TMI Blog2017 (12) TMI 1806X X X X Extracts X X X X X X X X Extracts X X X X ..... tent authority fails to adduce any ground supporting the validity of its conduct - In re, the duties, responsibilities and obligations of a public authority in a system based on Rule of law, unfettered discretion or power is an anathema as every public authority is a trustee of public faith and is under a duty to hold public property in trust for the benefit of the laity and not for any individual in particular. Jurisprudentially thus, as could be gleaned from the above legal enunciations, a public authority in its dealings has to be fair, objective, non-arbitrary, transparent and non-discriminatory. The discretion vested in such an authority, which is a concomitant of its power is coupled with duty and can never be unregulated or unbridled. Any decision or action contrary to these functional precepts would be at the pain of invalidation thereof. The State and its instrumentalities, be it a public authority, either as an individual or a collective has to essentially abide by this inalienable and non-negotiable prescriptions and cannot act in breach of the trust reposed by the polity and on extraneous considerations. In the present case, the dealership of the Respondent had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re at Allahabad in Civil Misc. Petition No. 34886 of 1998, thereby directing the Corporation to convert the dealership of a petrol pump initially allotted in favour of the Respondent No. 1 (hereafter to be referred to as the Respondent ) under the discretionary quota of the Departmental Minister concerned to one under its (Appellant) circular No. 67-2/2K4 dated 12.02.2004 and restraining it as well from interfering with the possession of the Respondent of the installation premises. As the sequence of events would unfold, the attendant facts do project a distressing state of affairs in the matter of distribution of State largesse, seemingly motivated by irrelevant considerations, deliberate defaults and casual disregard to binding judicial adjudications of a Constitutional Court. 2. We have heard Mr. Annam D.N. Rao, learned Counsel for the Appellants and Mr. Tripurari Ray, learned Counsel for the Respondent No. 1. Though served, but none has filed vakalatnama on behalf of Respondent No. 2. 3. First the skeletal facts, to facilitate the desired grip of the issues to be addressed. The Respondent herein, claiming to be an unemployed graduate but actively involved in activities p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LDO dealerships from January 1993 till 1996 by the Departmental Minister under his discretionary quota and upon complete adjudication of the issues with the participation of the parties involved, the proceeding was disposed of by the judgment and order dated 29.08.1997. It was held in a sense, on a scrutiny of the files/records produced before the Court that those reflected unexplained surge of favoritism in the matter of distribution of the aforementioned public contracts/distributorships/dealerships. Vis- -vis the award in favour of the Respondent, it was held thus: A retail on National Highway Phutahia Chauraha, Teh. Distt. Basti, UP, has been allotted to Smt. Shashi Prabha Shukla on her undated application on the ground that the applicant is unemployed graduate with keen interest in activities relating to rural development and welfare of women and has no regular source of livelihood. From the application it appears that the applicant is resident of district Sultanpur, UP. The allotment in her favour has also been made in a casual manner as is the case in respect of allotments in other cases noticed above. We were told by the learned Counsel for the applicant that the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the Petrol Pump/Distributorship is being run, he shall intimate this fact to Secretary, Ministry of Petroleum within two weeks. In such a case the right to open Petrol Pump/Distributorship, as the case may be within the close proximity of the existing location, as may be determined by the Oil Corporation concerned, depending upon the facts and circumstances of each case and the need of the public, shall alone be auctioned with a stipulation that the highest bidder would arrange for the land/superstructure for running the Petrol Pump/Distributorship. In such an eventually, all connections hitherto with the distributor whose allotment has been cancelled shall be transferred to the establishment of the highest bidder. (4) The Ministry of Petroleum is directed to file compliance report by 15th December, 1997. 7. The above quote would yield the following salient features of the peremptory directives: a) The concerned petrol pumps/LPG/SKO Distributors would stop operation on and from 01.12.1997. b) The Government of India/all concerned Corporations would take over the petrol pump premises or distributorship premises on 01.12.1997. c) The concerned Oil Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to enter the retail outlet premises. It was clarified that all these would be without prejudice to any other claim the Corporation might have against her under the terms of the dealership agreement and in law. 9. Meanwhile, the Respondent had on 23.09.1997 intimated the Ministry of Petroleum, Government of India, New Delhi that she was not interested to sell or part with the land on which the petrol pump distributorship was underway. She also filed SLP (C) No. 19872 of 1997 before this Court challenging the judgment and order dated 29.08.1997, which was disposed of on 20.10.1997 leaving her at liberty, as prayed for, to seek a review before the High Court. Incidentally, the review petition filed by her was dismissed on 07.11.1997, whereupon she unsuccessfully assailed the same in a fresh special leave petition before this Court, which too was dismissed on 28.11.1997. Thus, the judgment and order dated 29.08.1997 of the Delhi High Court attained finality and eventually the retail outlet was closed and the facilities were taken over by the Corporation w.e.f. 01.12.1997. 10. The Respondent No. 1 however in response to the notice dated 13.10.1997, did call upon the Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a corrigendum dated 13.10.1998, the word property appearing in Clause 6 was in essence substituted by the word dealership , as would be evident from the extract of the said corrigendum: In item 6 of the said notice for auction for retail outlet of M/s. Indian Oil Corporation Ltd. situated at NH Phutahia Chauraha, Basti (U.P.) may be read as follows: The word PROPERTY shall also be substituted by the word DEALERSHIP. It is further clarified that in case of company controlled retail outlets only license to operate the dealership will be substituted with the word DEALERSHIP in the terms and conditions and its Annexures being sold from our office at Allahabad. Other terms and conditions shall be applicable as per earlier advertisement. 13. Mentionably, no other record has been laid before this Court to further elaborate on the terms and conditions of the proposed auction. 14. To reiterate, the High Court of Delhi in its rendition dated 29.08.1997, Vis- -vis the cases where the allottee, whose allotment had been cancelled, was unwilling to sell/part with a land on which the petrol pump/distributorship was being operated, had directed the Corporation to auction the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Articles 14, 19(1)(g) of the Constitution of India. The High Court of Judicature at Allahabad in the first instance by its order dated 29.10.1998 stayed the operation of the auction notices and subsequent thereto, by its order dated 17.12.1998 directed the Corporation to permit the Respondent to run the dealership of petroleum in the petrol pump of Phutahia Chauraha, District Basti until the auction was held and finalized. Eventually, by the impugned judgment and order, noticing that the proposed auction had not taken place and that consequently the Respondent had been permitted to run the retail outlet since 1998, directed the Corporation, in view of its new policy dated 12.02.2004, to award fresh dealership to the Respondent thereunder and further restrained it from interfering with her possession of the petrol pump premises in question. 18. As the impugned judgment would demonstrate, the High Court, while traversing the relevant facts, took note of the pleaded stand of the Corporation before it that the lease executed by the Respondent Vis- -vis the land in question did subsist, cancellation of the dealership notwithstanding, and therefore she was not entitled for the poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel, the advertisement dated 05.10.1998 and the corrigendum dated 13.10.1998, if cumulatively read, are in meticulous compliance of the directions to that effect as contained in the judgment and order dated 29.08.1997 and thus the Corporation ought to have been permitted to undertake the process to its logical end. The learned Counsel for the Corporation when confronted with the omissions in the advertisement and absence of materials on record to authenticate that the exercise required to be undertaken by the Corporation for identifying a location in the proximity of the existing location was pursued, had no convincing explanation therefor. 20. Controverting the above, the learned Counsel for the Respondent emphatically urged that in the attendant facts and circumstances, though the judgment and order dated 29.08.1997 of the Delhi High Court had attained finality, the operative direction to the Corporation to convert the existing dealership into a new dealership under the policy dated 12.02.2004 is unassailable and therefore no interference in this appeal is called for. While imputing that, the Corporation though required in cases of dealership under category 'A', to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the corrigendum on 13.10.1998 without either determining or specifying the exact location for the site of dealership in the proximity of the earlier site of the Respondent, instead did take up an incomprehensible plea that the cancellation of the dealership notwithstanding, the lease of the land of the Respondent with it did subsist and that it was entitled in law to induct the new dealer through the auction process initiated, to the same location. The underlying objective in issuing the direction to determine and specify a location in the proximity of the existing site was with the avowed purpose of avoiding confrontation and possible litigation and also to ensure smooth and uninhibited supply of petrol and HSD from the new outlet at the fresh venue. 22. In the facts of the present case, we subscribe to the view of the High Court of Allahabad that with the termination of the dealership, the lease between the parties also stood extinguished and therefore, the Respondent being the owner of the land and she having expressed her disinclination to sell or part with it, the Corporation by no means could have contemplated to award the new dealership to a third party on her land. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usted with the role to perform for the benefit of the public and not for private profit and when a prima facie case of misuse of power is made out, it is open to a court to draw the inference that unauthorized purposes have been pursued, if the competent authority fails to adduce any ground supporting the validity of its conduct. 24. The following extract from the Halsbury's Laws of England, Fourth Edition, Vol. 1(1) Administrative Law provide the foundation of these observations: A public authority may be described as a person or administrative body entrusted with functions to perform for the benefit of the public and not for private profit. Not every such person or body is expressly defined as public authority or body, and the meaning of a public authority or body may vary according to the statutory context. 25. In re, the duties, responsibilities and obligations of a public authority in a system based on Rule of law, unfettered discretion or power is an anathema as every public authority is a trustee of public faith and is under a duty to hold public property in trust for the benefit of the laity and not for any individual in particular. The following excerpts from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... largesse. The following observations provide the guiding comprehension: 65. What needs to be emphasised is that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well-defined policy, which shall be made known to the public by publication in the Official Gazette and other recognised modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land, grant of quota, permit licence, etc. by the State and its agencies/instrumentalities should always be done in a fair and equitable manner and the element of favouritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the particular functionary or officer of the State. 66. We may add that there cannot be any policy, mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent as provider of services and benefits to the people was noticed in Ramana Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489 in the following words: 11. Today the Government in a welfare State, is the regulator and dispenser of special services and provider of a large number of benefits, including jobs, contracts, licences, quotas, mineral rights, etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political sufferers and the whole scheme of State and local welfare. Then again, thousands of people are employed in the State and the Central Governments and local authorities. Licences are required before one can engage in many kinds of businesses or work. The power of giving licences means power to withhold them and this gives control to the Government or to the agents of Government on the lives of many people. Many ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thod for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum, etc. it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. 33. Jurisprudentially thus, as could be gleaned from the above legal enunciations, a public authority in its dealings has to be fair, objective, non-arbitrary, transparent and non-discriminatory. The discretion vested in such an authority, which is a concomitant of its power is coupled with duty and can never be unregulated or unbridled. Any decision or action contrary to these functional precepts would be at the pain of invalidation thereof. The State and its instrumentalities, be it a public authority, either as an individual or a collective has to essentially abide by this inalienable and non-negotiable prescription ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard of new dealership to the Respondent would wholly undermine the purpose of cancelling her earlier dealership and annihilate the very objective of securing transparency, fairness and non-arbitrariness in the matter of distribution of public contract. In taking the steps for initiating a fresh process of auction, to state the least, the defaults and derelictions of the Corporation and its functionaries are writ large and deserve to be strongly deprecated. The omissions and commissions do have the potential of suggesting pre-determined perceptions and motivations in aid of the Respondent, resulting in such disagreeable culmination in her favour. The time lag, according to us, per se cannot purge the vitiation of the award of dealership originally granted to the Respondent, to entitle her to the relief granted by the impugned judgment and order, by way of a boon for the inexplicable faults and remiss in duty of the functionaries of the Corporation. In supervening public interest and to uphold the Rule of law as well as imperative of administrative fairness, transparency and objectivity, we are thus not inclined to sustain the impugned judgment and order. It is, therefore set aside s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
