9911796707
TMI Blog2001 (10) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... nder K. Verma, for Prashant Bhushan, Adv. Ms Indra Swahney, C.V.S. Subba Rao, K.C. Kaushik, B.V. Balram Das, A.K. Raina, R.K. Bhartiya, Anil K. Jha, B.R. Vig, Sanjay Kapur, K.K. Gupta, Sanjay Sarin, Ashok Mathur, Jai Prakash Narayan Gupta, Y. Raja Gopal Rao and S.U.K. Sagar, Advs. JUDGMENT G.B. Pattanaik, J. 1. 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 center 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n filed in Delhi High Court by the center 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 du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships 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 respondent 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 impliedly regularised the allotments made prior to 31st March, 1995 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5. 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 29.8.199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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)6SCC593 and was not in relation to the judgment dated 25.9.96 in the case of Common Cause vs. Union of India reported in AIR1996SC3538 . 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 Appeals Nos. 3085, 3094, 3099 and 3092, seriously contended that the judgment of this Court in the Center for Public Interest Litigation vs . Union of India 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 di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 center 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. 7. 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 no 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 appellant's case. This being the position, Mr. Narsimhan urged that the order of cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lotment 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 appellant's 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 fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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]3SCR1279 : [1999]3SCR1279 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 principles 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. 13. 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 AIR1996SC3538 : AIR1996SC3538 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 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir 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 appellant's 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(42)ELT338(SC) : 1989(42)ELT338(SC) . Mr. Bhandari also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 14. Mr. Jaideep Gupta, the learned counsel, appearing for the appellant in Civil Appeal NO. 3103 of 2000 contended that in his case, and 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. AIR1985SC1147 , whereunder 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 pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 17. 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 suffered 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. 18. Mr. Sanjeev K. Kapoor, the learned counsel appearing for the center 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 center for Public Interest Litigation 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. AIR1988SC2187 At any rate the earlier litigation filed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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. 19. 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. 20. 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 center for Public Interest Litigation susceptible of a construction that the Court indicated the guidelines for future guidance and had it given its stamps of judicial approval to the discretionary allotments already made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 Litig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 center for Public Interest Litigation case, which had been filed in this Court, the prayer that had been made was to law 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 respondent to submits 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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)6SCC593 : (1996)6SCC593 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. AIR1996SC3538 : AIR1996SC3538 as well as (1996)6SCC593 : (1996)6SCC593 . 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 ₹ 50 lacs. It is in that context the Court made the aforesaid observations not noticing the fact that in AIR1996SC3538 : AIR1996SC3538 , 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 indicted that the conduct of the concerned mini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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 AIR1996SC3538 : AIR1996SC3538 . 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)6SCC593 : (1996)6SCC593 . 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 case 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, cancelling the allotments in favour of the appellants, so as to be interfered with by this Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In this view of the matter, we hardly find any justification in the submissions of Mr. Bhandari that the entire proceedings are vitiated as notice under Order I Rule 8 CPC had not been given. It 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, where 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 I 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Minster 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 Minster. 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 Minster 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 wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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