Authority: High Court of Chhattisgarh at Bilaspur

Order Date: 2 July 2026

Case Overview

  • Petitioner: Smt. Ananta Chowdhary, aged about 38 years, resident of Ward No.11, Village Toresingha, Tahsil Saraipali, District Mahasamund, Chhattisgarh.
  • Respondents:

1. Hindustan Petroleum Corporation Limited (registered office: 17, Jamshed Ji Tata Road, Mumbai, Maharashtra).

2. Chief General Manager, Hindustan General Corporation Limited, East Zone (office: 77, 3rd Floor, Purvanchal Bhavan, Opposite Eastern Metropolitan Bypass, Anandapur, Kolkata, West Bengal).

3. Chief Regional Manager Retail, Hindustan Petroleum Corporation Limited (office: 1st Floor, Bajpai Pavilion, Vyapar Vihar Road, Bilaspur, Chhattisgarh).

4. Collector, Mahasamund, District Mahasamund (Chhattisgarh).

  • Nature of Petition: Writ petition (WPC No. 1464 of 2022) seeking quash of the order dated 01.02.2022 that withdrew the Letter of Intent (LOI) dated 29.12.2020 issued by HPCL for establishment of a Rural Retail Outlet (RO) dealership at Village Nawagaon, Saraipali‑Padampur Road, District Mahasamund, under the "Open" category.
  • Background:
  • Advertisement dated 14.12.2018 invited applications for Rural RO dealers in Chhattisgarh.
  • Petitioner submitted application offering land bearing Khasra No. 339/1, P.H. No. 00025, Village Nawagaon.
  • Paid Rs 40,000 for spot‑inspection charges to Respondent No.2.
  • After scrutiny, HPCL issued LOI on 29.12.2020.
  • Petitioner deposited Demand Draft No. 001979 (Rs 5,00,000) and Demand Draft No. 001978 (Rs 3,60,000) on 18.06.2021 in favour of Respondent No.1.
  • Received NOCs from Chief Regional Manager (Retail), HPCL and the Collector, Mahasamund.
  • Commenced construction, obtained a loan from Axis Bank, and installed an electricity transformer.
  • Demarcation report dated 04.01.2021 and related documents were submitted.
  • Respondent No.3 (Collector) issued a clarification request on 31.12.2021, questioning eligibility because the land lay on State Highway No. 16.
  • Petitioner clarified that the land, though intersected by the highway, remained in a rural area and satisfied eligibility.
  • Despite the clarification, Respondents withdrew the LOI on 01.02.2022, returning the un‑encashed demand drafts.
  • Earlier Litigation: Petitioner previously filed WPC No. 5421 of 2021; the Court directed respondents to act on the LOI within four weeks (order dated 11.01.2022). Respondents instead withdrew the LOI after the Court’s direction.
  • Contentions:
  • Petitioner’s Counsel: Argues that the land is rural, all procedural requirements were met, and withdrawal is arbitrary and illegal, seeking quash of the withdrawal order and compensation.
  • Respondents’ Counsel: Cites Dealer Selection Guidelines for Rural Markets, which prohibit Rural RO on National/State/Coastal Highways, Expressways, A‑B‑C class markets, or municipal areas. Since the land is on State Highway 16, it is ineligible; therefore withdrawal is justified and demand drafts were returned.

Final Outcome

  • The Court held that the withdrawal of the LOI was in accordance with the mandatory Dealer Selection Guidelines because the land is situated on State Highway 16, making it ineligible for a Rural Retail Outlet.
  • However, acknowledging the petitioner’s bona‑fide reliance on the LOI and the financial loss incurred, the Court declined to quash the withdrawal order.
  • The Court directed Respondents No. 1 to 3 to pay a consolidated compensation of Rs 1,00,000 to the petitioner:
  • Rs 40,000 as reimbursement for demarcation expenditure.
  • Rs 60,000 as compensation for financial loss, inconvenience, and mental agony.
  • Payment to be made within 60 days of receipt of a certified copy of the order.

Topics: Legal Dispute, Petroleum Retail