Advocate with Mr. Anand Varma, Ms. Adyasha and Ms. Divita Vyas, Nanda Advocates v. BHARAT PETROLEUM CORPORATION LIMITED

Judgment

1. The present petition under Article 226 of the Constitution of India, 1950 has been filed seeking the following prayers:- issue writ of mandamus and certiorari or any other writ “a) quashing the Notice dated 08.10.2020 and all other directives pertaining to the same issue, issued by the . Respondent whereby the members of the Petitioner have been directed to disengage any Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 stand along Bank EDC Terminals and completely switch all Credit Card/ Debit Card Transactions to the EDC Terminal provided by the Respondent.; and/or issue a writ of mandamus or any other writ directing the b) Respondent to refrain from introducing and implementing any scheme/system which in any manner restricts or impinges upon the financial Petitioner and arrangements; and/or c) issue a writ of mandamus or any other writ directing the Respondent to refrain from requiring removal of EDC Terminals of the banks selected by the Dealers; and/or d) Pass any other order or orders as deemed fit and proper in the circumstances of the case and in favour of the Petitioner.” its members banking and other FACTUAL BACKGROUND

2. Necessary averments in the present petition are as follows:- i) The petitioner is an association, representing all petrol dealers of Delhi. It has over 380 members, who are petrol dealers of Bharat Petroleum Corporation Limited i.e. the respondent, Hindustan Petroleum Corporation Limited and Indian Oil Corporation Limited. Out of the total, about 102 members are dealers of the respondent. ii) The respondent is a public sector company dealing in Oil and Gas. The respondent enters into a Dispensing Pump and Selling License Agreement (for short “DPSL Agreement”) with its appointed dealers across the country, who set up petrol pumps for selling the respondent’s petroleum products. iii) The respondent introduced Integrated Payment Solution (for short “IPS”), wherein, all the fuel transactions and payments made by its dealers Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 were integrated through the respondent’s automation system. For the same, the respondent provided Android Point of Sale (POS) machine (Electronic Data Capture Terminal), which was used to pick signals from Multi-Product Dispensers (MPDs)/ Forecourt Controller (FCCs) on the fuel transactions and debit the equivalent amount from the Debit card/ Credit card/ UPI wallet of the customer for the amount fuelled. iv) The said Android (POS) machines (Electronic Data Capture Terminal) are operated through Pine Labs Private Limited (for short “Pine Labs”) and AGS Transact Technologies Limited (for short “AGS”) and the payment gateway for the same is via HDFC Bank and RBL Bank. These terminals were installed in addition to the dealer’s existing terminals, which were installed by the dealers through their banks. v) On 11.10.2019, one of the respondent’s official sent an E-mail to the dealers, informing them that in the new implemented IPS, there will be no rental charge recoveries on the integrated Electronic Data Capture machines, irrespective of the make of the Electronic Data Capture Terminal (for short “EDC Terminal”) or the number of EDC Terminals deployed at a particular retail outlet (for short “RO”). vi) However, the respondent raised invoices towards rental of the EDC Terminals installed by them. Refuting to the same, the dealers wrote to the respondent informing them about turnaround its earlier communication dated 11.10.2019 and seeking reversal of such charges. Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 vii) The respondent vide E-mail dated 18.04.2020, shared the details of the respondent’s Policy, whereby rental charges were made applicable on the EDC Terminals. It also informed that all of its communication prior to December 2019 with respect to rental recoveries on IPS enabled EDC Terminals stands withdrawn. viii) Thereafter, the respondent informed their dealers that they can only use the respondent’s EDC Terminals of Pine Labs and AGS and no other EDC Terminals can be used by them. The dealers were also asked to remove all other standalone EDC Terminals provided by other banks from their respective outlets. Opposing the same, dealers wrote to the respondent criticizing their advice to disengage and remove any standalone EDC Terminal installed by them and completely switching to the EDC Terminal of Pine Labs and AGS provided by the respondent. ix) However, disregarding the objections raised by the dealers, the respondent wrote to various banks and directed them to remove their standalone EDC Terminals installed at the ROs and to not install any EDC Terminal at any RO in future. The Banks were also informed that the reimbursement of digital incentives and Merchant Discount Rates (for short “MDR”) for installed terminals will be stopped. x) Subsequently, the respondent vide notice dated 08.10.2020 (for short “Impugned Notice”) directed their dealers to remove all other EDC Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 Terminals by 17.10.2025 and to completely switch to the EDC Terminals provided by the respondent i.e. EDC Terminals of Pine Labs and AGS. xi) The petitioner representing its members/ dealers of the respondent vide letter dated 12.10.2020, objected to the implementation of respondent’s directives dated 08.10.2020 and sought withdrawal of the same and consequent information to the banks. But it went in vain. xii) Hence, the present petition has been preferred assailing the Impugned Notice dated 08.10.2020. xiii) During the pendency of the present petition, the learned Single Judge of this Court vide order dated 15.10.2020 stayed the operation of the Impugned Notice. SUBMISSIONS ON BEHALF OF THE PETITIONER

3. At the outset, learned Senior Counsel for the petitioner clarified that the present matter doesn’t pertain to payment made by the dealers to the respondent against purchase of fuel, since, fuel is purchased from the respondent by its dealers by making 100% payment in advance of the delivery of fuel. In fact, learned Senior Counsel submits that the present matter concerns itself with the manner of collection of payment by the dealers from their own customers.

4. Further, learned Senior Counsel for the petitioner in support of the Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 present petition made following submissions:- i) Once the respondent delivers the fuel to its dealers against 100% advance payment, the respondent does not have any nexus with the manner in which the dealers receive payment from its customers. ii) The decision made by the respondent vide Impugned Notice dated

08.10.2020, entails that the dealers are compelled to bank only with the HDFC Bank and RBL Bank, as only these Banks provide the payment gateway for the EDC Terminals provided by the respondent. iii) The petitioner’s members/ respondent’s dealers have an existing banking relationship with various banks and they avail credit facilities from such banks to facilitate their businesses. Under the terms of such credit facility, the dealers have to do all their transactions through the bank such facility is availed, including usage of their payment gateway. Thus, the respondent’s directive vide Impugned Notice will cause the dealers to stop transaction with their existing banks and breach the terms of agreement with their existing banks. iv) Electronic Data Capture system was implemented for improving the consumer convenience. However, there is no nexus between the said objective and the respondent’s directive vide Impugned Notice. The respondent by limiting the access of its dealers to EDC Terminals of only HDFC Bank and RBL Bank, have just disrupted the credit lines of the dealers with other banks. Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 v) Earlier, when EDC Terminals of other service providers (eg. PayTM) were used, money was credited in the dealer’s accounts on the same day and cash flows were steady. However, with EDC Terminals of HDFC Bank and RBL Bank, the dealers have to wait for money to be credited for one whole day (or two days in case of Sunday/ gazetted holiday), which, in turn, affects the dealers’ cash flow to make full advance payment of fuel to the respondent. vi) The EDC Terminals of various banks with whom the dealers have pre- existing arrangements were free of any rental/ ancillary charges. However, the respondent initially represented that their EDC Terminals would be rent-free, but later turnaround from their own statement and now, they are directing that the dealers have to pay rental charges of Rs. 250 per month for each EDC Terminal provided by the respondent. Further, HDFC Bank provides its standalone EDC Terminal free of cost but respondent is charging rental for such usage from its dealers. Thus, the directive of the respondent puts an unreasonable burden of rental cost on the dealers, for usage of respondent’s EDC Terminals. Also, their EDC Terminals doesn’t provide service support like paper rolls/ consumables etc. which are provided free of cost by other banks. vii) Central Government envisaged that the MDR (which is a rate charged for payment processing of debit and credit card transactions) would be borne by the Oil Marketing Companies such as the respondent. Thus, irrespective of identity of the bank, MDR is adjusted between the respondent and the Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 banks, who are providing the EDC Terminal. However, the respondent in order to tie-up with only HDFC Bank and RBL Bank, informed other banks that reimbursement of MDR charges would be stopped, if their standalone EDC terminals were not deactivated/ discontinued at respondent’s ROs. This in turn, means that the dealers would have to incur such charges causing additional financial burden on them. viii) The respondent’s directive vide Impugned Notice has created an artificial distinction between the HDFC Bank and RBL Bank, whose EDC Terminal is being provided by the respondent on one hand and the remaining scheduled Banks approved by RBI on the other hand. This distinction has no reasonable nexus with the object that the respondent purports to achieve by implementing IPS i.e. consumer convenience and plugging of certain

purported malpractices arising out of manual intervention in standalone EDC Terminals. ix) Respondent imposed IPS for digital transactions through credit/ debit cards, however, since digital transactions constitute only a minor part of a dealer’s total transactions and a major part of fuel sales to customers are through other modes such as cash and recently UPI, the imposition of IPS by the respondent constitutes an unreasonable and disproportionate restriction on the dealers’ right to carry on businesses and avail banking facilities from banks of its own choice and terms. Thus, the real purpose behind the Impugned Notice is not the professed customer convenience but the respondent’s commercial benefit through its private arrangements. The said Signature Not Verified Digitally Signed By:SHIWANI NEGI Signing Date:23.12.2025 18:43:43 W.P.(C) 8031/2020 constitutes unreasonable interference in the dealers’ freedom to conduct their businesses and it will lead to creation of monopoly for POS transactions to be compulsorily made only through HDFC Bank and RBL Bank. x) The EDC Terminals provided by the respondent are issued by Pine Labs and AGS. Both the Pine Labs and the AGS EDC Terminals are linked to HDFC Bank and RBL Bank. The amounts paid through these EDC Terminals gets deposited in an account with HDFC Bank or RBL Bank. Forcing the dealers to use the EDC Terminals of Pine Labs and AGS, leave them with no option but to transact with a bank of respondent’s choice only. Thus, the directive of the respondent amounts to imposition of an unreasonable restriction on the dealers and directly interferes with their right to carry on their businesses. xi) The restrictions placed by the respondent on its dealers’ right to carry on businesses, do not meet the standards of reasonableness and proportionality required under Article 19(2) of the Constitution. It is a well settled law that restriction on fundamental right under Article 19(1)(g) has to be reasonable, proportionate and “least restrictive”. Reliance for the same, is placed upon the judgments of the Hon’ble Supreme Court in Om Kumar v. Union of India1 and Akshay N Patel v. Reserve Bank of India2. Further, restriction on fundamental right under Article 19(1)(g) must be by “law” under Article 13, as held in Bijoe Emmanuel v. State of Kerala3.