Calcutta High Court (Appellete Side)
Prasanta Kumar Bhattacharya And Anr vs The Hindustan Petroleum Corporation … on 2 March, 2026
Author: Supratim Bhattacharya
Bench: Sabyasachi Bhattacharyya, Supratim Bhattacharya
2026:CHC-AS:355-DB
In the High Court at Calcutta
Civil Appellate Jurisdiction
Appellate Side
The Hon'ble Mr. Justice Sabyasachi Bhattacharyya
And
The Hon'ble Mr. Justice Supratim Bhattacharya
F.M.A. No. 686 of 2025
with
IA No: CAN 1 of 2025
And
IA No: CAN 2 of 2025
Prasanta Kumar Bhattacharya and Anr.
Vs.
The Hindustan Petroleum Corporation Limited and Ors.
For the appellants : Mr. Anirban Bose,
Mr. Sourath Dutta,
Mr. Amar Krishna Saha,
Mr. Satyajit Senapati,
Mr. Nayan Chowni.
Ms. Smita Singh
Mr. Rahul Nag
For the respondent No.1 to 4 : Mr. Biswanath Chatterjee,
Ms. Sayonee Bera,
Mr. S.K. Pathak.
` Mr. Soham Krishna Chatterjee
Mr. S. Basu
Heard on : 22.01.2026, 29.01.2026,
12.02.2026, 19.02.2026
Reserved On : 19.02.2026
Judgment on : 02.03.2026
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Sabyasachi Bhattacharyya, J.:-
1. The present appeal has been preferred against a judgment dated March
13, 2025 passed in WPA No. 2924 of 2025, dismissing the said writ
petition.
2. The backdrop of the case is as follows:
3. On November 5, 2020, a Letter of Intent was issued by the respondent
no.1/corporation in favour of and writ petitioners/appellants, granting
license to the latter to run a retail petrol pump/dealership outlet.
Pursuant thereto, on November 30, 2025, a formal Letter of
Appointment (LOA) was issued in favour of the appellants for MS/HSD
retail outlet dealership at a location within 5 Km from Kalachara Post
Office towards Arambagh on State Highway 15, in the District of
Hooghly, West Bengal under the „Open Category‟. On the same day, a
dealership agreement was also entered into between the parties in that
regard.
4. On January 31, 2025, an LOA was issued in favour of the respondent
no.6 in respect of another plot of land located on the same State
Highway, between Chanditala-II BDO Office and Bank of India,
Duttapur Branch, on both sides of the State Highway. Consequentially,
a dealership agreement was also entered into between the
respondent/HPCL (Hindustan Petroleum Corporation Limited) and
respondent no.6.
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5. The appellants challenge such grant dealership to the respondent no.6
primarily on the ground of legitimate expectation and violation of Article
19(1)(g) of the Constitution of India.
6. Learned counsel for the appellants argues that Clause 7 of the
dealership agreement of the appellants, which permits the respondent
no.1/HPCL to appoint any dealer at any place as they deem fit, is
unconscionable and arbitrary, since it provides unfettered rights to one
of the parties to the contract while saddling the other (appellants) with
numerous terms negating them from conducting any other business.
7. Secondly, the appellants contend that through the execution of the
dealership agreement in favour of the appellants, HPCL has created an
expectation of benefit arising expressly from their administrative
decision to enter into such dealership. Thus, the appellants have a
reasonable cause to have legitimate expectation, based on established
practice, to benefit from the retail dealership, as recognized by the legal
relationship between the parties. It is contended that the grant of
license to respondent no.6 violates such legitimate expectation.
8. In support of his submissions, learned counsel for the appellants cites
Rajeev Suri v. Delhi Developmnt Authority & Ors., reported at (2022) 11
SCC 1.
9. Learned counsel for the appellants further contends that although the
respondent no.1/HPCL seeks to argue that the award of fresh license
was a policy decision, no specific policy has been placed before this
Court, whereas it was well established that any public policy
promulgated has to be reasonable and non-arbitrary. It is contended
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that the distribution of State largesse, including but not limited to
licenses and dealerships, stands on a different footing than that of a
private individual as they require a higher degree of fairness in action.
Such distribution, it is submitted, cannot be prompted by arbitrary or
irrational policies.
10. In support of the above proposition, learned counsel cites Punjab State
Cooperative Milk Producers Federation Limited & Anr. v. Balbir Kumar
Walia & Anr. reported at (2021) 8 SCC 461 and State of Madhya
Pradesh v. Mala Banerjee reported at (2025) 7 SCC 698.
11. It is next contended alternatively by the appellants that even if the
respondent no.1/HPCL had the power to grant fresh license, the same
is not an unfettered right and has to be exercised reasonably, without
being tainted by any arbitrariness, capriciousness or whims.
12. In the present case, the grant of license to respondent no.6, it is
argued, is arbitrary in nature. In such context, learned counsel cites
B.P. Singhal v. Union of India and Anr. reported at (2010) 6 SCC 331 and
ABL International Ltd and Anr. v. Export credit Guarantee Corporation of
India ltd. and Ors. reported at (2004) 3 SCC 553.
13. Learned counsel for the appellants submits that the administration of
State Highways cannot operate in a vacuum of law. Since there exists
no notification that governs the placement of retail dealerships on State
Highways, it is contended that the respondent no.1 cannot have the
benefit of such absence of law. Even if the provision for making the
such law exists, this Court, it is argued, ought to step in and fashion
remedies in the form of directives or guidelines as it deems appropriate
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where there is a vacuum in law-making, in order to protect the
fundamental and other Constitutional rights of the appellants.
14. Learned counsel cites Dayaram v. Sudhir Batham & Anr. reported at
(2012) 1 SCC 33 and Chairman, Rajasthan State Road Transport
Corporation and Ors. v. Santosh and Ors. reported at (2013) 7 SCC 94 in
support of the above proposition.
15. Learned counsel for the appellants lastly argues that the impugned
action of the respondent no.1 has violated the right of the appellants to
practise their trade and business. The award of fresh license of the
respondent no.6, it is submitted, deeply impacts the livelihood of the
appellants, which in turn affects their right to life.
16. Learned counsel appearing for the appellants submits that the contract
between the parties is a standard form of contract, the benefit of which
should be afforded to the appellants to safeguard their business. The
appellants cite, in support of such proposition, Olga Tellis & Ors. v.
Bombay Municipal Corporation & Ors. reported at (1985) 3 SCC 485 and
Senior Divisional Commercial Manager, South Central Railways & Ors. v.
S.C.R. Caterers, Dry Fruits, Fruit Juicestalls, Welfare Association & Anr.
reported at (2016) 3 SCC 582.
17. Thus, the appellants argue that the impugned judgment, whereby their
writ petition was dismissed, ought to be set aside.
18. While controverting the submissions of the appellants, the learned
counsel appearing for the respondent nos. 1 to 4 submits that during
pendency of the writ petition before the learned Single Judge, an LOA
and a dealership agreement, both dated January 31, 2025, have been
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issued and executed respectively by the HPCL in favour of the
respondent no.6.
19. Learned counsel for the respondent nos. 1 to 4 submits that the
Guidelines/Norms dated March 26, 2020, for grant of permission for
construction of access fuel stations, wayside amenities, connecting
roads, other property, rest area complexes and such other facilities,
sought to be relied on by the appellants before the writ court and this
court, is not at all applicable in respect of a State Highway. The HPCL,
it is submitted, only has to obtain a „No Objection‟
Certificate from the concerned District Magistrate for grant of
dealership licenses, which has been done in the present case.
20. The dealers who are appointed have to obtain explosive license, fire
license and license under the West Bengal Motors and Spirit and High
Speed Diesel (LRS) Order, 2020 from the respective departments of the
Government of India and the Government of West Bengal, which have
also been obtained by respondent no.6.
21. The appellants‟ case of infringement of Article 19(1)(g) of the
Constitution, it is argued, has not been substantiated at all. It is
argued that National Highways come under the List I of the Seventh
Schedule of the Constitution of India, whereas State Highways come
under List II of the Seventh Schedule. Under List III (Concurrent List),
State Highways are not enumerated.
22. Thus, it is contended that the Guidelines pertaining to National
Highways, issued by the Central Government or its instrumentalities,
are not binding with regard to State Highways at all.
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23. Relying on Section 2(c)(ii) of the West Bengal Highways Act, 1964 (for
short, "the State Act"), it is argued that the said Act, governing State
Highways, specifically excludes National Highways from its operation.
Under Section 2(2) of the National Highways Act, 1956 (hereinafter
referred to as "the Central Act"), on the other hand, the Central
Government may, by notification in the Official Gazette, declare any
other highway to be a National Highway and on the publication of such
Notification, such Highways shall be deemed to be specified in the
Schedule thereof. Thus, no provision relating to National Highways can
be made applicable to State Highways.
24. It is further argued that the dealership agreement dated November 30,
2020, between HPCL and the appellants, has not been challenged in
the present lis; rather, the appellants have been enjoying the full
benefit under such agreement and are generating substantial revenue
therefrom. Thus, the appellants cannot now turn around and challenge
a clause of the said agreement.
25. Learned counsel for the HPCL cites Nataraja Agencies, rep. By its
Proprietor G Natarajan, Dealer, Indian Oil Corporation Ltd,. Pondicherry
vs. The Secretary, Ministry of Petroleum & National Gas, Government of
India, New Delhi Others, reported at 2005 (1) CTC 394, where it was
held that the writ petitioner/appellant therein had no locus standi at all
to complain against setting up of a rival retail outlet by the 4th
respondent therein near his place of business on the ground that it
could affect the business interest of the writ petitioner/appellant. It was
further held that merely because some of the customers may switch
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over to the rival retail outlet does not mean that public interest will
suffer; rather, in the opinion of the court, it would benefit the
customers when there is competition.
26. Learned counsel, in support of the proposition that the court should
not resort to second-guessing in case of Government contracts and
tenders unless there is arbitrariness of mala fides but must defer to the
understanding and appreciation of the tender documents of the
Government, cites the following judgments:
i) Galaxy Transport Agencies Contractors, Traders, Transports &
Suppliers v. New J.K. Roadways, Fleetowners & Transport
Contractors & Others] reported at 2020 SCC OnLine Sc 1035 [=
(2021) 16 SCC 808],
ii) [Agmatel India Pvt. Ltd. v. Resoursys Telecom & Others]. -DB,
Reported at (2022) 5SCC 362,
iii) [N.G. Projects Ltd. v. Vinod Kumar Jain & Ors.]-DB reported at
(2022) 6 SCC 127, and
iv) [Bansidhar Construction Pvt. Ltd v. Bharat Cooking Coal Ltd and
Others]-DB reported at (2024) 10 SCC 273
27. Learned counsel next cites Mithilesh Garg and Ors v. Union of India and
Ors. reported at (1992) 1 SCC 168 where it was held that the right
under Article 19(1)(g) of the Constitution does not extend to shutting
out competition; public interest, it was held, is served by healthy
competition and the legislative policy under the Act cannot be
challenged on such grounds.
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28. As such, learned counsel submits that the appeal ought to be
dismissed.
Legitimate Expectation
29. The doctrine of legitimate expectation, as discussed in Rajeev Suri
(supra)1, cited by the appellants themselves, was opined by the Hon‟ble
Supreme Court not to convey a tangible right but to be a mere
expectation of fair and reasonable treatment. It was held that the
legitimacy of the expectation would strictly depend upon the facts and
circumstances of the case, particularly on whether or not the absence
of a procedural step had led to failure of fairness. Legitimate
expectation was held to be a locus-based principle and not meant to
assuage the expectation of those whose interests are unaffected by the
decision. The Hon‟ble Supreme Court observed that it is easy to form an
expectation, but difficult to find a legitimate basis for such expectation.
30. More importantly, in Rajeev Suri (supra)1, the Hon‟ble Supreme Court
observed that such expectation gets developed only on the basis of an
established practice in the context of the decision being taken and in
the context of the body taking the decision. In the said case, the
Hon‟ble Supreme Court held that the petitioners had not demonstrated
any practice which has been deviated from.
1
Rajeev Suri v. Delhi Development Authority & Ors., reported at (2022) 11 SCC 1.
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31. Applying the same tests to the present case, the appellants, with their
eyes wide open, entered into a commercial transaction with the HPCL
by obtaining the license to run a retail fuel outlet/dealership, for the
purpose of earning profits. The terms of the said licence were
crystallised in the dealership agreement dated November 30, 2020.
Thereafter, the appellants merrily continued to take full advantage of
the license obtained under such agreement, and to earn revenue
therefrom by operating their fuel business till January 31, 2025, when
an LOA was issued and a dealership agreement entered into between
HPCL and the respondent no.6, a rival dealer of the appellants.
32. Thus, the rights of the appellants, if any, emanate in the present case
exclusively from the dealership agreement entered into between the
parties, of which the appellants took full advantage all along by reaping
benefits therefrom. Hence, there is no scope of applying the doctrine of
legitimate expectation, since the appellants have miserably failed to
show any "established practice" of whatsoever nature (which is a sine
qua non for claiming legitimate expectation) pertaining to restrictions
regarding distance in grant of dealership licenses adjacent to State
Highways in the State of West Bengal.
33. The Notification dated September 25, 2003, issued by the Government
of India, Ministry of Road Transport and Highway, relied on before the
learned Single Judge in the writ petition, was issued by the Central
Authorities entirely in respect of National Highways. Admittedly, there
are no regulations stipulating the minimum distance between fuel retail
outlets adjacent to State Highways, nor do the provisions of the
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aforesaid Central Notification apply to State Highways. Hence, there is
no "established practice‟‟ restricting opening up of new retail fuel
outlets within any particular distance from the existing outlets in
respect of State Highways. Thus, even going by the ratio of Rajeev Suri
(supra)2, the doctrine of legitimate expectation is not applicable to the
present case at all.
Clause 7 of the dealership agreement dated November 30, 2020
between HPCL and the appellants
Clause 7 of the aforesaid dealership agreement is set
out below:
"Nothing contained in this agreement shall be construed
to prohibit the Corporation from making direct and/or
indirect sales to any person whomsoever or from
appointing other dealers for the purpose of direct or
indirect sales at such place or places as the Corporation
may think fit. The dealer shall not be entitled to any
claim or allowance for such direct or indirect sales."
34. Although not referred to in the written notes of arguments of the
appellants, learned counsel for the appellants relied on two decisions
during his oral arguments, which are considered below.
35. In Vijay Bank and Anr. v. Prashant B Narnaware, reported at (2025) AIR
SC 2820, it was held that restrictive covenants in public sector
employment contracts for minimum tenure or liquidated damages upon
2
Rajeev Suri v. Delhi Developmnt Authority & Ors., reported at (2022) 11 SCC 1.
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premature resignation are valid if reasonable and not unconscionable,
unfair or against public policy.
36. However, the context of the said judgment is entirely different from the
present case, as we are dealing in the case at hand with a commercial
contract between the appellants, who are commercial entities, and the
HPCL/respondent no.1, and not an employment contract. The premise
of the Vijay Bank (supra)3 judgment was the bar under Section 27 of the
Indian Contract Act, which is set out below:
"27. Agreement in restraint of trade, void.--Every
agreement by which any one is restrained from
exercising a lawful profession, trade or business of any
kind, is to that extent void.
Exception 1.--Saving of agreement not to carry on
business of which good-will is sold.--One who sells the
goodwill of a business may agree with the buyer to refrain
from carrying on a similar business, within specified local
limits, so long as the buyer, or any person deriving title to the
goodwill from him, carries on a like business therein:
provided that such limits appear to the Court reasonable,
regard being had to the nature of the business."
*****
37. The restraint on the employees of Government instrumentalities in the
public sector, with regard to minimum tenure of service and default
clauses of payment of liquidated damages, was under consideration in
the said judgement. However, the Hon‟ble Supreme Court observed in
the said decision that such restrictive covenant was neither
unconscionable nor unfair or unreasonable and therefore was not in
contravention of public policy. The ratio laid down in the said report
3
Vijay Bank and Anr. v. Prashant B Narnaware, reported at (2025) AIR SC 2820
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has nothing to do with the context of the present case and, as such, the
reliance on the same by the appellants is misplaced.
38. Again, in Central Inland Water Transport Corporation Limited And Anr. v.
Brojo Nath Ganguly and Anr., reported at (1986) 3 SCC 156, the
question which fell for consideration before the Hon‟ble Supreme Court
was whether allegedly arbitrary termination rules which violate public
policy and Article 14 would be deemed to be void. The context of
consideration there was a challenge to Rule 9(i) of the Central Inland
Water Transport Corporation Limited‟s Service Rules allowing
termination of permanent employees‟ services with three months‟ notice
or pay in lieu thereof without assigning reasons or holding an enquiry.
The said Rule was held, in the context of gross inequality of bargaining
power between the Corporation and its employees, to be
unconscionable and opposed to public policy, thus being void under
Section 23 of the Indian Contract Act.
39. However, there is no applicability of Section 23 of the Indian Contract
Act at all in the present case. The dealership agreement between the
parties is a commercial contract and the appellants have taken full
advantage thereof for at least a period of more than four years before
challenging the same. It is not the allegation of the appellants that they
have been restricted in reaping the fruits of the said agreement by retail
sales of fuel in any manner whatsoever by the respondent no.1/HPCL.
Accordingly, the appellants, who took advantages all along of the
provisions of the dealership agreement, cannot now resile and challenge
an essential clause of the said contract. Even otherwise, Clause 7 does
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not incorporate any restriction whatsoever to the unfettered sale of fuel
from the appellants‟ retail outlet in terms of the dealership agreement
with HPCL. Rather, Clause 7 retains the otherwise-available right of the
HPCL to make direct and/or indirect sales to any person whomsoever
and from appointing other dealers for the purpose of such sales at such
place or places as the Corporation may think fit. A bare reading of the
said clause, thus, only finds a reflection and reiteration of the rights
which were already available to HPCL and no imposition of any fetter
whatsoever on the business being done by the appellants. Thus, there
is nothing “unconscionable” about Clause 7 and, as such, the said
clause cannot be permitted to be challenged by the appellants by
culling out the same from the rest of the dealership agreement,
particularly after the appellants having acted on the same and having
derived the benefit of the dealership agreement all along.
Whether any fundamental right of the appellants has been
violated
40. In order to be violated, the appellants had to plead in the first place a
fundamental right of theirs which has been infringed by grant of license
to respondent no.6, furnishing cause of action for a writ petition.
41. By mere grant of dealership to a different entity, the right of the
appellants under Article 19(1)(g) of the Constitution cannot be said to
have been curtailed in any manner whatsoever.
42. Article 19 (g)(1) of the Constitution recognises the fundamental rights to
all citizens to practice, inter alia, any trade or business. However, the
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right to practice any trade or business does not include the right to
earn more profit, which falls within the domain of laissez faire market
competition. The profits of business are governed by market forces in
commercial matters and do not, per se, form the basis of any
fundamental or legal right of a trader/businessperson to earn more
profits as opposed to other rivals.
43. In such context, a reference to the Division Bench judgment of the
Madras High Court in Nataraja Agencies (supra)4 would be profitable.
The Madras High Court, by relying on Mithilesh Garg (supra)5 , held that
a rival businessman cannot file a writ petition challenging the setting
up of a similar unit by another businessman, on the ground that the
establishment of a rival business close to his business place would
adversely affect his business interests, even in the setting up of a new
unit is in violation of law. The Division Bench of the Madras High Court
further considered that in Mithilesh Garg (supra)6, the Hon‟ble Supreme
Court followed its earlier decision in The Nagar Rice and Flour Mills and
Ors. v. N.T Gowda and Bros and Ors., reported at 1970 (1) SCC 575,
where it was held that a rice mill owner has not locus standi to
challenge under Article 226 the setting up of a new rice mill by another,
even if such setting up is in contravention of the concerned Act,
because no right vested in such applicant is infringed.
4
Nataraja Agencies rep. By its Proprietor, G Natarjan, Dealer, Indian Oil Corporation
Ltd,. Pondicherry vs. The Secretary, Ministry of Petroleum & National Gas,
Government of India, New Delhi Others reported at 2005 (1) CTC 394,
5
Mithilesh Garg and Ors v. Union of India and Ors. reported at (1992) 1 SCC 168
6
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44. In Mithilesh Garg (supra), which was relied on by the Division Bench of
the Madras High Court, the Hon‟ble Supreme Court categorically
observed, in a case where stage carriage operators on different routes
holding permits granted by the Regional Transport Authority had
challenged the liberalisation of private sector operations in the route
transport field, that there was no threat of any kind whatsoever from
any authority to the enjoyment of the existing carriage operators‟ right
to carry on their occupation. They were held to be in full enjoyment of
fundamental rights guarantee under Article 19(1)(g) of the Constitution
and it was observed that there was no infringement of such right at all.
45. Again, in The Nagar Rice and Flour Mills (supra)7, the challenge to grant
of permits to set up business of rice mills to new entrants in the field by
existing mill owners was turned down on similar lines.
46. Following the above principles, no fundamental or legal rights of the
appellants have been infringed at all by grant of license to respondent
no. 6 and, as such, the contention of the appellants regarding their
perceived infringement of Article 19(1)(g) of the Constitution is illusory
and not tenable.
47. In fact, in the event grant of similar dealership was refused to
respondent no. 6, the latter could have alleged infringement of Article
14 of the Constitution of India by such refusal in an arbitrary and
unreasonable manner.
7
The Nagar Rice and Flour Mills and Ors. v. N.T Gowda and Bros and Ors., reported
at 1970 (1) SCC 575
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Applicability of the Notification dated September 25, 2003,
issued by the Government of India, Ministry of Road and
Transport of Highways and the argument of ‘legal vacuum’
48. Section 2 (c) of the State Act clearly excludes National Highways from
the purview of the said Act. The scheme of the State Act clearly
indicates that it is the said statute which governs State Highways.
Admittedly, the infraction of the perceived rights of the appellants,
alleged herein, pertain to a State Highway and, as such, governed by
the said Act.
49. On the other hand, Section 2(2) of the Central Act governs National
Highways. Learned counsel for the HPCL is also justified in pointing out
that whereas National Highways are covered by List I (Union list) of the
Seventh Schedule of the Constitution and State Highways by List II
(State list), State Highways are not included under List III (Concurrent
List).
50. Thus, there is not an iota of doubt that the Notification issued on
September 25, 2003 by the Ministry of Road Transport and Highways,
Government of India pertains only to National Highways.
51. The “legal vacuum” argument of the appellants is flimsy, since in the
first place there is no vacuum in field of administration of State
Highways. The Courts have traditionally resorted to judicial activism by
filling in gaps and issuing directives/guidelines in order to ensure the
protection and preservation of fundamental rights of citizens where
there is a void in legislation in the concerned field. In the present case,
the lack of any specific rules stipulating the minimum distance between
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two fuel outlets adjacent to State Highways does not infringe any
fundamental, Constitutional or legal right of fuel outlet dealers or the
public at large. Rather, such lack of restrictions would encourage
competition among similarly-placed dealers, which would ultimately
benefit the public at large by ensuring quality control and better prices.
52. It is a matter of policy of the State as to whether or not to impose
restrictions regarding setting up of rival businesses within particular
zones marked by distance. Courts, it is well-settled, ought not normally
to enter into the domain of exclusive policy decisions of the State
through the device of judicial review, particularly where there is no
infraction or infringement of any legal or Constitutional right and there
is no palpable arbitrariness or unreasonableness in State
action/inaction.
53. None of the judgments cited by the appellants are relevant at all in the
present context.
54. The reliance of the appellants on Dayaram (supra)8 is entirely misplaced
in the context. In the said judgment, the Hon‟ble Supreme Court was
considering a legislative vacuum in respect of benefits extended to the
Scheduled Castes and Tribes.
55. In fact, the judgments relied on by the Hon‟ble Supreme Court in
Dayaram (supra)8 were all in the context of situations where there was a
legal vacuum in respect of enforcement of fundamental rights,
particularly in respect of the marginalized sections of Society. The
8
Dayaram v. Sudhir Batham & Anr. reported at (2012) 1 SCC 33
19
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Hon‟ble Supreme Court had stepped in to fill up the vacuum by issuing
appropriate directions in such cases.
56. In the case of Chairman, Rajasthan State (supra)9 as well, the Hon‟ble
Supreme Court was considering a legal vacuum regarding complete
liability of providing compensation in a vehicular accident. In the said
context, the Hon‟ble Supreme Court took into account cases where the
courts in India issued certain directions to meet such exigency, some of
them admittedly legislative in nature, only to fill up the existing
vacuum, till the legislature enacts a particular law to deal with the
situations.
57. In the present case, however, the State Legislature has deliberately
chosen, in its wisdom, not to pass any specific law imposing
restrictions on free trade through the grant of dealerships and licenses
to retail fuel outlets to commercial entities, by imposing fetters in
respect of distance between different such outlets. The matter pertains
entirely to the economic policy of the State and there cannot be any
assumption that such policy is tainted by unreasonableness and/or
arbitrariness. In fact, the lack of restrictions in the present case
encourages competition, which has been upheld by the Hon‟ble
Supreme Court in the judgments referred to above.
58. In Olga Tellis (supra)10, the Hon‟ble Supreme Court was dealing with the
Constitutional right of the pavement dwellers and inhabitants of slums
9
Chairman, Rajasthan State Road Transport Corporation and Ors. v. Santosh and
Ors. reported at (2013) 7 SCC 94
10
Olga Tellis & Ors. v. Bombay Municipal Corporation & Ors. reported at (1985) 3
SCC 485
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in the city of Bombay to a life of dignity. The Hon‟ble Supreme Court
observed that men and women who were living in the midst of filth and
squalor had come to the Court to ask for a judgment so that they
cannot be evicted from their squalid shelters without being offered
alternative accommodation. The situation of the petitioners therein
cannot, by any stretch of imagination, be compared with that of the
present appellants, who are fully commercial entities earning profits
from a retail fuel outlet.
59. In the S.C.R. Caterers’ Case (supra)11, a catering policy decision of the
Railways in not granting renewal of license was under challenge on the
ground of arbitrariness, unreasonableness and unfairness and
discrimination, invoking Article 14 of the Constitution. In such context,
the Hon‟ble Supreme Court upheld the principle that public property is
to be dealt with for public purpose and public interest.
60. As opposed thereto, in the present case we are looking at the so-called
right of an individual commercial entity to earn more profits from a
retail fuel outlet. The right to carry on such business and earn profits
therefrom is not even affected by the impugned action, but similar right
has been conferred on a business rival of the appellants. There is no
public element involved at all here; rather, the public interest would be
subserved if competition is encouraged by granting licenses to multiple
entities, which would enure to the benefit of the public at large by
11
Senior Divisional Commercial Manager, South Central Railways & Ors. v.
S.C.R. Caterers, Dry Fruits, Fruit Juicestalls, Welfare Association & Anr.
reported at (2016) 3 SCC 582.
21
2026:CHC-AS:355-DB
increasing competition and, thereby, ensuring the standard and quality
of the products sold as well as the reasonableness of the price of such
products.
61. As discussed above, there is no infringement of the fundamental right
of the appellants to do business, as envisioned in Article 19(1)(g) of the
Constitution, since nothing in the impugned act of grant of license to
respondent no.6 infringes the right of the appellants to do business
from their retail outlet/dealership in an unfettered manner.
62. The reliance of the appellants of B.P. Singhal (supra)12, is also
misplaced, since there is not arbitrariness or capriciousness in the
grant of license to respondent no. 6 at all.
63. In Punjab State Cooperative Milk Producers Federation (supra) 13 and
State of Madhya Pradesh (supra)14, the Hon‟ble Supreme Court was
considering reasonableness and equality in the distribution of the State
largesse. Such distribution, in the present case, is not arbitrary at all.
Mere grant of dealership/license to operate a retail fuel outlet to a rival
businessperson, standing on a similar footing as the appellants, cannot
be said to be so unreasonable or arbitrary as to taint such grant of
license or dealership to respondent no. 6.
64. Thus, there is no scope of legislation by the judiciary, since there is no
vacuum in legislation in the first place, nor there being any
12
B.P. Singhal v. Union of India and Anr. reported at (2010) 6 SCC 331
13
Punjab State Cooperative Milk Producers Federation Limited & Anr. v. Balbir
Kumar Walia & Anr. reported at (2021) 8 SCC 461
14
State of Madhya Pradesh v. Mala Banerjee reported at (2025) 7 SCC 698.
22
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arbitrariness or unreasonableness involved. As held above, it would
rather be violative of Article 14 of the Constitution if a licence was
refused to the respondent no. 6, which stands on similar footing as the
appellants.
65. HPCL had relied on several judgments, including Bansidhar
Construction (supa)15, N.G. Projects (supra)16, Galaxy Transport (supra)17
as well as Agmatel India Pvt. Ltd. (supra)18, which reiterate the well-
settled legal proposition that the State or Government agencies have a
play in the joint in the matter of grant of tenders. Although the
principle that an employer is entitled to decide as to what would be the
proper interpretation of a tender term may not be directly applicable in
the present case, at the same time, the extremely limited scope of
interference by the courts in judicial review with the grant of
dealerships and tenders has been recognized in the said reports.
66. Thus, in the present case, particularly due to the lack of any
arbitrariness or discriminatory attitude on the part of the State or its
instrumentality, the HPCL, there was no scope of interference by the
writ court at all.
15
Bansidhar Construction Pvt. Ltd v. Bharat Cooking Coal Ltd and Others]-DB
reported at (2024) 10 SCC 273
16
N.G. Projects Ltd. v. Vinod Kumar Jain & Ors.]-DB reported at (2022) 6 SCC 127,
17
Galaxy Transport Agencies Contractors, Traders, Transports & Suppliers v. New
J.K. Roadways, Fleetowners & Transport Contractors & Others]- FB reported at
2020 SCC OnLine Sc 1035/ (2021) 16 SCC 808,
18
Agmatel India Pvt. Ltd. v. Resoursys Telecom & Others]. -DB, Reported at (2022)
5SCC 362,
23
2026:CHC-AS:355-DB
Effect of the Notification dated September 25, 2003 issued by the
Government of India, Ministry of Road Transport and Highways
67. As held above, the September 25, 2003 Notification, subsequently
substituted by the Notification dated June 26, 2020, speaks about the
norms for location, layout and access to fuel stations along National
Highways, and does not have any effect on State Highways at all.
68. Even otherwise, Item 6 of Clause 2.2 of the said Notification, discussed
at length by the learned Single Judge, does not altogether prohibit
issuance of dealerships to new entrants within a particular distance
from existing locations of dealerships. What it does is merely to restrict
such grants unless all such fuel stations are provided access through a
common service road of 7.0m width and not directly through the
National Highway. Even access for fuel stations at closer proximity
than the stipulated distance is permitted by the said Clause, provided
entries/exits for both the fuel stations are provided through a service
road of 7.0m width having sufficient length, further additional length of
such service road being constructed at the cost of the latter fuel station
owner/company seeking grant of permission for access to the facility.
69. Thus, apart from the said norms not being applicable to the State
Highways, even the said norms themselves do not impose an unfettered
prohibition on setting up of new fuel stations within any particular
distance but permit such setting up subject to certain restrictions.
70. Hence, from no point of view can the said provisions be invoked at the
behest of the appellants to seek a complete prohibition regarding grant
24
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of license to respondent no.6 or other business competitors of the
appellants.
71. Even otherwise, by their conduct, the appellants have not only
acquiesced to, but have relied upon, their dealership agreement with
the HPCL by operating their business in terms of the said agreement all
along, without there being any infringement of their fundamental right
to conduct such business at any point of time.
CONCLUSION
72. In view of the above discussions, this Court does not find any illegality
in the impugned judgment, whereby the writ petition of the appellants
was dismissed.
73. Accordingly, FMA No. 686 of 2025 is dismissed on contest, thereby
affirming the impugned judgment dated March 13, 2025 passed in WPA
No. 2924 of 2025.
74. CAN 1 of 2025 and CAN 2 of 2025 are also disposed of consequentially.
75. There will be no order as to costs.
76. Urgent certified copies, if applied for, be supplied to the parties upon
compliance of due formalities.
(Sabyasachi Bhattacharyya, J.)
I agree.
(Supratim Bhattacharya, J.)