No Category Change Allowed Post Application: Supreme Court on BPCL Dealership Allotment.


02 April 2025 Civil Appeals >> Civil & Consumer Law  

The Supreme Court of India has overturned a judgment by the Madras High Court, emphasizing the importance of strict adherence to the guidelines stipulated in the application process for the allotment of retail outlets by Bharat Petroleum Corporation Limited (BPCL). The apex court's ruling set aside the High Court's direction to BPCL to consider the application of a respondent under a different category than the one she had originally chosen.

The case arose from a 2018 advertisement by BPCL for the selection of a retail outlet dealer. The respondent, who possessed suitable land, mistakenly indicated in her application that she belonged to "Group 2" – applicants with a "firm offer" for land – instead of "Group 1" – those who already own suitable land. Despite her attempts to rectify this error, BPCL did not take any action, leading her to file multiple writ petitions before the Madras High Court.


 

 

A Single Judge of the High Court had earlier directed BPCL to consider the respondent's application under Group 1, observing that as the advertisement was for the Scheduled Caste category, BPCL should have been more accommodating. This decision was upheld by a Division Bench of the High Court.

However, the Supreme Court, after hearing arguments from both BPCL and the respondent, found the High Court's intervention to be erroneous. The apex court highlighted the clear provisions in BPCL's advertisement, which classified applicants into groups based on their land status at the time of application. Crucially, the advertisement and the application form explicitly stated that the eligibility for dealership would be solely determined by the information provided in the application and the supporting documents.

The Supreme Court pointed out that Clause (k) of the advertisement required applicants to declare the land category and furnish a confirmatory letter from an advocate detailing ownership and relevant documents. Furthermore, Clause (d) listed specific ownership documents that Group 1 applicants should possess on the application date. These clauses indicated that the categorization was not a simple error in form filling but was linked to the documentary evidence of land ownership.

The court cited several precedents emphasizing the limited scope of writ jurisdiction in contractual matters involving state instrumentalities. While acknowledging the State's obligation to act fairly and reasonably, the court noted that in this instance, there was no demonstration of any violation of Article 14 of the Constitution.

The Supreme Court underscored that BPCL had established a detailed and transparent procedure for the allotment process, and the application form explicitly warned applicants about the consequences of providing incorrect information. The court found that the respondent, being aware of her land ownership, had taken a chance by selecting the wrong category, and the rules provided no mechanism for a subsequent change of category.

Referring to the doctrine of Public Trust concerning natural resources like petroleum, the Supreme Court also cited a Constitution Bench decision emphasizing the need for a fair and non-arbitrary selection process from eligible candidates, based on established criteria.

In its final judgment, the Supreme Court allowed BPCL's appeal and set aside the Madras High Court's orders. The apex court directed BPCL to proceed with the allotment process according to its established rules and regulations.

Furthermore, the Supreme Court expressed its disapproval of the respondent's repeated recourse to legal remedies despite the clear guidelines in the advertisement and application form. The court observed that the High Court's order appeared to be based on misplaced sympathy, leading to unnecessary litigation and a significant delay – approximately seven years – in the establishment of the petrol pump, thereby prejudicing public interest. The court refrained from imposing any costs.

This judgment reinforces the principle that applicants for public sector contracts must adhere strictly to the terms and conditions outlined in the application process. It also serves as a reminder of the limitations of writ jurisdiction in interfering with well-defined contractual procedures, especially when no fundamental rights or principles of fairness and non-arbitrariness are demonstrably violated.