1994 JTR(SC) 943
1994 AIR(SCW) 5139 ; 1995 1 AllCJ 29 ; 1995 25 AllLR 160 ; 1995 1 AWC 36 ; 1994 3 CurCC(SC) 545 ; 1995 57 DLT 284 ; 1995 1 JT 11 ; 1995 1 MLJ 64 ; 1994 4 Scale 803 ; 1995 1 SCC 85 ; 1995 1 UJ 76 ; 1995 KHC 1210 ; 1994 2 KLT(Online) 1208
SUPREME COURT OF INDIA
K. Ramaswamy and N. Venkatachala, JJ.
Civil Appeal No. 3870 of 1992 and W.P. (C) Nos. 253 of 1993 and 54 of 1994
Decided On: 22.09.1994
Mahinder Kumar Gupta and Ors. Appellants
Vs.
Union of India (UOI), Ministry of Petroleum and Natural Gas Respondent
Counsel for the Parties
For Appellant/Petitioner/Plaintiff: S.R. Bhat, Adv.
For Respondents/Defendant: A.K. Ganguli, Senior Adv., B.K. Prasad, A.D.N. Rao and S.N. Terdal, Advs.
Act Referred :CONSTITUTION OF INDIA : Art.19(1)(g), Art.6, Art.32, Art.39(c), Art.299, Art.39(b)(c), Art.14, Art.298
(A) The Constitution of India, Article 19(1)(g) guarantees citizens the right to practise any profession or carry on any occupation, trade or business, while Article 19(6) permits reasonable restrictions in the interests of the general public, including state monopolies in specified sectors. Articles 39(b) and 39(c) direct that the ownership and control of material resources be distributed to subserve the common good and prevent concentration of wealth, and Article 32 provides remedies for enforcement of rights. The guidelines challenged here operate under Article 19(6) to regulate dealership and distributorship of petroleum products, which are declared a Government monopoly. Clauses prescribing eligibility criteria and relationship-based ineligibility aim to ensure economic and social justice under the Preamble, prevent fragmentation of state policy, and distribute the State largesse to as many eligible persons as possible. The provisions further seek to prevent concentration of dealership within closely related persons or partners, thereby aligning with the constitutional objective of diffusion of ownership and control.
(B) Key principles include: (i) State monopoly over petroleum products permits reasonable classification in eligibility criteria; (ii) relationship-based ineligibility is a valid classification to prevent circumvention of distributive policy; (iii) classification based on physical handicap attracts favourable treatment; (iv) associations lack standing to challenge where no individual fundamental right is asserted; (v) partnership as a unit must satisfy eligibility criteria collectively; (vi) economic and social justice under Article 39 and equality under Article 14 are achieved through non-arbitrary, nexus-based regulation.
Facts of the case:
Three writ petitions challenge eligibility guidelines for dealership and distributorship of petroleum products. The first involves an association and a partner already holding petroleum product dealerships. The second involves a widow and daughter of a petroleum dealer. The guidelines prescribe criteria including nationality, age, education, residence, and relationship. Clause 10 bars any person or close relative (spouse, parents, siblings, children, in-laws) who already holds or is eligible for a dealership from obtaining another. Petitioners argue this violates Article 19(1)(g), is arbitrary, and discriminates between physically handicapped and other persons.
Findings of Court:
The court found no arbitrariness or unjustness in the guidelines. It held that petroleum product distribution is a state monopoly under Article 19(6), and the eligibility criteria, including relationship-based ineligibility, bear a reasonable nexus to the objectives of economic and social justice, preventing concentration of wealth and circumvention by legal ingenuity. Physical handicap is treated as a distinct category, and parity with that category is not available to other persons. Associations lack fundamental right under Article 32, and incomplete partnership details preclude relief.
Issues:
Whether relationship-based ineligibility criteria in dealership guidelines violate Article 19(1)(g) and Article 14, and whether associations have standing to file writ petitions under Article 32.
Ratio Decidendi:
Relationship-based ineligibility is a reasonable classification under Article 19(6) to achieve constitutional objectives of common good, non-concentration of wealth, and equitable distribution of state largesse, and associations without individual fundamental rights cannot invoke Article 32.
Result:
The appeal and writ petitions are dismissed with costs of twenty thousand rupees each.
(A) The Constitution of India, Article 19(1)(g) guarantees citizens the right to practise any profession or carry on any occupation, trade or business, while Article 19(6) permits reasonable restrictions in the interests of the general public, including state monopolies in specified sectors. Articles 39(b) and 39(c) direct that the ownership and control of material resources be distributed to subserve the common good and prevent concentration of wealth, and Article 32 provides remedies for enforcement of rights. The guidelines challenged here operate under Article 19(6) to regulate dealership and distributorship of petroleum products, which are declared a Government monopoly. Clauses prescribing eligibility criteria and relationship-based ineligibility aim to ensure economic and social justice under the Preamble, prevent fragmentation of state policy, and distribute the State largesse to as many eligible persons as possible. The provisions further seek to prevent concentration of dealership within closely related persons or partners, thereby aligning with the constitutional objective of diffusion of ownership and control.
(B) Key principles include: (i) State monopoly over petroleum products permits reasonable classification in eligibility criteria; (ii) relationship-based ineligibility is a valid classification to prevent circumvention of distributive policy; (iii) classification based on physical handicap attracts favourable treatment; (iv) associations lack standing to challenge where no individual fundamental right is asserted; (v) partnership as a unit must satisfy eligibility criteria collectively; (vi) economic and social justice under Article 39 and equality under Article 14 are achieved through non-arbitrary, nexus-based regulation.
Facts of the case:
Three writ petitions challenge eligibility guidelines for dealership and distributorship of petroleum products. The first involves an association and a partner already holding petroleum product dealerships. The second involves a widow and daughter of a petroleum dealer. The guidelines prescribe criteria including nationality, age, education, residence, and relationship. Clause 10 bars any person or close relative (spouse, parents, siblings, children, in-laws) who already holds or is eligible for a dealership from obtaining another. Petitioners argue this violates Article 19(1)(g), is arbitrary, and discriminates between physically handicapped and other persons.
Findings of Court:
The court found no arbitrariness or unjustness in the guidelines. It held that petroleum product distribution is a state monopoly under Article 19(6), and the eligibility criteria, including relationship-based ineligibility, bear a reasonable nexus to the objectives of economic and social justice, preventing concentration of wealth and circumvention by legal ingenuity. Physical handicap is treated as a distinct category, and parity with that category is not available to other persons. Associations lack fundamental right under Article 32, and incomplete partnership details preclude relief.
Issues:
Whether relationship-based ineligibility criteria in dealership guidelines violate Article 19(1)(g) and Article 14, and whether associations have standing to file writ petitions under Article 32.
Ratio Decidendi:
Relationship-based ineligibility is a reasonable classification under Article 19(6) to achieve constitutional objectives of common good, non-concentration of wealth, and equitable distribution of state largesse, and associations without individual fundamental rights cannot invoke Article 32.
Result:
The appeal and writ petitions are dismissed with costs of twenty thousand rupees each.
A.D.N.Rao, A.K.GANGULY, B.K.PRASAD, S.N.TERDAL, S.R.Bhatt
ORDER
1. This appeal arises from the judgment and order of the Division Bench of Delhi High Court in Civil Writ Petition No. 3165 of 1991 dated 1-11-1991. Writ Petition No. 253 of 1993 was filed by an Association and also a partner as an individual. Writ Petition No. 64 of 1994 was filed by the petitioner who is a widow and daughter of a dealer in petroleum products. These matters relate to the contracts of dealership or distributorship of petroleum products awardable by the Government of India Undertakings. In the first case, admittedly, the appellants sonrin-law is already having a dealership for distribution of petroleum products. In the second case it is an admitted fact that one of the appellants partners is already having a dealership of petroleum products and in the third case, the appellants mother is already having a dealership of petroleum products.
2. The questions raised in these appeals/petitions are whether the Government is justified in imposition of eligibility restrictions in the award of retail outlets (other than 2/3 wheeler ROs), SKO-LD dealerships and LPG distributorships guidelines. Part III of the guidelines prescribes the eligibility criteria, viz., nationality, age on the date of application, educational qualifications, residence, SC/ST certificates, eligibility for freedom-fighters and physically handicapped/government personnel disabled on duty/widows of government personnel who die in the course of duty. Then dealers relationship (applicable for all categories) has been prescribed as one of the criteria which reads as under :
(a) No person or a Consumer Cooperative Society shall be awarded a new dealership/distributorship if he/she or the Consumer Cooperative Society already holds a dealership/distributorship of LPG/kerosene/ LDO/HSD/MS/lubricating oil of any oil company.
(b) No person shall be awarded a new dealership/distributorship if any of the following close relatives (including step-relatives) of the person already hold a dealership/distributorship of LPG/ kerosene/ LDO/HSD/MS/lubricating oil or any other petroleum products of any oil company.
For other than PH candidates in PH category FF, DEF, SC/ST and OPENFor PH candidates only
(i) Spouse
(ii) Father/Mother
(iii) Brother/Sister
(iv) Son/Daughter
(v) Son-in-law/Daughter-in-law
(vi) Parents-in-law (i) aSpouse
(ii) Father/Mother
(iii) Son/Daughter-in-law
3. Clause 10 of the guidelines relates to partnerships with which we are concerned in one of the matters. The procedure for selection has been prescribed in Part VI of the guidelines. Criterion No. 2 relates to screening of the applicants for interview. Then, Rule 3 relates to norms for evaluation of competing claims of the candidates and Rule 5 regulates selection of dealers/distributors. In this case, we are concerned with dealership of petroleum products applicable for all categories in which Clause (b) prescribes ineligibility of persons if one of the persons mentioned therein has already a dealership. It is seen that one of the conditions subject to which a candidate is entitled to apply for grant of dealership is that his spouse, father/mother, brother/sister, son/daughter, son-in-law/daughter-in-law and parents-in-law if already had been given dealership, he/she is made ineligible to apply for dealership. In the case of partnerships, partners should individually fulfil the above-mentioned eligibility criteria/conditions and all of them must appear for an interview together.
4. Shri Ravindra Bhat, learned counsel for the appellants/petitioners contended that under Article 19(1)(g) all citizens have the right to practise any profession or to carry on any occupation, trade or business. Appellants/petitioners being eligible candidates to apply for the dealership or distributorship, then, one or the other of them cannot be made ineligible on the ground that his/her spouse, parents, sons-in-law or a relative is already having a dealership, because it is his/her own business and he has nothing to do with his sons-in-law and that, therefore, the prescription of ineligibility due to relationship is void under Article 19(1)(g). It is also arbitrary, unjust and also it bears no reasonable nexus to the object sought to be achieved. He further contended that while prescribing the ineligibility criteria for persons other than the physically handicapped PH category, discrimination has been made between the other persons and physically handicapped candidates in whose favour the ineligibility is only in respect of spouse, parents, son/daughter-in-law. The daughters and others having been excluded from the eligibility, the inclusion of parents-in-law, sons-in-law etc. in respect of others is also violative of Article 14 of the Constitution. We find no force in the contention:
5. The Preamble to the Constitution envisages the securing of economic and social justice to all its citizens; accorded equality of status and of opportunity assuring the dignity of the individual. Article 39(6) postulates that the ownership and control of the material resources of the community are to be so distributed as to best subserve the common good. Clause (c) prevents concentration of wealth and means of production to the common detriment. Since the grant of dealership or distributorship of the petroleum products belongs to the Government largesse, the Government in its policy of granting the largesse have prescribed the eligibility criteria. One of the eligibility criteria is that one among the near relations or partners or associates in other words among a named group of persons alone should have dealership and there should not be any concentration by them in the distribution of its petroleum products through the dealership. The guidelines further intend to prevent frustration of the State policy by process of legal ingenuity or subterfuge. One of the criteria is relationship. The relationship criteria has been prescribed to see that the persons who already had one dealership should not apply so that the above objectives of the Constitution are achieved. In Part III, Clause (b) of the relationship category, a person from among specified near relatives has been made ineligible to apply for another dealership to any of the nationalised oil companies. The petitioners/appellants dehors the guidelines have no independent right to have business or avocation in the distribution or production or ownership of one of the petroleum products. Production and distribution of the petroleum products are the exclusive monopoly of the State under Article 19(6) of the Constitution. As a part of its policy of the distribution of its largesse Government have prescribed the eligibility criteria to the persons to obtain dealership for distribution of petroleum products. The distribution of the largesse of the State is for the common good and to subserve the common good of as many persons as possible. The Government of India intended to group together certain near relations as a unit and one among that unit alone was made eligible to apply for and claim for grant of dealership. Further, economic and social justice as envisaged in the Preamble of the Constitution is sought to be achieved. Therefore, there is a reasonable nexus between the object and the prescription of the eligibility criteria envisaged in the guidelines. All those who satisfy the eligibility criteria alone are entitled to apply for the consideration of the grant of dealership. It is true that in case of physically handicapped persons, only three classes of persons were made ineligible. Physically handicapped persons have been treated as a class by themselves. Under these circumstances, any other person other than PH, cannot claim parity with PH persons. As far as partnership is concerned, if one of the persons either have a dealership or relations who were found to be eligible under the relationship criteria, and had the dealership, then Clause 10 of the said guidelines gets attracted and such partnership also did not become eligible to apply for dealership/distributorship. The object of Clause 10 appears to be that for those partners who either one among themselves or any of the relations of one of the partners had a dealership, the other partner or the specified relations also not be eligible to apply for grant of dealership individually or as a member of the partnership. Therefore, the guidelines are based on public policy to give effect to the constitutional creed of Part IV of the Indian Constitution.
6. Under these circumstances, we find no arbitrariness or unjustness in prescription of the guidelines for the eligibility criteria. The second writ petition stands liable to be dismissed on the sole ground that the Association cannot file a writ petition as it has no fundamental right under Article 32 of the Constitution. One of the petitioners/appellants has claimed as having partnership, but the details thereof have not been given. We, therefore, dismiss the appeal as well as the writ petitions with costs quantified at Rs 20,000 each.