Disqualification Clauses Must Be Strictly Construed, Cannot Be Expanded Beyond Advertisement: Patna HC Upholds Grant Of IOCL Dealership
The Patna High Court has held that mere pendency of a criminal case, at a stage where charges had not been framed, does not ipso facto render a candidate ineligible for allotment of a petroleum dealership unless the governing advertisement expressly stipulates such disqualification. The Court further held that the advertisement is the governing instrument of the selection process and cannot be enlarged or modified by the application form, and that equitable considerations arising from delay and substantial investments also weighed against interference.
A Division Bench of Justice Sangam Kumar Sahoo and Justice Alok Kumar Sinha was hearing a Letters Patent Appeal filed by Binod Kumar Mishra against the judgment dated 13.12.2024 passed in CWJC No. 12241 of 2018, whereby the learned Single Judge dismissed his writ petition challenging the selection of Respondent No. 10 for an SKO/LDO dealership at Brahmpur, District Buxar, pursuant to an advertisement issued by Indian Oil Corporation Ltd. (IOCL). The selection process, which initially placed Respondent No. 10 at Serial No. 1 and the appellant at Serial No. 2, had earlier been reconsidered pursuant to directions of the Supreme Court, following which Respondent No. 10 was again placed first in the select list dated 25.07.2008.
Appellant's Arguments
The appellant contended that Respondent No. 10 had deliberately suppressed material facts regarding the pendency of a criminal case against her at the time of submitting her application and affidavit in July 2008. He submitted that Clause 4 of the advertisement and Paragraph 20 of the application form specifically mandated disclosure of pending criminal cases, framing of charges, and convictions, and provided that false declarations would render the candidature liable to rejection.
It was argued that Buxar Town P.S. Case No. 197/1989 was admittedly pending against Respondent No. 10 and that cognizance had been taken and charges framed. Despite this, she falsely declared that no criminal case was pending against her. The appellant submitted that the learned Single Judge had erred in confining the inquiry only to conviction and had failed to appreciate that the requirement of disclosure was wider and that the selection stood vitiated due to deliberate suppression of material information.
Respondent's Arguments
The respondents submitted that under Clause 4 of the advertisement and Clause 11 of the Selection Brochure, disqualification arose only where a candidate had been convicted or where charges had been framed by a competent court. It was contended that as on the date of submission of the application and during the reconsideration process in 2008, no charges had been framed against Respondent No. 10 and she had not been convicted.
It was further submitted that the criminal case had been registered when Respondent No. 10 was a juvenile and was transferred to the Juvenile Justice Board. Charges were framed only on 05.07.2018, long after the selection process, and she was ultimately exonerated on 06.03.2020. Therefore, there was no suppression or ineligibility at the relevant time. The respondents also relied on the fact that the dealership had long been operational and substantial investments had been made.
Reasoning of the Court
The Court framed, inter alia, the following key issues:
1. Whether mere pendency of a criminal case, where charges had not been framed as on the date of submission of the application, renders a candidate ineligible under Clause 4 of the advertisement.
2. Whether, in case of variance between the advertisement and the application form, the advertisement governs the selection process or whether the application form can enlarge the scope of disqualification.
3. Whether equitable considerations, including lapse of time and substantial investments made by Respondent No. 10, justified refusal of relief.
4. Whether a new plea raised at the appellate stage was barred by constructive res judicata.
On the issue of whether mere pendency of a criminal case results in disqualification, the Court held that the eligibility condition could not be interpreted by isolating individual expressions divorced from their context. It observed that the clause in the advertisement “cannot be decided merely by isolating the expression 'pendency of a criminal case' from its contextual and textual setting.” Emphasising settled principles of interpretation, the Court held that “disqualification clauses in public notices must be construed strictly and not expansively,” and that the Court cannot read into the advertisement words that are not expressly provided. It noted:
“…If Clause 4 does not expressly stipulate that mere registration of an FIR or pendency at a pre-charge stage results in automatic ineligibility, the Court cannot supply such words. The decision underscores that pendency by itself is not a uniform or inflexible ground of disqualification in every context; the employer or authority must consider the attendant circumstances.”
The Court further held that no foundational pleading or material had been placed on record to establish fraud or deliberate suppression by Respondent No. 10. It noted that IOCL's decision had been examined strictly on the basis of reasons contemporaneously recorded, without any subsequent supplementation, and that the selection process was conducted in accordance with the governing advertisement. The Bench observed that the authorities relied upon by the appellant were distinguishable on facts and did not warrant interference.
Importantly, the Court held that the appellant's interpretation would require Clause 4 to be read in a manner that enlarges the scope of disqualification beyond what was expressly stipulated. Such an approach, it observed, would run contrary to settled principles of interpretation, particularly where civil consequences ensue. The Court concluded that the construction adopted by the Single Judge i.e., that mere pendency of a criminal case at a stage where charges had not been framed does not ipso facto render a candidate ineligible under Clause 4, absent an express stipulation, is a plausible and legally sustainable interpretation consistent with the principle that disqualification clauses must be strictly construed. The issue was accordingly decided in favour of the respondent.
On the issue of variance between the advertisement and the application form, the Court held that the advertisement inviting applications is the governing instrument of the selection process and cannot be modified or enlarged by the application form. The Bench observed that “in matters of public selection, whether in employment or in contractual allotments such as retail outlet dealerships, the advertisement inviting applications is the charter that governs the rights and obligations of the parties.” It clarified that the application form is merely an ancillary instrument intended to operationalise the advertisement and “does not and cannot exist independently of it.” The Court noted:
““It necessarily follows that the advertisement cannot be diluted, modified, or enlarged by a subsequent document such as an application form, unless such modification is expressly notified and made uniformly applicable to all aspirants. To permit the application form to independently expand the scope of disqualification would be to introduce uncertainty and arbitrariness into the process…”
The Court further held that permitting the application form to independently expand the scope of disqualification would introduce arbitrariness and uncertainty into the process. It therefore rejected the appellant's contention that the wording of the application form could be relied upon to enlarge the eligibility conditions beyond what was expressly stipulated in the advertisement, and upheld the reasoning of the Single Judge on this issue.
On the issue of equitable considerations arising from delay and investments made by Respondent No. 10, the Court held that the doctrine of delay and laches is well settled and requires a party seeking equitable relief to approach the Court with reasonable promptitude. The Bench observed that these principles assume greater significance where commercial arrangements have already been acted upon and substantial investments have been made.
The Court noted that the retail outlet had been commissioned and operational for a considerable period and that Respondent No. 10 had made substantial financial commitments towards land development, infrastructure, equipment, manpower, and statutory compliances. It observed that these were not reversible steps but reflected a complete alteration of position based on a concluded selection. Referring to the doctrine of fait accompli, the Court held that while it does not protect illegality, it is a relevant factor in moulding relief, and courts are slow to unsettle long-standing arrangements unless a glaring and foundational illegality is established.
The Bench further clarified that the learned Single Judge had not dismissed the writ petition solely on equitable considerations, but had first upheld the decision of IOCL on merits and additionally observed that even on equitable grounds, interference was not warranted. Accordingly, the Court found no reason to interfere with the exercise of discretion by the Single Judge.
On the last issue of whether the appellant could raise a new plea alleging violation of Clause 10 of the advertisement at the appellate stage, the Court held that such a plea was not permissible as it had neither been pleaded nor urged in the earlier proceedings. The Bench observed that pleadings constitute the foundation of adjudication in writ proceedings and that parties are bound by the case set up by them.
The Court noted that the doctrine of constructive res judicata, embodied in Explanation IV to Section 11 of the Code of Civil Procedure, applies in principle to writ proceedings to prevent multiplicity of litigation and to ensure finality in judicial determinations. It held that the appellant had sufficient opportunity to raise the plea earlier but failed to do so, and such omission cannot be cured by raising a fresh legal submission at the stage of an intra-court appeal, where the scope of interference is already limited.
Accordingly, the Court held that the new plea was barred by the principle of constructive res judicata and could not be entertained.
Case Title: Binod Kumar Mishra v. Indian Oil Corporation and Others.
Case Number: Letters Patent Appeal No. 140 of 2025 in Civil Writ Jurisdiction Case No. 12241 of 2018
Appearance: Senior Advocate Mr. Y.V. Giri, assisted by Mr. Pranav Kumar and Ms. Dimpal Kumari, appeared for the Appellant. The Additional Solicitor General, along with Senior Advocate Mr. Anil Kumar Jha and Mr. Ankit Katriar, assisted by Mr. Mithlesh Kumar Gupta and Mr. Sanat Kumar Mishra, appeared for the Respondents.