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Sunday, October 5, 2014

Appointment of dealers for superior kerosene oil and light diesel oil (SKO-LDO) - whether, on the cancellation of the allotment of a dealership or distributorship for petroleum products in favour of the first ranked or first empanelled candidate, there is an automatic allotment in favour of the second ranked or second empanelled candidate, subject to fulfillment of the conditions of allotment. Apex court held that In our opinion, in view of the decisions of this Court, if the allotment is tainted due to political connections or patronage or other extraneous considerations, the entire selection process is vitiated and, therefore the second ranked or second empanelled candidate is not entitled to an automatic allotment of a dealership or distributorship in his or her favour.= CIVIL APPEAL NO. 8980 OF 2014 (Arising out of S.L.P. (Civil) No. 313 of 2012) Chairman cum Managing Director Indian Oil Corporation Ltd. and Ors. ….Appellants Vs. Sunita Kumari & Anr. ….Respondents =2014- sept, month- http://judis.nic.in/supremecourt/imgst.aspx?filename=41934

Appointment of dealers for superior kerosene oil and light diesel  oil  (SKO-LDO) - whether,  on  the  cancellation  of  the allotment of a dealership  or  distributorship  for  petroleum  products  in favour of the first ranked  or  first  empanelled  candidate,  there  is  an
automatic allotment in favour of the  second  ranked  or  second  empanelled candidate, subject to fulfillment of the conditions  of  allotment. Apex court held that In  our opinion, in view of the  decisions  of  this  Court,  if  the  allotment  is tainted due to  political  connections  or  patronage  or  other  extraneous considerations, the entire selection process is vitiated and, therefore  the second  ranked  or  second  empanelled  candidate  is  not  entitled  to  an automatic allotment of  a  dealership  or  distributorship  in  his  or  her favour.=

  On 10th July 2000, an advertisement  was  issued  by  the  appellants,
that is, Indian Oil Corporation Ltd. (for short ‘IOC’) for  the  appointment
of dealers for superior kerosene oil and light diesel  oil  (SKO-LDO).   The
appointment was reserved for women belonging to  Scheduled  Castes  and  was
for Warisnagar, District Samastipur (Bihar).
4.    Several applications appear to have been received in response  to  the
advertisement and on 24th July, 2001, a panel  of  selected  candidates  was
prepared by the IOC in order of merit.  The panel was as follows:-
Smt. Neelam Kumari
Smt. Sunita Kumari (respondent no.1 herein)
Kumari Anju Chaudhary

5.    Sometime in the beginning of August, 2002 a news item appeared on  the
front page of the Indian Express to the effect that all over the country,  a
large number of dealerships or distributorships were allotted in respect  of
several petroleum products  to persons  close  to  political  functionaries.
The news item implied that the allotments were not on merits but on  account
of political considerations to favour the allottees.
6.    The news item resulted in a public outcry and on 5/9 August, 2002  the
Government  of  India  passed  an  order  cancelling  all   allotments   for
dealerships in  petroleum  products  with  effect  from  1st  January,  2000
including of SKO-LDO dealerships.=
 The allotment of dealerships in respect of  the  State  of  Bihar  was
considered by this Court Mukund Swarup Mishra v. Union of  India[3]  in  the
light of the Report given by the Committee. It was  held  therein  that  the
allotment made to Neelam  Kumari  was  not  on  merits  but  for  extraneous
considerations.  As  a  result  the  allotment  made  in  her  favour  stood
cancelled.
11.   Following the cancellation  of  the  allotment  in  favour  of  Neelam
Kumari, a writ petition was filed by Sunita Kumari in the Patna  High  Court
being CWJC No. 7186 of 2008 next in the list of selected candidates for  the
SKO-LDO dealership in Warisnagar.   In  her  writ  petition,  Sunita  Kumari
claimed that since she was the second ranked selected  candidate,  the  SKO-
LDO dealership should be awarded to her after  the  cancellation  of  Neelam
Kumari’s dealership.=

Decision of the High Court


12.   The writ petition filed by Sunita Kumari  was  allowed  by  a  learned
Single Judge of the Patna High Court by his judgment and  order  dated  15th
April, 2009.  While allowing the writ  petition  the  learned  Single  Judge
held that Sunita Kumari was entitled to be treated as the  first  empanelled
candidate upon the cancellation  of  the  dealership  in  favour  of  Neelam
Kumari.
13.   Feeling aggrieved by the  decision  rendered  by  the  learned  Single
Judge, a Letters Patent Appeal being LPA No. 307 of 2010  was  preferred  by
the IOC before the Division Bench of the Patna High Court. By  the  impugned
judgment and order dated 10th February, 2011 the  Division  Bench  dismissed
the appeal of IOC and upheld the decision of the learned Single Judge.
14.   It is under these circumstances, that the present appeal has  come  up
before us.
=
The controversy has now been set at  rest  in  Awadesh  Mani  Tripathi
where a three-judge Bench has taken the view that if the  selection  process
is  vitiated  due  to  political  considerations  or  patronage   or   other
extraneous considerations, there is no automatic allotment in favour of  the
second empanelled candidate when  the  selection  of  the  first  empanelled
candidate is cancelled. This is because the entire  selection  process  gets
vitiated and not just one selection or allotment. If the  selection  process
is itself vitiated,  there  is  no  question  of  going  down  the  list  of
empanelled candidates. We respectfully accept and follow this view. We  make
it clear that if an individual selection is cancelled  on  merits,  such  as
lack of eligibility or erroneous calculation of marks that  is  cancellation
for reasons other  than  political  considerations  or  patronage  or  other
extraneous considerations, then the entire selection process  would  not  be
vitiated and the law laid down in Raj Bala would be applicable.
27.   Under these circumstances, in our opinion, the decisions  rendered  in
Raj Bala and Anil Kumar Singh  fall  in  one  category  since  they  do  not
concern themselves with mass cancellations or  have  any  reference  to  the
Committee as in the present case  and  also  because  the  entire  selection
process was not vitiated by political considerations or patronage  or  other
extraneous considerations. These cases dealt with one-off cancellations.  On
the other hand, Ramesh Chand Trivedi and Awadesh Mani  Tripathi  fall  in  a
different category altogether. The decision in Ritu Mahajan is  contrary  to
Awadesh Mani Tripathi and so we must hold that it  does  not  lay  down  the
correct  law  with  regard  to  the  allotment  of   a   dealership   or   a
distributorship in favour  of  the  second  empanelled  candidate  in  cases
concerning blanket cancellations or in cases when the  allotment  in  favour
of the first empanelled candidate is cancelled, the  allotment  having  been
made  for  political  considerations  or  patronage  or   other   extraneous
considerations.
  Since the present case concerns itself  with  the  mass  cancellations
and the Report of the Committee, we are bound by the decision taken  by  the
three-Judge Bench in Awadesh Mani Tripathi.  Accordingly we hold,  following
that decision that when the allotment of the dealership  or  distributorship
in favour of the first empanelled candidate is cancelled as a result of  the
Report of the Committee appointed in Onkar Lal Bajaj, which Report has  been
accepted by this Court, the selection process itself is  vitiated.  In  such
an event, there is no question of  the  second  empanelled  candidate  being
automatically granted the dealership or  distributorship  in  place  of  the
first empanelled candidate.  The entire panel of  selected  candidates  must
stand cancelled and a fresh selection process must be initiated.
29.   In view of our conclusion,  the  impugned  order  of  the  High  Court
directing allotment of the dealership in SKO-LDO in favour of Sunita  Kumari
is quashed. The appeal is allowed. No costs.
2014- sept, month- http://judis.nic.in/supremecourt/imgst.aspx?filename=41934


                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO.  8980  OF 2014
               (Arising out of S.L.P. (Civil) No. 313 of 2012)


Chairman cum Managing Director
Indian Oil Corporation Ltd. and Ors.                       ….Appellants

                                     Vs.
Sunita Kumari & Anr.                                         ….Respondents


                                    WITH


                      S.L.P. (Civil) No. 31006 of 2012

Rajesh Kumar Tiwary                                      …Petitioner

                                     Vs.
The Union of India & Ors.
….Respondents


                               J U D G M E N T

Madan B. Lokur, J.


Leave granted in S.L.P. (Civil) No. 313 of 2012.
The question for consideration  is  whether,  on  the  cancellation  of  the
allotment of a dealership  or  distributorship  for  petroleum  products  in
favour of the first ranked  or  first  empanelled  candidate,  there  is  an
automatic allotment in favour of the  second  ranked  or  second  empanelled
candidate, subject to fulfillment of the conditions  of  allotment.  In  our
opinion, in view of the  decisions  of  this  Court,  if  the  allotment  is
tainted due to  political  connections  or  patronage  or  other  extraneous
considerations, the entire selection process is vitiated and, therefore  the
second  ranked  or  second  empanelled  candidate  is  not  entitled  to  an
automatic allotment of  a  dealership  or  distributorship  in  his  or  her
favour.
The facts
3.    On 10th July 2000, an advertisement  was  issued  by  the  appellants,
that is, Indian Oil Corporation Ltd. (for short ‘IOC’) for  the  appointment
of dealers for superior kerosene oil and light diesel  oil  (SKO-LDO).   The
appointment was reserved for women belonging to  Scheduled  Castes  and  was
for Warisnagar, District Samastipur (Bihar).
4.    Several applications appear to have been received in response  to  the
advertisement and on 24th July, 2001, a panel  of  selected  candidates  was
prepared by the IOC in order of merit.  The panel was as follows:-
Smt. Neelam Kumari
Smt. Sunita Kumari (respondent no.1 herein)
Kumari Anju Chaudhary

5.    Sometime in the beginning of August, 2002 a news item appeared on  the
front page of the Indian Express to the effect that all over the country,  a
large number of dealerships or distributorships were allotted in respect  of
several petroleum products  to persons  close  to  political  functionaries.
The news item implied that the allotments were not on merits but on  account
of political considerations to favour the allottees.
6.    The news item resulted in a public outcry and on 5/9 August, 2002  the
Government  of  India  passed  an  order  cancelling  all   allotments   for
dealerships in  petroleum  products  with  effect  from  1st  January,  2000
including of SKO-LDO dealerships.
7.    The blanket cancellation led to a spate of writ petitions being  filed
all over the country since several thousand allottees  were  affected.  Soon
thereafter, transfer petitions were filed to transfer the cases  pending  in
various High Courts to this Court. These  transfer  petitions  were  allowed
and the writ petitions taken up for consideration.
8.    This Court then heard the allottees  as  well  as  the  Government  of
India and in Onkar Lal Bajaj v. Union of India[1] it was observed  that  the
news item and subsequent news items in the Indian Express  made  a  specific
reference  to  413   allegedly   tainted   dealership   or   distributorship
allotments.   After  considering  all  aspects  of  the  case,  this   Court
appointed a Committee of two retired judges to examine these 413  allotments
and determine, on a preliminary examination of the  facts  and  records,  if
the allotments were made  on  merits  and  not  as  a  result  of  political
connections or patronage or other extraneous considerations.
9.    The Committee examined the records of the  allotments  made  and  also
heard the  aggrieved  parties  and  submitted  its  Report  to  this  Court.
Objections were filed to the Report and they were  considered  and  rejected
in Mukund Swarup Mishra v. Union of India.[2]  This  Court  also  considered
the allotment of dealerships made in  respect  of  some  States  and  passed
appropriate  orders.   The  case  was  then  adjourned  for  taking  up  the
allotments made in other States including the State of Bihar.
10.   The allotment of dealerships in respect of  the  State  of  Bihar  was
considered by this Court Mukund Swarup Mishra v. Union of  India[3]  in  the
light of the Report given by the Committee. It was  held  therein  that  the
allotment made to Neelam  Kumari  was  not  on  merits  but  for  extraneous
considerations.  As  a  result  the  allotment  made  in  her  favour  stood
cancelled.
11.   Following the cancellation  of  the  allotment  in  favour  of  Neelam
Kumari, a writ petition was filed by Sunita Kumari in the Patna  High  Court
being CWJC No. 7186 of 2008 next in the list of selected candidates for  the
SKO-LDO dealership in Warisnagar.   In  her  writ  petition,  Sunita  Kumari
claimed that since she was the second ranked selected  candidate,  the  SKO-
LDO dealership should be awarded to her after  the  cancellation  of  Neelam
Kumari’s dealership.

Decision of the High Court


12.   The writ petition filed by Sunita Kumari  was  allowed  by  a  learned
Single Judge of the Patna High Court by his judgment and  order  dated  15th
April, 2009.  While allowing the writ  petition  the  learned  Single  Judge
held that Sunita Kumari was entitled to be treated as the  first  empanelled
candidate upon the cancellation  of  the  dealership  in  favour  of  Neelam
Kumari.
13.   Feeling aggrieved by the  decision  rendered  by  the  learned  Single
Judge, a Letters Patent Appeal being LPA No. 307 of 2010  was  preferred  by
the IOC before the Division Bench of the Patna High Court. By  the  impugned
judgment and order dated 10th February, 2011 the  Division  Bench  dismissed
the appeal of IOC and upheld the decision of the learned Single Judge.
14.   It is under these circumstances, that the present appeal has  come  up
before us.

Discussion
15.   It was submitted by learned counsel for the IOC that in  view  of  the
decisions of this Court in Awadesh Mani Tripathi v. Union  of  India[4]  and
Bharat Petroleum Corporation  Ltd.  v.  Ramesh  Chand  Trivedi[5]  when  the
allotment of a dealership is cancelled due to  an  illegality  in  selecting
and preparing the panel  of  successful  candidates,  the  entire  selection
process  is  vitiated.  Therefore,  merely  because  the  first   empanelled
candidate is found ineligible or the allotment  in  his  or  her  favour  is
otherwise cancelled, it would not automatically result in the  allotment  of
the dealership in favour of the next empanelled candidate.
16.   Learned counsel for Sunita Kumari on the other  hand  relied  on  Ritu
Mahajan v.  Indian Oil Corporation[6], Raj Bala v.  Union  of  India[7]  and
Anil Kumar Singh  v.  The  Chairman,  Dealers  Selection  Board.[8]  It  was
contended, on the basis of  these  decisions  that  when  the  allotment  in
favour of the first empanelled candidate is cancelled, the  next  empanelled
candidate is entitled to an automatic allotment.
17.   Raj Bala was the first  such  case  in  which  the  second  empanelled
candidate was awarded the dealership on its cancellation in respect  of  the
first empanelled candidate. That case, however, did not  deal  with  blanket
cancellations such as the one we are concerned with.  In  that  sense,  that
case is somewhat dissimilar to the present case. The facts in Raj Bala  were
that the first empanelled candidate was held eligible for an allotment of  a
distributorship of petroleum products by the High  Court  but  this  finding
was set aside in appeal by a three-judge Bench of this Court.  It  was  then
held:
“Having regard to the ineligibility of the 7th respondent,  who  was  placed
first on the merit list, the distributorship ought to have been  awarded  to
the appellant, who was second in the merit list.  Having regard to what  has
transpired, we think it  appropriate  to  direct  that  the  7th  respondent
should cease to act as a dealer for the  2nd  respondent,  pursuant  to  the
award of the dealership to him as aforesaid,  on  and  from  1st  September,
1995 and that on and from that date the  2nd  respondent  should  award  the
dealership to the appellant who would be entitled  to  conduct  business  by
reason thereof from that date.  The appellant shall, of course,  be  obliged
to fulfil all  necessary  conditions  to  the  satisfaction  of  the  second
respondent.”

18.   Anil Kumar Singh also did not pertain to  blanket  cancellations  made
by the Government in 2002 nor did it pertain to the  case  referred  to  the
Committee. However, a Bench of two learned Judges relied upon Raj  Bala  and
held  that  once  a  person  to  whom  the  allotment  is  made  has  become
ineligible, the distributorship must be awarded to the person who is  second
in the merit list.
19.   In Ritu Mahajan a two-Judge  Bench  dealt  with  the  allotment  of  a
retail outlet dealership arising out of an advertisement issued by  the  IOC
on 22nd June, 2000. It had been alleged that the allottee (Rani  Gauba)  was
illegally given the allotment. The allotment was one  of  the  many  in  the
blanket cancellations and was a case referred to the  Committee  set  up  by
this Court in Onkar Lal Bajaj.  The Committee found that  the  allotment  in
favour of Rani Gauba was indeed illegal and that view  was  upheld  by  this
Court.  Ritu Mahajan then claimed a right to the allotment in place of  Rani
Gauba. In the final paragraph of the judgment, her prayer was  accepted  and
it was held as follows:-
“In that view of the matter, the  selection  of  the  fifth  respondent  for
allotment of retail outlet dealership at Dhariwal is set  aside  and  Indian
Oil Corporation  Respondent 1 is hereby directed to make  allotment  of  the
said retail outlet  dealership  at  Dhariwal  in  favour  of  the  appellant
immediately.  The appeal is allowed accordingly.”

20.   It will be seen that this Court proceeded on the basis that there  was
an entitlement for an automatic allotment in favour of  Ritu  Mahajan  after
the retail outlet dealership in favour of Rani Gauba was cancelled.
21.   These three decisions proceed on the basis that when an  allotment  is
cancelled  in  favour  of  the  first  empanelled  candidate,  there  is  an
automatic allotment in favour of the second empanelled candidate. The  first
two decisions did not deal with blanket cancellations while  the  third  one
did.
22.   In Ramesh Chand Trivedi a two-judge Bench dealt with a  case  referred
to the Committee and took the view that when the allotment in favour of  the
first person in the panel is set aside  due  to  some  irregularity  in  the
selection and preparation of the panel, the decision taken to have  a  fresh
selection does not call for interference. This view was taken on  the  basis
that the select panel is itself vitiated.  Therefore,  the  two-judge  Bench
declined to make the allotment of the distributorship to the  next  eligible
applicant as prayed for by Ramesh Chand Trivedi.
23.   Awadesh Mani Tripathi  concerned  itself  with  blanket  cancellations
that were referred to the Committee set up by this Court.  In that  case,  a
three-judge Bench took the view that “when the merit list  prepared  by  the
Selection Board was found to be vitiated due to the influence of  extraneous
considerations, the petitioner who  was  placed  at  no.  2  cannot  seek  a
mandamus for allotment of LPG distributorship. Any  such  direction  by  the
Court would amount to  perpetuation  of  the  illegality  committed  by  the
Selection Board.”
24.   It is clear from a perusal of the decisions mentioned above  that  the
view taken by this Court is that when the selection of the first  empanelled
candidate for  the  allotment  of  a  dealership  or  a  distributorship  is
cancelled, the next empanelled candidate ought  to  be  automatically  given
the allotment subject to the fulfillment of all necessary  conditions.  This
is clear from the decisions rendered by this Court  in  Raj  Bala  in  1995,
Anil Kumar Singh in 2003 and Ritu Mahajan in 2009.

25.   This Court has, however, taken a different view  particularly  in  the
case of mass cancellations which were dealt with by the Committee set up  by
this Court.  The view taken by a two-judge Bench was that if  the  allotment
of the dealership or distributorship  in  favour  of  the  first  empanelled
candidate  is  cancelled  then  the  second  empanelled  candidate  is   not
automatically entitled to the allotment (Ramesh Chand  Trivedi  contrary  to
Ritu Mahajan).

26.   The controversy has now been set at  rest  in  Awadesh  Mani  Tripathi
where a three-judge Bench has taken the view that if the  selection  process
is  vitiated  due  to  political  considerations  or  patronage   or   other
extraneous considerations, there is no automatic allotment in favour of  the
second empanelled candidate when  the  selection  of  the  first  empanelled
candidate is cancelled. This is because the entire  selection  process  gets
vitiated and not just one selection or allotment. If the  selection  process
is itself vitiated,  there  is  no  question  of  going  down  the  list  of
empanelled candidates. We respectfully accept and follow this view. We  make
it clear that if an individual selection is cancelled  on  merits,  such  as
lack of eligibility or erroneous calculation of marks that  is  cancellation
for reasons other  than  political  considerations  or  patronage  or  other
extraneous considerations, then the entire selection process  would  not  be
vitiated and the law laid down in Raj Bala would be applicable.
27.   Under these circumstances, in our opinion, the decisions  rendered  in
Raj Bala and Anil Kumar Singh  fall  in  one  category  since  they  do  not
concern themselves with mass cancellations or  have  any  reference  to  the
Committee as in the present case  and  also  because  the  entire  selection
process was not vitiated by political considerations or patronage  or  other
extraneous considerations. These cases dealt with one-off cancellations.  On
the other hand, Ramesh Chand Trivedi and Awadesh Mani  Tripathi  fall  in  a
different category altogether. The decision in Ritu Mahajan is  contrary  to
Awadesh Mani Tripathi and so we must hold that it  does  not  lay  down  the
correct  law  with  regard  to  the  allotment  of   a   dealership   or   a
distributorship in favour  of  the  second  empanelled  candidate  in  cases
concerning blanket cancellations or in cases when the  allotment  in  favour
of the first empanelled candidate is cancelled, the  allotment  having  been
made  for  political  considerations  or  patronage  or   other   extraneous
considerations.
28.   Since the present case concerns itself  with  the  mass  cancellations

and the Report of the Committee, we are bound by the decision taken  by  the
three-Judge Bench in Awadesh Mani Tripathi.  Accordingly we hold,  following
that decision that when the allotment of the dealership  or  distributorship
in favour of the first empanelled candidate is cancelled as a result of  the
Report of the Committee appointed in Onkar Lal Bajaj, which Report has  been
accepted by this Court, the selection process itself is  vitiated.  In  such
an event, there is no question of  the  second  empanelled  candidate  being
automatically granted the dealership or  distributorship  in  place  of  the
first empanelled candidate.  The entire panel of  selected  candidates  must
stand cancelled and a fresh selection process must be initiated.
29.   In view of our conclusion,  the  impugned  order  of  the  High  Court
directing allotment of the dealership in SKO-LDO in favour of Sunita  Kumari
is quashed. The appeal is allowed. No costs.

Special Leave Petition (Civil) No. 31006 of 2012

30.   In this case, the  allotment  of  LPG  dealership/distributorship  was
advertised for Bihiya, District Bhojpur (Bihar).
31.   After completing the selection  process,  the  IOC  prepared  a  panel
consisting of the following applicants in order of merit:-
Kameshwar Prasad Singh
Rangi Lal Rai
Rajesh Kumar Tiwary (Petitioner herein)


32.   The allotment of  the  dealership/distributorship  was  in  favour  of
Kameshwar Prasad Singh but it was quashed, pursuant to the decision of  this
Court in Mukund Swarup Mishra.
33.   Rajesh Kumar Tiwary claimed that Rangi Lal Rai was  not  eligible  for
an  allotment  and  therefore  being  the  third  empanelled  candidate  the
allotment should be made in his favour.  On  this  basis  he  filed  a  writ
petition in the Patna High Court being CWJC No. 18809  of  2008.  A  learned
Single Judge  of  the  High  Court  dismissed  Rajesh  Kumar  Tiwary’s  writ
petition by following the decision rendered in another case, that  is,  CWJC
No. 9362 of 2009 and Mukund Swarup Mishra.
34.   In appeal, being LPA No. 1291 of 2012  the  High  Court  followed  the
decision rendered by this Court in Ramesh Chand Trivedi and found  no  merit
in the appeal by the impugned  judgment  and  order  dated  13th  September,
2012.
35.   In view of our discussion in Sunita Kumari (supra) there is  no  merit
in this petition and it is accordingly dismissed.  No costs.



                                                                 .………………………J
                                                      ( Madan B. Lokur )



New Delhi;                                     ……………….……J
September 18, 2014                                ( C. Nagappan )

-----------------------
[1]    (2003) 2 SCC 673
[2]    (2007) 2 SCC 536
[3]    (2008) 15 SCC 243

[4]    (SLP (C) No. 34226/2009 decided on 23rd April, 2013)
[5]    (Civil Appeal No. 8586 of 2010 decided on 4th October, 2010)
[6]    (2009) 3 SCC 506
[7]    (Civil Appeal No.7718 of 1995  decided on 23rd August, 1995)
[8]    (Civil Appeal Nos.2012-2014 of 2003  decided on 3rd March, 2003)

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