Authority: High Court of Judicature at Patna

Order Date: 03-07-2026

Case Overview

  • Parties: Petitioner Rakesh Kumar (resident of Alampur, Rohtas) vs. Respondents: Indian Oil Corporation Ltd (including its General Manager Marketing (LPG Sales), Deputy General Manager (LPG‑S), Assistant Managers, and respondent Arun Kumar.
  • Nature of Proceeding: Writ petition under Article 226 seeking setting aside of cancellation letter dated 23‑11‑2018, refund of security deposit of Rs 40,000, stay of any further grant of LPG distributorship at Alampur, and confirmation of the petitioner’s original selection.
  • Background: Advertisement dated 17/18‑06‑2017 by IOC for LPG distributors; petitioner applied on 15‑07‑2017 (Ref. IOC0231213415072017). He was declared successful in the draw and received a Letter of Selection on 31‑01‑2018, subject to successful Field Verification of Credentials (FVC) and a deposit of Rs 40,000, which he paid on 05‑02‑2018.
  • Field Verification Issues: The lease deed for the proposed showroom/godown was executed on 03‑02‑2018, after the cut‑off date, rendering it ineligible. IOC gave petitioner a seven‑day window to furnish alternate land. Petitioner offered land (Khata No. 477, Khesra No. 341, 97 decimals) belonging to his father, submitting affidavits, genealogical table, no‑objection letters, Land Possession Certificate (LPC) and revenue receipts.
  • Dispute Over Land Ownership: Petitioner’s father’s name appeared variously as Ranglal Dusadh, Ram Lal Ram, and Ranglal Paswan. Revenue clerk and Circle Officer (communications dated 30‑06‑2018, 24‑08‑2018, 25‑10‑2018) clarified that discrepancies were clerical and that the land was recorded in the names of Ranglal and Suresh. The corporation, however, found the documentation insufficient to establish that Ranglal Dusadh and Ram Lal Ram were the same person.
  • Cancellation and Fresh Draw: On 23‑11‑2018 IOC cancelled the petitioner’s candidature, forfeited the Rs 40,000 deposit, and announced a fresh draw on 28‑11‑2018 (published in Hindustan on 25‑11‑2018). Arun Kumar was selected (letter dated 30‑11‑2018), appointed, and the distributorship was commissioned on 31‑08‑2019 with an agreement dated 04‑09‑2019.
  • Respondent’s Arguments: IOC contended that the cancellation complied with the Unified Guidelines for Selection of LPG Distributors 2017, that the petitioner failed to satisfy eligibility criteria for the alternate land, and that the decision was not arbitrary.
  • Petitioner’s Arguments: Petitioner argued that he had complied with all requirements, that revenue authorities had validated the land ownership, and that the corporation’s refusal was a hyper‑technical, arbitrary exercise violating natural justice.
  • Court’s Reasoning: The court held that the selection letter was conditional on successful FVC; mere selection did not confer a vested right. The alternate land did not meet eligibility criteria as the petitioner could not conclusively prove ownership. The corporation acted within the Unified Guidelines, provided the petitioner an opportunity to rectify, and the cancellation was therefore lawful. The fresh selection and appointment of Arun Kumar created third‑party rights, further precluding interference. Judicial review under Article 226 is limited to legality, not merits; no arbitrariness or procedural impropriety was found.

Final Outcome

  • The writ petition is dismissed.
  • The cancellation of the petitioner’s candidature and forfeiture of the Rs 40,000 security deposit stand affirmed.
  • No stay or reinstatement of the LPG distributorship is granted to the petitioner.
  • Interlocutory applications, if any, are disposed of.

Topics: LPG Distributorship, Judicial Review, Corporate Compliance