Supreme Court Upholds LPG Distributorship Allotment Despite Land Dispute: Jagwant Kaur vs. Union of India (2025) INSC 112 (27 January 2025)

Date of the Judgment: 27 January 2025
Citation: (2025) INSC 112
Judges: Justice Sudhanshu Dhulia and Justice K. Vinod Chandran
Can an LPG distributorship allotment be cancelled if the land offered is subject to a dispute? The Supreme Court of India recently addressed this question. This case revolves around a contested allotment of an LPG distributorship, where the land offered by the selected candidate was also claimed by another applicant. The Supreme Court, in this judgment, clarified the rules regarding land ownership and lease requirements for such allotments. The judgment was delivered by a division bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran, with Justice K. Vinod Chandran authoring the opinion.

Case Background

In 2013, the Indian Oil Corporation invited applications for LPG distributorships. Jagwant Kaur, the appellant, challenged the selection of the 4th respondent for a distributorship at Balachaur. The 4th respondent was successful in the draw of lots on 18 December 2014. Initially, the selection was cancelled due to Ministry of Petroleum and Natural Gas instructions. However, the selection was revived by guidelines issued in 2015 and 2016. The appellant raised concerns that the 4th respondent and another applicant had offered the same piece of land. The 4th respondent later offered a different piece of land, which was not in their possession at the time of application. The High Court rejected the appellant’s writ petition and subsequent appeal, leading to this Supreme Court case.

Timeline

Course of Proceedings

The appellant initially filed a writ petition before the High Court, challenging the allotment of the LPG distributorship to the 4th respondent. The High Court rejected the petition, stating that the 4th respondent had fulfilled the land requirements. The High Court also held that No Objection Certificates (NOCs) from co-sharers were not required in this case as the lease was in the name of the 4th respondent alone. The appellant then filed an appeal before the Division Bench of the High Court, which was also dismissed. This led to the appellant filing a Special Leave Petition before the Supreme Court.

Legal Framework

The case primarily revolves around the guidelines issued by the Indian Oil Corporation for the allotment of LPG distributorships. These guidelines specify that the applicant must possess land, either through ownership or a registered lease agreement for a minimum of 15 years, as on the last date of application submission. The guidelines also address the requirement of NOCs from co-owners or co-lessees in cases of joint ownership or lease. The court also considered the modification to the guidelines issued on 15.04.2015, which allowed for offering alternate land if the initially offered land was found deficient.

Arguments

The appellant argued that the 4th respondent was disqualified because the same piece of land was offered by another applicant. The appellant also contended that the alternate land offered by the 4th respondent was not in their possession at the time of application. The appellant further argued that the affidavits of co-sharers should have been obtained before the application date.

The 4th respondent argued that the lessor owned a larger piece of land and the two leases were for different parcels. The 4th respondent also stated that they had obtained consent letters from all owners of the larger property. They further argued that the alternate land was offered due to the lessor’s shifting stance and that they had already established and were running the distributorship.

The Corporation supported the 4th respondent, asserting that their inquiries showed the two applicants had leased different parcels of land from the same lessor. The Corporation also stated that the affidavits of land owners were obtained during field verification, as per the guidelines.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues but considered the following:

• Whether the 4th respondent was disqualified due to another applicant offering the same land.
• Whether the alternate land offered by the 4th respondent was valid.
• Whether NOCs from co-owners were required in this case.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

The Supreme Court found no reason to interfere with the High Court’s judgments. The Court emphasized that the 4th respondent had obtained a lease for a specific parcel of land, which satisfied the requirements of the advertisement. The Court also noted that the alternate land was offered due to the lessor’s contradictory statements. The Court relied on Mrinmoy Maity Vs. Chhanda Koley and others [Special Leave Petition (Civil) No.30152 of 2018 decided on 18.04.2024] to justify the acceptance of alternate land.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the factual findings that the land leased to the 4th respondent was a separate parcel, and the alternate land was offered due to the lessor’s shifting stance. The Court also emphasized that the guidelines allowed for offering alternate land in such cases.

The Court considered the lessor’s contradictory affidavits and the revenue official’s report confirming the separate lease deeds. The Court also noted that the 4th respondent had already established the distributorship. The Court stated, “We find absolutely no reason to place any credence on the affidavit of the lessor dated 11.01.2018, which was quite contrary to the earlier affidavit of the lessor himself.” The Court further observed, “We find that there is clear indication that the lands leased out by the 4th respondent and the other applicant were two separate parcels owned by the very same lessor.” The Court also stated, “The alternate land has been offered only in the context of the shifting stance of the lessor; the acceptance of which by the Corporation was possible as per the guidelines, which provided more flexibility in the allotment process.”

Key Takeaways

• ✓ LPG distributorship allotments can be upheld if the land offered is a separate parcel, even if leased from the same lessor.
• ✓ Alternate land can be offered if the original land has issues, as per the guidelines.
• ✓ NOCs from co-owners are not required if the lease is in the name of the applicant alone.
• ✓ The court will not give credence to contradictory affidavits.

Directions

The Supreme Court did not issue any specific directions, except to dismiss the appeal.

Development of Law

The ratio decidendi of this case is that an LPG distributorship allotment can be upheld if the land offered by the applicant is a separate parcel, even if leased from the same lessor, and that alternate land can be offered if the original land has issues. This judgment clarifies the application of the guidelines related to land ownership and lease requirements for LPG distributorships. There is no change in the previous position of law, but the judgment clarifies the interpretation of the existing guidelines.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision. The Court found that the 4th respondent’s allotment was valid as the land offered was a separate parcel and the alternate land was permissible under the guidelines. The judgment clarifies the rules for land requirements in LPG distributorship allotments and provides guidance on handling disputes arising from land issues.