Mukesh Sharma v. Hindustan Petroleum Corporation Ltd
2026-02-28
Jyotsna Rewal Dua
body2026
DailyLaw.ai
JUDGMENT : Jyotsna Rewal Dua, J. Petitioner seeks direction to the respondents to issue him Letter of Intent for establishing and commissioning the petrol retail outlet ‘within 2 K.M of Karsha village limits, in Tehsil Anni, District Kullu’. This direction has been sought primarily on the ground that petitioner had emerged most meritorious, had secured maximum marks and was the only candidate empaneled by the respondents in view of marks awarded by the duly constituted Committee on 15.11.2009. Respondents-Hindustan Petroleum Corporation has not issued Letter of Intent to the petitioner, hence the dispute. 2. Following facts can be gathered from the record:- 2(i) During June 2009, respondent-Corporation published an advertisement for grant of dealership for the retail outlet at different locations in State of Himachal Pradesh. Once such location was ‘within 2 K.Ms of Karsha village limits, Tehsil Anni, District Kullu’. Petitioner applied for the dealership at the aforesaid site. 2(ii) Respondent-Corporation called six candidates for the interview, for the proposed retail outlet, which was held on 21.11.2009. Five candidates, including the petitioner and one Smt. Sushma Gupta, appeared therein. Petitioner scored 71.16% marks including 34.16% given to him under the category ‘Land and Infrastructure’. Smt. Sushma Gupta obtained 55 % marks. No marks were awarded to her under the ‘Land and Infrastructure’ Category . Petitioner stood first in the merit and as per the pleadings of the parties, emerged as the only empaneled candidate having scored minimum qualifying marks of 60%. Smt. Sushma Gupta complained to the respondent on 14.10.2009 against higher marks awarded to the petitioner. She also put forth her case for award of marks under the category ‘Land and Infrastructure’. 2(iii) In the meanwhile, one Sh. Amar Chand, who had also applied for the retail outlet in question instituted CWP No.4340 of 2009 against rejection of his candidature and empanelment of the petitioner for the retail outlet. 2(iv) Respondent-Corporation filed reply to the writ petition (Annexure P-2), justifying rejection of Sh. Amar Chand’s candidature. It was also pleaded in the reply that the present petitioner had been selected as the successful candidate for the retail outlet after following the prescribed procedure in accordance with law. CWP No. 4340 of 2009 was dismissed on 23.11.2010. 2(v) Present petitioner represented to the respondents on 21.11.2011 (Annexure P-5), 26.08.2011 (Annexure P-6) and 23.12.2011 (Annexure P-7) for issuance of Letter of Intent.
CWP No. 4340 of 2009 was dismissed on 23.11.2010. 2(v) Present petitioner represented to the respondents on 21.11.2011 (Annexure P-5), 26.08.2011 (Annexure P-6) and 23.12.2011 (Annexure P-7) for issuance of Letter of Intent. He finally preferred this writ petition on 16.10.2012, seeking following substantive reliefs:- “i) That the writ in the nature of mandamus may kindly be issued thereby directing the respondents to issue letter of intent (LOI) and other permissions required in favour of the petitioner for establishing and commission the retail outlet at site Karsha, Village Karsha, Tehsil Anni, Distract Kullu, H.P. and justice be done. ii) That the writ in the nature of mandamus may kindly be issued directing the respondents to pay a sum of Rs.5,00,000/- as loss suffered by the petitioner for not issuing the Letter of Intent (LOl) for establishing the retail out let in question alongwith interest 12% per annum from the date when the other persons have been issued the letter of intent (LOl) whose applications were invited by the same advertisement as that of the petitioner and justice be done.” On 16.04.2013, this writ petition was admitted with order that “proceedings in respect of cancellation may be under taken. However, the final decision shall not be taken without the permission of the Court.” The above order was passed as the respondent- Corporation had in the meanwhile processed the case of the petitioner for cancellation of his empanelment for allotment of the retail outlet. In terms of the liberty granted to the respondent- Corporation for proceeding further in respect of cancellation of petitioner’s empanelment, an elaborate order was passed by it on 27.03.2014 (Annexure R-E) concluding that in view of the information furnished and the columns filled by the petitioner in his application for allotment of the dealership, marks allotted to him for ‘Land and Infrastructure’ 15.11/21.11.2009 were not in accordance with the applicable guidelines. Petitioner’s selection and his empanelment candidate was found to be not in accordance with the laid down guidelines. The complainant, Smt. Sushma Gupta, was also held not eligible to marks other than those awarded to her by the interview Committee on 21.11.2009. The petitioner after reduction of his marks under column of ‘Land and Infrastructure’ ended up with 37% marks in place of previously awarded 71.16 %. The revised marks being less than the minimum required marks of 60%, he was held to have not qualified.
The petitioner after reduction of his marks under column of ‘Land and Infrastructure’ ended up with 37% marks in place of previously awarded 71.16 %. The revised marks being less than the minimum required marks of 60%, he was held to have not qualified. Smt. Sushma Gupta stood already disqualified having scored 55.00% marks awarded to her in the interview on 21.11.2009. Learned counsel for the parties apprised during hearing that Smt. Sushma Gupta has not taken any recourse against the aforesaid findings of the respondent- Corporation and status quo has been maintained by the respondent-Corporation with respect to final decision in terms of order passed in this petition on 16.04.2013 3. Submissions Heard learned counsel for the parties and considered the case file. 3(i) Learned Senior Counsel for the petitioner submitted that: - 3(i)(a) Petitioner stood selected as first empaneled candidate for the dealership of petrol retail outlet in question by the duly constituted committee on 21.11.2009. The petitioner had scored 71.16% of marks, way ahead of the marks obtained by the other four candidates, who were called for the interview. Having selected the petitioner as first empaneled candidate in 2009, respondent-Corporation could not have taken a U-turn years later by revising and reducing his tally of marks. 3(i)(b) The respondent-Corporation had defended petitioner’s selection in Amar Chand Vs. Hindustan Petroleum Corporation Ltd. and Another, CWP No. 4340 of 2009 decided on 23.11.2010. Having done so, it was not open to the respondent-Corporation to hold years later that marks to the petitioner had been wrongly awarded and that his marks tally was bound to go down and in such process, the revised marks now awarded to the petitioner would not make him qualify the selection process in accordance with applicable guidelines. 3(i)(c) The original marks scored by the petitioner have been reduced by the respondent-Corporation only on account of a typographical error in petitioner’s application. While filling Sr. No. 12(d) of the application form, petitioner had not struck off ‘Yes/No’ in the aforesaid serial no. For this reason, respondents-Corporation revised petitioner’s marks tally, awarded him zero mark under the category of ‘Land and Infrastructure’, thereby impacting his total marks which were reduced from 71.16% to 37%.
While filling Sr. No. 12(d) of the application form, petitioner had not struck off ‘Yes/No’ in the aforesaid serial no. For this reason, respondents-Corporation revised petitioner’s marks tally, awarded him zero mark under the category of ‘Land and Infrastructure’, thereby impacting his total marks which were reduced from 71.16% to 37%. It was also urged that petitioner is ready to file an affidavit and has expressed so even before the respondent-Corporation that he is ready and willing to lease out his land to the respondent-Corporation and therefore, marks should not be deducted from his original tally. In case this proposition is accepted, petitioner would still be entitled to 71.16% marks and would continue to remain at top of the merit with marks more than required 60% marks. Accordingly, prayer was made for allowing the writ petition with direction to the respondent-Corporation to issue Letter of Intent to the petitioner for the retail outlet in question. 3(ii) Learned counsel for the respondents-Corporation submitted that even after the disposal of the Amar Chand (supra), allotment of retail outlet in question could not be processed further by the respondent-Corporation in view of interim orders passed in Hindustan Petroleum Dealers Association Vs. UOI and others, CWP No.3723 of 2010 decided on 17.05.2012, which had directed the respondent-Corporation to maintain status quo with respect to opening of new retail outlets across the State. The said writ petition was disposed of on 17.05.2012. Learned counsel also submitted that there was no bar upon the respondent-Corporation to examine and consider the case of the petitioner vis-à-vis allotment of marks to him in view of the complaint lodged by one of the participating candidates. On examining the same, the authorities detected wrongful awarding of more marks to the petitioner then deserved to be awarded to him in view of the information furnished/columns filled by him in his application. The petitioner was accordingly held to be eligible for award of only 37% marks instead of 71.16%, originally given to him. He, thus, failed to meet the qualifying criteria of securing minimum required 60% marks. Petitioner, therefore, is not eligible to issuance of Letter of Intent. 4. Consideration 4(i) The first thing that needs to be noticed is that petitioner has no vested right to the Letter of Intent.
He, thus, failed to meet the qualifying criteria of securing minimum required 60% marks. Petitioner, therefore, is not eligible to issuance of Letter of Intent. 4. Consideration 4(i) The first thing that needs to be noticed is that petitioner has no vested right to the Letter of Intent. Petitioner seeks issuance of Letter of Intent on the ground that he was the first empaneled candidate empaneled as such on the basis of marks awarded to him by the Committee on 21.11.2009. A perusal of the statement of marks reflects that petitioner had scored 71.16 % marks out of which 34.16% marks had been awarded to him under the ‘Land and Infrastructure’ Category. Petitioner has not disputed that minimum qualifying marks required were 60%. 4(iii) Respondent-Corporation’s case is that while examining the complaint preferred by Smt. Sushma Gupta- one of the participating candidates, it came to light that against Sr. No.12(d) of the application form, petitioner had failed to score out ‘Yes/No’ against the questions-“Are you willing to transfer the land on sale/long lease to the Oil Company?” Further there was an added question under Sr. No.12(d) that “if yes, at what rate/term”. The petitioner had mentioned ‘No’ in type written words to this sub question. According to the respondent-Corporation, petitioner having typed out ‘No’ to the sub question of the question figuring at Sr. No.12(d) of the application, and by not quoting any rate/terms for leasing out the land, clearly declared his intention for not leasing out the land. Despite this, 34.16 % marks had been wrongly awarded to him on 21.11.2009 under the ‘ Land and Infrastructure’ category. This being the admitted factual position, respondents-Corporation while deliberating Smt. Sushma Gupta’s complaint, had justifiably drawn the conclusion that by electing not to score out either ‘Yes or No’ to the main question at Sr. No.12(d) of the application form, the petitioner had ex-facie deliberately omitted to answer an important question. It has not been disputed before me that depending upon the answer to this question, different marks would have been allotted to the participating candidates under ‘Land and Infrastructure’ category. 4(iii) The petitioner having replied ‘No’ in type written words to the sub question at Sr. No. 12(d) of his application, had certainly expressed his unwillingness to lease the land in question to the respondent-Corporation.
4(iii) The petitioner having replied ‘No’ in type written words to the sub question at Sr. No. 12(d) of his application, had certainly expressed his unwillingness to lease the land in question to the respondent-Corporation. Petitioner does not dispute that his such answer would have resulted in awarding no marks to him under applicable parameters for ‘Land and Infrastructure’ category. The petitioner had previously been allotted 34.16% marks under the ‘Land and Infrastructure’ category. The petitioner does not dispute that his furnished answer to Sr. No.12(d) of the application as ‘No’ would fetch him the marks as revised by the respondent- Corporation i.e. 37% instead of 71.16 % or in other words ‘0’ marks under ‘Land and Infrastructure’ category. This being the admitted position, the petitioner had definitely scored much less than the required 60% marks. 4(iv) In view of above, petitioner, therefore, is not entitled for issuance of letter of intent having not qualified the selection process in terms of the admitted applicable guidelines, which incidentally have not even been placed on record. 4(iv) The contention of the petitioner that respondent- Corporation having defended petitioner’s selection in Amar Singh (supra) could not have revised and reduced petitioner’s marks years later, carries no force. It is not a case where any further action on the basis of statement of marks, showing petitioner as meritorious and empaneled candidate, was taken by the respondent-Corporation. The matter stood at the stage of awarding marks to the participating candidates. No further action had been taken by the respondent-Corporation. In Amar Chand (supra), respondent- Corporation in its reply had primarily defended its action of rejecting the candidature of aforesaid Amar Chand and in that process, had, inter alia, pleaded that petitioner’s selection was proper and in accordance with the guidelines. In the given facts and circumstances of the case, when complaint lodged by another participating candidate against the marks awarded to the petitioner was pending, it was certainly permissible to the respondent-Corporation to have investigated into the matter for ascertaining the veracity of allegations levelled therein and to correct demonstrated errors of facts. In the instant case, petitioner has not been issued Letter of Intent, even if this had been issued, then also errors of facts which had admittedly resulted in awarding him more marks than permissible, could have been rectified by the respondents-Corporation.
In the instant case, petitioner has not been issued Letter of Intent, even if this had been issued, then also errors of facts which had admittedly resulted in awarding him more marks than permissible, could have been rectified by the respondents-Corporation. In this context, it would be in place to refer to State of Himachal Pradesh Vs. M/s Oasys Cybernatics Pvt. Ltd., SLP (C)No. 6531 of 2025 decided on 24.11.2025, wherein Hon’ble Apex Court held that Letter of Intent creates no vested right until it passes the threshold of final and unconditional acceptance. It is but a ‘Promise in embryo’ capable of maturing into a contract only upon satisfaction of stipulated preconditions or upon issue of Letter of Acceptance. Portion relevant to context is as under:- “D. 1. Issue No . I: Whether the LoI created enforceable rights in favour of the Respondent-company? 11. The first issue that falls for our determination concerns the legal character of the LoI dated 02.09.2022 and the nature of rights, if any, accrued to the Respondent- company thereunder. 12. This question goes to the root of the matter, and is not one of mere semantics, i.e. ascertaining whether the issuance of the LoI created a concluded contract capable of enforcement, or whether it remained a conditional and inchoate expression of intent, leaving the Government free to reassess its position prior to formal acceptance. The answer defines the legal threshold for the Appellant-State’s power to cancel and the Respondent-company’s entitlement to protection. 13. The jurisprudence on the subject is neither nascent nor unsettled. A catena of decisions starting from Rajasthan Cooperative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Service (P) Ltd., (1996)10 SCC 405 , through Dresser Rand S.A. v. Bindal Agro Chem Ltd., (2006)1 SCC 751 , to Level 9 Biz Pvt. Ltd. v. HP Housing & Urban Development Authority, 2024 SCC On Line SC 480, this Court has consistently held that an LoI is, in the ordinary course, a precursor to a contract and not the contract itself. 14. In Dresser Rand (supra), it was re-stated with clarity that “a letter of intent merely indicates a party’s intention to enter into a contract with the other party in future.
14. In Dresser Rand (supra), it was re-stated with clarity that “a letter of intent merely indicates a party’s intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract.” The same principle animated Rajasthan Cooperative Dairy Federation (supra), where this Court observed that until the offer is accepted unconditionally and the preconditions are satisfied, “no binding legal relationship” comes into existence. The rationale is thus simple but fundamental: the law of contract distinguishes between a promise to make a promise and a promise performed. The former is not legally binding until its contingencies are fulfilled. 15. These authorities collectively articulate a coherent doctrine: an LoI creates no vested right until it passes the threshold of final and unconditional acceptance. It is but a “promise in embryo,” capable of maturing into a contract only upon the satisfaction of stipulated preconditions or upon the issue of an LoA. A bidder’s expectation that such a contract will follow may be commercially genuine, but it is not a juridical entitlement. To hold otherwise would be to bind the State in contract before it has consciously chosen to be bound—a proposition foreign to both contract law and public administration. 16 to 18 ……………………… 19. As a result, the First Issue is answered in the negative. We have no difficulty in holding that the Lol did not give rise to any binding or enforceable rights in favour of the Respondent-Company.” As noticed previously, petitioner has not even disputed that he had filled Sr. No.12(d) of the application in the manner as has been projected by the respondent- Corporation and further that he is not eligible to any marks under the category ‘Land and Infrastructure’ on the basis of application as filled by him. His case is that the way he had filled Sr. No.12(d) of the application form, was an inadvertent/typographical error on his part and that he is now ready and willing to furnish an affidavit for leasing out his land in favour of the respondent-Corporation. This plea cannot be accepted at this stage. Admittedly, furnishing of information, filling up different serial numbers of the application in a particular manner, would have fetched corresponding marks in accordance with prescribed parameters.
This plea cannot be accepted at this stage. Admittedly, furnishing of information, filling up different serial numbers of the application in a particular manner, would have fetched corresponding marks in accordance with prescribed parameters. Having filled the application form in a specific manner, would definitely attract awarding of marks to the participating candidates accordingly and relatable to the guidelines. Allowing the petitioner to change the information furnished by him in his application to permit him to alter the answer assertively given by him to the question at Sr. No.12(d) of the application at this stage, would not only be contrary to law but would also cause grave prejudice to the other participating candidates as well. Hence the prayer made by the petitioner for issuance of Letter of Intent in his favour, in the given facts and circumstances, cannot be accepted. 5. For the foregoing discussion, there is no merit in the present writ petition. The same is accordingly, dismissed. Pending miscellaneous application(s), if any, also to stand disposed of.