The Lucknow Bench of the Allahabad High Court has set aside an order by Bharat Petroleum Corporation Limited (BPCL) that cancelled a petrol pump dealership over a minor typographical error. Characterizing the cancellation as “unfair” and “legally untenable,” the court ruled that a single misplaced letter in a road classification should not strip an individual of a dealership after they have already invested significant resources into the project.
The dispute originated from a Letter of Intent (LOI) issued by BPCL in 2020 to Raghvendra Awasthi for the establishment of a petrol pump in the Hardoi district of Uttar Pradesh. Following the issuance of the LOI, Awasthi proceeded with all necessary formalities and made substantial financial investments to make the dealership operational.
However, on January 29, 2022, BPCL abruptly cancelled the allotment. The corporation cited an error in the original advertisement, which had classified the road adjacent to the proposed site as a “Major District Road” (MDR) instead of its actual classification as an “Other District Road” (ODR).
A division bench comprising Justice Shekhar B. Saraf and Justice Indrajit Shukla examined whether the clerical discrepancy was sufficient grounds to terminate the allotment.
The court observed that the error was “purely typographical” and did not lead to any genuine confusion regarding the physical location of the proposed petrol pump. Crucially, the bench noted that the misdescription did not deprive any other prospective applicants of the opportunity to apply for the dealership, nor was there any overriding public interest that necessitated the cancellation.
The bench emphasized the doctrine of “legitimate expectation,” noting that Awasthi had acted upon the assurances provided by BPCL. The court stated:
“The cancellation, based solely on a clerical mistake in an advertisement, was ‘unfair’ and contrary to law. Awasthi had acted on the assurance of BPCL and made financial investments, giving rise to a ‘legitimate expectation’ that the allotment would be honoured.”
The judges further held that such expectations cannot be “arbitrarily extinguished on a technical ground.”
Quashing the cancellation order dated January 29, 2022, the Allahabad High Court directed BPCL to immediately restore the Letter of Intent issued to Raghvendra Awasthi. The corporation has been ordered to proceed with the allotment process without further delay, ensuring the petitioner can finalize the establishment of the petrol pump.
