1 wp-5032-10 mgn IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, CIVIL JURISDICTION WRIT PETITION NO. 5032 OF 2010 Ashok Shankarlal Gwalani, Age 34, ) Gurudev Society, Flat No.3, ) Ulhasnagar, 421 003, Dist. Thane )..Petitioner Versus 1.Union of India through the Secretary ) Petroleum Department, New Delhi, ) (copy to be served on standing Counsel ) of Union of India. ) 2.Chief Divisional Retail Sales Manager, ) Indian Oil Corporation Ltd., Dr.Annie ) Besant Road, Worli, Mumbai-400 018 ) 3.General Manager Retail, Indian Oil ) Corporation Ltd., IOC Bhavan, 39, Ali ) Yavar Jung Marg, Bandra East, ) 2 wp-5032-10 Mumbai-400 051. ) 4.Chief Executive Direector,Indian Oil ) Corporation Ltd., IOC Bhavan, 39, Ali ) Yavar Jung Marg, Bandra East, ) Mumbai-400 051. )..Respondents Mr. S.P. Kanuga for the petitioner. Mr. Gaurav Joshi with Mr. Sunil Gangan i/b. R.M.G. Law Associates for respondent Nos. 2 to 4. CORAM: B. H. MARLAPALLE & U.D.SALVI, JJ. DATE: 29th September, 2010. ORAL JUDGMENT (PER B.H. MARLAPALLE, J.): Heard Mr. Kanuga, the learned Counsel for the petitioner. 2. Rule. 3. Respondent No.1 is a formal party and respondent Nos. 2 to 4 waive service. Affidavit reply has been filed on behalf of respondent Nos. 2 to 4. Petition has been heard finally. 4. On 11th June, 2005 the Indian Oil Corporation Limited published a 3 wp-5032-10 proclamation in leading newspapers and invited applications for grant of petrol/diesel retail outlets for various locations in the State of Maharashtra and by his application dated 14th July, 2005 the petitioner responded to the same advertisement. He received a call letter and appeared before the selection committee on 21st November, 2005. The oral interviews were held between 9th and 12th December, 2005 and the merit list was published. The petitioner scored 85.13% marks whereas the 1st applicant in the merit list had scored 86.92% marks. This merit list was reviewed by a committee of two members and a fresh merit list was published on 4th April, 2006 and the three candidates in the merit list were as under:- 1.Shri Nilesh Laxmikant Kudalkar : 90.77% 2.Shri K.Srinadharo : 87.69% 3.Ashok Shankarlal Gwalani : 80.00% 5. Aggrieved by this fresh merit list dated 4th April, 2006 the petitioner submitted a representation and a committee of 3 members was constituted by the oil company to find out whether any of the terms were violated by the earlier committees while awarding marks to the candidates interviewed. 6. This Screening committee submitted a report and the Screening 4 wp-5032-10 Committee recommended for re-interviews and accordingly fresh interviews were held on 22nd and 24th December, 2008 at Mumbai and the fresh panel as per the merit was published. The present petitioner was shown at No.1 in the merit list with 72.38% marks scored by him. Shri Nilesh Laxmikant Kudalkar who was at serial No.7 in the said merit list approached this Court and filed Writ Petition No.113 of 2009 and challenged the merit list. In the said petition the oil company also filed an affidavit in reply and opposed it. By an order dated 17th April, 2009 a Division Bench of this Court held that there was no irregularity in the selection process conducted by the selection committee and the petition was dismissed. In the meanwhile on 26th April, 2008 the oil company called for Field Investigation Report (F.I.R.), pursuent to the selection panel published in respect of the interviews held between 22nd to 24th December, 2008 in respect of the subject dealership at MAHAPE in Thane District where the petitioner’s name has been shown as 1st in merit. The F.I.R. came to be submitted by Vinamra Pandey, Assistant Manager on 31st December, 2008. However, the petitioner did not hear anything further even after Writ Petition No.113 of 2009 was dismissed on 17th April, 2009. He, therefore, submitted a representation to the Chairman of the respondent oil company on 24th August, 2009 and further reminders on 10th October, 5 wp-5032-10 2009, 14th November, 2009, 30th November, 2009, 10th December, 2009 and 23rd January, 2010. Finally he received a communication dated 3rd June, 2010 from the Senior Divisional Retail Sales Manager of the respondent oil company. It stated :- “On perusing the application and the accompanying documents it is observed that Relationship Affidavit not as per format. We regret that in view of the same your application is found ineligible.” It is under these circumstances this petition has been filed under Articles 226 and 227 of the Constitution praying for appropriate writ/direction to allot the petroleum dealership licence at Thane Belapur Road, Mahape, District Thane pursuant to the advertisement dated 11th June, 2005 by setting aside the communication dated 8th June, 2010 and implement the decision of the selection committee dated 24th December, 2008 in which the petitioner’s name was shown at serial No.1 in the merit list. 7. Affidavit in reply filed by Mr.Kuntal Mukharjee, Manager, (Retail Sales), has opposed the petition. It has been submitted by the oil company that on 8th December, 2009 L1 committee was nominated in view of the complaints filed by Shri Srinadhrao and Shri Pritesh Chhajed. These 6 wp-5032-10 complaints were throughly investigated and report dated 24th March, 2009 was received by the company. Pursuant to the said report the oil company decided to re-interview all the candidates from the scrutiny level so as to remove the defects in the selection process. It is also stated that rescrutiny of all the application was taken by and during that process the documents including the application submitted by the petitioner suffered from deficiencies. It is pointed out that the affidavit submitted by the petitioner was not as per the format and, therefore, his application was liable to be rejected as per the policy matter. Consequently, the impugned letter was issued to the petitioner. 8. Mr. Kanuga, the learned Counsel for the petitioner has invited our attention at the first instance to the affidavit in reply filed by Shri N.P. Rodge on behalf of the oil company in Writ Petition No.113 of 2009, thereby supporting the selection process as well as the merit list. Mr. Kanuga, more particularly invited our attention to paragraphs 11, 14, 16, 17 and 20 of the said affidavit. In para.14 of the said affidavit the allegation that the present petitioner was less meritorious was denied. In para.16 of the said affidavit the oil company contended that the decision to award dealership to the present petitioner did not suffer from any manifest, 7 wp-5032-10 equity, fair play and justice. The oil company reiterated that the decision was transparent and was not motivated on any consideration other than probity. The Division Bench of this Court after hearing both parties observed in its order dated 17th April, 2009 in Writ Petition No.113 of 2009 that the Court could not sit in appeal over the decision of the selection committee which decision was not arbitrary and the petitioner having participated in the subsequent selection without any protest could not revert back to the earlier selection process. As per Mr. Kanuga these observations made by the Division Bench should, on the face of the affidavit in reply submitted by the oil company in Writ Petition No.113 of 2009, leave no doubt regarding the petitioner’s empanelment in the merit list at serial No.1 and despite the order was passed on 17th April, 2009 for more than one year the oil company did not take any steps to proceed further so as to issue the Letter of Intent based on the Field Report received earlier. 9. The learned Counsel for the oil company maintained that on the basis of the complaints received from the other candidates who were interviewed a through investigation was undertaken and a bonafide decision has been taken to cancel the entire selection process and conduct a 8 wp-5032-10 de novo selection process by readvertising the subject location He also submitted that even if the petitioner succeeds, a writ of mandamus directing the oil company to allot the dealership to the petitioner cannot be issued by this Court and in support of these submissions he has relied upon the decisions of the Supreme Court in the case of State of Jammu & Kashmir vs. Ghulam Mohd. Dar and anr. (2004) 12 SCC 327, National Textile Corporation Ltd. & Ors. vs. Haribox Swalram & Ors., (2004) 9 SCC 786, Munindra Nath Upadhyaya vs. State of U.P. & Ors., 1993 Supp (1) S.C.C. 437 and Binny Ltd. & Anr. vs. V. Sadashivan & Ors., (2005) 6 SCC 657. 10. Mr. Kanuga on the other hand has placed before us a copy of the judgment in Writ Petition 6977 of 2009 wherein this Court (Division Bench) issued a writ directing the present respondents to allot the retail outlet dealership in favour of the candidate who was at Serial No.1 in the merit list in the selection process (Retail Outlet 28). Mr. Kanuga also relied upon the decision in the case of Ritu Mahajan vs. Indian Oil Corporation and Ors., (2009) 3 SCC 506 and submitted that a writ of mandamus deserves to be issued against the oil company as prayed. 9 wp-5032-10 11. As noted earlier, in the very first round of selection i.e. held on 9th and 10th December, 2005 the petitioner was at serial No.2 in the merit list i.e. below Mr. Nilesh Laxmikant Kudalkar. The respondent oil company again re-evaluated the marks obtained by all the candidates through a committee of two members and displayed yet another merit list on 4th April, 2006 wherein the petitioner was at the third place. He submitted that, as contemplated under clause 18.2 of the Brochure a representation was made for redressal of his grievances on 10th April, 2006. As per clause 18 on receipt of a complaint a letter would be sent by the oil company to the complainant through registered post asking him to submit all allegations with a view to prima facie substantiate the allegations along with supporting documents, if any, within 30 days. Response of the complainant to such letter would be examined by the oil company and if it is found that the complainant does not have specific and verifiable allegations, the same would be filed and the decision in that regard would be intimated. However, when a decision is taken to investigate the complaint the investigation will be done by one Senior Officer and thereafter the decision on the complaint would be taken as per the procedure prescribed. As per clause 18.2.2 action will be taken with regard to the appointment of the next candidate in the merit panel. The complaint 10 wp-5032-10 submitted by the petitioner in keeping with the terms of clause 18 of the Brochure was investigated/enquired into and the investigation report was submitted on 6th November, 2006. The findings were :- A) L-1 Committee has not strictly followed the guidelines regarding signing of all documents for assessment. However, irrespective of this deviation, L-1 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 the report, for financial capability, the L-1 Committee, Screening Committee has given weight-age to documents of family members/relatives even though ‘No Consent,’ affidavit/letter is available. The report further stated that final marks had undergone change and the result would be as under:- As per Interview Committee (in line with merit): Sr.No. Name of candidate Total marks 1. Shri Nilesh Laxmikant Kudalkar 56.50 2. Dr. Ashok Shrikarlal Gwalani 55.33 3. Shri K. Shrinadharao 54.33 As per Screening Committee (in line with merit): Sr.No. Name of candidate Total marks 11 wp-5032-10 1. Shri Nilesh Laxmikant Kudalkar 59.0 2. Shri Shri K. Shrinadharao 57.0 3. Dr.Ashok Shrikarlal Gwalani 52.0 As per Investigation (in line with merit): Sr.No. Name of candidate Total marks 1. Dr.Ashok Shrikarlal Gwalani 56.78 2. Shri Shri K. Shrinadharao 53.63 3. Shri Nilesh Laxmikant Kudalkar 48.52 Thus the Investigation Committee ranked the petitioner as first in the empalment of 3 candidates as per merit. However, the oil company decided to do away with the selection process and hence under intimation to all the candidates fresh interviews were held between 22nd and 24th December, 2008. In the interview held on 24th December, 2008 the petitioner was at No.1 with 78.38% marks. This was in a way a third round of selection and the said panel came to be challenged by Shri Kudalkar in Writ Petition No. 113 of 2009. As is clear from the affidavit in reply filed by the oil company and as has been referred to by Mr. Kanuga, the oil company whole heartedly supported the fresh selection process and maintained that on no count the panel published on 24th December, 2008 was vitiated. This Court while dismissing the petition had observed that there was no 12 wp-5032-10 irregularity in the selection process. After the panel was published on 24th December, 2008, on 26th December, 2008 the oil company called for field report from the Divisional Office at Mumbai and that too in respect of the petitioner who was the first empanled candidate. On 31st December, 2008 the Assistant Manager at Ulhasnagar submitted his report and did not record anything adverse that would be required to be considered before issuing the Letter of Intent or against issuing such a letter to the petitioner. As there was no further response from the oil company the petitioner went on submitting representations after representations and the impugned one line reply was given. The only reason given in holding the petitioner ineligible is that his application and the accompanying documents (relationship affidavit) were not as per the format. We have perused the said document and we do not find any material lapse or deficiency so as to affect the petitioner’s empanelment. If the petitioner has not indicated his marital status or gender, that would not be a material deficiency. Even otherwise for the last about 5 years the oil company in three different rounds of assessment had examined and re-examined the documents submitted by all the applicants. By its own contention a decision was taken to cancel the first selection process and therefore, fresh interviews were held between 22nd to 24th December, 2008. We are not impressed by the 13 wp-5032-10 stand of the oil company, that the reason assigned in the communication dated 3rd June, 2010 would make the petitioner ineligible. This late awakening on the part of the oil company officials smacks of arbitrariness and when the oil company had supported the panel published on 24th December, 2008 it could not be now allowed to take a stand that the petitioner was ineligible. It is not the case of the oil company that it has decided to withdraw the notice and it had only contended before us on the basis of some subsequent representations received they decided to release fresh advertisement. This cannot be allowed to be done by a public sector undertaking and more so when the selection process has been going on during the last 5 years. The selection process must receive finality at some point of time and on the spacious ground as contended in the impugned communication the oil company cannot be allowed to set aside the empalment made on 24th December, 2008. 12. Clause 17.1 of the Brochure deals with ‘Field Verification’. It reads,:- ”The dealership will be offered to the No.1 candidate in the merit panel on the basis of the interview after necessary field verification and Letter of Intent (LOI) will be issued. 14 wp-5032-10 - If the no.1 candidate is not found suitable/fails to full fill the terms and conditions of the award of dealership or the award is to be cancelled for any reason whatsoever, the dealership will be offered to the 2nd candidate in the merit panel after necessary field verification. - If the 2nd candidate also failed to fulfill the terms and conditions of offer or found unsuitable for any reason whatsoever, then the dealership will be offered to the third candidate in the merit list, so as to offer to the third candidate. - A person who has been issued the LOI would be required to fulfill the terms and conditions of the same within the specified time period for issuance of letter of appointment and commissioning of the dealership”. 13. We have gone through the decisions relied upon by Mr. Joshi, the learned Counsel for the oil company and in our considered opinion, none of these decisions come in our way to issue a writ against the oil company so as to quash the impugned communication dated 3rd June, 2010 and direct the oil company to proceed further to issue the Letter of Intent and commissioning of the dealership is the next step which will have to be 15 wp-5032-10 considered on the basis of Clause 17.1 of the Brochure. In the case of Mahabir Auto Stores & Ors. v. Indian Oil Corporation & Ors., AIR 1990 S.C.1031, the Supreme Court held “....even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of transactions. In Jameshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai & Anr., 2994 AIR SCW 537 the Supreme Court reiterated that the State and its authorities including instrumentalities of State have to be just, fair and reasonable in all their activities including those in the field of contract. In the case of ABL International Ltd. (2004) 4 S.C.C.553 the Supreme Court held “once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants, an instrumentality of the State has acted in contravention of the aforesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the instrumentality of State”. 16 wp-5032-10 14. On the touchstone of this well settled legal position, we do not find any merit in the contentions of Mr. Joshi that this Court lacks powers to issue a writ directing the oil company to issue a Letter of Intent. We have already noted that the field report submitted on 31st December, 2008 and as has been placed before us does not indicate anything adverse against the petitioner or there could be any impediment in directing the oil company to issue the Letter of Intent. Hence we allow this petition, set aside the impugned communication dated 3rd June, 2010 addressed to the petitioner. We further direct the respondent Nos.2 to 4 to issue the Letter of Intent in favour of the petitioner within a period of four weeks from today. Further steps undoubtedly will be as per the requirement of clause 17.1 of the Brochure. 15. Rule is made absolute in the above terms, but without any order as to costs. (U.D.SALVI, J.) (B. H. MARLAPALLE, J.)