PAWAN KUMARversusUNION OF INDIA & ORS.

        [2024] 12 S.C.R. 1253 : 2024 INSC 1041

                      Pawan Kumar
                             v.
                   Union of India & Ors.
               (Civil Appeal No. 14689 of 2024)
                      18 December 2024
       [J.B. Pardiwala and R. Mahadevan, JJ.]


                    Issue for Consideration
Pursuant to an advertisement published by the Bharat Petroleum
Corporation Limited (“BPCL”), the appellant made an online
application for being appointed/ allotted a regular and rural retail
outlet. The appellant was selected on draw on lots and he offered
a suitable piece of land for purchase/lease belonging to third
parties - Shri Lila Dhar and Shri Dinesh Kumar, whose consent
letters were made available along with the application. At the time
of application, there was some dispute between Mr. Lila Dhar
and Mr. Dinesh Kumar as regards the land which was offered
by the appellant. But the same ultimately came to be settled to
the satisfaction of the Corporation before they issued the Letter
of Intent. An unsuccessful contender in the application process
filed a writ petition challenging the allotment to the appellant on
ground of ‘False information’. The High Court allowed the writ
petition. The appellant is before the Hon’ble Supreme Court
against that order.
The issue before the Hon’ble Supreme Court was as to when a
Constitutional Court can interfere with the decision of the Public
Sector Undertaking (PSU) allotting retail outlets.

                           Headnotes†

Judicial review – When can a Constitutional Court interfere
with the decision of the allotment of retail outlets made by
Public Sector Undertaking:
Held: The Court shall interfere with the decision of allotment of
dealership when the Corporation (PSU) shows outright favor to
the appellant – Once the PSU was convinced with the entire
procedure undertaken by the appellant, the Constitutional Courts
have no business interfering with the allotment – Power of judicial
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    review would be called for if the approach of the PSU is arbitrary
    or mala fide or procedure adopted is meant to favor one of the
    applicants – The decision-making process should clearly show that
    the said maladies are kept at bay. [Paras 22-23, 25]

    Tenders – When should a Constitutional Court exercise Judicial
    Restraint with regard to the decision of PSU Corporations
    granting it:
    Held: The PSU that authors the tender documents is the best
    person to understand and appreciate its requirements and interpret
    its documents and therefore, the constitutional courts must defer to
    this understanding and appreciation of the tender documents, unless
    there is mala fide or perversity in the understanding or appreciation
    or in the application of the terms of the tender conditions – For the
    mere reason that the PSU has given an interpretation to the tender
    documents that is not acceptable to the constitutional courts it cannot
    be a reason to interfere with the interpretation – Where a decision
    is taken that is manifestly in consonance with the language of the
    tender document or subserves the purpose for which the tender is
    floated, the court should follow the principle of restraint and technical
    evaluation or comparison by the court would be impermissible –
    The principle that is applied to scan and understand an ordinary
    instrument relatable to contract in other spheres has to be treated
    differently than interpreting and appreciating tender documents
    relating to technical works and projects requiring special skills – The
    owner should be allowed to carry out the purpose and there has
    to be allowance of free play in the joints. [Para 25]

                                 List of Acts
    Constitution of India.

                              List of Keywords
    Retail outlet dealership; Allotment of dealership; False information;
    Judicial review; Judicial restraint

                             Case Arising From
    CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14689 of 2024
    From the Judgment and Order dated 06.07.2023 of the High Court
    of Himachal Pradesh at Shimla in CWP No. 835 of 2020
[2024] 12 S.C.R.                                                        1255

                  Pawan Kumar v. Union of India & Ors.


                         Appearances for Parties
     Jayant Bhushan, Sr. Adv., Shyam S Sharma, Sanjeev Kumar
     Baliyan, Rishabh Singhle, Amartya Bhushan, Yojit Mehra, Tushar
     Bhushan, Yash Yadav, Ms. Jyoti Garg, Sujoy Chatterjee, Advs.
     for the Appellant.
     S.D. Sanjay, A.S.G., V. Giri, Sr. Adv., Vikrant Narayan Vasudeva,
     Rohit Lochav, Shlok Chandra, Suyash Pandey, Shaurya Rai, Sunita
     Gautam, Madhav Sinhal, Dr. N. Visakamurthy, Parijat Sinha, Divyam
     Dhyani, Ms. Reshmi Rea Sinha, Rahul Narang, Shyamal Kumar,
     Advs. for the Respondents.

                 Judgment/Order of the Supreme Court

                                   Order

1.   Application seeking deletion of proforma Respondent No.1 from the
     array of parties is allowed at the risk of the appellant.
2.   Cause title be amended accordingly.
3.   Leave granted.
4.   This appeal arises from the judgment and order passed by the
     High Court of Himachal Pradesh at Shimla dated 6-7-2023 in CWP
     No.835/2020, by which the Writ Petition filed by the Respondent
     No.5 - herein (original petitioner before the High Court) came to be
     allowed and thereby the allotment of dealership by Bharat Petroleum
     Corporation Limited to run a petrol pump in favour of the appellant -
     herein came to be cancelled.
5.   The facts in brief necessary for the disposal of this appeal may be
     set out thus:-
6.   The Bharat Petroleum Corporation Limited (for short, the “BPCL”)
     issued an advertisement dated 25-11-2018 for appointment/allotment
     of retail outlet dealerships for petrol pumps in the State of Maharashtra.
7.   It is not in dispute that the appellant - herein made an online
     application showing his willingness for being appointed/ allotted
     retail outlet dealership.
8.   The appellant - herein claims to be falling within the OBC category
     and accordingly he applied against the OBC category on 24-12-2018.
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9.   The appellant was included in Group II as mentioned in clause 4(v)
     of the brochure for selection of dealers for regular and rural retail
     outlet, i.e., the appellant had affirmed offer for suitable piece of land
     for purchase/lease belonging to a third party.
10. It appears from the materials on record that the appellant offered a
    piece of land owned by Shri Lila Dhar and Shri Dinesh Kumar bearing
    KK No. 4/5, Khasra No. 167/70 measuring 7-6 Bighas situated at
    Mauza Patta.
11. It also appears that there was some dispute between Mr. Lila Dhar
    and Mr. Dinesh Kumar as regards the land which was offered by the
    appellant herein. However, the same ultimately came to be settled
    to the satisfaction of the Corporation.
12. The Respondent No.5 - herein preferred a Civil Writ Petition
    No.835/2020 in the High Court and prayed for the following reliefs:-
          "i)    Issue a writ of certiorari to quash the letter of intent
                 issued to the respondent No. 5 on the basis of draw
                 lots held on 17.06.2019 for running of RO Dealership
                 at village Patta, Tehsil Arki, District Solan, H.P.
          ii)    Issue a writ of mandamus directing the Respondent
                 Nos. 1 to 4 to process the case of the petitioner
                 for allotment of RO Dealership being most eligible
                 applicant forthwith.
          iii)   Issue writ of mandamus directing the Respondent
                 Nos. 1 to 4 to action who initiate appropriate has
                 connived with respondent No. 5 in violating of RO
                 Dealership Guidelines.
          iv)    Call for the records pertaining to the case at hand.
          v)     Direct the Respondent authorities to pay the cost of
                 the petitions.”
13. The Writ Petition came to be allowed vide the impugned order passed
    by the High Court.
14. The High Court while allowing the Writ Petition filed by the Respondent
    No.5 observed in paras 32 to 44 as under:-
[2024] 12 S.C.R.                                                            1257

                 Pawan Kumar v. Union of India & Ors.



          “32) None of these facts had been disclosed by respondent
          no.5 in his application.
          33) Admittedly, Annexure P-3 Brochure issued by the
          Corporation for selection of dealer for retail outlets, contains
          Clause 22 which states as under:-
          “22 FALSE INFORMATION
                If any statement made in the application or in the
                documents enclosed therewith or subsequently
                submitted in pursuance of the application by
                the candidate at any stage is found to have
                been suppressed/misrepresented/incorrect
                or false, then the application is liable to be
                rejected without assigning any reason and in
                case the applicant has been appointed as a
                dealer, the dealership is liable to be terminated.
                In such cases the candidate/dealer shall have
                no claim whatsoever against the respective
                Company.”
          34) Thus, if any statement made in the application
          submitted by an applicant like respondent no.5 was at any
          stage found to have been false, incorrect or certain facts
          are found to have been suppressed or misrepresented,
          then the application was liable to be rejected by the
          Corporation without assigning any reason and in case, an
          applicant had been appointed as a dealer, the dealership
          was liable to be terminated.
          35) Strangely, notwithstanding such a Clause having been
          incorporated in the Brochure issued by the Corporation, and
          notwithstanding the fact that the petitioner had informed
          about the false information furnished by respondent no.5
          to respondents no.2 to 4 on 25.06.2019 (including the
          factum of pendency of a Civil Suit between Leeladhar and
          his brother Dinesh Kumar), respondents no.2 to 4 went
          ahead and issued the Letter of Intent on 21.09.2019 to
          respondent No.5 in gross violation of Clause-22, referred
          to above.
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        36) In our considered opinion, it was not open to
        respondents no.2 to 4/Corporation to grant the retail outlet
        dealership to respondent no.5 in the face of Clause-22
        of the Brochure, merely on the ground that there was a
        subsequent Out of Court Settlement between Leeladhar
        and his brother Dinesh Kumar and Dinesh Kumar later
        gave an affidavit stating that he has no objection for grant
        of retail outlet dealership to respondent no.5.
        37) This is because in the application filed by respondent
        no.5 at Sr. no.13 where land details are to be furnished,
        respondent no.5 could have mentioned that Leeladhar
        and others were co-owners of the land, but instead, he
        mentioned only Leeladhar and did not mention either about
        the other co-owners or about the pendency of the civil suit
        between Leeladhar and his brother Dinesh Kumar.
        38) In view of the undertaking given in the said application
        as well as declaration signed by respondent no.5 that wrong
        information/misrepresentation/ suppression of facts would
        make him ineligible the retail outlet dealership, which would
        bind the 5th respondent, not only respondents no.2 to 4
        cannot grant him the retail outlet dealership but cannot
        also they cannot defending their action in giving him the
        Letter of Intent by calling the petitioner as a medlesome
        interloper.
        39) We fail to see how the petitioner can be considered as
        a medlesome interloper in the facts and circumstances of
        the case, when he was also a contender for the allotment
        of the retail outlet alongwith the respondent no.5.
        40) As held in the decision of Ramana Dayaram Shetty
        versus The International Airport Authority of India &
        Others, (1979) 3 SCC 489 if an executive agency lays
        down certain standards which it professes its actions to
        be judged, it must scrupulously observe those standards.
        In the said case, the Supreme Court held that today
        the Government in a welfare State is the regulator and
        dispenser of special services and provider of a large
[2024] 12 S.C.R.                                                           1259

                 Pawan Kumar v. Union of India & Ors.


          number of benefits, including jobs, contracts, licenses,
          quotas etc.; the valuables dispensed by Government take
          many forms; many individuals and many more businesses
          enjoy largess in the form of Government contract, and the
          discretion of the Government or its agency is not unlimited,
          in that, it cannot give or withhold largess in its arbitrary
          discretion or its sweet will.
          41) This was reiterated in B.S. Minhas versus Indian
          Statistical Institute & Others (1983) 4 SCC 582, where the
          Supreme Court held that it is obligatory on the part of the
          respondent to follow its bye-laws since they have been
          framed for the conduct of its affairs to avoid arbitrariness
          and the respondent cannot escape liability for not following
          the procedure prescribed in the bye-laws.
          42) Recently, this was reiterated in M.P. Power Management
          Company Limited versus Sky Power Southeast Solar India
          Private Limited & Others (2023) 2 SCC 703 and it was held
          that if an agency of the State had laid down astandard or
          a norm of eligibility and if a person submitting a tender
          did not satisfy this condition of eligibility, his tender would
          not be eligible for consideration. It held that this Principle
          had an independent existence apart from Article 14 of the
          Constitution of India.
          43) Having regard to the settled legal position, we are of
          the opinion that the award of the retail outlet dealership by
          respondents No.2 to 4-BPCL to respondent no.5, cannot
          be sustained since respondent no.5 had misrepresented
          in his application that Leeladhar was the sole owner
          of the land offered for setting up the said outlet, but
          the truth was otherwise, and the land was co-owned
          by Dinesh Kumar and there was also a civil litigation
          pending before the Civil Court, which was not disclosed
          by respondent no.5.
          44) Accordingly, the Writ petition is allowed; the letter of
          intent issued on 21.09.2019 by respondent nos.2 to 4 to
          respondent no.5 is set aside; and the respondents are
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          directed to consider the case of the petitioner for grant
          of the retail outlet dealership in the said village within six
          weeks. The respondent no. 2-4 together and the respondent
          no.5 shall pay costs of Rs.10,000/- each to the petitioner.”
15. It appears from the line of reasoning assigned by the High Court that
    the appellant – herein was found to be guilty of not disclosing few
    relevant facts before the Corporation for the purpose of allotment
    of the dealership.
16. Since the allotment in favour of the appellant – herein came to be
    cancelled by the impugned judgment of the High Court, the appellant
    is here before this Court with the present appeal.
17. We have heard Mr. Jayant Bhushan, the learned Senior counsel
    appearing for the appellant, Mr. V. Giri, the learned Senior counsel
    appearing for the BHPL and Mr. Vikrant Narayan Vasudeva, the
    learned counsel appearing for the Respondent No.5 – herein who
    was the original petitioner before the High Court.
18. We take notice of the stance of the Corporation before the High
    Court as reflected from the reply.
19. The Corporation made itself abundantly clear that it had received
    all the relevant documents with necessary information from the
    appellant – herein for the purpose of processing the online application
    for allotment of dealership.
20. We quote Paras 17 and 18 respectively of the affidavit in reply filed
    by the Corporation before the High Court.
          “17. That the contents of this para are factually in correct,
          hence denied. The petitioner has deliberately indulged in
          mis-statement of facts regarding the out of court amicable
          settlement between the co owners of the land leading upto
          issuance of LOI in favor of respondent no.5. As mentioned
          earlier the selected candidate provided the replying
          respondents all the relevant land documents including
          consent from co-owners which were checked and verified
          by the concerned application scrutiny committee and after
          having found them to be in order his case was processed
          further. Only after following all the guidelines and policies
[2024] 12 S.C.R.                                                         1261

                 Pawan Kumar v. Union of India & Ors.


          for allotment of retail outlet a Letter of Intent was finally
          issued in favor of respondent no.5.
          18. Contents of this para are factually incorrect, hence
          denied. It is not understood as to on what basis the
          petitioner has come up with the claim as the selection
          process was to be completed within 41 days. It is submitted
          that the selected candidate Sh. Pawan Kumar had applied
          online under Group 2 for the retail outlet dealership. The
          intimation of selection post draw of lots and the list of
          documents to be submitted by the selected candidates
          was sent to Respondent no.5 over e-mail on 21.06.2019.
          He submitted all the relevant documents as required by
          the replying respondent including consent from the co-
          owners. The application and documents submitted by
          selected candidate were scrutinized by the application
          scrutiny committee strictly in line with Selection Brochure
          2018. After following all the laid down norms mentioned in
          Selection Brochure 2018, Letter of Intent was finally issued
          in favor of respondent no.5. Besides, in consonance with
          the conditions of letter of Intent, respondent no 5 entered
          into a lease agreement with the other co-owners on
          20.12.2019. Finally the replying respondent received NOC
          from DC Solan for the subject location dated 1.02.2020. It
          is further pertinent to mention that the petitioner was never
          selected for the subject location and therefore there is
          absolutely no occasion for him to submit any documents to
          the replying respondent. It is further reiterated that as the
          petitioner was never selected, the answering respondent
          could not comment upon his eligibility.”
21. Before this Court also, the Corporation has filed its reply stating as
    under :-
          “XII. The said Special Leave Petition deserves to be allowed
          also because the respondent No. 5 has unnecessarily and
          wrongly impleaded respondent No. 1 - Union of India as
          a party respondent in the present proceedings as it is not
          in any manner whatsoever connected with the issue in
          question. As such, the Hon’ble High Court ought to have
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        dismissed the writ-petition itself for misjoinder of parties
        and in the alternative, the respondent No. 1 ought to have
        been deleted from the parties.
        XIII. The said Special Leave Petition deserves to be
        allowed also because as per the Policy Guidelines,
        online applications were invited from amongst the eligible
        candidates and the categories of their applications were
        segregated according to the guidelines. The answering
        respondent/BPCL did not receive any application under
        Group 1 category. Hence, the answering respondent/BPCL
        proceeded with the draw of Lots for candidates under
        Group 2 category on 17.06.2019, in which the petitioner was
        selected. Accordingly, he was sent intimation of selection
        and was also asked to submit all the necessary documents
        for further verification. Only after meticulously going through
        all the documents including land papers provided by the
        petitioner, his case was processed and he was issued the
        Letter of Intent (LOT) by the answering respondent/BPCL
        strictly in conformity with the said Brochure of 2018.
        XIV. The said Special Leave Petition deserves to be allowed
        also because all the relevant documents received from the
        petitioner/ selected candidate were thoroughly scrutinized
        and only after that the Letter of Intent (LOI) was issued
        in his favour. It is also pertinent to mention that before
        issuance of the LOI, a compromise had been reached
        between Sh. Leela Dharand Sh. Dinesh Kumar and the
        other co-owners of the offered land. Accordingly, Sh. Dinesh
        Kumar, prepared and submitted an affidavit mentioning the
        amicable out of court settlement of the dispute between
        the co-owners of the land offered for establishment of
        Retail Outlet/Petrol Pump by the petitioner. He also filed
        an application on 08.08.2019 before the Ld. Civil Judge
        Arki, District Solan, Himachal Pradesh, for withdrawal of
        the pending Civil Suit. Subsequently, vide registered lease
        deed dated 20.12.2019, the subject land has been taken
        on lease by the petitioner from the co-owners, including
        Sh. Dinesh Kumar and Sh. Leela Dhar.
[2024] 12 S.C.R.                                                           1263

                 Pawan Kumar v. Union of India & Ors.


          XV. The said Special Leave Petition deserves to be allowed
          also because the Court case on the subject land has
          been amicably resolved between the co-owners by way
          of amicable out of court settlement and only after that the
          LOI has been issued in favour of the petitioner. As a matter
          of fact, pendency of civil dispute in respect of offered land
          does not ipso facto debar the candidate from applying for
          retail outlet dealership. The affidavits from all the co-owners
          were obtained as per Appendix III A of the said Brochure
          of 2018. Since the dispute was resolved and the court
          case was withdrawn, the land in question became free
          from any encumbrance and only after meticulous scrutiny
          of all the documents provided by the petitioner / selected
          candidate, his case was processed and has been issued
          the LOI by the answering respondent/BPCL absolutely in
          consonance with the said Brochure of 2018.
          XVI. The said Special Leave Petition deserves to be allowed
          also because immediately on the receipt of the complaint
          from the respondent No. 5, the selection process of the
          petitioner was stopped and explanation and supporting
          documents, were sought for from the petitioner. Only
          after being satisfied that the offered land was suitable
          for establishment of a retail outlet and the court case
          had been resolved amicably, the answering respondent/
          BPCL proceeded to issue the LOI to the petitioner on
          21.09.2019. In fact the petitioner /selected candidate
          provided to the answering respondent/BPCL all the relevant
          land documents, including consent from the co-owners
          which were checked by the concerned application scrutiny
          committee even prior to the complaint of the respondent
          No. 5. Moreover, any complaint against a candidate can be
          entertained only if it is made as per procedure prescribed
          under Clause 18 - Grievance Redressal System provided
          in the said Brochure of 2018.
          XVII. The said Special Leave Petition deserves to be
          allowed also because the respondent No. 5 subsequently
          made a representation through the PG Portal, which
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        was duly replied vide the answering respondent/BPCL’s
        letter dated 10.08.2019. It is respectfully submitted that
        from the averments made in para 14 of his writ petition,
        it appears that the respondent No. 5 has misconceived
        and misunderstood the selection process described in
        the said Brochure of 2018. It is pertinent to mention that
        the Field Verification of Credentials (FVC) is to be carried
        out for the selected with respect to the details provided
        by him in the application form. The FVC was duly carried
        out by the FVC with the guidelines laid down in the said
        Brochure of 2018 and only thereafter the petitioner was
        recommended for issuance of the LOI.
        XVIII. The said Special Leave Petition deserves to be
        allowed also because before establishment of the retail
        outlet, it is required of the co-owners of the offered
        land to give their consent letter for establishment of the
        retail outlet prior to issuance of the LOI. The petitioner
        /selected candidate was called upon to provide all the
        relevant land documents, including consent affidavits
        from the co-owners of the land which were duly submitted
        by him before the Application Scrutiny Committee and
        only after the thorough verification of their authenticity,
        approval was sanctioned for issuance of the LOI in favor
        of the petitioner.
        XIX. The said Special Leave Petition deserves to be allowed
        also because the averment of respondent No. 5 in para
        18 of his writ petition that the whole process was to be
        completed within a period of 41 days from the date of draw
        of lots and that respondent No. 5 was very much eligible
        and has given all the requisite documents as required by
        the answering respondent /BPCL at the time of making
        application, was clarified by the answering respondent/
        BPCL in its reply dated 03.11.2020. It is submitted that
        the averment of the respondent No. 5 to the effect that the
        selection process was to be completed within 41 days is
        without any basis and is misconceived. It is further stated
        that the respondent No. 5 was not selected in the draw
[2024] 12 S.C.R.                                                     1265

                 Pawan Kumar v. Union of India & Ors.


          of lots for the subject location and therefore there was
          absolutely no occasion for him to submit any documents
          to the answering respondent/BPCL.”
22. It would have been altogether a different situation had the Corporation
    shown outright favour to the appellant in the allotment of dealership.
    That does not seem to be in the present litigation.
23. What weighed with the High Court was some non-disclosure of
    information relevant for the purpose of allotment of dealership. Once
    the Corporation, a Public Sector Undertaking was convinced with the
    entire procedure undertaken by the appellant – herein, then there
    was no good reason for the High Court to disturb the allotment of
    dealership which was granted way back in the year 2020 at the
    instance of the respondent no. 5.
24. The BPCL having authored the tender documents, is the best
    person to understand and appreciate its requirements and
    interpret its documents. The constitutional courts must defer to this
    understanding and appreciation of the tender documents, unless
    there is mala fide or perversity in the understanding or appreciation
    or in the application of the terms of the tender conditions. It is
    possible that the owner or employer of a project may give an
    interpretation to the tender documents that is not acceptable to the
    constitutional courts but that by itself is not a reason for interfering
    with the interpretation given.
25. Exercise of power of judicial review would be called for if the approach
    is arbitrary or mala fide or procedure adopted is meant to favour
    one. The decision-making process should clearly show that the
    said maladies are kept at bay. But where a decision is taken that is
    manifestly in consonance with the language of the tender document or
    subserves the purpose for which the tender is floated, the court should
    follow the principle of restraint. Technical evaluation or comparison
    by the court would be impermissible. The principle that is applied
    to scan and understand an ordinary instrument relatable to contract
    in other spheres has to be treated differently than interpreting and
    appreciating tender documents relating to technical works and projects
    requiring special skills. The owner should be allowed to carry out
    the purpose and there has to be allowance of free play in the joints.
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26. In such circumstances, referred to above, we have reached the
    conclusion that the impugned judgment is not sustainable in law and
    deserves to be set aside and is, accordingly, set aside.
27. The appeal is allowed in the aforesaid terms.
28. Pending applications, if any, also stand disposed of.


     Result of the case: Appeal allowed.




     †
         Headnotes prepared by: Swathi H. Prasad, Hony. Associate Editor
                                 (Verified by: Kanu Agrawal, Adv.)