IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA LPA No.34 of 2007 Judgment Reserved on: 2.12.2009 Date of decision: December ,2009 Indian Oil Corporation …..Appellant VERSUS Union of India and others …..Respondents Coram The Hon’ble Mr. Justice R.B. Misra, Acting Chief Justice The Hon’ble Mr.Justice Kuldip Singh, Judge. Whether approved for reporting?1 For the Appellant: Mr. K.D.Sood, Advocate For Respondent No. 3: Mr. Lalit Kumar Sharma, Advocate Per R.B.Misra, ACJ The present appeal has been preferred against the order, dated 31.5.2007, passed in CWP No. 112 of 2004, titled as Sanjay Kumar Vs. Union of India and others, whereby while adjudicating the prayer of the respondent, namely Sanjay Kumar, for setting aside the allotment of retail outlet of high speed diesel and motor spirit in favour of Megh Singh Saini (respondent No. 6 in CWP No. 112 of 2004 and respondent No. 3 herein the present appeal), learned Single Judge vide order, dated 31st May, 2007 has allowed the writ petition by quashing the order of allotment of retail outlet of high speed diesel and motor spirit in favour of Shri Megh Singh Saini with further direction to 1 Whether the reporters of the local papers may be allowed to see the Judgment? …2… issue fresh advertisement as per circular No. 60-09/2K3, dated 4.9.2003 and to complete the process of selection and allotment. In order to adjudicate the present appeal, it is necessary to give brief background of the case. The Secretary, Ministry of Petroleum and natural gas had issued advertisement, dated 22.9.2002, whereby offers were invited for suitable land on long lease/purchase to set-up petrol pump. The Indian Oil Corporation (in short ‘‘IOC’’), appellant herein, had issued corrigendum which appeared in the daily edition of the Tribune on 30.9.2002, whereby, a few changes were made in the earlier advertisement, dated 22.9.2002. However, in reference to such advertisement, indicated above, it appears that some applications were received and out of them the retail outlet of high speed diesel and motor spirit was allocated in favour of Shri Megh Singh Saini. Such allotment, however, was challenged by Shri Sanjay Kumar (writ petitioner/respondent No. 1 in the present appeal) on the ground that advertisement, though was issued on 22.9.2002, followed by corrigendum, however, the guidelines under which petrol pump was allotted in favour of Shri Megh Singh Saini were issued in reference to policy circular No. 43, dated 28.12.2002 and policy circular No. 60-09/2K3, dated 4.9.2003. As had been submitted by the learned counsel for the petitioner that the writ petitioner since belongs to Scheduled Caste category and as per guidelines issued on 4.9.2003, reservation to the extent of 25% was to be given in favour of SC/ST candidates, but the writ petitioner was deprived of from even participation in the allotment. It appears …3… that learned Single Judge has perused, analyzed, scrutinized and noticed that as per policy circular No. 43, dated 28.12.2003, the dealership was to be categorized as under: “Category ‘I’: Land owners and nominees of land owners within family as under:- - Spouse - Son/daughter Category ‘II’: Fleet operators. Category III : Others.” The procedure for category ‘I’ (Land Owners) has been prescribed under paras 2.0 to 2.8. , Para 4.2 of the circular dated 28.12.2002 deals with selection procedure and para 4.2.1 provides that selection of dealers shall be made through advertisement in the newspapers and the application form shall be a part of the advertisement and no separate application forms shall be printed. The Central Government, Ministry of Petroleum and Natural Gas has revised the guidelines on 4.9.2003, whereby, 25% reservation was provided as per para 6.2 to the SC/ST candidates and as per para 5.2, the selection of dealers was to be done through advertisement in the newspapers. Surprisingly, the respondent No. 1 had issued advertisement on 22.9.2002 followed by corrigendum on 30.9.2002, before the issuance of circular No. 43, dated 28.12.2002 and Policy Circular No. 60-09/2K3, dated 4.9.2003. The correct procedure to be adopted by respondent No. 2 was to issue the advertisement after the issuance of circular dated 28.12.2002 and 4.9.2003. If the advertisement had been issued after the issuance of …4… circulars, the petitioner belonging to Scheduled Caste category could also have participated in the selection process under the reserved category. It is evident from the language of Annexure R-2/1 and R-2/2 that no reservation has been provided for any category, and thus, depriving the candidates belonging to the reserved categories from the opportunity to participate in the selection process. It appears, the allotment has been made in favour of respondent No. 3 as per Annexures R-2/4 and R-2/5 dated 28.12.2002 and 4.9.2003 of writ petitioner, respectively. We find force in the stand of the writ petitioner taken before learned Single Judge in his saying that he had been deprived of the right to participate in the selection procedure despite belonging to Scheduled Caste category since the ‘IOC’ has not followed the prescribed procedure. It appears from the circular, dated 28.12.2002 read with circular dated 4.9.2003 that it was for the first time that category (i) (Land Owners) has been prescribed for the first time in circulars dated 28.12.2002 and 4.9.2003; we do not appreciate as to why the advertisement has been issued seeking offers for the land on22.9.2002 read with corrigendum, dated 30.9.2002, which amounts to nullify the circulars dated 28.12.2002 and 4.9.2003. The ‘IOC’ was dealing with State largesse, but by issuing the advertisement on 22.9.2002 before waiting for the issuance of circulars dated 28.12.2002 and 4.9.2003 had violated Article 14 of the constitution of India. The parameters laid down for land owners category are very detailed in both the circulars, dated 28.12.2002 and …5… 4.9.2003 and they were to be considered and applied by issuing the advertisement after the circulars have come into force. Learned Single Judge has relied upon the observations of Hon’ble Supreme Court, made from time to time in Erusian Equipment and Chemicals Vs. State of W.B. 1975 (1) SCC 71; Ramana Dayaram Shetty Vs. International Airport Authority jof India and others 1979 (3) SCC 489; Kasturi Lal Lakshmi Reddy Vs. State of J&K 1980 (IV) SCC 1; Ajay Hasia Vs. Khalid Mujib Sehravardi 1981 (1) SCC 722; Ram and Shyam Company Vs. State of Haryana and others (1985) 3 SCC 267; M/s Dwarkadas Marfatia and sons Vs. Board of Trustees of the Port of Bombay (1989) 3 SCC 293; Mahabir Auto Stores and others Vs. Indian Oil Corporation and others (1990) 3 SCC 752; Kumari Shrilekha Vidyarthi and others Vs. State of H.P. and others (1991) 1 SCC 212; Delhi Science Forum and others Vs. Union of India and another (1996) 2 SCC 405 and Association of Registration Plates Vs. Union of India and others (2005) 1 SCC 679 wherein the administrative authorities are expected to act and functions with fairness in a reasonable manner free from arbitrariness and discrimination, more so, even in respect of the matters of contracts, licenses, quotas, auctions they are expected to discharge of their statutory duties by observing the norms, regulations and the principles of natural justice. Learned Single Judge has relied upon the decision of Hon’ble Supreme Court in Ram and Shyam Company Vs. State of Haryana and others (1985) 3 SCC 267, wherein it was observed that …6… disposing of public property State must give equal opportunity to all concerned and endeavour to fetch the best available price in public interest. In M/s Dwarkadas Marfatia and sons Vs. Board of Trustees of the Port of Bombay (1989) 3 SCC 293, it was held that any authority covered under Article 12 of the Constitution of India cannot act arbitrarily even in contractual matters and must act only to further public interest. In Mahabir Auto Stores and others Vs. Indian Oil Corporation and others (1990) 3 SCC 752 it was observed that every administrative action must be fair and the State or its instrumentality engaged in commercial transaction must act reasonably and in just manner. In Delhi Science Forum and others Vs. Union of India and another (1996) 2 SCC 405 it was observed by Hon’ble Supreme Court that grant of contract/licences to private bodies/companies by government or statutory authority can be judicially reviewed on the grounds of bad faith, based on irrational or irrelevant consideration as well as non-compliance of prescribed procedure or violation of Constitutional or statutory provision. Learned Single Judge has placed reliance on the decision of the Hon’ble Supreme Court in Association of Registration Plates Vs. Union of India and others (2005) 1 SCC 679 where the Hon’ble Supreme Court has reiterated the principles governing the distribution of state largess. Learned Single Judge by the impugned judgment, dated 30th May, 2007 has observed that the petitioner has been deprived of the right to be considered for allotment of retail out-lets as per circulars, dated 28.12.2002 and 4.9.2003 …7… against the reserved category. It was incumbent upon ‘IOC’ to issue advertisement after coming into force of circulars No. 43 and 60- 09/2K3, dated 28.12.2002 and 4.9.2003 instead of issuing the advertisement on 22.9.2002. The action of the ‘IOC’ of allotting the retail out-let to respondent No. 6 is arbitrary and is also against the norms prescribed. During the course of argument, learned counsel for the appellant has submitted that the allotment of retail outlet of high speed diesel and motor spirit in favour of Megh Singh Saini was as per norms laid down by policy circular No. 43, dated 28.12.2002 read with Policy Circular 60-09/2K3, dated 4.9.2003 and the petrol pump was allotted to suitable candidate in terms of the above indicated policy circular. According to learned counsel for the appellant, since in view of the allotment of retail outlet of high speed diesel and motor spirit, Megh Singh Saini, respondent No. 3 herein, had already started functioning, therefore, upsetting his allotment would unsettle the present functioning of retail outlet of high speed diesel and motor spirit. Though the allotment of retail outlet in favour of respondent No. 3 herein, has also stated to be justifiable in the submissions of Mr. Lalit Kumar Sharma, learned counsel for Shri Megh Singh Saini. According to him, in view of the advertisement, dated 22.9.2002 followed by corrigendum, it was open for every one to participate in the selection/allotment and since the writ petitioner had not chosen to participate on his own, therefore, he has no right to challenge the allotment of retail outlet made in favour of successful candidate. …8… We have heard leaned counsel for the appellant as well as learned counsel for respondent No. 3. We are conscious that no corrigendum was ever issued subsequent to the Circular, dated 28.12.2002 and 4.9.2003. Undisputedly, the allotment in favour of respondent No. 3 was made in reference to advertisement dated 22.9.2002 and policy circular, dated 4.9.2003. Advertisement, dated 22.9.2002 has nowhere indicated that all category of persons are invited, including the applicants belonging to the category of SC/ST, Defence personnel, Freedom fighters, outstanding sportspersons, paramilitary/police/government personnel, physically handicapped personnel, open category. Clause 4.2 of Policy Circular 43, dated 28.12.2002 deals with selection procedure. Clause 4.2.1 deals with advertisement in the news paper. Clause 1.0 of Circular No. 60- 09/2K3, indicates ‘the guidelines will be applicable for the approved Marketing Plan locations which are yet to be advertised as well as the new locations outside these Marketing Plans’, Clause 5.2.1 deals with Advertisement and indicates that “Selection of dealers will be done through advertisement in the newspaper”. Clause 6.1 of Circular, dated 4.9.2003 has provided a long list of reservation as indicated hereinbelow:- Reservation for different selections of the Society will be as under:- SC /ST 25% Defence Personnel 8% Freedom Fighter 2% Outstanding sportspersons 2% Parmailitary/Police/Govt. Personnel 8% …9… Physically handicapped personnel 5% Open Category 50% In our respectful consideration, when subsequent policy circular, dated 4.9.2003, was adhered to and followed by appellant, which specifically provides for advertisement to be issued for allocation and for selection of dealership by putting advertisement in newspaper and by adhering the reservation policy, then the selection, of any made in reference to earlier circular, dated 22.9.2002 would be unjustifiable. The appellant cannot afford to observe and follow the norms and parameters issued subsequent to the advertisement and subsequently depriving the legal rights of participation of the writ petitioner. The selection made by observing the guidelines provided in Circular No. 60-09/2K3, dated 4.9.2003, for allotment of retail outlet in favour of the aspirants in reference to advertisement, dated 22.9.2002 would be illegal as the parameters provided in policy circular, dated 4.9.2003 was not in existence at the relevant time, when, earlier advertisement, dated 22.9.2002 was applicable. SC/ST category of aspirant, in whose favour 25% reservation is available for allotment of retail outlet of high speed diesel and motor spirit has completely been ignored, inter alia, ignoring other category of persons, as provided in Clause 6.1 of Circular, dated 4.9.2003. In our respectful consideration the writ petitioner has become successful before learned Single Judge in demonstrating the arbitrariness, unreasonableness and discrimination in allotment of retail outlet of high speed diesel and motor spirit in favour of Shri Megh Singh Saini. …10… In our respectful consideration, we do not find any scope of interference in the impugned judgment, dated 30th May, 2007, passed by the learned Single Judge in CWP No. 112 of 2004 therefore, the appeal being devoid of any merit is accordingly dismissed. ( R.B.Misra ), Acting Chief Justice December _____, 2009(K) (Kuldip Singh ) Judge