MUKUND SWARUP MISHRA vs. UNION OF INDIA & ORS.

1 IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION TRANSFERRED CASE NO.100 OF 2002 Mukund Swarup Mishra … Petitioner Vs. Union of India & Ors. … Respondents WITH T.C. Nos.101 to 108 of 2002, T.C. No.57 of 2006, SLP (C) No.11556/2002, SLP (C) No.11568/2002 and SLP (C) No.1394/2003. J U D G M E N T R. V. Raveendran J. nd th The Indian Express in its issues dated 2 to 5 August, 2002 carried news reports alleging irregularities in allotment of Retail Outlets, LPG distributorship and SKO-LDO dealerships, by selection of relatives/associates of political functionaries. Questions were also raised in the Parliament in regard to the alleged irregularities. In view of the said controversy, on a review on 5.8.2002, the Prime Minister of India directed the Ministry of Petroleum & Natural Gas to initiate steps to 2 cancel all allotments made on the basis of recommendations of Dealer Selection Boards from January, 2000 till that date. In pursuance of it, a formal order dated 9.8.2002 was issued by the Government of India, Ministry of Petroleum & Natural Gas, cancelling all allotments made in regard to the retail outlets, LPG distributorship and SKO - LDO dealerships on the recommendations of the Dealer Selection Boards since 1.1.2000. The relevant portion of the said order reads thus: “Having considered the facts and circumstances as also to ensure fair play in action, the Government in the public interest have now decided that all allotments made with respect to retail outlets. LPG distributorships and SKO LDO dealerships on the st recommendations of the Dealer Selection Boards since 1 January 2000 be cancelled. it has further been decided that all annulled petrol pumps, LPG distributorships and kerosene dealerships may be auctioned on the basis of competitive bidding. 2. You may, in view of the above, take necessary action in the matter to: (a) cancel all the petrol pumps LPG distributorships and kerosene dealerships made on the recommendations of DSBs since 1.1.2000 forthwith. (b) make alternate arrangements to that consumers are not put to any difficulties till the appointment of new dealers/distributors and (c) settle the above petrol pumps, LPG distributorships and kerosene dealerships on the basis of auction through competitive bidding modalities for which be worked out by the Government. 3. The above decision will not be applicable to the allottees under Operation Vijay scheme." 3 2. The said order resulted in the cancellation of 3760 merit panels prepared by Dealer Selection Boards including 2248 cases where agreements had been entered between the oil companies and the selected allottees and dealerships/distributorship had become operational. The said order was challenged by several allottees in different High Courts. All those writ petitions were transferred to this Court and they were disposed of (except these cases) by order dated 20.12.2002 (reported in Onkar Lal Bajaj v. Union of India - 2003 (2) SCC 673). By the said judgment, this Court quashed the order dated 9.8.2002 except in regard to 413 cases which were named in the newspapers as cases involving irregularities. This Court appointed a Committee comprising 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 said 413 cases and submit its report. This Court instructed the Committee that if on a preliminary examination of the facts and records, it formed an opinion that the allotment was made on merits and not as a result of political connection or patronage or other extraneous considerations, it would be open to the Committee not to proceed with the probe in detail. This Court postponed the consideration of those cases, till receipt of the report of the Committee. 4 3. The Committee issued notices to the concerned parties, sought responses, gave due opportunity of hearing, considered the material produced and submitted a detailed report. In all there were 417 cases (413 cases plus 4 missing cases which were subsequently traced) before the Committee. Out of 417 cases, three were found to be repetitions. Five cases were pending consideration in court. The Committee therefore considered the remaining 409 cases. It opined that in 297 cases, the selections and allotments were not on merits and were as a result of political connection/patronage and/or extraneous consideration. In the remaining 112 cases, the Committee was of the opinion that the selection and allotments were made on merit and did not call for interference. 4. Several allottees filed objections to the Committee report and prayed for its rejection. This Court by judgment dated 12.1.2007 rejected the objections to the said report with the following observations : “In our opinion learned amicus curiae is right that the Committee has considered in detail individual cases and submitted the report. This Court therefore would consider a complaint of an allottee who can successfully put forth his complaint and satisfy the court that in the facts and circumstances of the case, the finding of the Committee that the allotment was not on merit, was not correct but only in those individual cases the court would consider him and grant relief to such applicant. It however cannot be said that the 5 report of the Committee was without power, authority or jurisdiction or was uncalled for and liable to be ignored.” By the said judgment, this Court also considered and disposed of the cases relating to States of Himachal Pradesh, Jharkhand, Chhatisgarh, Gujarat, Tamil Nadu, Rajasthan, Punjab and Haryana. Cases of other States were adjourned for hearing. The cases relating to other States have subsequently been heard individually and they are being disposed of by this order. Madhya Pradesh : 5. In regard to the State of Madhya Pradesh, 29 cases were referred to the Committee. In 8 cases the Committee found that the allotment was on merits and approved them. It found that the selection and allotment in the remaining 21 cases was not on merit. Out of the said 21 cases, 15 allottees have filed applications objecting to the findings of the Committee. Remaining 6 allottees have not challenged the findings of the Committee. We have examined the 15 cases where objections have been filed by way of applications. 6 5.1) In regard to the following 13 cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report and uphold their cancellation :

5.2) The remaining two cases [Trivendi Devi (Case No.211/MP/2003 – LPG/Ichhawar) and Smt. Rohit Samant (Case No.221/MP/2003 – LPG/Harsud)] were borderline cases, where two views were possible. In view of it, the allotments in their favour are not disturbed. We therefore allow their applications and set aside the cancellation of their allotment. Bihar : 7 6. In regard to the State of Bihar, 32 cases were referred to the Committee. In 6 cases the Committee found that the allotment was on merits and approved them. In the remaining 26 cases, the Committee found that the allotments were not on merit. Out of those 26 cases, 20 allottees have filed applications objecting to the findings of the Committee. Two applications have been filed by non-allottees and they are rejected as not maintainable. We have examined the 20 cases where objections have been filed. 6.1) In regard to the following 11 cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report and uphold their cancellation :

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6.2) In the following 8 cases, no political connection was found or even if there was some political connection, they were borderline cases where two views were possible :

We therefore allow their applications and set aside the cancellation of allotment. 9 6.3) In the case of Bimal Kumar Jain (Case No.173/Bihar/2003 – RO/ Budhmarg), we are informed that a civil case (Title Suit No.106/2001), a criminal proceedings and SLP(c) No.14339/2004 are pending. In view of the above, we do not propose to decide the said case. The validity of the allotment will have to be decided in the pending proceedings. Andhra Pradesh : 7. In regard to the State of Andhra Pradesh, 44 cases were referred to the Committee. In 19 cases the Committee found that the allotments were on merits and approved them. One case was not considered on account of pendency of court proceedings. In 24 cases, allotment was found to be not on merit. Out of said 24 cases, 20 allottees have filed applications objecting to the findings of the Committee. Subsequently, in one case -- C.H. Jayashree (Case No.369/AP/2003), the objection to the Committee’s report was withdrawn. Other four have not challenged the findings of the Committee. Three non-allottees have filed applications and they are rejected as not maintainable. We have examined the 20 cases where objections have been filed by way of applications. 10 7.1) In regard to the following 11 cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report and uphold their cancellation:

7.2) In the following nine cases, no political connection was found or even if some political connection was found, they were borderline cases where two views are possible:

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We therefore allow their applications and set aside the cancellation of allotment. 7.3) We may notice here that in the case of A.Chandrashekhar Rao (Case No.370/AP/2003), the Committee did not find any political connection. But it found that there were errors in aggregating the marks. In regard to the selected candidate A.Chandrashekhar Rao, the Chairman, and Members 1 and 2 had awarded 65, 62 and 58 marks respectively, the grand total being 185. But there was mistake in totalling the marks allotted by Members 1 and 2. The total of marks awarded by Member 1 was 42 and total of the marks awarded by Member 2 was 60. Thus the grand total was 167 marks instead of 185 in the case of A. Chandrashekar Rao. In regard to M. Praveen placed second in the panel, the Chairman, Members 1 and 2 had awarded marks of 55, 52 and 55, the grant total being 162. While the totalling of marks allotted by the Chairman and Member 1 was correct, there was a mistake in totalling the marks allotted 12 by Member 2. It ought to have been 65. When that is corrected, the grand total of the marks of M. Praveen would be 172 instead of 162. In the case of Gampa Srinivas Gupta placed third in the panel, the Committee found that the Chairman, Members 1 and 2 had allotted 47, 56 and 51, the grand total being 154. The total marks awarded by Chairman should have been 43 instead of 47 and consequently the grand total would be 150 instead of 154. It would thus be seen that the person getting the highest marks would be M.Praveen with 172 marks as against Dr. A.Chandrashekhar Rao who was shown as selected but who secured only 167. In view of the above, the Committee found that the allottee A.Chandrashekhar Rao was not the first candidate and should not have been recommended for allotment. As this is a case of mistaken calculation, it is open to the allottee A. Chandershekhar Rao, if he is so advised, to seek return of possession of the land as a consequence of cancellation. Karnataka : 8. In regard to the State of Karnataka, 24 cases were referred to the Committee. In 2 cases the Committee found that the allotments were on merits and approved them. In remaining 22 cases, allotments were found to be not on merit. Out of the said 22 cases, 18 allottees have filed 13 applications objecting to the findings of the Committee. Remaining four have not challenged the findings of the Committee. One non-allottee has filed an application which is rejected as not maintainable. We have examined 18 cases where objections have been filed by way of applications. 8.1) In regard to the following sixteen cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report, and uphold their cancellation :

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8.2) In the following two cases, no political connection was found or even if some political connection was found, they were borderline cases, where two views are possible:

We therefore allow their applications and set aside the cancellation of the allotments. Maharashtra : 9. In regard to the State of Maharashtra, 74 cases were referred to the Committee. In 21 cases the Committee found that the allotments were on merits and approved them. In remaining 53 cases, allotments were not approved as the Committee found that they were not made on merits. Out 15 of the 53 cases, 30 allottees have filed applications objecting to the findings of the Committee. Two applications have been filed by non- allottees and they are rejected as not maintainable. We have examined the 30 cases where objections have been filed by way of applications. 9.1) In regard to the following 22 cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report and uphold their cancellation:

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9.2) In the following eight cases, no political connection was found or even if some political connection was found, they were borderline cases, where two views are possible:

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We therefore allow their applications and set aside the cancellation of allotments. 9.3) It should be noted that in the case of Kiran J. Kasat (Case No.324/Mah./2003) the allotment was challenged by the third candidate in the panel in W.P. No.1084/2002 before the Aurangabad Bench of Bombay High Court which has been transferred to this Court and renumbered as Transferred Case No.57/2006. The Committee has considered the case in detail and upheld the allotment. We accept the Committee’s finding and consequently reject the challenge in T.C. No.57/2006. Uttar Pradesh : 10. In regard to the State of Uttar Pradesh, 43 cases were referred to the Committee. In 9 cases the Committee found that the allotments were on merits and approved them. It did not consider one case as it was subject matter of a court proceedings. In the remaining 33 cases, the Committee 18 found that the allotment was not on merit. Out of said 33 cases, 29 allottees have filed applications objecting to the findings of the Committee. There are 14 applications by non-allottees and they are rejected as not maintainable. We have examined the 29 cases where objections have been filed by way of applications. 10.1) In regard to the following twenty cases, we accept the findings of the Committee that the allotments were not on merits, for the reasons recorded in the report and uphold their cancellation :

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10.2) In the following nine cases, no political connection was found or even if there was some political connection, they were borderline cases where two views are possible.

We therefore allow the above nine applications and set aside the cancellation of allotments. 20 11. The Committee’s report in regard to other cases is accepted. The approval by the Committee in respect of 112 allotments is accepted and consequently, the cancelling of allotments in those cases is set aside. Wherever the Committee has not approved the allotment as not being on merits, and the allottees have not filed objections to the Committee’s report or filed objections belatedly (which were not accepted), the non- approval of selection/allotment are upheld. 12. The four public sector oil companies (IOCL, BPCL, HPCL and IBPCL) shall take appropriate consequential action. T.C. Nos.100 to 108 of 2002 and T.C. No.57 of 2006 are disposed of accordingly. 13. Before parting with the matter, we wish to place on record, our appreciation for the excellent assistance rendered by Mr. Gopal Subramanium, amicus curiae (and the band of young advocates who assisted him) by thorough preparation and presentation of the facts of the individual cases. The four petroleum companies shall remunerate him appropriately, having regard to the enormous workload undertaken by him. 21 SLP [C] Nos.11556 and 11568 of 2002 : These SLPs by the Indian Oil Corporation and by the allottee (Anurag Singh Thakur) of retail outlet at Mand, District Jallandhar, challenge the judgment dated 21.3.2002 of the High Court of Punjab & Haryana, setting aside the selection in a writ petition filed by one Manjit Singh Virk. These SLPs are ordered to be delinked and heard separately. SLP [C] No.1394 of 2003 : This SLP by a non-allottee challenging the allotment in favour of one Manoj Kumar S.Navale, is ordered to be delinked and heard separately. …………………………J [C. K. Thakker] ………………………….J [R. V. Raveendran] New Delhi; November 7, 2008.