2005 (5) TMI 682 - SC - Indian Laws

Summary

Issues Involved:
1. Eligibility criteria for LPG dealership/distributorship.
2. Interpretation of the term "resident" in the eligibility criteria.
3. Jurisdiction and enforceability of mandatory injunction.
4. Validity of the selection process and recommendations by the Oil Selection Board.

Detailed Analysis:

1. Eligibility Criteria for LPG Dealership/Distributorship:
The case revolves around the eligibility criteria set by Hindustan Petroleum Corporation for allotting LPG dealership in Kangra, Himachal Pradesh. The criteria stipulated that applicants must be unemployed graduates, residents of Kangra district, with a family income not exceeding Rs. 24,000, and without close relatives as dealers or distributors of any oil company. Additionally, applicants should not be partners or hold any dealership/distributorship agency in any petroleum corporation company.

2. Interpretation of the Term "Resident":
The core issue was the interpretation of the term "resident" as used in the eligibility criteria. The term "resident" was not explicitly defined in the advertisement, leading to varied judicial interpretations. The High Court initially held that "residence" includes both temporary and permanent residence. It concluded that since respondent no.1's husband owned property in Kangra, she would be deemed a resident of Kangra district.

However, the Supreme Court disagreed with this interpretation, emphasizing that the term "resident" should be understood in its actual sense, i.e., de facto residence. The Court cited various precedents, including decisions from the Privy Council and Supreme Court, to establish that "residence" generally refers to a place where a person lives permanently or for a considerable period, not merely based on ancestral or marital connections.

3. Jurisdiction and Enforceability of Mandatory Injunction:
The High Court had ruled that there was no contract between the respondents and the appellants to allot the dealership, thus no specific performance or enforcement could be mandated. The Supreme Court noted that while there was some admission on the binding nature of the Oil Selection Board's recommendations, it chose not to delve into this issue further. The High Court's decision to set aside the mandatory injunction was based on the administrative discretion of the Corporation, which the Supreme Court did not contest.

4. Validity of the Selection Process and Recommendations by the Oil Selection Board:
The selection process involved an interview by the Oil Selection Board, which recommended a merit list including respondent no.1, respondent no.5, and the appellants. The Corporation issued a letter of intent to respondent no.1, which was challenged by the appellants. The trial court found that respondents no.1 and no.5 did not meet the eligibility criteria, specifically the residency requirement, and declared their selection illegal.

The appellate court upheld this decision and further granted a mandatory injunction directing the Corporation to allot the dealership to the appellants. However, the High Court later overturned this mandatory injunction, emphasizing the Corporation's administrative discretion.

Conclusion:
The Supreme Court concluded that the High Court erred in its interpretation of the term "resident." It held that the eligibility criterion required actual residence in Kangra, not merely a casual or temporary connection. The case was remanded to the High Court for fresh consideration of the appeals, with the Supreme Court's interpretation of "resident" as the guiding principle. The appeals were disposed of with no order as to costs.