Oil Companies Must Adopt Flexible Approach While Taking Land From Distributors If Defects Are Cured: Himachal Pradesh High Court

The Himachal Pradesh High Court has held that oil companies must adopt a flexible approach when minor technical issues with the land offered for distributorship arise, especially when the applicant removes the defect in time.

Justice G.S. Sandhawalia and Justice Ranjan Sharma: “The appellant had also removed the deficiencies as such of the electric wires over the land which is a much larger chunk of land and if the Corporation had kept this aspect in mind, part of the said land could have been utilized as such for the construction of godown.”

Background Facts:

On 13^th August, 2017, three major oil companies, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd., jointly invited applications for allotment of dealership of Liquefied Petroleum Gas at various places.

The appellant, Vijay Kumar, applied for the dealership under the Scheduled Caste quota on 1 September 2017. Thereafter, in the draw of lots, the appellant was found eligible for selection of LPG distributorship of Bharat Petroleum Corporation at Dharampur District Mandi.

As per guidelines, Bharat Petroleum Corporation conducted field verification of the appellant's land. During the investigation, the field officer found that there were overhead high-tension electric wires passing through the plot.

After the inspection, the appellant was asked to submit a written undertaking, stating that he has land to offer for a Godown in his own name at the advertised location.

Despite his undertaking, Bharat Petroleum Corporation rejected the appellant's dealership, stating that he was not eligible for LPG distributorship.

Aggrieved, the appellant filed a writ petition. The High Court directed Bharat Petroleum Corporation to keep the order of rejection in abeyance and permitted the petitioner to file a representation with a direction to the respondent to decide the same afresh in terms of policy.

The appellant submitted a fresh representation, submitting that he had arranged to have the wires removed and still had eligible land. However, Bharat Petroleum Corporation rejected the same, stating that the land must have been suitable on the date of the original application.

The appellant filed another writ petition for quashing of both rejection letters and the Field Verification Credentials. The Single Judge dismissed this writ petition, upholding BPCL's stand that the land was not eligible as of the cut-off date.

Aggrieved, the appellant filed an LPA before the Division bench, challenging the order of the Single Judge Bench.

Findings:

The Division bench noted that oil companies had modified their policies to permit applicants to offer alternate land or cure defects if the originally offered land had problems. It was observed that the appellant had removed the wires from the land, and the land does not suffer from any other disqualification.

The Court noted that strict adherence by Bharat Petroleum Corporation Limited to reject the application was not according to the terms of flexibility which have been offered in the terms of the Unified Guidelines.

Accordingly, the Division Bench set aside both rejection orders and directed Bharat Petroleum Corporation to carry out fresh Field Verification within four weeks and reconsider the dealership in line with the new flexible guidelines.

Case Name: Vijay Kumar V/s Bharat Petroleum Corporation Ltd. & Ors.

Case No.: LPA No. 09 of 2025

Date of Decision: 11.07.2025

For the Appellant: Mr. Vinay Kuthiala, Senior Advocatewith Mr. Rajiv Rai and Mr. Diwan Singh Negi, Advocates.

For the Respondents: Mr. B.N. Misra, Senior Advocate with Ms. Vandana Misra, Advocate.

Click Here To Read/Download Order