Rahul Yadav & Anr. v. M/s. Indian Oil Corporation Ltd. & Ors.
Background
The appellant owned land that he leased to Indian Oil Corporation (IOC) for 30 years to secure a petrol pump dealership awarded to him in 2001. His dealership was later cancelled after the Supreme Court, in earlier litigation (Onkar Lal Bajaj v. Union of India), found that a batch of petrol pump allotments, including his, had been made on political considerations rather than merit, and directed cancellation. Despite the cancellation of his dealership, the appellant continued to occupy the land and refused to hand over possession to IOC, even building a wall to obstruct the Corporation.
Decision Breakdown
The Supreme Court held that once the dealership itself was found to be tainted and cancelled, the appellant, despite owning the land, could not use that ownership to retain possession while the long-term lease to IOC remained in force; he was effectively a trespasser in continuing to deny possession. The Court rejected the argument that the low lease rent (justified by the dealership) made the lease voidable, calling it a plea "only to be noted to be rejected." It also held that the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 applied since IOC is a public sector undertaking. The Court granted liberty to the appellant to apply afresh for a dealership under any future policy, but declined to direct any reconsideration, and ordered him to hand over peaceful possession within four weeks, failing which he would face contempt proceedings. The appeal was dismissed without costs, given the eviction direction already imposed.
Lesson Learnt
A person who loses a government dealership or licence due to a finding that it was improperly granted cannot use an unrelated contractual arrangement (like a lease to the same public authority) to continue occupying public-linked property; cancellation of the underlying benefit extinguishes the right to retain possession tied to it.