V. Purushotham
Rao Vs. Union of India & Ors [2001] Insc 559
(19 October 2001)
G.B.
Pattanaik & Ruma Pal Pattanaik, J.
With
Civil Appeal Nos. 3104-3105, 3089, 3090, 3117, 3097, 3102, 3086, 3106, 3085,
3094, 3099, 3103, 3092 & 3101 of 2000.
In
this batch of appeals the judgment of Delhi High Court, canceling the allotment
made by the concerned minister from out of his so- called discretionary quota
on petroleum dealership as well as LPG dealership is under challenge. Prior to
1995, the Minister of Petroleum in exercise of his discretion had been
allotting retail outlets for petroleum products, LPG dealership and SKO
dealership, without having any prescribed norms. A Public Interest Litigation
had been filed in this Court by Centre for Public Interest Litigation under
Article 32 of the Constitution, praying that guidelines to regulate the
exercise of discretion in the matter of such allotment, which results in
exercise of the discretion arbitrarily be fixed. It may be stated that
initially a prayer had also been made in that application to cancel the
dealership in favour of respondent No. 4, but that prayer stood deleted and an
amended petition was filed as the said respondent did not accept the dealership
in question. This Court after hearing the counsel for the petitioner, and the
learned Attorney General, issued a set of guidelines for discretionary
allotment of petroleum products agencies to ensure that the exercise of
discretion in making such allotments are in conformity with the rule of law and
by excluding the likelihood of arbitrariness and minimising the area of discretion.
The said decision of this Court has since been reported in the case of Centre
for Public Interest Litigation vs. Union of India and Ors., 1995 Supp.(3)
S.C.C. 382. In para (4) of the aforesaid Judgment, the Court had directed as
under:
We
hereby direct that the above-quoted norms/guidelines etc. shall be followed by
the Central Government in making all such discretionary allotments of retail
outlets for petroleum products, LPG Dealership and SKO Dealership, hereafter.
The
Common Cause had filed a petition under Article 32 on the basis of a news item
which appeared in a national newspaper that the Minister of Petroleum was
personally interested in making allotment of petrol pumps in favour of 15
persons, who were either the relations of his personal staff or sons of the
Ministers, or sons/relations of the Chairman and Members of the Oil Selection
Boards, praying for cancellation of allotments made inter alia on the ground
that the allotments had been made by the concerned minister, mala fide and the
decision is arbitrary and motivated by extraneous considerations. The Court
ultimately cancelled the allotments made in favour of the 15 persons mentioned
in the petition, on a conclusion that the allotments are arbitrary,
discriminatory, mala fide and wholly illegal. The Court also issued certain
other directions in relation to the allottees and called upon the concerned
minister to show cause as to why a direction be not issued to the appropriate
police authority to register a case and initiate prosecution against him for
criminal breach of trust or any other offence under law and in addition, why he
should not be liable to pay damages for his mala fide action in allotting
petrol pumps to 15 persons mentioned therein. This judgment of the Court is
reported in 1996(6) SCC 530. While the Common Cause case was pending in this
Court, Civil Writ Petition Nos. 4003 and 4430 of 1995 had been filed in Delhi
High Court by the Centre for Public Interest Litigation, as public interest
litigation, which were pending in Delhi High Court. In those two petitions,
allotment of petrol pumps/gas agencies to various persons during the period
1992-93, 1993-94, 1994-95 and 1995-96 had been challenged. A Transfer Petition
had been filed in this Court, which was registered as Transfer Petition
No.127/96 and this Court had issued notice in the transfer petition and stayed
further proceedings before the High Court. In an affidavit filed by the
Ministry of Petroleum in the aforesaid transfer petition, the then Joint
Secretary had stated that in 1995-96 under the discretionary power of the
Government, allotment had been made to 99 persons and further orders had
already been made in favour of 61 more persons, allotting petrol pumps/gas
agencies. One Mr. Srinivasan, Advocate had filed an affidavit giving a long
list of persons who are related to the then Prime Minister/Ministers and other V.I.Ps
and who had been allotted petrol pumps and gas agencies. On behalf of petroleum
ministry, an affidavit had been filed, stating that due inquiry had been made
through the oil companies and after due inquiry, the concerned minister had
made the allotment. This Court ultimately held that since the two writ
petitions are pending before the High Court, wherein the allotment made to all
these persons have been challenged, it would not be necessary for this Court to
get the writ petitions transferred and decide the matter. The Court, therefore,
vacated the stay order granted and directed the Registry of the Court to send
all affidavits filed by the parties in the transfer petition along with the annexures
to the High Court. The Court observed:
We
have no doubt that the High Court shall examine the issues involved in the writ
petitions and shall also go into the validity of the allotment of petrol
pumps/gas agencies to various persons, after hearing them, in accordance with
law. We request the High Court to expedite the hearing of the petitions.
Pursuant
to the directions contained in the judgment of this Court in Common Cause vs.
Union of India, 1996(6) SCC 530, show cause notice having been issued to the
then Minister Captain Satish Sharma, said Shri Sharma had filed an affidavit in
reply to the show cause notice. The Court ultimately perused the show cause
notice filed and after hearing the counsel appearing for the Minster, directed
the CBI to hold an investigation, after registering a case against the
concerned minister in respect of the allegations dealt with and findings made
by the Court earlier in the Common Cause case. On the question of liability of
the minister to pay exemplary or compensatory damages, the Court considered the
matter and came to the conclusion that Captain Satish Sharma, the then minister
would be liable to pay exemplary damages and quantified the same at Rs. 50 lacs.
This Judgment of the Court has been reported in 1996(6) S.C.C. 593.
Pursuant
to the directions of this Court in Common Cause case, 1996(6) S.C.C. 530, the
Delhi High Court took up the writ petitions which had been filed as Public
Interest Litigation by the Centre for Public Interest Litigation. On
examination of the relevant files dealing with the allotment of retail outlets
of petrol, LPG distributorship and SKO/LDO dealership under the discretionary
quota made by the minister concerned, it was revealed that between January 1993
till 1996, 179 retail outlets (petrol pumps), 155 LPG distributorships and 45
SKO/DLO dealerships had been allotted by the concerned minister under the
discretionary quota. In its order dated 29th of August, 1997, the Division
Bench of Delhi High Court came to the conclusion that the examination of files
clearly shows that these are not the cases of aberrations here or there but are
cases which show a pattern of favouritism. From the judgment of Delhi High
Court in C.W. 4003/95 dated 29.8.1997, it transpires that even before the
Supreme Court stayed the proceedings by order dated 6th December, 1995 , the
High Court had called upon the respondents by order dated 2nd November, 1995 to
produce the list of allotments made under the discretionary quota of the
petroleum minister for allotment of petrol retail outlets, LPG distributorship
and Kerosene distributorship from the date of the tenure of the minister which
was 18th of January, 1993. Before the Delhi High Court, it had been contended
by the allottees as well as by the Government that the judgment dated 31st
March, 1995 of the Supreme Court laying down the guidelines, since reported in
1995 Supp.(3) S.C.C. 382 would indicate that the Supreme Court had implidely regularised
the allotments made prior to 31st March, 1995 and consequently the validity of
the said allotments need not be gone into. The High Court however was not
persuaded to agree with the submissions and in our view rightly, particularly,
when in the Common Cause case [1996(6) SCC 530] this Court has positively
directed the High Court to examine the issues involved and dispose of the two
pending writ petitions in accordance with law. Since the allottees were
required to be noticed before any decision is taken, the High Court by its
order dated 11th December, 1996, constituted a Committee of three advocates and
directed them to examine all the files and submit a report in a Proforma which
had been prepared by the Court itself, after discussion with the counsel
appearing for the parties. The said Committee submitted its report, on the
basis of which the Court issued notices to various persons by its order dated
27th of February, 1997 and 20th of March, 1997 and the Court was to deal with
the cases of about 400 allottees. Pursuant to the notices issued, the allottees
filed their respective show causes and then the Court heard the respective
counsel for the allottees as well as examined the report of the Committee and
scrutinized the same by perusing the original file and finally disposed of the
cases of about 100 allottees by its judgment dated 29th of August, 1997. The
Court on examination of the materials before it and on perusal of the original
files, appears to have taken the view in several cases that the discretion had
been exercised on sufficient materials and after inquiry and held those
allotments to have been proper exercise of the discretion and accordingly
discharged the notices of cancellation. But in those cases, where the Court
found either there were no materials before the concerned minister in support
of the applications filed to justify the exercise of power for allotment under
the discretionary quota or such allotments had been made on account of
political patronage or some other extraneous considerations, the Court
cancelled the allotment made with certain directions therein. It would be
appropriate at this stage to notice the observations of the High Court:
It is
unfortunate that perusal of the files show that a large number of persons to
whom allotments were made under the discretionary quota belong to an affluent
class of society and not to the class which may deserve compassion, resulting
in exercise of discretion in their favour. Whether this large number of persons
got allotment on account of their affluence or on account of their close
proximity with the powers that be, it may be difficult to say definitely, one
way or the other but that makes no difference since both affluence and/or
proximity, are irrelevant and extraneous considerations for exercise of
discretion.
The
Court also came to the further conclusion that there had been no verification
of the statements made in the applications by the allottees and hardly any
application contains details of annual income or bio-data and hardly any person
had filed any affidavit in support of his claim, seeking grant of discretionary
allotment and in several cases the applications even did not bear any data and
a number of allottees belonged to one Parliamentary Constituency and were
active members and supporters of the party in power at the relevant time. The
Court having cancelled the allotments made in favour of the appellants, who are
before us, the present appeals have been filed by grant of special leave.
After
the disposal of first batch of cases by the High Court by its judgment dated
29.8.1997, the High Court issued notices to some other allottees and disposed
of the second batch of cases by its order dated 11.10.99 and both these orders
of Delhi High Court are under challenge, so far as it relates to the
cancellation of allotments made under the discretionary quota.
Captain
Satish Sharma, who was the concerned minister and against whom the Court had
directed registration of a criminal case by the C.B.I., and also levied penalty
of Rs. 50 lacs, filed a review petition against the aforesaid two directions of
the Court, which was entertained and that review petition was allowed by a
three Judge Bench of this Court, since reported in 1999(6) S.C.C. 667. In the
aforesaid case, this Court came to the conclusion that the factors relevant to
the award of exemplary damages had not been taken by this Court and
consequently the levy of penalty of Rs.50 lacs was not in accordance with law.
The Court also held that no case could be said to have been made out against
the concerned minister for directing registering a case under Section 409 and
such a direction could not have been given under Article 32 or under Article
142 and further, such a direction would be contrary to the concept of right to
life under Article 21. The Court, therefore, set aside the two directions
earlier made in relation to registering a criminal case and levy of penalty
against the minister. Certain observations had been made in the aforesaid three
Judge Bench Judgment, which form the sheet anchor of one of the contentions of
the appellants in the present batch of appeals and we will refer to those
observations and deal with the same at appropriate stage. The aforesaid
judgment of the Court has since been reported in 1999(6) SCC 667.
Between
1997 and 1999, against the order of cancellation of allotments made under
discretionary quota, about 79 special leave petitions had been filed in this
Court, which had been dismissed or dismissed as withdrawn. Notwithstanding the
dismissal of the aforesaid special leave petitions, after the three Judge Bench
Judgment of this Court dated 3rd August, 1999 since reported in 1999 (6) S.C.C.
667, special leave petitions having been filed, this batch of cases were listed
before the Bench presided over by the very learned Judge, who was presiding
over the Bench which reviewed the earlier judgment and absolved the concerned
minister from the direction of levy of penalty as well as from the criminal
prosecution. The Bench, therefore, having granted leave, the present appeals
were placed for hearing. At this stage, it would be appropriate for us to
notice that the review petitions filed by Captain Satish Sharma, the concerned
Minister was in relation to the order dated 4.11.96 in the case of Common Cause
vs. Union of India, 1996(6) S.C.C. 593 and was not in relation to the judgment
dated 25.9.96 in the case of Common Cause vs. Union of India reported in
1996(6) S.C.C. 530. The three Judge Bench however committed an error in
paragraph (7) by noticing that the review petition relates to both the
judgments viz. the Judgment dated 25.9.96 and 4.11.1996. Mr. P.P. Rao, the
learned counsel, appearing in four of these appeals viz. Civil Appeal Nos. 3085,
3094, 3099 and 3092, seriously contended that the judgment of this Court in the
Centre for Public Interest Litigation vs. Union of India, 1995 Supp.(3) S.C.C.
382 in no uncertain terms, stipulates that the norms and guidelines should be
followed by the Central Government in making discretionary allotment of retail
outlets of petroleum products, LPG distributorship and SKO dealership,
subsequent to the said judgment which necessarily and impliedly indicates that
the Court has approved the earlier lapses in the matter of such allotment under
discretionary quota and, therefore, it was not open to the High Court to re-
examine all the cases and decide the legality of the allotments made under the
discretionary quota. He further contended that in view of the observations of
this Court in the three Judge Bench Judgment [1999(6) S.C.C. 667], in paragraph
115 of the said judgment, the plea of constructive res- judicata should have
been applied by the High Court and the High Court committed error in rejecting
the said contention.
According
to Mr. Rao, on a plain reading of the judgment of this Court in Centre for
Public Interest Litigation case [1995 Supp.(3) S.C.C. 382], the conclusion is
irresistible that the Court in that case had given its stamp of judicial
approval to the discretionary allotments had already been made by that date and
it is for that reason, the Court had indicated that the guidelines therein
would be followed hereafter. That being the position, not only that the
principle of constructive res- judicata would apply, but also it was not open for
the High Court to re-open and examine the legality of the discretionary
allotments made prior to 1995. According to Mr. Rao, during the period when the
allotments had been made in favour of his clients, which is prior to the
guidelines indicated by this Court in the Centre for Public Interest Litigation
case, under the pre-existing practice and norms, the concerned minister having
exercised the discretion, the High Court committed serious error in interfering
with those discretionary orders of allotment. Mr. Rao further urged that the
impugned judgment would indicate that there has been no due consideration of
the show-cause filed by the allottees and the materials referred to in the
show-cause have not been considered by the High Court and, therefore, it would
be a fit case where matter should be remitted back to the High Court for re-
consideration. According to Mr. Rao , the discretion having been exercised in favour
of his clients, who happened to be political sufferers and a political sufferer
having been recognised as a class/category by themselves in the case of D.N. Chanchala
vs. State of Mysore and Ors. etc., 1971 Supp.S.C.R. 608 at 629, the High Court
committed serious error of law in interfering with the allotments made in favour
of his clients and as such the impugned orders cannot be sustained. Mr. Rao
also urged that allotments having been made in individual cases of extreme
hardship by the minister concerned and that being one of the norms which this
Court formulated in its guidelines in the case of Centre for Public Interest
Litigation and the appellants having invested huge money and this being the
only source of livelihood since 1993, the same ought not to have been
cancelled, particularly when no public interest will be served by such cancellation.
Mr.
P.S. Narasimha, the learned counsel, appearing for the appellant in Civil
Appeal No. 3100/2000, while supporting the arguments of Mr. Rao, further urged
that all the necessary information was available with the High Court but the
Court never considered those materials nor did the Court inquire into the
correctness of those materials, as it would be apparent from the affidavit of
the appellant, filed pursuant to the notice of show-cause and also the impugned
order of the High Court dealing with the appellants case.
This
being the position, Mr. Narsimhan urged that the order of cancellation should
be set aside and the matter should be remitted back to the High Court for
re-consideration.
Appearing
for the appellants in Civil Appeal Nos.3104-3105 of 2000, Mr. Narsimha, the
learned counsel urged that in these two cases, the concerned authority having
exercised the discretion in favour of a young educated unemployed youth
belonging to a back-ward community and his family being under financial constraint,
the conclusion of the High Court that it was a case of arbitrary allotment, is
unsustainable in law.
Mr.
V.A. Mohta, the learned senior counsel appearing for the appellant in Civil
Appeal No. 3089/2000, urged that the allotment in favour of his client had been
made under discretionary quota as the family of the applicant had been put to
severe financial hardship on account of natural calamity on one hand and the Naxailite
activities on the other hand. According to the learned counsel, this must be
held to be a germane consideration which weighed with the concerned authority
for exercise of his discretionary power and, therefore, the High Court ought
not to have cancelled the allotment made in favour of the appellant.
Mr. Dushyant
A. Dave, the learned senior counsel appearing for the appellant in Civil Appeal
No. 3090 of 2000 urged that the only ground on which the High Court has set
aside the allotment made in favour of the appellant is that there had been no
verification whatsoever regarding other members of his family and their sources
of income before exercising discretion, and therefore, since the minister
approved the allotment without any verification, the allotment is liable to be
cancelled. According to Mr. Dave, the fact that the order of allotment itself
indicated that the I.O.C.Ltd. would conduct requisite verification before
issuance of Letter of Intent, it cannot be said that the order in question was
without any inquiry. Mr. Dave urged that it is nobodys case that the I.O.C., on
an inquiry came to the conclusion that the grant of distributorship in favour
of the appellant on compassionate grounds was unjustified. That apart, the
appellant himself had filed an affidavit before the High Court, indicating his
family conditions and the fact that he had no resources and he had gathered the
resources from friends, but the High Court unfortunately over-looked these
materials and directed cancellation of the allotment made in favour of the
appellant. The learned counsel also urged that the order of the High Court
would indicate that in case of several other noticees, the High Court
discharged the notice of cancellation without ascribing any reason and
therefore, there was no reason why the High Court should have cancelled the
allotment made in favour of the appellant. The learned counsel further urged
that even if the High Court found that there had been no verification, then it
would have been appropriate for the High Court to direct for a fresh
verification, rather than canceling the distributorship and the approach of the
High Court is wholly uncalled for.
According
to the learned counsel, the appellants case being covered under the existing
discretionary scheme, as was prevalent, and further even under the guidelines
issued by this Court in the judgment reported in 1995 Supp.(3) S.C.C.382,
individual cases of extreme hardship which in the opinion of the Government are
extremely compassionate and deserve sympathetic consideration being one of the
criteria, there was absolutely no rhyme or reason on the part of the High Court
to set aside the discretionary allotment made in favour of the appellant. He
also reiterated the arguments advanced on behalf of Mr. Rao that the judgment
of this Court in 1995 Supp.(3) S.C.C. 382 must be so construed, that allotments
made under the discretionary quota prior to the date of the said judgment were
not intended to be interfered with and as such, the High Court had no
jurisdiction to examine the allotment made in favour of the appellant, which
was in the year 1993.
Mr. Sushil
Kumar Jain, the learned counsel, appearing for the appellant in Civil Appeal
No. 3117 of 2000, contended in addition to what had been urged by Mr. P.P. Rao
that the impugned judgment of the High Court is earlier to the three Judge
Bench Judgment of this Court in 1999(6) S.C.C. 667 and the observations made in
the three Judge Bench Judgment more particularly, in paragraph 115 thereof,
unequivocally supports the contention of the appellant that the Court approved
all allotments made prior to the Judgment in 1995 Supp.(3) S.C.C. 382 and
therefore, the matter should be remitted back to the High Court for re-
consideration in the light of the aforesaid three Judge Bench decision of this
Court. Mr. Jain also appearing for the appellant in Civil Appeal No. 3114 of
2000 reiterated his submissions made in the earlier case and contended that
there has been gross injustice by the High Court in canceling the allotment
made and the equitable considerations require that this Court should interfere
with the order of cancellation and in the alternative, the matter should be
remitted back to the High Court for reconsideration after due inquiry.
In the
written submission given by Mr. Bhachawat, learned senior counsel, in this case
it was urged that prior to 31st March, 1995 there being no fixed guidelines for
allotment under discretionary quota, the High Court was not justified in
canceling the allotment which are not tainted by any favoritism or nepotism
merely because there is no proof to support the allotment on compassionate
ground, or that the application is undated, or there is no receipt entry on the
application or even that there is no bio-data of the applicant.
According
to Mr. Bhachawat even judicial notice can be taken of the fact that Ministers
hold open Darbar in which they meet people, hear their grievances and also
solve their problems on the spot, therefore, the possibility of applications
for allotment from discretionary quota having been received during such Darbars
cannot be denied. Mr. Bhachawat also urged in his written submission that the
concerned Minister, who is the author of the alleged wrong allotment having
been given a clean chit by the three Judge Bench of this Court, since reported
in 1999 (6) SCC 667 and the main culprit thus being exonerated, it would not be
fair deal to punish the allottees, particularly when they have made investments
and are earning their livelihood by operating the allotments made in their favour.
He also reiterated on the question of applicability of the principle res judicata
by stating that if the parties were the same and the relief sought for is
identical then Explanation 6 to Section 11 should apply.
Mr.
M.C. Bhandari, the learned senior counsel, appearing for the appellant in Civil
Appeal No. 3101 of 2000, seriously contended that the appellant does not belong
to any of the three categories of persons mentioned in the judgment of this
Court in 1996(6) S.C.C. 530 inasmuch as the High Court never found that the
allotment in favour of the appellant had been made as he happened to be
relation of any personal staff of the minister or that the allotment had been
made on extraneous considerations nor the appellant can be said to be belonging
to the category of sons of ministers or related to any member of the Oil
Selection Board. That being so and no mala fide, favouritism or nepotism having
been established, the allotment could not have been nullified by the High
Court.
According
to Mr. Bhandari, the father of the appellant, Karibasavaraj, being a well known
talented stage artist in the State of Karnataka, who through his performance,
had been able to convey the messages of freedom fighters and religious
tolerance, having faced with acute financial stringency and said Karibasavaraj
having died, the responsibility to maintain a large family fell on the
appellant, who though a graduate, had no job or employment. It is on this
consideration, the then Chief Minister of Karnataka and the then Vice President
of India had recommended the case of the appellant for being favourably considered
for getting allotment under discretionary quota and ultimately the Minister,
Petroleum had made the grant in favour of the appellant. The said allotment is
neither arbitrary nor motivated nor vitiated by mala fides and as such the High
Court was wholly in error in canceling the allotment without proper examination
of the aforesaid materials. According to Mr. Bhandari, the finding of the High
Court that the minister has exercised his discretion without any verification,
is on the face of it erroneous inasmuch as the order of allotment itself
specified that the Letter of Intent could be issued only after requisite
verification. In fact such verification can be effectively done only by the Oil
Company at site and not by the Minister, sitting in Delhi and to hold that the minister must
verify the contents of the application, would be unreasonable and
impracticable. Mr. Bhandari further urged that the so-called questionnaire
which was formulated was behind the back of the appellant and the records
indicating that the appellant is related/connected to Mr. Veerapa Moily, the
then Chief Minister of Karnataka is untrue. Mere recommendation by the Chief
Minister would not constitute any relationship and the conclusion therefore, is
without any materials.
According
to the learned counsel, the procedure adopted by the High Court, so far as the
appellant is concerned, tantamounts to denial of a fair hearing and justice to
the appellant inasmuch as even before serving the notice on the appellant on
15.4.1999, the High Court itself heard the first batch of cases and delivered
its judgment on 29.8.97, answering all the questions of law, including the
question of constructive res judicata. Mr. Bhandari urged that in a public
interest litigation like the one, the High Court was duty bound to issue notice
under Order 1 Rule 8 CPC so that persons likely to be affected, could have
appeared before the High Court and made their submissions before the High Court
prior to its first order on 29.8.1997. Since the Court itself has come to a
definite conclusion on several issues arising in the matter by its order dated
29.8.97, the issuance of notice to the appellant was a mere formality to comply
with the principles of natural justice and the ultimate disposal of the
appellants case by the High Court must be held to be a disposal by the learned
Judges who had already made up their mind and this resulted in patent
injustice. In support of this contention, the learned counsel placed reliance
on the decision of this Court in 1989(3) S.C.C. Page 202 at 208- 210 (para 13).
Mr. Bhandari also urged that even in the case of a public interest litigation,
the basic principle of law to avoid multiplicity of proceedings should be
implemented.
Necessarily,
therefore, when the Centre for Public Interest Litigation filed a petition in
this Court, which was disposed of by the Judgment since reported in 1995 Supp.(3)
SCC 382 and that application also related to the allotment of retail dealership
in petroleum, under discretionary quota and did not assail the allotments
already made, then a second petition before the Delhi High Court was not entertainable.
He
also reiterated the argument that explanation 4 to Section 11 CPC should apply
to the case in hand and in support of the same he placed reliance on the
judgment of this Court reported in AIR 1986 SC 391 at Page 397, para 20. The
learned counsel with emphasis urged that it is no doubt true that discretion in
public matters should be least but it cannot be totally denuded of, nor can any
Court strike down the power exercised by an authority having discretion even in
deserving cases. The exercise of discretion by an authority depends upon the
independence and integrity of the individual exercising such discretion.
Adjudged from any stand point, the allotment made in favour of the appellant in
his case would not be a case of allotment on the ground of favouritism,
nepotism and/or abuse of power and, therefore, the High Court committed serious
error in canceling the allotment made. According to Mr. Bhandari, compassion or
a case of extreme hardship has all along been recognised as a germane factor
for exercise of a discretion. Even this has been recognised in the guidelines
issued by this Court in 1995 Supp (3) S.C.C. 382. The allotment made in favour
of the appellant being covered by the guidelines (6) and (7) of the Judgment of
this Court in 1995 Supp.(3) S.C.C. 382, it must be held that the discretion has
been exercised in a fair, reasonable and legal manner and, therefore, the same
ought not to have been interfered with by the High Court.
Mr. Bhandari
lastly urged that such a discretionary allotment having existed for a long
time, as has been noticed by the three Judge Bench decision of this Court in
1999(6) S.C.C.667 and the appellant having been allowed to run the agency for
about eight years and having invested about Rs. 30 lacs and the entire family
being dependent on the income derived from the agency, this Court should set
aside the order of cancellation made by the Delhi High Court and follow the
judgment of this Court dated 28th of September, 2001 in Civil Appeal No.
6840/2001 and batch, relating to allotment of land from the discretionary quota
in the State of Haryana.
Mr. Jaideep
Gupta, the learned counsel, appearing for the appellant in Civil Appeal No.
3103 of 2000 contended that in his case, an eminent Member of Parliament,
highly respected in the political sphere Smt. Gita Mukherjee, since deceased,
had herself filed an affidavit before the Delhi High Court, explaining the
circumstances that led her to recommend the case of the appellant and the High
Court even did not bother to notice the said affidavit filed by Late Smt. Gita Mukherjee
and came to the conclusion that the Minister before exercising the discretion,
did not himself verify about the source of income of the applicant and his
family members. According to Mr. Gupta, if a Member of Parliament recommends
the case of a citizen belonging to his/her constituency and if the Minister
acts upon such recommendations, it cannot be said that the Minister did not
verify himself before exercising his discretion. Mr. Gupta also urged that even
before entering into the dealership agreement, the appellant had been
extensively interviewed by the Chief Regional Manager and the Legal Officer of
the company regarding his income and on being fully satisfied with the same and
the aforesaid state of affairs having been made by the appellant on oath, which
was not denied by anyone concerned, on the un-controverted statement of the
appellant, the High Court was not justified in canceling the allotment made on
the ground as already stated. Mr. Gupta further urged that the agreement
entered into between the appellant and the Oil Company itself contains power to
terminate the dealership if it is found that the applicant had made any
incorrect statement at the time of allotment of dealership. That being the
position, it would be always open for the Oil company to annul the dealership
if it is found that the appellant had furnished any incorrect information. In
the premises, it would be more appropriate to direct the oil company to
investigate into the matter, rather than to cancel the allotment made.
According to Mr. Gupta, the principles to be followed in a case of cancellation
of a grant should be different from the principles for determining the legality
of a grant and, therefore, the High Court was wholly unjustified in canceling
the allotment made on the sole ground that the concerned minister had not made
any inquiry before exercising his discretion. The learned counsel also urged
that the appellant has invested a huge amount of money and cancellation of the
dealership at this point would cause untold hardship. To deprive of the
appellant and his family of earning his livelihood at this length of time would
not be in the interest of justice and, therefore, this Court should set aside
the order of cancellation passed by the Delhi High Court.
Mr. Subba
Rao, the learned counsel appearing for the appellant in Civil Appeal No. 3097
of 2000 urged that the appellant, a widow was a destitute, having no source of
income and the allotment made in her favour cannot but be held to be an
allotment on germane consideration and, therefore, the High Court was wholly in
error in canceling the allotment solely on the ground that the minister
accepted the statement made in the application as a gospel truth.
According
to Mr. Subba Rao, it is nobodys contention nor has the High Court found as a
fact that the statements made in the application for allotment are untrue and
in such a case the discretion exercised ought not to have been interfered with
on an hypothesis that the Minister committed an error in accepting the
statement made in the application for allotment. In this case the source of
livelihood from out of the agency is a source for the entire family. According
to Mr. Rao, this source ought not to be closed down, which would make the
entire family destitute. Mr. Subba Rao in support of his contention placed
reliance on a judgment of this Court in the case of Ram and Shyam Company vs. State
of Haryana and Ors. 1985 Supp.(1) S.C.R.541,
where under this court noticed that there exists a clear distinction between
the use and disposal of private property and social property. While the Court
observed in the aforesaid case that disposal of public property partakes the
character of a trust in that in its disposal their should be nothing dubious,
but this is subject to one important limitation namely that the socialist
property may be disposed at a price lower than the market price or even for a token
price to achieve some defined constitutionally recognised public purpose, one
such being to achieve that goals set out in Part IV of the Constitution. In
this view of the matter, according to Mr. Subba Rao the discretion used by the
concerned minister in favour of his client cannot be held to be illegal or
invalid.
Mr. P.
N. Misra, the learned senior counsel appearing for the appellant in Civil
Appeal Nos. 3102/2000 and 3086/2000, strenuously urged that in the first
appeal, the applicant had lost her husband in a road accident while she was of
a young age of 32. She had two small school going children and to establish her
in life for the maintenance of the young children it is her father-in-law who
had made the application to allot her a retail outlet. The concerned Minister
had approved the case of allotment in favour of the applicant. In the other
case, on an application being made, an inquiry had been made from the ministry
to furnish the bio-data which the applicant had furnished and on being satisfied
with the materials furnished, the allotment had been made in favour of the
applicant. According to Mr. Misra, these are two genuine cases and a case of
pure compassion and as such the order of allotment ought not to have been
interfered with. Be it be stated that the father-in-law, who had made the
application for getting an allotment in favour of the applicant was none else
than a Member of Parliament.
According
to Mr. Misra, the allotment letter clearly having stipulated that the allotment
would be subject to verification to be made by the concerned oil company and
the company itself having made the necessary verification, the High Court was
not justified in interfering with the allotment made.
According
to Mr. Misra, the applicant was asked to furnish the bio-data, which the
applicant did comply with and therefore, the conclusion that there were no
material before the minister was incorrect. According to Mr. Misra, it is no
doubt true that the father-in-law of the applicant was an M.P. since 1991 but the
application was made only in 1994, after the unfortunate death of his son which
is indicative of the fact that the father-in-law never misused his position.
Mr. P.
N. Misra also placed before us the counter affidavit filed on behalf of the
Union Government in the Delhi High Court in some other allied matters and also
the noting dated 5.5.93, which indicates as to how the application of the allottee
is sent to the company concerned for verification of facts therein like income,
residence, social status etc., and contends that the conclusion of the High
Court that there had been no verification is unsustainable.
Mr.
O.P. Sharma, the learned senior counsel, appearing for the appellant in Civil
Appeal No. 3106/2000 reiterated the submissions made by all the counsel
appearing before him and argued at considerable length by placing all the
decisions afresh and urged that the three Judge Bench Judgment having
over-ruled the earlier two Judge Bench decision, the High Court could not have
set aside the allotment made, relying upon the judgment of this Court in the
two Judge Bench decision. The learned counsel also urged that the three Judge
Bench Judgment has categorically come to a finding that allotment has been made
in accordance with the prescribed guidelines. That being the position, the High
Court was not competent to over-ride the aforesaid conclusion of the three
Judge Bench Judgment of this Court and arrive at a conclusion contrary to the
same.
Mr.
Sharma also urged that the plea of constructive res judicata should apply to
the case in hand inasmuch as the aforesaid plea is applied as a matter of
public policy to avoid multiplicity of litigation and not to allow re-opening
of a matter already adjudicated upon. In this view of the matter, the High
Court was not entitled to re-examine the matter after the judgment of this
Court in 1995 Supp.(3) SCC 382.
In
support of this contention, reliance had been placed on the decision of this
Court in AIR 1997 SC 1680. Mr. Sharma also relied upon the recent judgment of
this Court in Haryana Land Allotment case and contended that the theory of
prospective over-ruling should apply to prospective cancellation of the grant
made and that would subserve larger public interest and in this view of the
matter this Court should set aside the order of cancellation made by the High
Court. Relying upon the observations made in the reviewed judgment of three
learned Judges of this Court, Mr. Sharma contended that this decision approves
the fact that allotments made earlier to the guidelines issued by this Court in
1995 must not be interfered with and the said observation being binding on this
Bench, this Bench should allow this appeal or refer the matter to a three Judge
Bench. Mr. Sharma urged that right to life engrafted in Article 21 of the
constitution also equally applies to the case in hand and as such the entire
family will be ruined if the dealership is cancelled. He lastly urged that
pursuant to the notice issued to the appellant, the appellant having filed an
affidavit before the High Court, giving all material particulars, the High
Court could not have set aside the allotment made in favour of the appellant
without even consideration of those materials. The disposal made by the High
Court on such non-consideration of such germane materials must be held to be
vitiated and therefore, the matter should be remitted back to the High Court.
So far as the ground on which the High Court set aside the allotment made viz.
the minister had not verified the particulars, Mr. Sharma urged that the
minister is not required to make any check or verification and can make the
allotment under the discretionary quota, relying upon the statements made by an
applicant, since the so-called grant is subject to the verification to be made
by the oil company. It is always open for the oil company on verification, not
to grant the dealership notwithstanding the order of the minister inasmuch as
order itself stipulates that the grant should be subject to the verification by
the oil company. According to Mr. Sharma, the touch-stone for exercise of
discretionary power being that it should not suffer from the virus of nepotism
and favouritism and should be devoid of any personal interest and should not be
for extraneous considerations and none of these grounds having been found by
the High Court, the order of cancellation on the face of it is wholly
unsustainable.
Mr. Sanjeev
K. Kapoor, the learned counsel appearing for the Centre for Public Interest
Litigation repels the submissions made by the counsel for the appellants.
According
to the learned counsel, the contention that the judgment of this Court in the
Centre for Public Interest Litigation[1995 Supp.(3) S.C.C 382] amounts to a
tacit approval of the Court to the allotments made, any illegal exercise of
discretionary power is nothing but a misreading of the judgment. He further
urged that in public interest litigation, when there is no adversarial
adjudication, the principles of constructive res judicata ought not to apply,
as was held by this Court in the case of Rural Litigation and Entitlement Kentra
vs. State of U.P. 1989 Supp.(1) S.C.C.504. At any rate the earlier litigation
filed at the behest of the Centre for Public Interest Litigation was only for
laying down the guidelines for exercise of the discretionary power, as is
apparent from the amended petition, the amended petition was considered and
disposed of and as such there has been no adjudication by this Court with
regard to the legality or illegality of the allotments made by the concerned
minister from the discretionary quota. The learned counsel also vehemently
submitted that in the Common Cause case, where subsequent to the judgment in
Centre for Public Interest Litigation case, legality of allotments made in favour
of 15 allottees from the discretionary quota was the subject matter for
adjudication, this Court in no uncertain terms, cancelled the allotments made
and in the very same judgment, directed the Delhi High Court where the writ
petitions were pending to dispose of the matter in accordance with law. In fact
the High Court proceeded to dispose of the matter pursuant to the aforesaid
judgment/observations of this Court in the Common Cause case. In this view of
the matter, the contention that the High Court should have applied the
principle of constructive res judicata, is wholly misconceived. So far as the
observations made by the three Judge Bench Judgment of this Court in the review
petition arising out of Common Cause case judgment, Mr. Kapoor contends that
the review petition merely related to the subsequent order, wherein this Court
directed institution of a criminal case and levied exemplary damages to the
tune of Rs.50 lacs on the concerned minister Capt. Satish Sharma.
In the
aforesaid premise, any observations made by the said three Judge Bench in
relation to the legality of the allotments made by the minister from
discretionary quota, cannot be treated to be of any binding precedent.
According
to Mr. Kapoor, the High Court was examining the legality of the exercise of
discretion by the concerned minister on the materials available to find out
whether it was in fact an exercise of discretion on germane materials or the
discretion has been exercised arbitrarily and for extraneous considerations in
which event the order emanated out of such discretion was required to be
nullified. The High Court has applied its mind to each and individual case of
allotment under the discretionary quota and wherever some materials were there,
the High Court has discharged the notice of cancellation and it is only when
there existed no materials for the minister concerned for exercise of his
discretion and the minister passed the order of allotment without any inquiry
into the assertions made in the application, the Court has set aside the same.
According to Mr. Kapoor, the notoriety by which such discretionary allotment by
a Minister has reached, it would be unwise to interfere with well reasoned
order of the High Court, particularly when the High Court had the opportunity
of examining the file from the Ministry, in relation to each and every case of
allotment under the discretionary quota.
Mr.
T.L.V. Iyer, the learned senior counsel, appearing for the Union of India,
submitted that the Union Government has no role to play and it merely complied
with the directions of the Court.
In
view of the rival submissions at the Bar, the following questions arise for our
consideration:
(a) Is
the Judgment of this Court in the case of Centre for Public Interest Litigation
[1995 Supp.(3) S.C.C. 382] susceptible of a construction that the Court
indicated the guidelines for future guidance and had it given its stamp of
judicial approval to the discretionary allotments already made by the date of
the judgment?
(b)
Would the principle of constructive res judicata as provided under Section 11
explanation 4 of the Code of Civil Procedure or Order 2 Rule 2 CPC apply to a
public interest litigation and if so, in the case in hand, can it be said that
the writ petitions filed by the Centre for Public Interest Litigation in Delhi
High Court from out of the judgment of which the present appeals have been
preferred, are barred by the aforesaid principles on the ground that in the
petition filed under Article 32 by the said Centre, no prayer for cancellation
of illegal allotments had been made, though could have been made? and what is
the impact of the observations made by the three Judge Bench in the review
petition filed by Captain Satish Sharma, which stood disposed of by the
judgment reported in 1999(6) S.C.C. 667?
(c)
Does the expression over ruled in the three Judge Bench Judgment, refer to
over-ruling the judgment in the Common Cause case wholly or does it refer to
only the subsequent order in the Common Cause case, directing registration of
the criminal case and its investigation and levy of penalty/exemplary damages
against Captain Sharma?
(d)
The judgment of the High Court being earlier to the three Judge Bench judgment
of this Court in the review petition filed by Captain Satish Sharma since
reported in 1999(6) SCC 530, is there any necessity for remitting these appeals
to the High Court for reconsideration, in the light of the subsequent three
Judge Bench judgment of this Court?
(e)
Are the appellants entitled to any equitable considerations on the ground that
they have spent a substantial amount and have also operated the petrol
outlets/gas agencies for about eight years? and
(f)
Can the impugned judgment of the High Court in any of these appeals be said to
be vitiated on account of non- consideration of any germane materials?
(g)
Whether in a Public Interest Litigation, where large number of persons are
going to be affected, the Court is bound to issue notice under Order I Rule 8
and does non-issuance of such notice vitiate the entire proceedings?
(h)
Whether the verification supposed to have been made by the Oil Company pursuant
to the order of allotment made by the Minister, can be held to be the proper
verification for exercise of discretion by the Minister himself and in such
event whether the order of cancellation by the High Court is valid?
(i)
Whether the principle decided in the judgment of this Court in Civil Appeal No.
6840 of 2001, in relation to such discretionary allotment of land in the State
of Haryana, can be made applicable to the case in hand, so that the judgment
would be made applicable prospectively and consequently, the orders of
cancellation will have to be set aside?
So far
as the first question is concerned, the entire emphasis is on the directions
given by the Court in paragraph (4) of the Judgment, which is quoted hereunder:
We
hereby direct that the above-quoted norms/guidelines etc. shall be followed by
the Central Government in making all such discretionary allotments of retail
outlets for petroleum products, LPG Dealership and SKO Dealership, hereafter.
The
appellants contention is that while the writ petition was filed in public
interest, the exercise of discretion in allotment of retail outlets for
petroleum products, LPG Dealership and SKO Dealership had been challenged and a
prayer for laying down the guidelines to regulate the exercise of discretion
had been made, the Court only laid down the guidelines and further observed
that the norms and guidelines would be followed hereafter and necessarily,
therefore, there has been a tacit approval to the earlier allotments made under
the discretionary quota inasmuch as the Court never cancelled the allotments
made nor had issued any direction in that respect. This contention in our
considered opinion, cannot be sustained for two reasons. Firstly, the amended
petition which the Centre for Public Interest Litigation has filed, merely
prayed for laying down the guidelines to regulate exercise of discretion in the
matter of such allotments.
Secondly,
which is rather more important is that this judgment was delivered by the Court
on 31st of March, 1995.
The
Common Cause had filed another petition under Article 32, alleging arbitrary
exercise of discretion in favour of 15 allottees and that petition was
entertained by this Court and disposed of by Judgment dated 25th September,
1996 and the Court cancelled all such allotments on a finding that the Minister
without keeping in view any guidelines, allotted in exercise of his discretion
in a cluster manner and the public property have been doled out in wholly
arbitrary and discriminatory manner. If the earlier Judgment is susceptible of
the construction, as contended by the appellants, then it would not have been
possible in the Common Cause case to examine the legality of such allotments
which had been made in favour of 15 persons. Instead of construing the judgment
in the Centre for Public Interest Litigation to the effect that it accords a
tacit approval of the allotments made prior to the judgment in the Common Cause
case, the Court relied upon the earlier judgment in 1995 Supp.(1) S.C.C.382,
and ultimately cancelled the orders of allotment, having found that the
allotments were made arbitrarily and for extraneous considerations. In this
view of the matter, it is difficult for us to sustain the contention of the
learned counsel, appearing for the appellants. We, therefore, hold that the
judgment of this Court in Centre for Public Interest Litigation, 1995 Supp.(3)
S.C.C. 382, cannot be construed by any stretch of the imagination to be a tacit
approval of the discretionary allotments made prior to that judgment. We,
therefore, do not find any substance in this submission of the learned counsel
for the appellants.
Coming
to the second question, Explanation (IV) to Section 11 of the Civil Procedure
Code postulates that any matter which might and ought to have been made ground
of defence or attack in such former suit shall be deemed to have been a matter
directly and substantially in issue in such suit. Order II Rule (2) of the Code
of Civil Procedure provides that every suit shall include the whole of the
claim which the plaintiff is entitled to make in respect of the cause of action
and if he omits to sue in respect of, or intentionally relinquishes, any
portion of his claim, then he shall not afterwards sue in respect of the
portion, so omitted or relinquished. By virtue of explanation to Section 141 of
the Code of Civil Procedure, since proceedings under Article 226 of the
Constitution is excluded from the expression proceedings, therefore, the Civil
Procedure Code is not required to be followed in a proceeding under Article 226
unless the High Court itself has made the provisions of Civil Procedure Code
applicable to a proceeding under Article 226. Then again, the principles of
Section 11 as well as Order II Rule 2, undoubtedly contemplate an adversarial
system of litigation, where the Court adjudicates the rights of the parties and
determines the issues arising in a given case. The Public Interest Litigation
or a petition filed for public interest cannot be held to be an adversarial
system of adjudication and the petitioner in such case, merely brings it to the
notice of the Court, as to how and in what manner the public interest is being jeopardised
by arbitrary and capricious action of the authorities. In the case of Rural
Litigation and Entitlement Kendra vs. State of U.P. 1989 Supp.(1) S.C.C. 504,
which is commonly known as the Doon Valley case, such a contention had been
raised, as is apparent from paragraph (14) of the judgment viz. the decision of
the Court dated 12th March, 1985 was final in certain aspects, including the
release of A category mines outside the city limits of Mussoorie from the
proceedings and in view of such finality it was not open to this Court in the
same proceedings at a later stage to direct differently in regard to what had
been decided earlier. The Court repelled the same by holding that the writ
petitions are not inter- parties disputes and have been raised by way of public
interest litigation and the controversy before the Court is as to whether for
social safety and for creating a hazardless environment for the people to live
in, mining in the area should be permitted or stopped. The Court hastened to
add:
We may
not be taken to have said that for public interest litigations, procedural laws
do not apply.
At the
same time it has to be remembered that every technicality in the procedural law
is not available as a defence when a matter of grave public importance is for
consideration before the Court. Even if it is said that there was a final order,
in a dispute of this type it would be difficult to entertain the plea of res judicata.
Thus
even in the self-same proceeding, the earlier order though final, was treated
not to create a bar inasmuch as the controversy before the Court was of grave
public interest.
The
learned counsel appearing for the appellants drew our attention to the decision
of this Court in the case of Forward Construction Co. and Ors. vs. Prabhat Mandal,
AIR 1986 SC 391, whereunder the Court did record a conclusion that Section 11
of the Civil Procedure Code applied to Public Interest Litigation. In our
considered opinion, therefore, the principle of constructive res judicata
cannot be made applicable in each and every public interest litigation,
irrespective of the nature of litigation itself and its impact on the society
and the larger public interest which is being served. There cannot be any
dispute that in competing rights between the public interest and individual
interest, the public interest would over-ride. In the Centre for Public
Interest Litigation case, which had been filed in this Court, the prayer that
had been made was to lay down the guidelines for the discretion being exercised
in the matter of allotment of Gas agencies, petroleum dealership and others. It
is no doubt true that the applicant therein could have made a prayer for
examining the legality of the allotments already made but as the applicant
states in the writ petition filed in Delhi High Court that he had no knowledge
about the persons to whom such allotments had been made and in fact the Delhi
High Court itself on a petition being filed, called upon the respondents to
submit the list of such allottees, whereafter notices could be issued to the allottees.
That apart, when this Court entertained another public interest litigation,
filed by the Common Cause in respect of 15 discretionary allotments made in favour
of 15 persons, the Court did entertain the same and instead of treating the
earlier decision to be a bar and applying the principle of constructive res judicata,
the Court relied upon the same and cancelled the allotments made in favour of
those 15 persons who had been arrayed as parties to the said petition filed
under Article 32. That apart, the writ petitions in which the judgment of which
are the subject matter of challenge in these appeals, had been filed in Delhi
High Court and which were pending when the Common Cause case was taken up by
this Court. This Court initially stayed the proceedings and issued notice in
the Transfer Petitions but ultimately, vacated the stay order and instead of
bringing the writ petitions to this Court on transfer, directed the Registry of
the Court to send the petitions along with the annexures to the High Court and
required the High Court to examine the issues involved in the writ petitions
and go into the validity of the allotments of petrol pumps/Gas agencies to
various persons. In view of the aforesaid positive direction in para 31 of the
judgment of this Court in Common Cause case, 1996(6) S.C.C. 530, it is difficult
for us to sustain the plea of bar of constructive res judicata, as urged by the
counsel, appearing for the appellants. In this connection, the counsel also
brought to our notice, observation made in the review petition judgment in the
Common Cause Case 1999(6) S.C.C. 667 in paragraph 115, which is quoted herein
below in extenso:
It is
contended that since the allotments made by the petitioner till the filing of
the writ petition in this Court, in spite of a challenge having been raised
therein, were not set aside and only guidelines were settled for future
exercise of discretionary quota, tacit stamp of judicial approval shall be
deemed to have been placed on the allotments made by the petitioner and
consequently those allotments could not have been reopened on the principle of
constructive res judicata. Normally, we would have accepted this argument, but
in this case we cannot go to that extent.
According
to the learned counsel, the three Judge Bench accepted the contention of the
applicability of principle of constructive res judicata and, therefore, this
Bench being a two Judge Bench must be bound by the said observations or in the
alternative, may refer the matter to a larger Bench. We are not in a position
to accept either of these submissions. It may be stated at the outset that the
three Judge Bench was concerned with the review petition that had been filed in
relation to the order dated 4.11.96 since reported in 1996(6) S.C.C. 593. The
learned Judges committed an error in the beginning in thinking that the review
petition filed by Capt. Satish Sharma was in relation to both the judgments
viz. 1996(6) S.C.C. 530 as well as 1996(6) S.C.C. 593. In the review petition,
the Court was concerned with the correctness of the directions contained in the
order dated 4.11.96 to institute criminal prosecution against the concerned
Minister and levy of penalty as exemplary damages to the tune of Rs.50 lacs. It
is in that context the Court made the aforesaid observations not noticing the
fact that in 1996(6) S.C.C.530, the Court had earlier directed the High Court
to dispose of the two writ petitions pending in the High Court and decide the
legality of the order of discretionary allotment made by the concerned
minister. It is indeed interesting to notice that in paragraph 125 of the
judgment of the three Judge Bench, the Court itself had indicated that the
conduct of the concerned minister in making allotments of petrol outlets was
atrocious and reflects a wanton exercise of power by the Minister. But what the
Court wanted to examine and ultimately held was that the said action fell short
of misfeasance in public office which is a specific tort and the ingredients of
that tort were not wholly met in the case, so that there was no occasion to
award exemplary damages. It would be indeed a travesty of justice to accept the
submission of the counsel for the appellants that the three Judge Bench
expressed opinion that the principle of constructive res judicata would apply
to the case in hand, so as to debar the High Court from entertaining the writ
petitions and disposing them of on merits. As we have already noted, prior to
the three Judge Bench Judgment of this Court , the self-same order of the Delhi
High Court had been assailed in as many as 79 cases by approaching this Court
by way of special leave petitions and all those petitions had been dismissed.
The
extent to which corruption in the governing structure has corroded the very
core of our democracy, the notoriety which the discretionary allotment of
petroleum dealership and LPG gas agencies had acquired, the earlier petition
under Article 32 entertained by this Court at the behest of the Common Cause,
the cancellation of 15 of such allotments and finally, the express direction
therein to the High Court to dispose of the pending writ petitions after
examining the individual cases, it is difficult for us to accept the bar of
principle of constructive res judicata on the ground that the earlier judgment
in the case of Centre for Public Interest Litigation has accorded any tacit
approval or the subsequent so-called observation made in the three Judge Bench
decision of this Court in the review petition. We, therefore, unhesitatingly
hold that the aforesaid contention is devoid of any substance.
The
third contention was seriously argued by Mr. Sharma, the learned counsel
appearing for the appellant in Civil Appeal No. 3106 of 2000. The learned
counsel very much emphasised that Common Cause vs. Union of India 1996(6)
S.C.C. 530, has been over-ruled and, therefore, nothing survived for Delhi High
Court to examine the legality of the allotments made under discretionary quota.
This
argument appears to have been made on the basis of the Head Note at page 671 of
the reported judgment with reference to paragraph 123 of the judgment. But when
we examine paragraph 123 of the judgment, we do not find anywhere that the
three Judge Bench had in fact over-ruled the judgment in Common Cause case,
1996(6) S.C.C.530.
On the
other hand, in paragraph 125 it affirms the earlier conclusion that the conduct
of the Minister was wholly unjustified. Then again, the review petition itself,
as already stated had been filed by Capt. Satish Sharma, the then Minister only
in relation to the order and direction dated 4.11.96 since reported in 1996(6)
S.C.C.593. In this view of the matter, we find no substance in the aforesaid
contention raised by Mr. Sharma, appearing for the appellant in Civil Appeal
No. 3106 of 2000. We have therefore no hesitation in rejecting the same.
So far
as the fourth question is concerned, it is no doubt true that the three Judge
Bench decision of this Court, reviewing the direction in the Common Cause Case,
so far as order dated 4.11.96 is concerned, is subsequent to the disposal of
the writ petition by the Delhi High Court, but we do not find any justification
for requiring the Delhi High Court to re-consider the appeals in the light of
the observations made by the three Judge Bench judgment of this Court inasmuch
as in the said judgment this Court was merely concerned with the directions to
register a criminal case and prosecute the concerned minister, if he is found
to have committed any criminal offence and levy of exemplary damages to the
tune of Rs. 50 lacs. Consequently, any observation made in that regard will
have no bearing on the merits of the individual allotments, which were the
subject matter of consideration in the two writ petitions before the Delhi High
Court. We, therefore, do not find any substance in the aforesaid submission
made on behalf of the appellants.
So far
as the fifth question is concerned, it is no doubt true that the appellants
have invested considerable amount in the business and have operated for about
eight years but even on equitable considerations, we do not find any equity in favour
of the appellants. The conduct of the Minister in making the discretionary
allotments has been found to be atrocious, in the very three Judge Bench
decision of this Court and in relation to similar allotments made by the said
minister in favour of 15 persons, who were respondents in the Common Cause
case. This Court came to hold that the allotments of the public property has
been doled out in arbitrary and discriminatory manner and the appellants had
been held to be beneficiaries of such arbitrary orders of allotments. The question
of granting the allottees relief on an equitable consideration did not arise at
all, for the same reasons in a case like this, a sympathetic consideration on
the ground of equity would be a case of misplaced sympathy and we refrain from
granting any relief on any equitable consideration. In our view, the appellants
do not deserve any equitable consideration.
So far
as the sixth question is concerned, we have examined the judgment of Delhi High
Court in the case of each individual appellant. We have also considered the
questionnaire that had been evolved and also the replies to the show-cause
notices that had been filed by the allottees.
We
have also considered the original applications that had been filed by these
appellants and the orders of allotment made by the concerned minister, wherever
they are available on record as well as the recommendations and circumstances
leading to the exercise of discretion. The impugned judgment also indicates
that in each and every case, the High Court had considered the original file,
dealing with the allotments in question and it cancelled only those allotments
where there was not an iota of material in support of the claim made by the
applicant, whereas it sustained several other cases of discretionary allotments
made during that period, wherever materials were available in the original
file.
It is
difficult for us to come to a conclusion that the conclusion of the High Court
in the cases in hand can be said to be vitiated on account of non-consideration
of any germane materials. Factually, we do not have any basis to come to the
aforesaid finding. On the other hand, we are satisfied that the High Court has
applied its mind to each and every individual case of discretionary allotment
and cancelled only those, which it came to hold to have been arbitrarily
granted without any inquiry and only on being persuaded by certain
recommendations of high dignitaries and without verification of any materials.
We, therefore, see no infirmity with the ultimate conclusion of the High Court,
canceling the allotments in favour of the appellants, so as to be interfered
with by this Court.
So far
as the seventh question is concerned, it is Mr. Bhandari, who argued with
vehemence that non-issuance of notice under Order I Rule 8 CPC by the High
Court before deciding the legal issues by its order dated 22.8.97, has vitiated
the entire proceedings and consequently, the order of cancellation must be set
aside by this Court. According to Mr. Bhandari, in a matter like the present
one, unless the Court directs issuance of notice by publication in a newspaper,
following the procedure under Order I Rule 8 CPC and all the affected persons
get an opportunity to appear and made their submissions, before the Court
formulates the legal position and answers them, the subsequent notice to
different persons like the appellants is nothing but a compliance of paper
formality and such procedure adopted has grossly prejudiced the appellants. We,
however, are not persuaded to accept this submission. The provisions of Order I
Rule 8 C.P.C. get attracted when there are numerous persons having the same interest,
are sued or sue and the Court can permit such a suit to be defended by adopting
the procedure under Order I Rule 8 CPC. In the case in hand, the writ petition
that had been filed was in fact a petition in Public Interest, where the
allegations were that the concerned authority had been involved in large-scale
allotments of retail outlets in petrol, gas and kerosene, arbitrarily and for
extraneous considerations without having any guidelines for such allotments and
as such it tantamounted to disposal of public property in a manner which is
shocking to conscience. By the time when the High Court went into those
allegations in the two petitions filed, this Court had taken the view that such
allotments had in fact been made arbitrarily and contrary to the public
interest and this Court directed the High Court to dispose of the pending
proceedings in accordance with law. The High Court, on receipt of the names of the
allottees during a specified period from the Union Government, issued notice to
each and every such allottee, who had been allotted out of the discretionary
quota of the concerned Minister and granted opportunity to each of such allottee
to inspect the relevant file dealing with the allotment in his/her favour and
then heard the said allottee before passing the final order, either discharging
notice of cancellation or canceling the allotment made. In this view of the
matter, we hardly find any justification in the submission of Mr. Bhandari that
the entire proceedings are vitiated as notice under Order I Rule 8 CPC had not
been given. If the allottee like the appellant whose allotment has been
cancelled by the impugned order, had the opportunity of examining the materials
on the file of the Government, wherein his case of allotment has been dealt
with and had the opportunity of filing his show-cause, pursuant to the notice
of cancellation that had been issued and the allotment in his case having been
cancelled on the ground that the concerned minister did not make any
verification with regard to the necessary criteria indicated in the application
for discretionary allotment, we fail to understand how a contention could be
raised that the whole procedure adopted is vitiated for non-compliance of the
procedure under Order I Rule 8 CPC. The object of order 1 Rule 8 CPC is to give
notice to persons likely to be affected by litigation, so that they may be
heard. If the Court would have directed issuance of notice under Order I Rule 8
CPC without giving individual notice to the allottees to show-cause why the
allotment will not be cancelled, then that perhaps would have been an
infraction and violation of the principle of natural justice. But in this case,
each and every allottee had been duly noticed, they have filed their replies to
the notices, they have availed of the opportunity of examining the original
file, wherein the case of discretionary allotment had been dealt with and it
was only after hearing them that the orders of cancellation had been passed. We
have, therefore, no hesitation in answering this question that there was no
requirement of following the procedure under Order I Rule 8 nor can it be said
that the entire exercise is vitiated.
So far
as the eighth question is concerned, it was repeatedly argued before us by
several counsel that the concerned minister was not required to verify and
since the order of allotment stipulates that the Oil company would verify
before granting the agency in question that itself is a good verification and
consequently, the High Court was in error in canceling the allotment on the
ground that there had been no proper verification. It is no doubt true that the
Minister having exercised his discretion and allotting a particular agency in favour
of the applicant, has required the Oil company to make necessary verification
before entering into an agreement with the allottee, but that verification
supposed to have been done by the oil company has nothing to do with the
materials on which the subjective satisfaction of the Minister was arrived at
for exercise of his discretion in favour of any individual for any justifiable
reason. When a State property as distinct from a private property is being
dealt with by a Minister then it is of paramount importance that such public
property must be dealt with for public purpose and in the public interest. The
disposal of a public property undoubtedly partakes the character of a trust and
therefore, in the matter of such disposal, there should not be any suspicion of
a lack of principle. The exercise of discretion must not be arbitrary or
capricious or for any extraneous considerations. It is in that context when the
Court was examining each and every individual case of discretionary allotment,
the Court was trying to find out whether there existed some materials, on the
basis of which the Minister could be said to have arrived at his subjective
satisfaction for exercise of his discretion in favour of the applicant. It is
the so-called satisfaction of the Minister for exercise of his discretionary
power and making the grant that was being examined and scrutinized by the Court
and only when the Court found that there had been absolutely no materials or
that Minister had made the grant without making any inquiry or verification,
that the Court had interfered with the allotments in question, obviously on a
conclusion that such allotments had been arbitrarily made. The subsequent
inquiry supposed to have been conducted by the Oil company cannot replace the
pre-conditions for exercise of discretion by the Minister. If the initial order
of allotment by exercise of discretion is vitiated on the ground of absence of
any materials or verification by the concerned authority who has exercised the
discretion, then the so-called subsequent inquiry by the Oil company which
operates in different fields cannot make the so-called arbitrary order of the
Minister a legal or just order. This being the position, we see no force in the
submission made by the counsel appearing for the appellants on this score. The
same accordingly stands rejected.
The
next question which arises for consideration is whether the judgment of this
Court in Civil Appeal No. 6840 of 2001 and principles evolved therein can be
applied to the case in hand, so as to protect the allotments already made under
the discretionary quota. The aforesaid case no doubt was a case of allotment of
land by the Chief Minister of a State in the State of Haryana. The High Court
of Punjab and Haryana by its order dated 20th January, 1988 disposed of the
case of S.R. Dass vs. State of Haryana, 1988 Punjab Law Journal page 123, under
which it formulated certain principles on which the discretionary allotments
could be made with certain conditions. The so-called discretionary allotments
made by the Government and HUDA, pursuant to the earlier judgment of Punjab and
Haryana High Court were sought to be assailed as being contrary to certain
stricter principles, which were evolved in the case of Anil Sabharwal which
stood disposed of on 5.12.97. This Court in the appeal in question held that
the stricter scrutiny required to be made as per the guidelines evolved in Anil
Sabharwals case, must be made applicable to the period subsequent to the
judgment viz. 5.12.97 and allotments made between 1988 and 1997 in accordance
with the principles and guidelines indicated in S.R. Dass case, were protected
by applying the principle of prospective application, so far as the judgment in
Anil Sabharwals case. We fail to understand how the aforesaid principle can
apply to the case in hand where the allotments made prior to the judgment of
this Court in Centre for Public Interest Litigation, 1995(3) Supp.(3) S.C.C.
382, are the subject matter of scrutiny and had been made indiscriminately, as
there had been no guiding principle for making such allotments. Consequently,
the principles evolved in Civil Appeal No. 6840 of 2001, will have no
application at all to the present appeals. The said contention, therefore, must
fail.
In
view of our conclusions on the nine issues, as mentioned above, these appeals
fail and are dismissed. There however will be no order as to costs.
While,
we are dismissing the appeals, we are also aware of the fact that these
appellants are operating the allotments made in their favour since 1993-94 and
even after the judgment of the High Court, they are continuing by virtue of an
interim order of this Court. In these circumstances, we direct that they shall
be allowed to wind-up their respective businesses by 31st of December, 2001.
..........................J
(G.B.
PATTANAIK) ..........................J.
(RUMA
PAL) October 19, 2001.
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