CHAIRMAN CUM MANAGING DIRECTOR INDIAN OIL CORPORATION LTD. AND ORS.versusSUNITA KUMARI & ANR.

                     [2014] 9 S.C.R. 559


  CHAIRMAN CUM MANAGING DIRECTOR INDIAN OIL                         A
          CORPORATION LTD. AND ORS.
                         v.
              SUNITA KUMARI & ANR.
          (Civil Appeal No.8980 OF 2014)
                                                                    B
                   SEPTEMBER 18, 2014
      [MADAN B. LOKUR AND C. NAGAPPAN, JJ.]

     Public Distribution - Petroleum products - Allotment of
dealership/distributorship - Cancellation of - Effect - Whether,    c
on cancellation of allotment of a dealership or distributorship
for petroleum products in favour of the first ranked or first
empanelled candidate, there is automatic allotment in favour
of the second ranked or second empanelled candidate,
subject to fulfillment of the conditions of allotment - Held: If    D
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         E
gets vitiated and not just one selection or allotment~ However,
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       F
selection process would not be vitiated.

   Allowing the appeal and dismissing the petition, the
Court

     HELD: If the selection process is vitiated due to G
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 ·
                            559                           H
    560       SUPREME COURT REPORTS [2014] 9 S.C,R.


A because the entire selectio11 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. The entire panel of
  selected candidates must stand cancelled and a fresh
B selection process must be initiated. However, 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
c considerations, then the entire selection process would
  not be vitiated. [Paras 26, 27] [568-C-E; 569-A-B]

       Raj Bala v. Union of India, [Civil Appeal No. 7718 of
  1995 decided on 23rd August, 1995] and Anil Kumar Singh
  v. The Chairman, Dealers Selection Board Civil Appeal
D Nos.2012-2014 of 2003 decided on 3rd March, 2003 -
  distinguished.

        Ritu Mahajan v. Indian Oil Corporation (2009) 3 SCC
    506; 2009 (1) SCR 1126 - overruled.
E
       Awadesh Mani Tripathi v. Union of India 2014 (10)
    SCALE 655 - relied on.

         Onkar Lal Bajaj v. Union of India (2003) 2 SCC 673: 2002
    (5) Suppl. SCR 605; Mukund Swarup Mishra v. Union of India
F   (2007) 2 SCC 536: 2007 (1) SCR 825; Mukund Swarup
    Mishra v. Union of India (2008) 15 SCC 243 and Bharat
    Petroleum Corporation Ltd. v. Ramesh Chand Trivedi 2014
    (10) SCALE 659 - referred to.

G
                         Case Law Reference:
       2002 (5) Suppl. SCR 605      Referred to     Para 8
       2007 (1) SCR 825             Referred to     Para 9
       (2008) 15 sec 243            Referred to     Para 10
H
      CHAIRMAN CUM. MD. IOCL v. SUNITA KUMARI                      561


     2014 (10) SCALE 655               Relied on         Para 15           A
     2014 (10) SCALE 659               Referred to       Para 15
     2009 (1) SCR 1126                 Overruled         Para 16

      CIVIL APPELLATE JURISDICTION : Civil Appeal No.
                                                                           B
  8980 of 2014.

      From the Judgment and Order dated 10.02.2011 of the
  High Court of Judicature at Patna in LP.A. No.307 of 2010.

                                    WITH                                   c
  SLP (Civil) No. 31006 of 2012.

      N.K. Kaul, ASG, N. Rai. B. Sunita Rao, Ritu Bhardwaj,
  Anurag, Annam D.N. Rao Neelam Jain, Vaishali R. Akhilesh
  Kumar Pandey, Ashish Giri, Swati Chandra, B. Krishna Prasad,             D
  Himanshu Shekhar for the Appearing Parties.

       The Judgment of the Court was delivered by

      MADAN B. LOKUR, J. 1. Leave granted in S.L.P. (Civil)
  No. 313 of 2012.                                                         E

        2. The question for consideration is whether, on the
  cancellation of the allotment of a dealership or distributorship
I for petroleum products in favour of the first ranked or first
  empanelled candidate, there is an automatic allotment in favour          F
  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,            G
  therefore the second ranked or second empanelled candida~e
  is not entitled to an automatic allotment of a dealership or
  distributorship in his or her favour.

  The facts
                                                                           H
      562         SUPREME COURT REPORTS [2014] 9 S.C.R.


 A          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
 8    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:-
 c
             1.    Smt. Neelam Kumari

             2.    Smt. Sunita Kumari (respondent no.1 herein)

             3.    Kumari Anju Chaudhary
 D
             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
 E    · 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 '
. F   cancelling all allotments for dealerships in petroleum products
      with effect from 1st January, 2000 including of SKO-LDO
      dealerships.

            7. The blanket canGellation led to a spate of wtit petitions
 G     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.
 H
       CHAIRMAN CUM. MD. IOCL v. SUNITA KUMARI                 563
                [MADAN B. LOKUR, J.]
        8. This Court then heard the allottees as well as the          A
                                                                  1
  Government of India and in Onkar Lal Bajaj v. Union of lndia
  it was observed that the news item and subsequent news items
  in the Indian Express made a specific reference tu 413
• allegedly tainted dealership or distributorship allotments. After
  considering all aspects of the case, this Court appointed a          B
  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.                                           c
       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 lndia 2. This Court also considered the allotment of     D
  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      E
  Bihar was considered by this Court Mukund Swarup Mishra
  v. Union of lndia 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         F
  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        G
  Warisnagar. In her writ petition, Sunita Kumari claimed that

  1.   (2003) 2 sec 673.
  2.   (2007) 2 sec 536.
  3.   (2oos) 15 sec 243.                                              H
    564          SUPREME COURT REPORTS [2014] 9 S.C.R.


A   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
B      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 helcj that Sunita Kumari
  was entitled to be treated as the first empanelled candidate
C 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.
0   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.
E       14. It is under these circumstances, that the present appeal
    has come up before us.

    Discussion

F       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 lndia 4 and Bharat Petroleum Corporation Ltd. v.
  Ramesh Chand Trivedi5 when the allotment of a dealership is
  cancelled due to an illegality in selecting and preparing the
G 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

    4.    (SLP (C) No. 34226/2009 decided on 23"' April, 2013).
H   5.    (Civil Appeal No. 8586 of 2010 decided on 4th October, 2010).
     CHAIRMAN CUM. MD. IOCL v. SUNITA KUMARI                            565
              [MADAN B. LOKUR, J.}
allotment of the dealership in favour of the next empanelled                  A·
candidate.

     16. Learned counsel for Sunita Kumari on the other hand
relied on Ritu Mahajan v. Indian Oil Corporation6 , Raj Bala v.
Union of lndia7 and Anil Kumar Singh v. The Chairman, Dealers
                                                                              8
Selection Board8• 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                  C
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                D
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:
                                                                              E
      "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                  F
      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                  G


6.   (2009) 3 sec 506.
7.   (Civil Appeal No. 7718 of 1995 decided on 23"'August, 1995.
8.   (Civil Appeal Nos. 2012-2014 of 2003 decided on 3"' March, 2003.         H
    566         SUPREME COURT REPORTS [2014] 9 S.C.R.


A         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
8
    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.

C      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 allotmen~. The allotment was one of the many in the blanket
D cancellations and was a case referred to the Committee set
  up by ti 1is 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
E paragraph of the judgment, her prayer was accepted and it was
  held as fo!lows:-

          "l n 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
F         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
G 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
H an allotment is cancelled in favour of the first empanelled
   CHAIRMAN CUM. MD. IOCL v. SUNITA KUMARI                   567
            [MADAN B. LOKUR, J.]
candidate, there is an automatic allotment in favour of the          A
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         B
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   C
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     D
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              E
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
                                                                     F
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           G
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        H
    568       SUPREME COURT REPORTS [2014] 9 S.C.R.


A 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).
B
       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
C 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
D 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
E 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
F 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-
G 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
H
   CHAIRMAN CUM. MD. IOCL v. SUNITA KUMARI                    569
            [MADAN B. LOKUR, J.]
empanelled candidate in cases concerning blanket                      A
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.
                                                                      B
     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     C
of the first empanelled candidate is cancelled as a result of the
R~port 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        D
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           E
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/               F
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      G
of merit:-

      1.     Kameshwar Prasad Singh

      2.    Rangi Lal Rai
                                                                      H
    570        SUPREME COURT REPORTS [2014] 9 S.C.R.


A       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.

B       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
C 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 of2012 the High Court
  followed the decision rendered by this Court in Ramesh Chand
D 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.
E No costs.
    Bibhuti Bhushan Bose                           Matters disposed of.