Detailed terms and conditions for Dealer (Auto LPG) under CODO scheme

1) Eligibility criteria

The person should be of age minimum 18 years, educated, having good reputation in the market. He should have suitable land with minimum plot area of Approximate 500 sq. mtrs. (frontage 20 mtrs x depth 25 mtrs.) within town/municipal limits or 1500 sq. mtrs. on national highways with a minimum frontage of 36 mtrs. x depth 40 mtrs either owned or leased. The other requirement of land is described at question no. 82 in “FAQ”. The applicant will execute lease agreement in favour of the company after approval of drawings from explosive department. The expenses for execution of lease deed and conversion charges of land applicable in the area will be borne by the dealer in all respect.

2)  Financial requirement

The approx. cost of setting up ALDS will be Rs. 30.00 lac (Rs. thirty lac only) as under:-

  1. 10 lac: - Rs. 5.00 lac on account of layout approval and issue of L.O.I (letter of intent) and thereafter Rs. 5.00 lac for getting license to operate ALDS from CCOE.
  2. 20 lac: - Civil work for installation of equipment’s, construction of drive way, canopy & beautification of ALDS. This investment will be made by the dealer himself during installation of plant and machinery or can be arranged by the Company on mutual terms.

3) Infrastructure

The dealer will construct his office on the land itself which will also be approved from explosive deptt. while submitting the drawings for approval of ALDS. The responsibility for approval of drawings will be of the company & thereafter getting NOC from Distt. Authority will rest with dealer (Auto LPG).

4)Security deposit

The dealer will provide security deposit of Rs. 5.00 Lac (Rupees five lac) only & company will pay simple interest @ Rs. 8% per annum at the time of maturity. This amount will be deposited with the company on completion of installation work of machinery before trial by competent person duly authorized by CCOE before supply of gas. The company shall have the right to recover its losses from the security deposit amount if it is established that the loss is attributed to the company for non- compliance of any terms of the agreement by the dealer.

5) Franchisee fee

₹. 1.00 lac (Rupees one lac) only one time payable with 1st order(Non Refundable). This amount can be earned by the dealer on introduction of business to the company on the pattern of business associate’s terms anytime during the terms.

6) Terms of appointment

The terms will be minimum for 15 years. The renewal will be at the sole discretion of the company. The company will have a right to terminate the agreement earlier, if violation of any of the contractual terms is brought to its notice, and in that case, his security will be forfeited.

7)  Jurisdiction/area

The Company will not appoint any Auto LPG dealer within a radius of 5 Km. area except well populated location where three wheelers are running at large. However, LOI (Letter of Intent) will be issued only with the consent of Dealer (Auto LPG) appointed in the area and he refused to provide land after running of his ALDS successfully.

8) Statutory requirements

  1. The company has been approved by the C.C.O.E as ‘Operator' and empowered to issue L.O.I. to the dealer. The dealer has to comply with the terms & conditions/guidelines issued by the Govt. Authorities in respect of ALDS from time to time. The company will assist the dealer in all respects. However, local statutory requirements, i.e. shop establishment, Registration of GST etc. are to be complied with by the dealer. Insurance of the ALDS/Stock-in-trade/Third party /Public liability is mandatory, which will be the responsibility of dealer at his cost. All incidental expenses for the same are to be borne by the dealer. The dealer will comply with the provisions mentioned in the LPG control order, 2001 issued by the Ministry of Petroleum and Natural Gas and its subsequent amendments from time to time. He will also abide by the terms & conditions/recommendations of the Task Force Committee constituted by the Govt. of India under the chairmanship of C.C.O.E. Nagpur which are available at website. From various acts, rules regulations, By-Law enacted and/or amended and/or imposed as at present or in future from time to time as well as, Labour, Environment, Petroleum Rules, Municipal acts etc with regards to the ALDS.
  2. The dealer shall at all times keep PLL indemnified for losses against all actions, proceedings, claims and demands against it for his ALDS by the Central and/or State Government, Municipal, Local, and/or any other authorities, any customers or third party as a result of or in consequence of any act or omission of whatsoever nature by the dealer or his personnel/representative during execution/operation of ALDS.

9)  Rates

The rate of Auto LPG will be changed as per International market every month. The circular will be issued by the company by 1st of every month. Changes if any, in rates will be communicated by the company in advance. Issue of circular at the address/e-mail given by the dealer will be sufficient to implement the rates of supply. The rates applicable by the company as per its circular will be charged from the customer as the dealer will get its fixed margin. The other items will also be sold by the dealer as per rates fixed by the company from time to time in case supplied by the company. The items arranged by dealer will be sold at the rates fixed by the dealer himself.

10)  Procurement

The company has tied up with Aegis Gas Pvt. Ltd., Mumbai and Indian oil Petronas Private Limited ensuring product consistency, quality, and safety with International standards for regular supply of Auto LPG as per specification. The company will have the right to purchase Auto LPG from any other party and in that case dealer will have no objection. The dealer will place order at company's office on whatsApp.  Supply will be made within 3 days. The dealer will transfer the amount by RTGS on receipt of material within 3 days. The bill will be issued by in the company's after deducting his commission/margin on the prevailing rates by mail.

11) Supply

The dealer will receive Auto LPG at the ALDS and dispense the same to the consumer using motorized vehicle along with ensuring that the conversion kit is duly approved & tested from time to time as notified in Central Motor Vehicle Rules, 2001.

12)  Maintenance of stock

The dealer must always hold a minimum stock of 3 days ‘supply subject to the maximum capacity of the storage tank

13)  Responsibilities

  1. Operation of ALDS

Sufficient manpower has to be arranged by the dealer after training from company or its authorized representative. Only qualified persons will be deployed for working at ALDS. The training will be imparted by the company without any charges. However, if changes are made frequently by deputing the persons at ALDS by dealer, the company will charge for training.

  1. Working capital
  1. The dealer will meet with all the expenses for day-to-day operations and arrange working capital to operate the ALDS.
  2. The dealer shall provide a computer at site with internet facility, CCTV cameras and maintain the same operational for 24 hours, all days of the week.
  3. The dealer will make all the payments to concerned authorities i.e. Weight & Measure Deptt. etc. directly and proof of such payments made shall be submitted to PLL as and when needed.
  1. Maintenance of plant & machinery
  1. PLL will stand warranty for 12 months of all equipment installed in the ALDS from the date of commissioning/installation for the ALDS. On expiry of warranty, the dealer will enter into an annual maintenance contract with PLL or any authorised installer. Annual maintenance charges will be borne by the dealer. The dealer will maintain all the facilities and equipment in good working condition at his cost. He will also upkeep the decorum of the outlet to make it pleasant to the delight of the customers.
  2. The dealer will provide air compressor, public convenient facility, drinking water and also further keep all facilities/apparatus in working condition without any charges.
  3. While developing the above model, additional revenue towards ATM/ Service centre are not considered in the profitability statement. The company will not have any right on the income generated from it.

14)  Return on investment

Dealer will get Margin as per category wise as under:-

For North India

Codo: Rs 1.40 Per ltr. 

For South & West Bengal:

Codo: Rs 2.75 Per ltr

Rest part of India negotiable as per distance from import facility

Above margin are including GST. The Dealer will also get income on fitment & other services provided by the dealer to consumers.

15) Support from company

Company will support in following manners:-

  1. Training to sales representative, accountant, clerk and any other staff to be appointed by the dealer at business associate/company’s offices
  2. Provide printed stationery at reasonable rates, if desired by the dealer
  3. The company can provide consultant at his cost for getting NOC from Distt. Authority, if required by the dealer
  4. Re-imbursement of 50% expenses of the salary/expenses/incentive of business consultant, liasioning assistant, surveyor engaged on the terms laid down by the company to establish and develop his business as well as for publicity in his area.
  5. Support in arranging funds from the banks/financial institutions against collateral for construction of ALDS, purchase of machinery & working capital. However, in any case, company can introduce his associate concern in partnership.

16) Publicity

  1. Initially, publicity material as per list mentioned in the website will be supplied by the company to the dealer. Indent for further requirement should be made by the dealer to the company with payment. For details, refer to our guidelines for publicity in our website under head “publicity”.
  2. He can arrange further local publicity including cable TV in consultation with the PRO/BDM as per policy of the company. The company will reimburse 50% of the expenses on such advertisement if he got approval from the Head office of the company in writing.
  3. The company will also provide maximum support in organizing road show, public campaign and exhibition in his areas.
  4. National & zonal level publicity, national newspaper, T.V., hoardings on highways etc. will be arranged by the company as and when company felt the need of it.
  5. However, he cannot compel the company for any type of publicity. Even at his cost, he cannot make any publicity without permission of the company.

17) Submission of report /returns

He will submit periodical reports/returns required by the company from time to time.

18) Surrender of associationship

Either party shall give at least 3 months’ notice in writing in case it wants to dissolve the agreement before maturity but not before the completion of period of lease/agreement. The notice to be given to either party shall be deemed to have been served if sent by registered post at the address entered in this agreement or the changed address duly communicated.

19)Arbitration clause

In case, any differences or dispute arises between the parties, it will be referred to the sole arbitrator to be appointed by managing director of the company. The arbitration proceedings shall be governed by the provisions of arbitration and conciliation act as applicable at the prevailing time. Language of the proceedings shall be in English and venue for arbitration shall be in Delhi. The decision of the arbitrator will be binding on both the parties. Courts of Delhi only shall have jurisdiction to adjudicate upon the findings of sole arbitrator.

20) Miscellaneous provisions

  1. All terms and conditions have been framed in English language and translation options are for understanding purposes and facilitate the visitors only. In case any difference is found in translation, English version shall be final and binding.
  2. These are general terms and conditions; the contract/agreement executed between the parties after negotiations shall be final and have an overriding effect on these general terms and conditions.
  3. These terms and conditions may be changed, altered, modified depending upon the change in governing rules and regulations issued by the Government of India from time to time.
  4. The acceptance or rejection of the application is at the sole discretion of the company. After rejection, no correspondence will be entertained in this regard.
  5. The company reserves the right to change, amend, add or delete any/all clauses at any time without prior notice.
  6. All disputes are subject to jurisdiction of Delhi courts only.

He will return the duplicate copy of these detailed terms and conditions duly signed in token of acknowledgement and acceptance to the company.

FAQ (Q-47 to 82) ALDS Cat I,II,III Summary of terms Projected profitability Step by step action Application form