Petrol Pump Dealership Reconstitution | Clause L-8 Does Not Permit Reconstitution from Cooperative Society to Individual; Settled Claim of Lessee to Dealership Cannot Be Reopened Due to Res Judicata: Punjab and Haryana High Court

Case Name: Ex-Servicemen Service Station v. Union of India and Others

Date of Judgment: 18 August 2026

Citation: CWP No. 18817 of 2026

Bench: Hon’ble Mr. Justice Kuldeep Tiwari

Held: The Punjab and Haryana High Court held that Clause L-8 of the Oil Marketing Companies’ reconstitution guidelines applies to dealerships held by approved individual proprietors or partners. It does not permit the reconstitution of a dealership originally allotted to a cooperative society, a non-individual entity, in favour of an individual operating the outlet.

The Court further held that a lessee or person permitted to operate a petrol pump for an extended period does not thereby acquire a right to the dealership. Once the person’s status as a stranger or lessee operating on behalf of the actual licensee has been judicially determined and the finding has attained finality, the same issue cannot be reopened in subsequent proceedings due to the principle of res judicata.

Summary: The dispute concerned a petrol pump dealership allotted in 1972 to M/s Ex-Servicemen Motor Transport Cooperative Society Limited. The petitioner claimed through operational arrangements and asserted entitlement to reconstitution of the dealership in her favour. However, in an earlier writ petition decided in 2017, the High Court had held that she was not the dealer but merely a stranger or lessee managing the petrol pump on behalf of the licensed cooperative society. Her prolonged operation of the outlet did not confer dealership rights upon her.

In subsequent proceedings, the petitioner confined her claim to consideration of an application dated 17 January 2019 under the prevailing dealership reconstitution policy. Bharat Petroleum Corporation Limited rejected the proposal on 29 May 2026, holding that Clause L-8 did not permit reconstitution of a dealership from a society or other non-individual entity to an individual.

The High Court examined Clause L-8, which addresses cases where approved proprietors or partners have completely exited a dealership and it is being operated by persons who are neither their legal heirs nor family or blood relatives. The Court found that the clause expressly contemplated dealerships held by approved individual proprietors or partners. It did not extend to dealerships allotted to limited cooperative societies, government bodies or other non-individual entities.

The Court also rejected the petitioner’s reliance on past operational permissions and correspondence. These circumstances could not override the earlier final determination that she was merely a lessee and had no recognized dealership status. Her broader claim to continue the petrol pump as its proprietor had already been adjudicated and could not be revived through repeated litigation.

Decision: The High Court upheld BPCL’s order rejecting the petitioner’s reconstitution proposal. It held that the petitioner had no existing right to seek reconstitution under Clause L-8 and that her remaining dealership claims were barred by res judicata.