Indian Oil Corporation Ltd. v. Binu Abraham and Ors.; Union of India and Ministry of Social Justice & Empowerment

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE THE CHIEF JUSTICE MR.MOHAN M.SHANTANAGOUDAR & THE HONOURABLE MR. JUSTICE SATHISH NINAN WEDNESDAY, THE 23RD DAY OF NOVEMBER 2016/2ND AGRAHAYANA, 1938 WA.No. 1975 of 2016 () IN WP(C).5481/2016 ------------------------------------------- AGAINST THE JUDGMENT IN WP(C) 5481/2016 of HIGH COURT OF KERALA DT. 06-06-2016 APPELLANT(S)/RESPONDENTS 1 & 2: ------------------------------ 1. INDIAN OIL CORPORATION LTD. KOZHIKODE DIVISIONAL OFFICE, 2ND FLOOR, P.M.K.TOWER, CIVIL STATION POST, WAYANAD ROAD, KOZHIKODE-673 020. 2. CHIEF DIVISIONAL RETAIL SALES MANAGER INDIAN OIL CORPORATION LIMITED, KOZHIKODE DIVISIONAL OFFICE, 2ND FLOOR, P.M.K.TOWER, CIVIL STATION POST, WAYANAD DISTRICT, KOZHIKODE-673 020. BY ADVS.SRI.E.K.NANDAKUMAR (SR) SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS RESPONDENT(S)/PETITIONER AND RESPONDENTS 3 AND 4: ------------------------------------------------- 1. BINU ABRAHAM S/O. K.J.ABRAHAM, KUZHIKATHOPPIL HOUSE, MOONNILAVU P.O., KOTTAYAM-686 586. 2. UNION OF INDIA REPRESENTED BY THE SECRETARY TO GOVERNMENT, MINISTRY OF PETROLEUM & NATURAL GAS, NEW DELHI-110 001. 3. MINISTRY OF SOCIAL JUSTICE AND EMPOWERMENT ROOM NO.740, 'A' WING, SHASTRI BHAVAN, DR.RAJENDRA PRASAD ROAD, NEW DELHI-110 001. R1 BY ADV. SRI.KALEESWARAM RAJ R2, R3 BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL R2, R3 BY ADV. SMT.O.M.SHALINA, CGC THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 14-11-2016, THE COURT ON 23-11-2016 DELIVERED THE FOLLOWING: MOHAN M.SHANTANAGOUDAR, C.J. & SATHISH NINAN, J. ----------------------------------W.A.No.1975 of 2016 ----------------------------------Dated this the 23[rd] day of November, 2016 ## JUDGMENT ## Mohan M.Shantanagoudar, C.J. - 1.The judgment dated 6.6.2016 in W.P(C).5481/16 is appealed against by the Indian Oil Corporation Limited, respondents 1 and 2 therein, since it is aggrieved by the observations made in the said judgment that the Corporation shall obtain fresh land valuation in the light of the discussions made in the judgment and take a decision afresh in the matter within two months. - 2.The first appellant Corporation invited application for allotment of dealership of retail outlet of the Corporation in Perinthalmanna town in Malappuram district under the “Corpus Fund Scheme”. The said location was reserved for persons belonging to the ST category. Since the writ petitioner belongs to ST category, he also applied for getting the dealership. WA.1975/16 2 3. One of the requirements is that the applicant should arrange for the plot to establish the retail petroleum outlet. As per Ext.P2 guidelines, the above location would be taken on lease/purchased by the Corporation. The offered land can be taken either from the applicant or from the land owner directly by the Corporation. The writ petitioner made Ext.P3 application, providing details of the offer from the owner of a plot of land (namely Dr.Anish Ahamed) in Perinthalmanna town to sell the plot to the Corporation at the rate of `6.5 lakhs/cent for setting up the retail petroleum outlet. The writ petitioner was selected in ST category. Relying on the contents of the application filed by him, letter of intent was issued in favour of the writ petitioner. Thereafter, negotiations were held between the Corporation and the owner of the land in respect of the value of the land to be purchased for establishing the retail petroleum outlet. However, the rate quoted by the owner of the land was higher than the valuation of the land as determined by the Government approved valuers. The WA.1975/16 3 Government approved valuers had quoted `5.5 lakhs per cent. The writ petitioner was informed of the said fact by the Corporation. Since the price quoted by the owner of the land is `1,00,000/per cent higher than the rate quoted by the Government approved valuers, the Corporation has not taken steps on the application of the writ petitioner to issue him a letter of appointment. Hence the writ petitioner/ first respondent herein filed W.P(C).5481/16 which came to be disposed of by the impugned judgment, with direction to the Corporation to obtain fresh land valuation in the light of the discussion made therein and to take a decision in the matter within two months. Being aggrieved by the said conclusion arrived at by the learned single Judge, this appeal is presented by the Corporation. 4.Sri.E.K.Nandakumar, learned senior Advocate appearing on behalf of the Corporation, submits that the Corporation is bound by the prescribed guidelines and it is not open for them to pay higher land value than what is approved by the Government valuers. The price of the land quoted by the owner of the land is WA.1975/16 4 in excess of `1,00,000/cent (Rupees One lakh per cent) which means `1,00,00,000/acre (Rupees one crore per acre) and hence, it may not be possible for the Corporation to accept the said valuation. It is open for the writ petitioner to select another land of similar dimension which is feasible in terms of money as well as other respects in order to get the order for appointment. He further submits that the onus of providing suitable land is on the applicant. As per the procedure followed by the Corporation, prior to issuance of letter of intent to an applicant, the land evaluation committee verifies whether the land offered is in the advertised stretch or location; whether the dimensions etc., of the land meets with the prescribed requirements, including the special requirements if the land is adjacent to a National Highway; and whether there are any High Tension lines over the property and such other impediments that might stand in the way of establishing a petrol pump on the land in question. It is the further case of the Corporation that the land evaluation committee is WA.1975/16 5 not authorized to consider or negotiate on the price at which the land is offered at that point of time. The price of the land is considered/negotiated only after issuance of the letter of intent to the selected applicant. The Corporation cannot be compelled to and has no legal obligation to purchase a property irrespective of the rate at which it is offered. As per the applicable guidelines produced as Annexure R1(a) in the writ petition, after the issuance of letter of intent to an applicant, a three member negotiating committee is to be constituted and the land is to be valued by two Government approved valuers from the panel empaneled with the Corporation. The negotiating committee is required to attempt to finalize a rate which is lower than or at the lower of the 2 valuation reports. However, for strategic reasons, the committee can offer the land owner a rate up to the higher of the two valuation reports with specific justification. It is submitted that the letter of intent is not a commitment to purchase the land at the price at which it is offered in the application by a candidate. Lastly, it is submitted that the learned single Judge WA.1975/16 6 is not justified in observing that the two valuers will have to keep in mind, considering the strategic location, whether the demand of the land owner is unreasonable, arbitrary or inflated and if the demand of the land owner is not arbitrary, unreasonable or inflated, the valuation of the strategic land concerned should be that of the valuation done by the owner; and that since the applicant is a member of ST community, some leverage should be shown while considering such demand of the owner. 5.Sri.Kaleeswaram Raj, learned Advocate appearing on behalf of the writ petitioner, while arguing in support of the judgment of the learned single Judge, contends that the writ petitioner belongs to ST community and therefore, if the land is not purchased, it will be denial of an opportunity to an ST community member of his livelihood. The very fact that the letter of intent is issued to the writ petitioner discloses that the Corporation have agreed for the proposal made by the owner to sell his property at `6.5 lakhs/cent. After issuing the letter of intent, it is not open for the Corporation WA.1975/16 7 to stall further proceedings in respect of allotment of the retail petroleum outlet. He further submits that the Corporation ought to have considered the case of the writ petitioner for award of temporary COCO retail outlet against the letter of intent as there is a direction issued by the central Government to oil marketing companies to allot outlets operated in COCOs to letter of intent holders belonging to SC/ST category in case land is not available. In other words, he submits that in case it is not possible for the corporation to accept the valuation quoted by the land owner at `6.5 lakhs/cent, the writ petitioner may be alloted a COCO retail outlet under special circumstances. - 6.Learned single Judge, after hearing the parties and after verifying the valuation report containing the valuation of the land made by the Government approved valuers, has rightly concluded as under: “8. This Court is of view that the Corporation cannot deviate from the guidelines in the matter of purchase of land. If the value as prepared by WA.1975/16 8 the surveyor and the price of the land offered by the owner is having disparity, as per the guidelines as above, at the best, the Corporation can be directed to purchase the land based on strategic reasons, at the rate of the higher of the two Government valuation reports; though normally lowest of the valuation report has to be relied on. It is to be noted that the Petroleum Corporation is a public sector undertaking, it has to follow some guidelines for purchase of land, otherwise it would result in arbitrariness in purchase of land.” 7.However, learned single Judge has proceeded further to overcome the aforementioned finding, taking into account various factors which are not relevant to decide the matter on hand. Learned single Judge has observed that in real property, the market value is the only component for fixing the land value, but it cannot be mere conjectural. The prevailing land value in surroundings shall be one component but not a considerable decisive component. The probable use of the property in more attractive manner and non availability of similar land for strategic purpose like establishing a petroleum outlet should be considered for the purpose of valuation. Relying on the judgments in the case of Southern Eastern Rail WA.1975/16 9 Co. v. L.C.C. [(1915) 2 Ch 252], Sm.Swaranamunjury Dassi v. Secretary of State for India-in-Council [AIR 1928 Cal. 522] and in Alaul Haq v. Secretary of State for India-in-Council [(1910) 11 CLJ 393], learned single Judge has concluded that the land value has to be in the perspective of the land owner who is in an advantageous position to bargain due to strategic location. If the valuation is determined from the perspective of a purchaser, it will be an erroneous approach. The sum and substance of the impugned judgment is that the Corporation can purchase the land for strategic reasons on higher value as quoted by the owner of the land. If the demand of the land owner is not arbitrary, unreasonable or inflated, the valuation of the strategic land concerned should be that of the valuation done by the owner and not the valuation done by the purchaser. - 8.We are unable to agree with the reasons and conclusion arrived at by the learned single Judge in directing the Corporation to obtain fresh land WA.1975/16 10 valuation in the light of the discussion made in the judgment and to take decision in the matter. 9. There is no doubt that the land owner is in an advantageous position to quote and bargain about the price of the property intended to be sold, since he is the owner of the property. The owner can value his property as per his will and wish. But, that does not mean that the purchaser has no say in the matter while agreeing to purchase the property. If the intending purchaser is not willing to purchase the property at a price ultimately quoted by the owner, nobody can force the owner of the property to sell his property for a lesser price. So also, nobody including the courts can force any person to purchase a property at a particular price if the intending purchaser is not willing to purchase such property at the rate quoted by the owner of the property. To complete a sale, there will have to be a voluntary agreement between the parties. The sale consideration will be based on the value agreed to between the intending vendor and intending vendee. In such matters, the courts cannot sit as an WA.1975/16 11 appellate authority to guide the purchaser for purchasing the property for a higher value or for a particular value. In the case on hand, the Corporation is bound by the prescribed guidelines. The relevant guidelines relating to outright purchase of the land reads thus: ## “10.1. For Outright Purchase of land: - a. The committee would negotiate for outright purchase and would arrive at the mutually agreeable rate per Sq.Mtr., which would be generally lower than or upto the lower of the two valuation reports. However, in case for some reasons, the committee feels that considering the strategic location of the site or other strategic reasons, there is justification to procure the land, then the rate offered to the landowner can be upto the higher of the two Govt. Valuation Reports. In such cases, clear justification will be brought out by the committee in their recommendations.” - 10.From the aforementioned guidelines, it is clear that the negotiating committee would negotiate for outright purchase and would arrive at a mutually agreeable rate which would be generally lower than or WA.1975/16 12 upto the lower of the two valuation reports. However, in certain cases and for certain reasons, if the committee feels that considering the strategic location of the site or other strategic reasons, there is justification to procure the land, then the rate offered by the land owner can be up to the higher of the two Government valuation reports. It is made clear in the very guideline that in such cases, clear justification need be arrived at by the committee in their recommendations. - 11.The Corporation is not only bound by the guidelines but also is not willing to purchase the site at the rate quoted by the owner of the site in as much as the committee feels that the rate quoted by the owner of the site is on the higher side. The court will not sit as an appellate authority in such matters to overturn the decision of the approved Government valuers. The guidelines are based on certain policy decision taken by the concerned authorities. Such policy decisions will not be interfered with by the Corporation normally, unless such guidelines are per se unconstitutional or arbitrary. We do not find any WA.1975/16 13 unconstitutionality or arbitrariness in the guidelines and the decision taken by the approved valuers. In view of the same, the observations made by the learned single Judge and the conclusion arrived at cannot be sustained. 12.We find that the price of the land is considered/negotiated only after letter of intent is issued to the applicant. It is clarified in clause (2) of Ext.P5 letter of intent that there is no commitment from the Corporation for taking the land offered by the applicant. The Corporation has no obligation to purchase the property irrespective of the rate at which it is offered. As per the guidelines, a three member negotiating committee is to be constituted and the land is to be valued by two Government approved valuers from the panel empaneled with the Corporation. The consideration and negotiation of rate at which the property is to be purchased happen only after the issuance of letter of intent and not prior to the issuance of letter of intent. Moreover, the letter of intent is not a WA.1975/16 14 commitment to purchase the land at the price at which it is offered in the application. - 13.The letter of intent (Ext.P5) clearly reveals that it is a proposal to offer a retail outlet dealership to the applicant. It is also made clear that if the site offered by the applicant for sale to the Corporation for putting up the retail outlet is not made available for purchase as per the advice of the Corporation, the letter of intent will be withdrawn without any further notice. However, there is no commitment from the Corporation for taking the said land from the applicant or from the owner of the property. - 14.It is not necessary for us to advert to the arguments of the learned Advocate for the writ petitioner with regard to allotment of COCO retail outlet in favour of the applicant in as much as such a case seems to have not been argued before the learned single Judge though such ground was taken in the writ petition. However, in order to satisfy our conscience, we have gone through the material after WA.1975/16 15 hearing the arguments of the learned Advocate for the applicant to consider the case for allotment of COCO retail outlet. 15. The claim of the writ petitioner that there is a Central Government direction to allot temporary COCO retail outlets to applicants who are letter of intent holders belonging to SC/ST category in cases where land is not available, appears to be incorrect in as much as the current Marketing Plan against which the letter of intent is issued to the writ petitioner clearly states that the availability of land is one of the eligibility criteria. Further the brochure of the dealer selection policy clearly spells out that there is no commitment for the oil company for taking over land from the applicant. There is no obligation under the current Marketing Plan to hand over temporary COCO outlets to SC/ST applicants who have been issued with letter of intent. Therefore, in our considered opinion, the writ petitioner is not justified in claiming the COCO retail outlet in its favour based on the letter of intent till the WA.1975/16 16 purchase of the plot is finalised on the terms acceptable to the Corporation. Having regard to the aforementioned facts and circumstances, in our considered view, learned single Judge is not justified in directing the Corporation to re-consider the matter in the light of the observations made at paragraphs 9 to 13 of the impugned judgment in respect of obtaining fresh land valuation. Accordingly, the impugned judgment, in so far as it relates to issuance of direction to the Corporation to obtain fresh land valuation in terms thereof, is liable to be set aside. The appeal stands allowed. Sd/- MOHAN M.SHANTANAGOUDAR Chief Justice Sd/- SATHISH NINAN Judge kkb. /True copy/ PA to CJ