SR.DIVNL.RETAIL SALES MGR. TR. POA HOLDR vs. ASHOK SHANKARLAL GWALANI

       REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.  9101    2012. (Arising out of SLP(C) No.31932 of 2010)  SR. DIVISIONAL RETAIL SALES MANAGER,  INDIAN OIL CORPORATION LTD. THROUGH POA HOLDER & ORS.    . . APPELLANT(S) VERSUS ASHOK SHANKARLAL GWALANI        . .RESPONDENT(S) J U D G M E N T SUDHANSU JYOTI MUKHOPADHAYA, J. Leave granted. 2. The present appeal has been filed against  JUDGMENT th the   impugned   order   dated   29   September,   2010  passed by the Bombay High Court in Writ Petition  No.   5032   of   2010   wherein   the   High   Court   has  granted the Writ of Mandamus directing the Indian  Oil Company to allot the dealership of the site  located   at   Thane   Belapur   Road,   Village   Mahape,  Navi Mumbai, Maharashtra to Shri Ashok Shankarlal  1 Page 1 Gwalani   (hereinafter   referred   to   as   the  “respondent”) 3. The relevant facts as pleaded by the appellant  are as follows: th On   11   June,   2005,   the   Indian   Oil  Corporation   Limited   (hereinafter   referred   to   as  the   “Company”)   published   a   proclamation   in  leading   newspapers   and   invited   applications   for  grant   of   petrol/diesel   retail   outlets  (dealership) for various locations in the State  th of   Maharashtra.     The   respondent   on   14   July,  2005,   amongst   others   applied   for   the   same.  th th Interviews   were   conducted   on   9 ­10   December,  2005.   One Mr. Nilesh L. Kudalkar was placed at  the top of the merit panel while the respondent  was placed second and one Mr. K. Srinadha Rao was  JUDGMENT third.  However, since the difference between the  marks of the top three candidates was within 5%,  the result of the interview was kept in abeyance  in   accordance   with   the   policy   of   the   company  dated April 7, 2005.       A   Screening Committee  was established which reviewed the markings and  carried   out   another   interview   of   the   three  2 Page 2 th candidates.  The result was declared on 4  April,  2006 and Mr. Nilesh L. Kudalkar was first in the  merit panel. 4. Being aggrieved respondent and Mr. K. Srinadha  Rao   both   made   complaints   on   10.4.2006   and  19.4.2006 respectively to the company alleging  irregularities   in   the   selection   process.     In  st accordance with the policy dated 1  September,  2005, an investigation was made by the Company  into   the   allegations   made   by   them.     It   was  found, among other things, that the respondent  and   Mr.   Srinadha   Rao   had   not   been   marked  correctly as regards their financial capability  and   that   both   had   failed   to   provide   the  attested   documents   as   had   been   specifically  required   under   the   advertisement.     Since   the  JUDGMENT allegations   in   the   complaints   were   found   to  have merit, the selection was cancelled and all  the   candidates   were   to   be   called   for   re­ th interview.     In   the   meantime,   on   28   April,  2006,  one Mr. Pritesh Chhajed,  who was an M&H  Contractor   operating   on   the   site   filed   Civil  Suit No. 230/2006 before the Thane Sr. Division  3 Page 3 Court seeking an injunction against the company  from terminating the contract and evicting him  from the land.  He was unsuccessful in the same  and   filed   an   appeal   before   the   Bombay   High  Court which was dismissed by the High Court on  th 27  June, 2008 and he was asked to vacate the  site by December 31, 2008. nd th  5. Re­interviews   were   conducted   on   22   and   24 December, 2008.  The respondent was found to be  the   only   candidate   in   the   merit   panel.  However,   complaints   were   received   from   Mr.  Pritesh Chajjed (who had also appeared in the  th interviews) on 26  December, 2008 and from Mr.  K.   Srinadha   Rao   on   16.12.2008,   23.12.2008,  30.12.2008, 2.01.2009 and 10.02.2009.     Again  on 30.12.2008, a one man Inquiry Commission was  JUDGMENT appointed   to   investigate   the   allegations  contained   in   the   complaints.     Also   on  14.1.2009, Mr. Nilesh L. Kudalkar filed a Writ  Petition   vide   no.   113   of   2009   against   the  company   for   cancelling   the   merit   list   and  declaring him to be the no.1 candidate.   The  4 Page 4 High Court of Bombay was pleased to dismiss the  aforementioned writ petition in April, 2009. 6. In the meantime, the inquiry instituted by the  Company   revealed   that   the   complaints   made   by  various persons had merit.   th 7. Therefore, on 6   August, 2009, the appellants  sought approval from their management for re­ th advertisement of the location.  On 18  August,  2009, the Company management advertised for re­ interview   of   all   the   candidates   including  scrutiny   of   all   documents   from   the   initial  stage in order to remove all errors from the  selection   process.   Since   the   code   of   conduct  for   elections   was   in   force,   the   re­interview  was deferred till its withdrawal. 8. In   December,   2009,   the   L­1   Committee   was  JUDGMENT appointed before which the applications along  with   other   documents   of   all   ten   eligible  candidates were placed. The Committee submitted  its report. The candidature of the respondent  was   rejected   on   the   ground   that   the  ‘Relationship Affidavit’   was not as per the  format. 5 Page 5 rd 9. On 3   June, 2010, respondent was communicated  about the rejection of his application. 10. Being   aggrieved   respondent   filed   a   writ  petition being WP(C) No. 5032 of 2010 before  the   Bombay   High   Court   on   17.6.2010   praying  inter alia for issuing of an appropriate writ  directing   the   appellants   to   allot   the  dealership at the site as per the advertisement  dated   11.6.2005   and   setting   aside   the   letter  dated 3.06.2010 to enforce the decision of the  Selecting Committee dated 24.12.2008, which was  allowed by the impugned order. According to the appellants, considering that all  the former merit panels were vitiated on account  of   grave   errors,   including   complaints   received  JUDGMENT with regard to all the interviews, the Company is  desirous of undertaking the selection process de  novo by re­advertising the location. 11. Learned counsel for the appellant submitted  th that   on 8   December, 2009, L­I Committee was  nominated in view of   the complaints filed by  one Srinadhrao and Shri Pritesh Chajed.  These  6 Page 6 complaints   were   thoroughly   investigated   and  th report dated 24   March, 2009 was received by  the Company.   Pursuant to the said report the  Company decided to look into the matter from  the scrutiny level and to re­interview all the  candidates so as to remove the defects in the  selection   process.     Re­scrutiny   of   all   the  applications was made and during that process  the   documents   including   the   application  submitted   by   the   respondent   found   to   be  suffering from deficiencies.  It was contended  that the affidavit submitted by the respondent  was not as per the format and, therefore, his  application was liable to be rejected as per  the policy. Consequently, the impugned letter  was issued to the respondent. JUDGMENT 12. The   aforesaid   fact   was   disputed   by   the  learned   counsel   appearing   on   behalf   of   the  respondent.   They invited the affidavit filed  by the Company in Writ Petition No. 113 of 2009  wherein they supported the selection process as  well   as   the   merit   list   prepared   by   the  Selection Committee on 24.12.2008.  In the said  7 Page 7 affidavit, the allegation that the respondent  was less meritorious was denied by the Company.  The  stand of the Company was that the decision  to award dealership to the respondent did not  suffer   from   any   manifest   error,   equity,   fair  play   and   justice.       In   the   said   case,   the  Company pleaded that the decision in favour of  the   respondent   was   transparent   and   was   not  motivated   on   any   consideration   other   than  probity.     The said case was filed by second  person   challenging   the   selection   of   the  respondent.   The   Division   Bench   of   the   Bombay  High Court after hearing both the parties vide  th order dated 17   April, 2009 in Writ Petition  No. 113 of 2009 held that the High Court could  not   sit   in   appeal   over   the   decision   of   the  JUDGMENT selection   committee   and   the   decision   is   not  arbitrary.     The   Court   further   held   that   the  writ petitioner of the said case (Writ Petition  No.   113/2009)   having   participated   in   the  subsequent selection without any protest, could  not   revert   back   to   the   earlier   selection  process.  8 Page 8 th 13. On 17   September, 2012, after hearing both  the parties, this Court requested   the learned  Attorney General who was appearing on behalf of  the Company to give us the reasons in detail  for cancellation of the first and second rounds  of   the   selection   process   held   by   the  authorities   concerned.   The     learned   Attorney  General after meeting with the representative  nd of the Company in his office on 22  September,  2012   and   after   going   through   the   relevant  papers of interviews submitted a report;   the  relevant portion of which reads as under:­ “ In respect of the first round of  the   selection   process,     in   which  th interviews   were   conducted   on   9   land  th 10   December,   2005,     the   Screening  Committee   had   released   the   results   on  4.4.2006 subsequent to which complaints  received   from   Shri   Ashok   Shankarlal  Gwalani on 10.04.2006 and from Shri K.  Srinadha Rao on 19.4.2006.  The General  Manager, Maharashtra State Office of the  Indian   Oil   Corporation   appointed   an  inquiry   committee   to   investigate   the  complaints.     Based   on   the   Inquiry  Report, which was submitted  on October  7, 2006,   the Maharashtra State Office  prepared a Note dated 17.10.2006 which  was   finally   approved   and   endorsed   on  November 7, 2006 by   which a decision  was taken in   accordance with existing  guidelines   to   re­interview     eligible  candidates as the merit panel had been  vitiated   due   to   errors   in     evaluating  JUDGMENT 9 Page 9 financial parameters of the  candidates  in the merit panel which resulted in a  change in the merit panel.       A typed  copy   of   the   Note   dated   17.10.2006   has  been   annexed   by   the   petitioner   in   the  Application   to   bring   on   record   facts,  subsequent events and documents, marked  as Annexure P­5 thereto. 4. In respect of the second round of the  selection   process,   in   which   interviews  were conducted on December 22­24, 2008,  two complaints were received from Shri  Pritesh Chhajed on  26.12.2008 and from  Shri K.Srinadha Rao on 16.12.2008 with a  reminder   on   10.1.2009.     An   inquiry  report   was   prepared   by     investigating  officer on 24.3.2009 which was finalized  by   the   Maharashtra   State   Office   vide  Note   dated   13.4.2009.     In   relation   to  the complain of Shri Pritesh Chhajed, it  was found that  after giving benefit to  the complainant, the following position  emerged: “a) Even   if   it   is   considered  giving benefits to the complainant  candidates   Sri   Pritesh   J.   Chajjed  as   eligible   based   on   enquiry  findings, the number one empanelled  st  candidate   remains   unchanged   as   1 JUDGMENT in   the   Merit   Panel,   however,   the  panel   will   get   changed   by   adding  nd  other   qualified   candidates   in   2 rank at least. b) The   other   two   complainant  candidates   would   be   ranked  hypothetically as below”

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JUDGMENT 1 Page 11

JUDGMENT c) From   the   records,   it   is   also  observed   that   the   location   Mahape   had  been originally advertised on 11.6.2005  against which based on interview,   the  first   merit   panel   was   declared   on  4.4.4006,     thereafter   there   were  complaints   and   after   investigation   as  per grievance   redressal procedure and  the decision by the competent authority,  re­interview   of   all   the   eligible  candidates was conducted on 22.12.08 to  1 Page 12 24.12.2008   and   accordingly   the   above  referred   merit   panel   dated   24.12.2008  was declared by the interview committee.  The selection process for this location  remained inconclusive for the last four  years   and   is   yet   to   be   concluded.  Further it is   also observed that this  nd will be a case of 2   re­interview with  all the eligible candidates for the same  location.  In all likelihood,  based on  the   above   investigation   details   and  analysis,  there may not be any further  change in the merit panel in  respect of  the   first     empanelled   candidate.  Additionally,   there   may   be   other  candidates who may come in the panel in  nd rd the 2   and 3   position.       Though as  per   policy   in   vogue     re­interviews  recommended.” 5. In   view   of   this,     the   following  recommendations   were   put   up   for   final  verdict by the competent authority in the  matter:­ “  1.       Since   the   above   referred  selection process on investigation gets  vitiated   and   also   there   are   other  eligible   candidates   available,   the  location   should   be   re­interviewed   with  all   the   eligible   candidates   as   per  selection guidelines in  vogue.      2.         However,     the   competent  authority,   i.e.   State   Head,   MSO   while  giving   the   final   order   in   the   above  investigation   (vide   report   dated  6.2.2009   and   24.3.2009   by   Sri   R.  Ganeshan as placed below), may also like  to   take   a   view   on   the   facts   given   in  para (c) above,     whether to continue  with   the   existing   merit   panel   dated  24.12.08 with the lone candidate whose  position is not disturbed as per above  st analysis   remaining     as   1   empanelled  candidate or to go for re­interview as  per extant guidelines. JUDGMENT 1 Page 13   3. Action   is   recommended   in   view   of  the   lapses   by   the   DO   Coordinating  officer   and   interview     committee   (L2)  for   not   accepting   the   duplicate   of  original marksheet as detailed above in  the IO’s report in tabulation. 6. These   recommendations   were  studied/reviewed by the new Retail team at  the   MSO   and   comments   were   prepared   on  29.07.2009,   which   were   approved   on  3.08.2009: 1. Since   vitiation   in   the   selection  process   has   been   established,   as  recommended, it is agreed/recommended  that   the   location   should   be   re­ interviewed as per the extant policy  guidelines. 2. In view of Sr. No.1 above, in which  vitiation   in   the   selection   process  has been established and re­interview  recommended,   in   order   to   have  transparency   in   selection   it   is  recommended that re­interview be done  with   all   the   eligible   candidates   as  per the extant policy guidelines. 3. Chief Manager (RS), MSO has proposed  action   against   the   DO   Co­ordinating  and the L2 Committee.   Our  comments  are as under: JUDGMENT In   this   case   the   candidate   had  brought the Duplicate copy of the  original, which in its strictest  sense   is   not   the   original.  Logically   duplicate   copy   of   the  documents   should   have   been  considered   as   original   for   the  purpose   verification.     This  could/should   have   been   got  confirmed   by   the   coordinating  officer and implemented. However   it   appears   that   the   DO  coordinating   officer/L2Committee  1 Page 14 has strictly gone by the policy  guidelines   in   this   regard   to  verify the attested copy of the  document   submitted   with   the  application, from the Original to  be   brought   by   the   candidate   at  the   time   of   interview.  Therefore   technically   the   DO  coordinating Officer/L2 Committee  has   strictly   followed   the  guidelines.  ED MSO has detailed his views &  finally opined as follows in: “In   order   to   avoid   any   further  complication   and   to   give   fair  chance to everyone, in my opinion  this selection process should be  cancelled and the location should  be Re­advertised.  Since there is  no specific policy in this regard  it is suggested that HO opinion  may be sought.” 14. From the pleading of the parties as noticed  above   and   the   record,   the   following   facts  emerges:­ JUDGMENT (a) The proclamation was made on 11.6.2005  i.e.   more   than   seven   years   ago   but   till  date   no   person   has   been   granted   the  dealership in question.   (b) The   first   interview   was   conducted   on  th­ th 9 10   December,   2005   in   which   one   Mr.  Nilesh L. Kudalkar was placed at the top of  1 Page 15 the   merit   panel   while   the   respondent   was  placed second and one Mr. K. Srinadha Rao  was   third.     When   complaints   were   made  against   the   selection   as   well   as   an  allegation of irregularity in the process,  after investigation, the Company found that  the respondent and Mr. Srinadha Rao had not  been   marked   correctly   and   both   failed   to  provide the attested documents as had been  specifically   required   under   the  advertisement   and   therefore   the   first  selection was cancelled. (c) The second re­interview was called for  nd th and   conducted   on   22   and   24   December,  2008.     In   the   said   re­interview   the  respondent was the only eligible candidate  JUDGMENT in the merit panel.   On the basis of the  complaints made by other persons a one man  Inquiry Commission was appointed.   On the  basis of the report of the   Investigating  Officer   dated   6.2.2009   and   24.3.2009,   it  was found that there were lapses by the DO  Coordinating   Officer   and   the   interview  1 Page 16 committee   (L2),   in   not   accepting   the  duplicate of the original mark­sheet of a  candidate   as   detailed   in   the   Inquiry  Officer report in tabulation.   (d) The   record   further   shows   that   the  respondent   submitted   a   representation  before   the   Chairman   of   the   Company   on  24.8.2009   with   the   reminder   filed   on  different   dates   including   the   one   dated  23.1.2010.   The   Senior   Divisional   Retail  Sales   Manager   by   communication   dated  3.06.2010 informed the respondent that “ on  perusing   the   application   and   the  accompanying documents it is observed that  Relationship   Affidavit   not   as   per   format.  JUDGMENT We   regret   that   in   view   of   the   same   your  ”   application is found ineligible. In the aforesaid background, the DGM (RC)  by its note dated 13.8.2009 rejected the opinion  submitted by the Office for re­interview. 15. It is not clear as to how the assessment  was made by the authorities as apparent from the  investigation   report   (Annexure­R6).     The  1 Page 17 Investigating   Officer   in   the   summary   of  investigation   submitted   his   conclusion,   the  relevant potion of which reads as follows: “ Summary of Investigation : Based   on   documents   provided/handed  over   by   DO,   as   also   application   the  policy guidelines RO/6002 dt. 7.4.2005 &  4.4.2006   the   following   is   the  conclusion: A) L­1 Committee has not strictly  followed   the   guidelines  regarding   signing   of   all  documents   for   assessment.  However,   irrespective   of   this  deviation,   L­1   Committee   has  considered   all   documents   for  assessment. B) In   case   of   ‘Liquid   Cash   in   the  form   of   Bank   Fixed   Deposit   etc.   and  ‘Fixed and Movable Assets” as detailed  in my report, for financial capability,  the   L­1   Committee,   Screening   Committee  has   given   weight­age   to   documents   of  family   members/   relatives   even   though  ‘No   Consent’   affidavit/letter   is  available.   Therefore,   in   my   final  assessment, in line with the policy ‘No  weight­age has been given to documents  without consent.  Therefore final marks  have   undergone   change.     Hence   in   line  with the above the final result is as  under: JUDGMENT As   per   Interview   Committee   (in   line  with merit):

1 Page 18 As   per   Screening   Committee   (in   line  with merit):

As   per   Investigation   (in   line   with  merit):

From the aforesaid report, it is clear that  the Interview Committee, Screening Committee and  the   Investigation   Officer   assessed   the   three  candidates in three different groups due to which  JUDGMENT the   position   of   the   candidates   changed   in   the  merit list prepared by the Interview Committee,  Screening   Committee   and   the   investigation  Officer.  16. In the present case, the High Court has not  noticed   and   discussed   the   aforesaid   facts   and  without   discussing   the   further   developments   as  1 Page 19 taken   place   after   24.12.2008,   directed   the  appellants   to   issue   the   Letter   of   Intent   in  favour of the respondent.  Though the High Court  noticed   the   stand   taken   by   the   appellants   that  the   ‘relationship   affidavit’   submitted   by   the  respondent was not as per format, it failed to  discuss   the   effect   of   such   an   incomplete  affidavit in the matter of selection. 17. Generally,   if   an   irregularity   is   detected  in the matter of selection or preparation of a  panel it is desirable to have a fresh selection  instead of re­arranging the panel which is found  to   be   vitiated.     The   Authority   empowered   to  appoint, is the competent authority to decide as  to   whether   the   panel   should   be   discarded   and  JUDGMENT there should be a fresh selection in view of the  facts narrated above.  In such circumstances, the  High Court under Article 226 of the Constitution  of India ought to not have interfered with the  decision of the competent authority in canceling  the selection.  2 Page 20 18. For the reasons aforesaid, we have no other  option   but   to   set   aside   the   order   of   the   High  Court.  Accordingly, the order and judgment dated  29.9.2010 passed by the High Court of Bombay is  set   aside   with   a   liberty   to   the   Competent  Authority   to   re­advertise   the   petrol/diesel  retail outlets in question and to make a fresh  selection in accordance with law. The appeal is  allowed   with   aforesaid   observation   and  directions.  There shall be no order as to costs. ………..………………………………………..J.       ( SWATANTER KUMAR ) ………………………………………………….J.         (SUDHANSU JYOTI  MUKHOPADHAYA) JUDGMENT NEW DELHI, DECEMBER 14, 2012. 2 Page 21