Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Prakash Kesarwani and Dr Yogendra Kumar Srivastava, JJ., reiterated the settled position that in normal course it is not open for a person to seek to prevent a rival from exercising the right to carry on business.

Petitioner had a retail outlet dealership of MS/HSD, awarded by the Bharat Petroleum Corporation Limited. The instant petition was filed to seeking to raise a grievance with regard to issuance of a ‘Letter of Intent’ and Addendum to LOI whereunder it was proposed to offer the respondent 6 a retail outlet dealership of Bharat Petroleum Corporation Limited pursuant to an advertisement issued for the purpose.

Question as to whether a competitor in business could seek to prevent a rival party from exercising its right to carry on business came up for consideration in Nagar Rice and Flour Mills v. N.T. Gowda, (1970) 1 SCC 575.

In the above-cited case, it was held that a competitor in business cannot seek to prevent a rival from exercising its right to carry on business.

Analysis, Law and Decision

Bench reiterated the position that in normal course it would not be open to a competitor in business to seek to prevent a rival from exercising a right to carry on business.

Competition in a trade or business may be subject to restrictions as are permissible and as may be imposed by a law enacted in the interests of the general public. However, independent of any such restriction, a person cannot claim that no other person shall carry on business or trade so as to adversely affect his trade or business.

Adding to the above, bench while parting with its’ decision expressed that where the claim of the petitioner was solely to prevent a rival from exercising a right to carry on business, he would not have the locus standi to maintain a writ petition as the same would essentially be aimed at eliminating healthy competition in business.

In light of the above discussion, petition was dismissed. [Prince Filling Station v. Union Government of India, 2020 SCC OnLine All 1562, decided on 17-12-2020]

Advocates for the parties:

Counsel for the petitioner: Awadhesh Kumar Singh, Abhai Kumar Singh

Counsel for the respondent: A.S.G.I., Anand Tiwari, Anand Tiwari, C.S.C., Vikas Budhwar

High Courts

Punjab and Haryana High Court: While deciding the question that whether the differential eligibility criteria of being a graduate for obtaining allotment for LPG dealership is arbitrary under Article 19(1)(g) of the Constitution, the Court held that the notification bearing the requisite eligibility criteria is not arbitrary as the intelligible differentia here are the gradations dependent on educational qualifications and the object sought to be achieved is to empower section of people who are educated and who would also fulfill certain other norms relating to property holding identifying property for locating the business.

In the instant case the petitioner was aggrieved about the requisite educational qualifications for the purposes of applying for LPG dealership which required the applicant to be a graduate from any universities incorporated by the Centre or State Legislature or recognized under the UGC Act, 1956 etc. whereas the petitioner was a matriculate. The petitioner’s counsel Mr M.S. Sandhu contended that policy existing in 1928 for the dealership purposes allowed a matriculate to get LPG dealership and the eligibility criteria in question that has been introduced in 2013 violates the fundamental right guaranteed under Art. 19 (1)(g) and the reasonable restriction of interest of general public therefore should be imposed by the State, the Indian Oil Corporation has imposed such a restriction of eligibility, without there being any specific law pronounced by the State. Respondents were represented by Mr Brijeshwar Singh.

The Court on perusing the grievance of the petitioner observed that Art. 19 allows the freedom to practice any trade or profession without being restricted, but when it comes to avail a grant of State largesse from the State or its functionary then the reference has to be made under Art. 14. The Court further observed that differential educational criteria for dealership in LPG outlets in urban and rural areas are justified as such criterion does not involve restriction on freedom of profession under Art. 19. Vikas v. Union of India, Civil Writ Petition 28009 of 2013, decided on 17.09.2014

To read the full judgment, refer SCCOnLine