Mere Rivalry in IOCL Dealership Process Does Not Confer Locus: Allahabad High Court Upholds Validity of Private Lease Under Section 94

“Petitioner Is Neither Lessor Nor Lessee — Mere Participation in Dealership Process Is Not Enough to Challenge Private Lease Deed”, In a decisive ruling reiterating the principle that only parties with a legitimate legal interest can challenge land transactions, the Allahabad High Court dismissed a writ petition filed by a rival applicant for an Indian Oil Corporation (IOCL) dealership who had sought cancellation of a private lease deed executed for setting up a petrol retail outlet.

The judgment was delivered by Justice Neeraj Tiwari in Abhinav Singh v. Board of Revenue U.P. and 5 Others, Writ-B No. 3195 of 2025, holding that the petitioner had no locus standi under the U.P. Revenue Code, 2006, to question the lease deed as he was neither the lessor, lessee, nor a title-holder of the land.

The Court held:

“The petitioner is deriving his locus from the cancellation of his application submitted for allotment of Retail Outlet of Indian Oil. In case the suit is allowed, the land would revert to the original owner, and the petitioner would not be a beneficiary in any way.”

Lease Executed Under Section 94 — Section 105 Consequences Not Attracted

The controversy arose when the petitioner challenged a 29-year private lease deed executed under Section 94 of the U.P. Revenue Code, 2006, between a landowner and respondent no. 6 — a successful applicant in the IOCL dealership selection process. The petitioner alleged that the lease was void because it violated the terms of Section 94, which permits private leases only for agricultural purposes or solar energy plants, not for retail fuel outlets.

However, the Court clarified that the statutory framework treats leases under Section 94 as private contracts, and such leases do not attract the invalidity provisions of Sections 104 and 105, which apply to unauthorized transfers of State land or transfers made in contravention of the Code by a bhumidar.

Relying on the express statutory bar under Section 105(e), the Court held:

“Once Section 105(e) has been inserted excluding the applicability of the same upon the lease executed under Section 94, the provisions of Sections 104 & 105 read with Rule 103 are not applicable.”

Rule 103 Applies to State Land — Not to Private Agreements Between Bhumidar and Lessee

The petitioner had relied heavily on Rule 103 of the U.P. Revenue Code Rules, 2016, arguing that any lease violating the Code could be annulled upon “information,” without requiring ownership. Rejecting this, the Court explained that Rule 103 is a procedural mechanism specifically meant for invalid leases of State land, not for privately executed lease deeds under Section 94.

“Rule 103 would apply only when transfer is made by a bhumidhar in contravention of the Code involving State interest, not for private leases between bhumidar and lessee.”

Declaratory Suits Under Section 144 Not Available to Strangers to the Land

The Court further analyzed Section 144 of the U.P. Revenue Code, which allows a bhumidhar or asami to seek a declaration of rights in a holding. The petitioner, however, did not claim any ownership or tenancy rights in the land. He was only a competing applicant in the IOCL dealership process.

The Court underscored:

“Only a person who is a bhumidhar or asami, or has some interest in the land, can file for declaration or cancellation of lease. The petitioner, being an outsider, is entirely disqualified from doing so.”

IOCL Grievances Must Be Raised Within Dealership Dispute Mechanism

While dismissing the petition, the Court clarified that the petitioner was not without remedy altogether. If the petitioner believed that the dealership allotment was flawed due to use of an allegedly invalid lease, he was free to challenge the allotment before IOCL or an appropriate forum.

“For redressal of his grievance, he may challenge the allotment of Retail Outlet of Indian Oil even taking the ground of alleged illegal lease deed… but not by filing a cancellation application against a lease he is not party to.”

CPC Inapplicable When Locus is Absent — Rule 186 Argument Rejected

The petitioner also sought to invoke Rule 186 of the Revenue Code Rules, which limits the application of the Code of Civil Procedure. The Court dismissed this argument as irrelevant:

“Once the Court has held that petitioner has no locus… the applicability of Rule 186 would not come to his rescue.”

Sub-Divisional Officer and Revisional Court Orders Upheld

The Sub-Divisional Officer had dismissed the petitioner’s cancellation application for lack of locus. The same was upheld by the Revisional Court on July 10, 2025, and now affirmed by the High Court.

In doing so, the Court acknowledged the valuable assistance rendered by Mr. Samir Sharma, Senior Advocate, who was appointed Amicus Curiae to assist the Court in interpreting the complex provisions of the Revenue Code and its Rules.

The Allahabad High Court's ruling firmly establishes that land ownership and tenancy laws cannot be used as proxy battlegrounds in commercial rivalries, especially where the law clearly demarcates who can challenge a lease deed.

While the U.P. Revenue Code allows internal checks on illegal transfers, it preserves the sanctity of private leasing arrangements under Section 94, shielding them from third-party interference unless the challenger has a legally recognized interest in the property.

The ruling sends a strong message that legal process cannot be weaponized to indirectly thwart commercial competition or IOCL’s dealership process through unauthorized litigation over lease documents.

Date of Decision: December 17, 2025