Preliminary Decree Is Not Enough – Final Partition Must Be Shown: Allahabad High Court Dismisses Challenge Against IOCL’s Rejection of Dealership

“Lease deed by one co-sharer without final decree of partition is legally insufficient – IOCL is justified in rejecting the application” – In a decisive judgment Allahabad High Court ruled that a retail outlet dealership applicant offering joint land without a final partition decree and consent from all co-owners cannot claim eligibility.

Observing that “a preliminary decree merely declares shares; it does not entitle a person to exclusive possession unless followed by a final decree by metes and bounds,” the Division Bench comprising Justice Neeraj Tiwari and Justice Vivek Kumar Singh upheld IOCL’s decision to reject the petitioner’s application.

The ruling reinforces that IOCL is within its rights to demand strict compliance with Clause 4(vi)(a) of its dealership selection brochure, and that the Writ Court cannot interfere in such commercial decisions unless they are arbitrary or unreasonable.

“Preliminary Decree Declares Rights, Final Decree Confers Possession” – High Court Emphasizes the Need for Finality in Land Title

Opening the judgment with a clear focus on the core issue, the Court observed that "the preliminary decree relied upon by the petitioner on the date of application cannot serve as a basis for exclusive land ownership in the eyes of the oil company".

The petitioner, Ashish Kumar Agarwal, had applied for a retail dealership with IOCL pursuant to its advertisement dated 28.06.2023, offering a plot located in Village Mubarakpur Hardas, Tehsil Najibabad, District Bijnor. His application, submitted on 16.10.2023, was accompanied by a lease deed executed by only one co-sharer, Bhism Singh, and supported by a preliminary partition decree passed on 23.09.2023 under Section 116 of the Uttar Pradesh Revenue Code, 2006.

IOCL, however, rejected the application on 15.04.2024, stating that the lease deed lacked the signatures of other co-sharers, making it invalid under Clause 4(vi)(a) of the dealership brochure. A subsequent representation by the petitioner was also rejected on 28.06.2024.

Challenging both rejection orders before the High Court, the petitioner contended that the preliminary decree had settled his exclusive share, and that the final decree was merely a formality.

The Court, however, disagreed.

“Land Title Must Be Absolute and Undisputed at Time of Application” – IOCL's Position Found Legally Sound

Referring extensively to the provisions of the U.P. Revenue Code, 2006 and Rules 108 and 109 of the U.P. Revenue Code Rules, 2016, the Court emphasized that a final decree of partition is indispensable.

It observed, “At the stage of preliminary decree, location of land may still change. It is only the final decree which separates shares by metes and bounds and corrects the record of rights. Without it, the lease cannot be treated as valid in a case of joint ownership.”

The judgment clarified that Clause 4(vi)(a) of IOCL's brochure demands a valid lease deed from all co-owners at the time of filing. It states:

“If the offered land is on Long-term lease and there are multiple owners, then lease deed should be executed by all co-owners... In case lease deed is not executed by all co-owners, such lease deed shall be treated as invalid.”

The Court categorically held that "on the date of submission of application i.e. 16.10.2023, the petitioner had neither a lease deed from all co-owners nor a final decree of partition. The defect, therefore, was fatal."

“Commercial Decision of IOCL Cannot Be Interfered With in Absence of Arbitrariness” – High Court Declines Writ Relief

The Court reinforced that judicial review under Article 226 in such matters is limited to correcting arbitrary or irrational decisions, not to question the correctness of a contractual requirement set by a commercial body like IOCL.

"The IOCL, after issuing allotment, invests a huge amount in infrastructure. If the title is later challenged or the land location changes, it could suffer significant losses. Therefore, its insistence on a final, uncontested title cannot be faulted,” the Bench noted.

It further held that "since the lease deed was incomplete and preliminary decree was legally insufficient to establish exclusive title, IOCL’s decision is neither illegal nor arbitrary."

Earlier Precedents Affirmed: Same Issue, Same Outcome

The Court relied on its earlier decisions in Rahul Singh vs. IOCL (Writ C No. 7354 of 2024) and Amarjeet vs. Union of India (Writ C No. 11586 of 2024), where similar facts led to the same result.

In Rahul Singh, the Court had held:

"Execution of lease deed by all co-owners is mandatory under Clause 4(vi)(a). If not complied with, the application is invalid at inception. No post-application rectification can cure this defect."

In Amarjeet, the Court rejected the argument that a compromise or settlement prior to final order could serve as a valid basis for dealership allotment, ruling that "in absence of final decree and updated land records, IOCL is not bound to accept claimed title or possession."

The Court found that the case of Ashish Kumar Agarwal was identical and squarely covered by these two precedents.

No Right Without Final Title – Petition Dismissed

Concluding its judgment, the High Court reiterated:

"The petitioner cannot claim any right to dealership without satisfying the land ownership requirement at the time of application. Preliminary decree is not enough. IOCL was fully justified in its action."

Date of Decision: 1st December 2025