Swarup Mishra Vs. Union of India &
Ors  Insc 33 (12 January 2007)
Y.K. Sabharwal,C.K. Thakker & R.V. Raveendran with Transferred Case Nos. 101,
102, 103, 104, 105, 106, 107, 108 of 2002, S.L.P.(C) Nos. 1394 of 2003, 11556,
11568, 16261 of 2002 and T.C. No. 57 of 2006 C.K. Thakker, J.
applications have been filed by the applicants who are aggrieved by the Report
made by a Committee appointed by this Court while dealing with and deciding
transferred cases in Onkar Lal Bajaj & Others v. Union of India &
Another, (2003) 2 SCC 673.
be stated that a news item appeared in Indian Express dated August 2, 2002 alleging political patronaze in
allotment of retail outlets of petroleum products, LPG distributorship and
August 2 and August 5,
2002, certain names
were published by the said newspaper and it was stated that without following
guidelines, dealers/distributors were appointed on the basis of political patronaze/linkage.
A question was also raised in Parliament. Consequent upon criticism by the
Press and Parliament, cases were reviewed on August 5, 2002 by the then Prime Minister. The
Deputy Prime Minister, Minister of Petroleum & Natural Gas and Minister of
Parliamentary Affairs also participated in the review process. In view of the
controversy in allotment, the Prime Minister directed the Ministry of Petroleum
& Natural Gas to cancel all allotments made with effect from January, 2000
till date. Press release was issued by the Press Information Bureau and a
formal order was issued by the Government of India, Ministry of Petroleum &
Natural Gas on August
9, 2002 cancelling all
said order was challenged by aggrieved allottees by instituting writ petitions
in several High Courts. Transfer petitions were filed in this Court and this
Court, in Onkar Lal Bajaj disposed of all the petitions by setting aside the
order dated August 9,
2002 passed by the
Central Government and by appointing a Committee comprising of Hon'ble Mr.
a retired Judge of this Court and Hon'ble Mr.
P.K. Bahri, a retired Judge of the High Court of Delhi, to examine 413 cases of
allotment. This Court requested the Committee to submit its report within a
period of three months. The said decision dated December 20, 2002 is reported in (2003) 2 SCC 673. The directions which were
issued by this Court were as under:
We appoint a
Committee comprising of Mr. Justice S.C. Agrawal, a retired Judge of this Court
and Mr. Justice P.K.
Bahri, a retired
judge of Delhi High Court, to examine the aforesaid 413 cases. We request the
Committee to submit the report to this Court within a period of three months.
would device its own procedure for undertaking the examination of these cases.
If considered necessary, the Committee may appoint any person to assist it.
We direct the
Ministry of Petroleum and Natural Gas, Government of India and the four oil
companies to render full, complete and meaningful assistance and cooperation to
the Committee. The relevant records are directed to be produced before the
Committee within five days.
We direct the
Ministry to appoint a nodal officer not below the rank of a Joint Secretary for
effective working of the Committee.
Government, State Government/Union Territories and all others are directed to
render such assistance to the Committee as may be directed by it.
The oil companies are directed to
provide as per Committee's directions, the requisite infrastructure, staff,
transport and make necessary arrangements, whenever so directed, for travel,
stay, payments and other facilities etc.
In respect of any case if the
Committee, on preliminary examination of the facts and records, forms an
opinion that the allotment was made on merits and not as a result of political
connections or patronage or other extraneous considerations, it would be open
to the Committee not to proceed with probe in detail.
the pendency of the matters before the Committee, this Court continued interim
order granted earlier. Pursuant to the directions of this Court, the Committee
commenced its proceedings by examining the relevant records relating to
allotment. Notices were issued, replies were sought in the form of affidavits,
letters or other applications/representations. The Committee also afforded an
opportunity of making oral submissions to the allottees. Oral hearing was also
afforded to other applicants on the panel whose applications were rejected or
who were not granted allotment. In several cases, allottees or other applicants
were represented by their counsel to whom opportunity of hearing was extended.
Hearings were held at Delhi and at other places mentioned in
the report. The Committee, thereafter, considered the relevant materials
keeping in view the salient features of the guidelines laid down by the
Government of India and submitted its detailed report.
Committee considered the background of the case, eligibility criteria,
educational qualifications, income of the applicants and other relevant
considerations in the light of guidelines for allotment.
to the observations in Onkar Lal Bajaj by this Court, the Committee observed
that it was required to consider whether the alleged tainted allotments were
made on merits or as a matter of political connection or patronaze or on any
other 'extraneous considerations'.
behalf of the allottees, it had been urged that mere fact that a person was
politically connected should not disentitle him/her from allotment if he/she is
otherwise found meritorious by the DSB and the political connection of a person
should not stand in the way of his/her application being considered on merits.
Committee, in our opinion, rightly stated;
correctness of this proposition cannot be disputed. Merely because a person has
a political connection should not operate as a handicap in his/her being
considered for allotment on his/her own merits. But if from other surrounding
circumstances, it is apparent that the political connection of an applicant has
weighed in the matter of consideration of the application by the DSB and an
allotment has been made in his favour, then such an allotment would be open to
challenge on the ground that it is not made on merits but on extraneous
Committee again correctly observed that an inference that the political
connections of an applicant have influenced the selection and that such
selection is based on extraneous considerations could be drawn under the
was selected even though he did not fulfill the requisite conditions for
eligibility as prescribed in the Guidelines.
of the Guidelines were not adhered to in the process of selection.
In the matter of
award of marks for the purpose of evaluation of the merits of an allottee vis-`-vis
other applicants, the Chairman or any member of the DSB has displayed an
attitude of upgrading the allottee and downgrading other more or equally
Committee was also of the view that an allottee who had given a wrong
information or had concealed a material fact in his/her application or any
document filed therewith, could not be permitted to avail the allotment in
his/her favour. The Committee then stated that as regards evaluation of the
merits under the guidelines by DSB, the marks were to be awarded by the
Chairman and Members of the DSB under the following norms:
Business ability and Salesmanship
qualifications and general level of intelligence.
provide infrastructure and facilities (land, godown, showroom etc.)
Committee noticed that total number of marks that had been earmarked for each
Member of the DSB was 100. The total number of marks earmarked for Chairman was
also 100 initially but subsequently they were increased to 200. Thus, the
maximum marks earmarked for the Chairman of DSB were equal to the maximum marks
earmarked for the other two members of the DSB. The Committee, hence, observed;
"In the matter of evaluation of merit, the marks awarded by the Chairman
could, therefore, prove to be decisive in the selection process". The
Committee further stated that 'it was also found by the Committee, in many
cases, even though the other two members of the DSB had awarded more marks to
the applicant/applicants placed at Nos. 2 and/or 3 in the merit panel, the
applicant at No.1 was selected for allotment on the basis of very higher number
of marks awarded by the Chairman of DSB. The situation became further
aggravated when the DSB was composed of the Chairman and one member only
because then, out of total number of 300 marks, the Chairman had 200 marks and
the other member had only 100 marks. Even though the member had rated
applicant/applicants at Nos. 2 and/or 3 on the merit panel better than the
applicant at No.1, the applicant at No.1 was selected on the basis of higher
number of marks awarded by the Chairman. This shows that the Chairman of the
DSB, if so inclined, could play a crucial role in the selection of the
candidate for allotment. The evaluation and award of marks by the Chairman of
the DSB, was, therefore, of considerable significance.
Committee also regretfully noted that in a large number of cases, allegations
have been made regarding political linkage and bias of the Chairman and in some
cases, allegations of even corruption had been made against the Chairman. Since
the Committee did not have any machinery to verify the veracity of those
allegations, it had rested the conclusions on the evaluation and award of marks
by the Chairman and Members of the DSB.
matter of evaluation of the merits of the candidates, the Committee was of the
view that an inference about the marking being arbitrary could be drawn in the
There is a wide
variation in the marks awarded by the Chairman and the marks awarded by the
other member/members of the DSB to the three applicants who have been placed on
the merit panel.
marks have been awarded by the Chairman/Members of the DSB to an applicant as
compared to other applicants on the merit panel.
Higher number of
marks have been awarded to a particular applicant under norms (a), (c), (c) or
(d) even though as per the objective factors relating such norms, another
applicant has shown better merit and suitability.
Committee scrutinized 409 cases of alleged tainted allotments in the States of Himachal
Pradesh, Haryana, Rajasthan, Uttar Pradesh, Bihar,
Jharkhand, Orissa, Madhya Pradesh, Chattisgarh, Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka.
Out of 409 cases examined, the Committee was of the view that in 297
allotments, the selection could not be said to have been made on merits. The allottees
either did not fulfill the eligibility requirements or had incurred
disqualification on account of suppression/concealment of material information
relating to their eligibility for consideration or other extraneous
considerations weighed with the Board in granting such allotments. In other
words, almost 73 per cent of tainted allotments examined by the Committee were
found to be improper. The Committee, therefore, opined the need for evolving
transparent and objective criteria/procedure.
aggrieved by the findings of the Committee holding certain allotments being not
made on merits and therefore were not sustainable, the applicants have
approached this Court by filing interim applications.
have heard the learned counsel for the applicants as also Mr. Gopal Subramaniam,
learned amicus curiae. On behalf of the applicants, it was contended that the
Committee went beyond the directions issued by this Court and in observing that
the allotment was not done in accordance with the guidelines and hence, could
not be held to be legal or proper. It was submitted that so far as the
directions of this Court are concerned, they related to allotment due to
political patronaze/linkage/connection. The Committee appointed by this Court,
therefore, had limited power to consider whether the allotment was made due to
political linkage or patronaze and was tainted and nothing more. It was also
submitted that the main consideration before this Court was press reports in
Indian Express which was the basis and foundation of inquiring into the matters
and keeping in view the allegations in those reports, the orders were passed by
this Court. It was also submitted that the direction of this Court to consider
'other extraneous matters' must be construed ejusdem generis i.e. political
influence or of the like nature. The Committee illegally and unauthorisedly
exceeded its jurisdiction by considering several other factors, such as,
whether the applicants were eligible, whether the guidelines were followed in
the grant of allotment and whether extraneous considerations weighed with the
Board in giving marks to applicants. Since it was not within the power of the
Committee, the findings recorded, conclusions arrived at and observations made
by the Committee deserve interference by this Court by setting aside the
direction to cancel allotments made in favour of applicants/allottees. It was
also submitted that no adequate opportunity had been afforded by the Committee
inasmuch as in almost all notices issued to the allottees, the allegation was
that the allotment had been made due to political patronaze/linkage and it was
only at the time of hearing that certain other defects or matters came up for
consideration by the Committee and impugned orders were made observing that
either the allottees were not eligible, or the marks given to them were
arbitrary, or there was suppression of fact on the part of applicants.
Virtually, thus, the Committee acted as an 'appellate forum' over the decision
of the Board which was not within the power or jurisdiction of the Committee,
nor such authority was conferred or such power was given by this Court while
disposing Onkar Lal Bajaj and on that ground also, the orders are vulnerable.
counsel also submitted that to say or to hold that a decision was taken by the
Board on extraneous consideration is to cast aspersion on the members of the
Committee and the Chairman of the Board who is a retired Judge of a High Court.
It would also be against the principles of natural justice and fair play, since
no opportunity to those members and Chairman had been afforded and they were
neither before the Committee nor before this Court. According to the
applicants, there may be an error of judgment on the part of the Board but such
error is bona fide and would not vitiate the action nor it can be construed as
violation of guidelines issued for making selection.
also urged that the doctrine of equitable/ promissory estoppel would get
attracted in all these cases. After the applicants were selected, letters of
intent (LoI) were issued, agreements were entered into and huge amount had been
spent by the allottees. If, at this stage, allotment is cancelled, serious
prejudice will be caused to them and they would suffer without there being any
fault on their part. Since there is no grievance so far as the Board is
concerned and it was on the basis of decision in Onkar Lal Bajaj that such an
action is taken, even if this Court accepts the report of the Committee, it may
not cancel the allotments already made by declaring correct legal position.
further submitted that in some cases, the land has been given by the
'prospective' allottees to the Oil Companies since the allotment was to be made
to owners/occupiers of such land. Keeping in view the fact that allotment has
been made or likely to be made to the applicants, they have made available land
at a concessional rental value. Such agreement is for a substantial period. Had
the applicants/land owners/occupiers, been not selected and allotted the
distributorship, they would not have entered into lease agreements and/or
claimed substantial amount of rent or return. If at this stage allotment is
cancelled they would be seriously affected for years to come. This equitable
aspect may also be taken into account while deciding these applications and
before passing final orders.
learned amicus curiae, on the other hand, submitted that a herculean task has
been performed by the Committee. Keeping in view the directions issued by this
Court in Onkar Lal Bajaj and considering individual cases in their proper
perspective, the Committee submitted a report by dealing with each and every
report runs into few thousand pages. The Committee has also observed, as seen
in the earlier part of the judgment that no allotment has been cancelled merely
on the ground of political linkage/patronaze but while considering the legality
or otherwise of the allotment, political linkage/patronaze was kept in mind as
one of the factors. It was submitted that even after recording a finding that
there was a political linkage/patronaze, the Committee has considered as to
whether such political linkage/patronaze has weighed with the authorities at
the cost of merits or undue favour in allotment was made ignoring public
interest. Only in those cases where merits have suffered or allotment has been
made on extraneous considerations that the Committee held the allotment as
contrary to law. It is also clear from the fact that out of 409 cases, the
Committee had approved on merits more than 100 cases and in respect of 297
allotments, it found that they were not in accordance with the guidelines and
therefore could not be approved.
counsel also submitted that the directions in Onkar Lal Bajaj were explicitly
clear and the Committee was asked to consider claims of all the applicants
whether the allotment in their favour was on merits or on account of any
political or 'other consideration'. It, therefore, could not be said that the
direction to the Committee was to consider a political linkage/patronaze only.
The Committee was bound to consider all the cases as per the direction of the
Court which has been done and no fault can be found against the report of the
Committee and the applications deserve to be dismissed.
as the preliminary objection is concerned, we find no substance therein.
Reading Onkar Lal Bajaj in its entirety and the directions issued by this
Court, it cannot be said that the Court was considering allotment only on the
basis of political linkage/patronaze. It is clear that the proceedings had been
initiated because of news reports appeared in Indian Express and this Court was
called upon to consider the action taken by the Central Government of
cancellation of all allotments. It was, therefore, obligatory on the part of
the aggrieved parties to satisfy the Court that the action taken by the
Government was not in consonance with law. This Court, keeping in view the
circumstances in their entirety, set aside the order as being violative of
principles of natural justice and fair play and directed the Committee to
consider certain cases as to whether allotment had been on the basis of
political patronaze/linkage or other extraneous considerations weighed with the
Board in making orders of allotment. In fact, in Onkar Lal Bajaj, the Court
noted the submission of the allottees that selection by DSBs in their favour
was on merits and not on account of any political or other extraneous
Court then said;
the present, we are not expressing any opinion on the question whether the
selection of the allottees by DSBs in this category of alleged tainted
allotments was a result of political or other extraneous consideration or the
selection was on merits alone. As already mentioned, these aspects require an
phrase 'other consideration', in our opinion, therefore, cannot be read ejusdem
generis with political linkage/connection/patronaze. The expression 'other
consideration' would take within its sweep all considerations other than merit
of the case. Ultimately, the direction of this Court was not a statute nor it
can be considered as an enactment.
light of the above, a Committee was appointed and directions were issued. The
Committee considered the question on merits. It, therefore, could not be said
that the Court was to consider only political linkage/patronaze and the
Committee had exceeded its powers and/or jurisdiction in taking into account
other extraneous matters. In fact, the direction of this Court was to consider
extraneous considerations, if any, in allotment and if so, to pass an
appropriate order and to report on those aspects. We are, therefore, not
inclined to uphold the preliminary objection of the learned counsel for the
also not impressed by the argument of the petitioners that the doctrine of
promissory or equitable estoppel would apply. May be that the petitioners have
spent some amount. But once the allotment itself was found to be vitiated,
obviously they cannot claim any benefit as allotment was contrary to law.
Moreover, such allotment has been made in remote past and even though an order
of cancellation had been passed by the Central Government as early as in
August, 2002, the allottees have been protected by interim order passed by this
Court. Even after the decision in Onkar Lal Bajaj, interim order was continued.
In the circumstances, for more than four years interim order is in favour of allottees
even though the allotment is found to be illegal or contrary to law. In our
opinion, therefore, it is not open to the allottees whose allotments have been
found to be vitiated to plead equity.
opinion, the learned amicus curiae is right that the Committee had considered
in detail individual cases and submitted the report. This Court, therefore,
would consider a complaint of an allottee who can successfully put forward his
complaint and may satisfy this Court that in the facts and circumstances of the
case, the finding of the Committee that the allotment was not on merits was not
correct. But only in those individual cases, the Court would consider and may
grant relief to such applicants. It, however, cannot be said that the report of
the Committee was without power, authority or jurisdiction or was uncalled for
and liable to be ignored.
considered the basic issues, it is now time to consider individual cases.
PRADESH So far as
Himachal Pradesh is concerned, sixteen cases were referred to the Committee and
the Committee considered all the cases and found that in respect of five cases,
the allotment was on merits while in eleven cases it was not on merits and was
held to be vitiated. Four applicants, namely, Mahesh Kumar, Deshraj, Ms. Anita Kumari
Sandal and Smt. Lakshmi Devi have approached this Court. We have gone through
the report of the Committee and found that the Committee was right in its
conclusions. We, therefore, hold that the cancellation of allotment in eleven
cases cannot be said to be illegal or unlawful. All interim applications,
therefore, deserve to be dismissed and are, accordingly, dismissed.
OF JHARKHAND In State of Jharkhand, twelve cases were referred to the
Committee. Three were found to be on merit and remaining nine were not on
merit. Five applicants have approached this Court. In the case of Rohit Priyadarshi
Oraon and Smt. Poonam Singh, the Committee observed that both were ineligible
and hence could not be allotted retail outlet. As to Smt. Mamta Kumari, the
Committee observed that though she was only a housewife, a retail outlet had
been allotted to her who is a daughter of one Nand Kishore Yadav, BJP Bihar
Unit President. It was also observed that another allotment has been made to
her brother. According to the Committee, the allotment was not on merits. It
cannot be said that the above findings deserve interference. For Smt. Sushila Hansdak,
wife of Congress MP, no one appeared. The Report of the Committee is accepted
in regard to the said four allottees.
case of Janendra Kumar Rai appears to be a border line case and in the facts
and circumstances, in our opinion, allotment could not have been cancelled.
of Janendra Kumar Rai is, therefore, allowed and recommendation for
cancellation of allotment in his case is not accepted.
OF CHATTISGARH So far as Chattisgarh is concerned,
we are having two applications. Five cases were referred to the Committee. Two
were found to be on merits. Allotment in favour of 3 allottees was found to be
arbitrary by the Committee. Having gone through the reasons of the Committee,
it cannot be said that the order deserves interference by this Court. One
application is by a non- allottee. It is not considered by us since we are of
the view that it is not of the function of this Court to consider the cases of
other applicants for the grant/allotment of outlet. The Report of the Committee
OF GUJARAT In regard to Gujarat, eighteen cases were referred to
the Committee. Seven were found to be on merit.
were not found to be on merit. Two were not considered. There are six
applications. In the cases of Rathod Bhanu Mayabhai, Manek Jayadeep Karanbhai, Madhubhai
Thakore and Bhartiben Nardevbahi Patel, we find that the Committee has rightly
held that allotment could not have been made for the reasons recorded in the
report. We have gone through the reasons which weighed with the Committee and
find no illegality therein.
as Siddharaj Bharatsingh Rana and Manish Kantibhai Solani are concerned, no
political connection was found and they are border line cases. In view of the
said fact, in our opinion, it would be appropriate if allotment in their favour
is not disturbed. We, therefore, allow these applications and set aside the
Hirasinh R. Baria, it was not case of cancellation as he was not an allottee.
It was also stated that a petition is pending and the matter is sub-judice in
the High Court of Gujarat. We, therefore, reject the application reserving
liberty to pursue the matter before the High Court.
OF TAMILNADU In the State of Tamil Nadu, eleven cases were referred to the
Committee. Two were found to be on merit. Nine were found to be not on merit.
Out of them, six have filed applications before us. The Committee dealt with
cases of G.Raviraj, S. Guna Sekaran, K.
Arul R, A.P. Mahesh and Tamilkumaran and after considering the relevant
guidelines held that allotment was vitiated as they were not in consonance with
the guidelines. Having examined the Report, we accept the same in respect of
all allottees. Consequently, all six applications are rejected.
OF RAJASTHAN In respect of State of Rajasthan, the Committee considered
forty-seven cases and found that ten were in order and remaining thirty-seven
allotments were not in consonance with law. Out of them, thirty-three have
filed applications. We have been taken to the reasoning recorded by the
Committee. So far as Smt. Krishna Kanwar, Kundan Sharma, Prem Ratan and Rameshwar
Khandelwar are concerned, it appears that they are in the nature of border line
cases and we, therefore, hold that in respect of those four applicants,
allotment may continue. The applications by those four are allowed and the
cancellation is set aside. Regarding other cases, accepting the reasons
recorded in the report by the Committee, we find that no illegality had been
committed in cancellation. All those applications are, therefore, rejected.
PUNJAB In respect of State of Punjab, the Committee considered
thirty-seven cases referred to it. It found that seven allotments were on merit
and twenty-nine allotments were not in consonance with the guidelines.
them, twenty-six have filed applications. We have been taken through the
reasoning recorded by the Committee. So far as cases of Shri Surinder Singh, Chander
Kant Bhatia, Gurpreet Singh, Smt. Kanta Rani Smt. Suman Lata, Ms. Ruby Sekhri,
Mr. Manmohan Singh, Mr. Rajesh Madan and Mr. Tejinder Singh are concerned, they
appear to be border line cases. In our view, it may not be appropriate to
cancel the allotment in favour of these nine persons. Their applications are
allowed. Rest of the cases do not call for interference and the applications
are rejected. There are six applications by non-allottees. They are also
rejected as we are not concerned with non-allottees.
of Haryana In regard to State of Haryana, the Committee considered
twenty-one cases referred. It found no irregularity in allotment in seven
cases. It disapproved allotments in fourteen cases. Out of them, twelve have
filed applications. We find no infirmity in the conclusions arrived at or reasons
recorded by the Committee and no interference is called for. The other
applications are rejected.
interim applications with regard to above- mentioned States are disposed of,
including applications for impleadment. Interim orders in favour of those
applicants whose allotments have been cancelled would continue for three months
and stand vacated thereafter.
as remaining cases are concerned, they stand adjourned. Registry is directed to
place the matters before Hon'ble the Chief Justice of India for listing of
these matters before appropriate bench.
parting with the matter, we would like to place on record our appreciation for
Mr. Gopal Subramaniam, amicus curiae for onerous work undertaken by him and in
placing before the Court necessary facts and circumstances so as to enable us
to decide individual cases.