgment which is running as under:
In these circumstances, I allow this petition, quash the order contained in letter dated 22-7-1979 rejecting the petitioner's application on the ground for want of supportive land document as well as quash the order of the State Government rejecting application for grant of land on the supposed ground of rejection of the petitioner's application for grant of dealership and make fresh orders within a period of three weeks from today by taking into consideration the finding recorded in S.C.A. No. 622 of 1983 to the extent they have not been modified by the Division Bench in Letters Patent Appeal and this order. The respondent-State as well as Corporation both shall pay costs to the petitioner of this petition which I quantify Rs. 10,000/ - each. In case, the respondents consider it proper and are able to fix the liability on the officers concerned in creating this situation, the costs may be recovered from them. Rule made absolute.
12. At the cost of repetition it must be stated that admittedly there was no further renewal of the lease in favour of respondent Parmar after the lease deed of 22-2-1978. Therefore, as the position remains today, there is no lease of any land where the pump/outlet is to be constructed.
13. If the nature of transaction between the respondent-Parmar as well as the appellant-I.O.C. is taken into consideration then it would be quite clear that at the most it could be said in favour of the respondent Parmar is that on the date of this petition there was only an agreement to give contract of dealership in favour of respondent-Parmar. Such a transaction is a contract falling within the provisions of Section 14(1) of the Specific Relief Act. The transaction in question in our opinion falls within the provisions of Sections 14(1)(a) and (c) of the Specific Relief Act, 1963 are as under:
Contracts not specifically enforceable: (1) The following contracts cannot be specifically enforced, namely,
(a) a contract for the non-performance of which a compensation in money is an adequate relief;
(c) a contract which is in its nature determinable.
14. No doubt as the law has developed today, it is very much settled that the principles of judicial review would apply to exercise of contractual powers by the Government bodies in order to remove arbitrariness and favoritism. However, there are inherent limitations in exercise of that power of judicial review. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made but the decision making process itself, It is not the function of a Judge to act as a super board, or with the zeal of a pedantic school-master substituting its judgment for that of the administrator. But for the purpose of exercising judicial review a public law element must be present before judicial review can be invoked. In the case of G.B. Mahajan v. Jalgaon Municipal Council : AIR1991SC1153 it has been observed : AIR1991SC1153 as under:
While it is true that principles of judicial review apply to the exercise by a Government body of its contractual powers, the inherent limitation on the scope of the inquiry are themselves a part of those principles. For instance, in a matter even as between the parties, there must be a public law element to the contractual decision before judicial review is invoked. In the present case the material placed before the Court falls far short of what the law requires to justify interference.
15. In the case of Kumari Shrilekha Vidyarthi v. State of U.P. : AIR1991SC537 the Apex Court was considering the action of the State. The State of U.P. had terminated by a general order the appointments of all Government Counsels (Civil, Criminal, Revenue) in all the districts of the State of U.P. with effect from February 28, 1990 and directed preparation of fresh panel to make appointments in place of existing incumbents. The Apex Court has quashed and set aside the said order of the State of U.P. and ordered restoration of status quo ante by holding that said order was violative of the principles of natural justice and the provisions of Article 14 of the Constitution of India. Even in that case in para 28 the necessity to make the concept of presence of some public element in a State action to attract Article 14 was accepted. In that case in para 12 the Apex Court has laid down as under:
The above provisions in the L.R. Manual clearly show that the Government Counsel in the districts are treated as Law Officers of the State who are holders of an 'office' or 'post'. The aforesaid provisions in Chapter VII relating to appointment and conditions of engagement of District Government Counsel show that the appointments are to be made and ordinarily renewed on objective assessment of suitability of the person based on the opinion of the District Officer and the District Judge; and character roll is maintained for keeping a record of the suitability of the appointee to enable an objective assessment for the purpose of his continuance as a law officer in the district. There are provisions to bar private practice and participation in political activity by D.Gs. Apart from Clause (3) of para 7.06 to which we shall advert a little latter, these provisions clearly indicate that the appointment and engagement of District Government is not the same as that by a private litigant of his Counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of appointment. Suitability of the appointee being the prime criterion for any such appointment, it is obvious that appointment of the best amongst those available, is the object sought to be achieved by these provisions, which, even otherwise, should be the paramount consideration in discharge of this Governmental function aimed at promoting public interest. All Government Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the 'office' or 'post'.
Thereafter in the subsequent paras the Apex Court has considered various Rules and regulations of the State Government as well as the provisions of Cr.P.C. and had considered the earlier decision of the Apex Court as well as the decisions of the English Courts and has concluded in para 17 as under:
We are, therefore, unable to accept the argument of the learned Additional Advocate General that the appointment of District Government Counsel is only a professional engagement like that between a private client and his lawyer or that it is purely contractual with no public element attaching to it, which may be terminated at any time at the sweet-will of the Government excluding judicial review. We have already indicated the presence of public element attached to the 'office' or 'post' of District Government Counsel of every category covered by the impugned circular. This is sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review.
(emphasis supplied by us)
In that case the Apex Court had recorded a finding that office of the post of District Government Counsel was to be a public post and public law element was attached to the said post and because of the same, the order in question was considered in the light of the provisions of Article 14 of the Constitution of India.
16. Even in the case of New Horizons Limited v. Union of India : (1995)1SCC478 , the existence of public law element was considered. That would be quite clear from the following observations in para 17 of the judgment on page 489:.The State, in exercise of its various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in State action and requires the State to act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover, a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection....
Therefore, if this aspect is taken into consideration and if the dispute which respondent Parmar has brought to This Court by filing original petition is considered, then it is very difficult to hold that in the dispute in question there is an involvement of public interest or public element. The transaction between the parties is pure and simple transaction of an offer given by the present appellant to respondent Parmar and that offer is ultimately withdrawn by the appellant Corporation and said transaction is covered by the provisions of Sections 14(1)(a) and (c) of the Specific Relief Act. Therefore, merely because the petitioner makes an averment that said action of the appellant is violative of Articles 14 and 16 of the Constitution of India by alleging that said action is arbitrary and unreasonable, powers of This Court governed under Article 226 could not be exercised to circumvent specific provisions of Specific Relief Act in view of the fact that there is no involvement of any public element in the transaction in question. Therefore, the proper remedy for the appellant is to go before the civil Court for claiming damages for non-performance of the said agreement of which he cannot seek a specific performance.
17. In view of the above view taken by us, in our opinion it is not at all necessary to consider in detail the question as to whether the action of the present appellant is arbitrary or not because in our opinion if we happened to go into that question and record any finding on the same, this way or that way, the same is likely to cause hardship and prejudice to the parties in case the parties happen to go before the civil Court because that finding recorded by us is likely to create res judicata against the parties. But without recording any positive finding on the said issue, we hereinafter refer to the material on record and discuss the case laws cited by the learned Advocate for respondent Parmar, in order to show that we are not inclined to review the action of the present appellant for the reasons to be discussed hereinafter. At the cost of repetition it must be stated that as per the letter of 15-11-1976 only an offer was made by the appellant to respondent Parmar to consider the installation of MS/HSD Pump at Kotharia. As quoted earlier, said offer itself mentions in clause term No. 5 that either party was entitled to terminate said agreement without notice before construction of the pump was taken on hand. Admittedly, the construction of pump was never taken on hand by the respondent-Parmar.
18. When respondent Parmar had applied for getting said dealership by application dated 24-8-1976, as a matter of fact he was not holding any right either as an owner or licensee or lessee over the land where the pump was to be installed. No doubt in the subsequent letter of the appellant on 15-11-1976 he had applied to the State Government to grant lease and he got lease of the land of 2,091 sq. mtrs. of land on 20-2-1978. Said lease was initially for a period of 7 years and the lease was further extended for 8 years. This lease was valid upto 21-2-1993. The material on record further shows that after the decision of S.C.A. 622 of 1983 decided on 22-12-1983 by which the cancellation of the grant of the land was quashed by This Court. The appellant had not applied for getting the lease of the said land for any further period beyond 21-2-1993. Before the respondent filing S.C.A. No. 622 of 1983 the lease granted to respondent-Parmar was cancelled on account of cancellation of the offer given by the present appellant and in that S.C.A. No. 622 of 1983 the learned single Judge of This Court had allowed the petition by quashing the order of canceling the land and also directed the present appellant to deal with the case of the petitioner's claim for dealership without in any way influenced by the new policy decision. After the decision of the said S.C.A. as well as L.P.A. No. 69 of 1984 as per the directions of This Court, the present appellant has reconsidered his claim and present appellant had rejected the claim of the respondent Parmar by letter dated 22-7-1991 on account of failure to produce fresh documents. Relevant portion of the said letter is as under:
Please note since your representation was not supported by land documents, further opportunity was given to you. In fact, though in your letter of 11-3-1991 you have mentioned that you will be producing the fresh relevant documents, the same have not been received by us till date.
Kindly be advised that we have considered your written representation and the documents attached. We have also considered that various submissions you made during your discussions with us at Bombay on 4-3-1991. The matter has also been examined from all the angles. Finally, we have come to the conclusion that your claim for the Retail Outlet dealership at the above location does not deserve any consideration, the same being untenable and unjustified.
19. The learned Counsel for respondent Parmar has cited before us the case of Mahabir Auto Stores v. Indian Oil Corporation : [1990]1SCR818 in support of his contention. Said case is not at all applicable to the facts of the case before us. In that case the appellant Mahabir Auto Stores was carrying on business of sale and distribution of lubricants for respondents for about 18 years Abruptly the respondent had stopped supply of lubricant to the firm without giving any notice or intimation. The Apex Court held that said act of the respondent-Corporation was against the principles of natural justice and the Apex Court directed the respondent-Corporation to restore the supply and to take necessary action after giving opportunity of being heard to the appellant before the Apex Court. Thus, in that case there was already a contract subsisting between the parties and that contract was arbitrarily terminated without following the principles of natural justice and Rule of law and therefore, a particular order was passed but it must be remembered that even in that case it was nowhere laid down by the Apex Court that the respondent-Corporation was not entitled to terminate the contract. In that case in para 13, the Apex Court has observed as under:
The exercise of power of judicial review, however, depends upon the nature of and the right involved in the facts and circumstances of the particular case.
19.1 The learned Advocate for the respondent further cited before us the case of G.J. Fernandez v. State of Karnataka : [1990]1SCR229 . In that case also the facts are quite different. That would be quite clear from the head-note that the second consequence, indicated by This Court in earlier decision is not that the K.P.C. cannot deviate from these guidelines at all in any situation but that any variation, if made should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with or within from the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general.
19.2 He has also cited before us the case of Ms. Erusian Equipments & Chemical Ltd. v. State of West Bengal : [1975]2SCR674 . In that case the question of placing the name of a person in the black list without giving an opportunity of hearing to the said person was considered and it was held that placing the name of a person in the black list without giving an opportunity of being heard is arbitrary and illegal. Therefore, that case is also not applicable to the facts before us. The learned Advocate has also cited before us the case of New Horizons Ltd. and Anr. v. Union of India : (1995)1SCC478 . We have already referred to this case earlier. There is no dispute about the principles laid down in the said case. The Apex Court held that the action complained of could not be said to be arbitrary, irrational or irrelevant. In that case the question of consideration of tenders by the Evaluation Committee was considered by the Apex Court and the powers of judicial review by the Apex Court under Article 32 or by the High Court under Article 226 were considered. In that case there was clear involvement of public money and the doctrine of public element but in our opinion there is no such case in the case before us. In the case of Tata Cellular v. Union of India 1994 (6) SCC 651 the Apex Court has again considered the principles regarding exercising of judicial review by the Court. In that case also there was an occasion of involvement of public element and public money but there is no such case before us.
20. Thus, all the cases cited by the learned Advocate for the respondent are not applicable to the facts before us. In the case of Indian Oil Corporation v. Amritsar Gas Service : (1991)1SCC533 , the distributorship agreement with the Indian Oil Corporation by the respondent Amritsar Gas Service, was terminated. In that case, the arbitrator, had found that said termination was invalid and illegal and had, therefore, granted relief of restoration of distributorship. The Apex Court even had accepted said finding of breach of agreement by the Corporation and upheld said finding, but held that in view of the provisions of Sections 14(1)(c) of Specific Relief Act, but there is no question of granting any relief of restoration of distributorship. It is true that as has been urged by the learned Advocate for the respondent that in that case there was no raising of the question under Article 14 of the Constitution by the dealer and the parties had proceeded on the basis of breach of contract and the remedies flowing therefrom. But as stated earlier, from the material we are unable to hold that in the case before us there is an involvement of any public element so as to attract the provisions of Article 14 of the Constitution of India. Therefore, in view of the above consideration we are unable to hold that This Court can grant the relief which the respondent petitioner wants, viz., of getting the dealership contract by exercising power under Article 226 of the Constitution of India. When the Court cannot grant such a relief there was no purpose in asking the appellant to reconsider the claim of the respondent-original petitioner. Therefore, in the circumstances, we allow the present appeal but in view of the background and history of the litigation we do not think it proper to interfere with the order of costs ordered by the learned single Judge while allowing the said writ petition. We therefore, hold that present appeals are allowed. The order of the learned Judge except the order of directing the original respondents and both the appellants before us to pay costs of Rs. 10,000/ - to the original petitioner, is hereby quashed and set aside. The order of costs passed by the learned single Judge is maintained. The appellant in L.P.A. No. 1056 of 1996 is further directed to refund Rs. 1,000/- which was deposited by the original petitioner-respondent Parmar with 12 percent interest thereon from the date of deposit till the date of payment of the said amount within six weeks from today. Both the parties in both the appeals to bear their own costs.