CORAMTHE HONOURABLE MR v. IBP Company Ltd having its Regional Office at No.10

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 18-12-2007CORAMTHE HONOURABLE MR.JUSTICE M.CHOCKALINGAMW.P.No.28758 of 2007andMP No.2 of 20071.Kurshed Sharfudeen2.S.Hafez Khadar Ibrahim.. Petitionersvs1.IBP Company Ltd having its Regional Office at No.10, Mayor Ramanathan Road Chetpet, Chennai 31.2.The Divisional Manager IBP Company Ltd., Madurai Divisional Office Plot Nos.3 & 4, Ponmeni By-passRoad, Madurai 625 016.3.The Indian Oil Corporation Ltd., Rep. By its Divisional Manager Ponmeni N.H. 7, By-pass Road Madurai 625 016... RespondentsWrit petition filed under Article 226 of the Constitution ofIndia praying for a writ of certiorarified mandamus to call for therecords of the 3rd respondent herein relating to his proceedings madeunder Ref.No.CH4/9 COCO at S.No.152/4B, Pudukkottai North Panchayat,Alangudi Road, Pudukottai, dated 11.7.2007 and quash the same, andconsequently direct the third respondent to allot the retail outletdealership in respect of Alangudi Road, Pudukottai District, to thepetitioners herein.For Petitioners: Mr.M.PalaniFor Respondents: Mr.R.Ravi for RR1 & 2 Mr.Anand for M/s.Anand, Abdul andVinod Associates for R3 https://hcservices.ecourts.gov.in/hcservices/ ORDERChallenge is made to an order of the third respondent passed on11.7.2007, in Ref.No.CH4/9 COCO at S.No.152/4B, Pudukkottai NorthPanchayat, Alangudi Road, Pudukottai. The petitioners have broughtforth this petition seeking a writ of certiorarified mandamus.2.The affidavit in support of the petition along with thegrounds are perused. The Court heard the learned Counsel on eitherside,and the materials are also scrutinised. 3.As could be seen from the available materials and thesubmissions made by the learned Counsel for the petitioners, alicense to run a petrol outlet at Alangudi Road, Pudukottai, wasgranted to one Sumathi for a period of one year from 2002 to 2003,and it was renewed, and since she was sick, she could not furthercontinue the same, and she had got a proposal to sell the same.According to the petitioners, they purchased the said piece of landfor a heavy price, and they applied for the interview which was doneby the second respondent Corporation, pursuant to which a contractwas entered into between them originally for one year namely 2004-2005, and subsequently, it was renewed for 2005-2006 and also for aperiod of six months. While the matter stood thus, the impugnedorder was served upon the petitioners stating that the contract wasterminated, and the notice for that purpose will have its effectfrom 11.7.2007, and hence, necessary proceedings have got to befollowed, and the contract stood terminated from 10.8.2007.Aggrieved over the same, the petitioners have brought forth thiswrit petition before this Court.4.The learned Counsel for the petitioners with vigour andvehemence would submit that in the instant case, it is not incontroversy that originally, lease was granted in favour of oneSumathi for a period of one year; that since she could not continuedue to her sickness, the petitioners were permitted to run thepetrol outlet pursuant to an interview, and it has been subsequentlyrenewed; that the renewal documents if looked into, would clearlyindicate that it was not a license, but permission; that permissionand license cannot go together; that apart from this, the permissionoriginally what was granted and subsequently renewed, for no reasonsor fault on the part of the petitioners, was suddenly terminated;that needless to say that the undertaking of the third respondentCorporation is being done by the State, and thus, it has got mightybargain; that by exercise of that mighty bargain arbitrarily andwithout any reason whatsoever, it has terminated the contract inquestion, which it should not have done; that apart from that, inthe instant case, the petitioners have purchased the property for asum of Rs.22 lakhs from Sumathi, who was the original owner, andhave also been running the petrol outlet; and that this purchase wasmade and a rest room at a cost of Rs.3 lakhs was also constructedonly on the assurance given by the respondents that it would berenewed continuously; but, to their shock and surprise, it has beenterminated without any reason whatsoever. https://hcservices.ecourts.gov.in/hcservices/

5.The learned Counsel relied on the decisions of the Apex Courtto say that even in the case of fault, the Government cannot actarbitrarily and terminate the contract to the disadvantage of theperson in whose favour the contract was given; that in the instantcase, no fault of the petitioners is noticed; that the thirdrespondent has suddenly addressed a communication which is underchallenge; that nowhere it speaks about any mistake or reason orfault on the part of the petitioners, and under the circumstances,the Court has to come to the rescue by issuing a writ as one askedfor in this case. 6.The learned Counsel relied on Clause "r" of the contract,which reads that the M & H Contractor will inform the Company atleast 30 days in advance of the expiry date of the Licenses,permissions, etc. of the retail outlet to enable the Company torenew the same. The learned Counsel would further add that thepetitioners have purchased the land for a heavy price and madeimprovements on the assurance given by the respondents, and thus, itamounts to legitimate expectation.7.Contrary to the above contentions, the learned Counsel forthe respondents 1 and 2 relying upon the contract entered intobetween the parties, would submit that as per Clause 48, theagreement is only for a period of one year having effect from31.3.2006 to 30.3.2007 subject to the renewal by the year 2007 atthe Company's option at the same rates and on the same terms andconditions as contained in that agreement, and without prejudice tothe same, the agreement could be terminated at the option of eitherparty by giving at least one month's notice in writing to the otherparty without assigning any reason whatsoever; that after thelicense period as found in the agreement, was over on 30.3.2007, theimpugned order has been passed terminating the contract given to thepetitioners; that even that Clause would be binding on both theparties; that in addition to that, 30 days' notice has got to begiven for termination, and further, no reasons are necessary to beassigned; that under the circumstances, without assigning anyreason, the termination has been made, and under the circumstances,the contention put forth by the learned Counsel for the petitionerscannot be countenanced.8.Added further the learned Counsel that it was only a license;that there was no occasion for the Company to come forward to giveany assurance; that the petitioner could have purchased the land inorder to continue the outlet ever long; that even the contractentered into between the parties, would clearly reveal that if thereis any dispute between the parties, either of the party must gobefore arbitration and not before the Court of law; and that underthe circumstances, even assuming that the petitioners are aggrievedby the termination order, they should have gone for arbitration. 9.The learned Counsel relied on a decision of the First Benchof this Court in W.A.No.737 of 2007 dated 7.6.2007, and wouldfurther add that in the instant case, once the license period is https://hcservices.ecourts.gov.in/hcservices/ over, they are entitled to terminate the contract; that even as perthe agreement, it was understood between the parties; thataccordingly, it has been done, and hence, the writ petition has gotto be dismissed.10.The Court paid its anxious consideration on the submissionsmade and also looked into the materials available.11.This Court is afraid whether it could agree with the case ofthe petitioners herein. It is not in controversy that the land onwhich the outlet is being run, originally belonged to one Sumathi,and she was actually running the outlet pursuant to a license issuedin her favour. A very reading of the affidavit would make it clearthat it was only a license and not a lease. Admittedly, it wasgiven to the petitioners for a period of one year. It was renewedsubsequently and came to an end on 30.3.2007. Thus, it is clearthat there was a renewal. The learned Counsel for the petitionersrelied upon the word "renewal" used on the earlier occasion when thecontract was renewed. Nowhere in the entire contract entered intobetween the parties at the earliest or the present one entered intobetween the parties or the latest renewal, the word "lease" isfound; but, it was found either the license or the permission.Needless to say that the concept of license and lease are entirelydifferent. As could be seen, the petitioners cannot travel beyondthe Clauses what are found in the agreement entered into between theparties. Even Clause "r" relied on by the petitioners, would alsoreveal that it was only a license since it says that M & HContractor will inform the Company at least 30 days in advance ofthe expiry date of the licenses, permissions, etc. of the retailoutlet to enable the Company to renew the same. The contention putforth by the learned Counsel for the petitioners that the word"permission" is used and therefore, the case of the petitioners hasgot to be accepted cannot be countenanced in law since it was not alease, but only a license or permission. It would be more apt andappropriate to reproduce Clause 48 as follows:"48.The agreement will be for a period of ONE YEAReffective from 31.03.2006 TO 30.03.2007 subject to therenewal by the year 2007 at the Company's option at thesame rates, and on the same terms and conditions as areherein contained. Without prejudice to the aforesaid,this Agreement may be terminated at the option of eitherparty by giving at least one month's notice in writing tothe other party, without assigning any reason whatsoever.In case of breach of contract, the Company reserves theright to terminate this Agreement forthwith. Unlessotherwise mentioned or renewed in writing this Agreementstands automatically terminated at the end of theagreement period. If any information given by the M & HContractor in his application for appointment shall befound to be untrue or incorrect, in material respect, theCompany reserves the right to terminate this Contractforthwith." https://hcservices.ecourts.gov.in/hcservices/

12.The above Clause would clearly reveal that whenever theperiod of one year is over, it could be terminated, and one month'snotice is sufficient and no reasons to be assigned therefor. Underthe circumstances, such a notice has been issued validly terminatingthe contract. 13.As regards the contention put forth by the learned Counselfor the petitioners that they have purchased the property from theerstwhile owner for a fabulous price and also made developments onlyon the assurance made by the Company, no material is available toindicate the same; but, only the mere assertions are made by thepetitioners which are found in the affidavit, and the same cannot,but be to their advantage only. Merely because it was purchased forsuch a price and improvements have also been made, the petitionerscannot compel the respondents Company that the contract has got tobe renewed. 14.Apart from the above, the contention put forth by thelearned Counsel for the petitioners that it is a legitimateexpectation cannot be accepted by the Court even for a moment. Itwas only the fond hope of the petitioners without any vested right,and therefore, it cannot be stated to be a legitimate expectation inlaw. The mere fond hope or desire of a person to obtain a thing maynot amount to legitimate expectation. To call it as a legitimateexpectation, the expectation must be legitimate. In the instantcase, it is not so. Under the circumstances, all thecontentions put forth by the learned Counsel for thepetitioners do not carry any merit whatsoever.Accordingly, this writ petition fails and the same is dismissed. Nocosts. Consequently, connected MP is also dismissed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.nsv/To:1.IBP Company Ltd having its Regional Office at No.10, Mayor Ramanathan Road Chetpet, Chennai 31.2.The Divisional Manager IBP Company Ltd., Madurai Divisional Office Plot Nos.3 & 4, Ponmeni By-passRoad, Madurai 625 016. https://hcservices.ecourts.gov.in/hcservices/

3.The Indian Oil Corporation Ltd., Rep. By its Divisional Manager Ponmeni N.H. 7, By-pass Road Madurai 625 016.1 cc to Mr.M. Palani, Advocate, Sr. 750431 cc to M/s. Anand and Abdul and Vinodh, Advocate, Sr. 75668WP No.28758 of 2007SSV (CO)kk 3/1