VERY IMPORTANT POINTS
1. Exemplary damages can be awarded in a case where the action of a public servant is oppressive, arbitrary or unconstitutional is unexceptionable.
2. The action of the Minister for Petroleum and Natural Gas, in allotment of petrol pumps being wholly arbitrary, malafide and unconstitutional, the Minister is liable to pay a sum of Rs. 50 lac as exemplary damages to the Government Exchequer.

ORDER

The question before this Court in Common Cause v. Union of India and Ors.1, was whether the allotments of retail outlets for petroleum products (Petrol Pumps) were illegal and as such liable to the quashed. This Court by the judgment dated September 25, 1996 came to the conclusion that the allotments made by Capt. Satish Sharma were arbitrary, discriminatory, mala fide, wholly illegal and as such were liable to be quashed. This Court reached the said findings on the following reasoning :

"All the 15 allotments - discussed above - have been made by the Minister in a stereotyped manner. The applications have not been officially received by the Petroleum Ministry. There is no receipt - entry on any of the applications. The applicants seem to have approached the Minister directly. None of the applications have been dealt with in any of the branches of the Ministry. There is nothing on the record to indicate that the Minister kept any criteria in view while making the allotments. How the applicants came to know about the availability of the petrol pumps is not known. No advertisement was made to invite the applications. There is nothing on the record to show that any other method of inviting applications was adopted. There is no indication in the allotment-orders or any where in the record to show that the Minister kept any guidelines in view while making these allotments. The allotments have been made in a cloistered manner. The petrol pumps - public property - have been doled out in a wholly arbitrary manner." ......

"All these allotments are wholly arbitrary, nepotistic and are motivated by extraneous considerations." .......

"We have no hesitation in holding that Capt. Satish Sharma in his capacity as a Minister for Petroleum and Natural Gas deliberately acted in a wholly arbitrary and unjust manner. We have no doubt in our mind that Capt. Satish Sharma knew that the allottees were relations of his personal staff, sons of Ministers, sons/relations of Chairmen and members of the Oil Selection Boards and the members of the Oil Selection Boards themselves. The allotments made by him were wholly mala fide and as such cannot be sustained.

We are further of the view that Capt. Satish Sharma acted in a wholly biased manner inasmuch as he unfairly regarded with favour the cases of 15 allottees before him. The relevant circumstances available from record and discussed by us leave no manner of doubt in our mind that Capt. Satish Sharma deliberately acted in a biased manner to favour these allottees and as such the allotment orders are wholly vitiated and are liable to be set aside."....................

"Mr. Satish Sharma has acted in utter violation of the law laid-down by this Court and has also infracted Article 14 of the Constitution of India. As already stated a minister in the Central Government is in a position of a trustee in respect of the public property under his charge and discretion. The petrol pumps/gas agencies are a kind of wealth which the Government must distribute in a bona fide manner and in conformity with law. Capt. Satish Sharma has betrayed the trust reposed in him by the people under the Constitution."

One of the directions issued by this Court was as under :

"5. Capt. Satish Sharma shall show-cause within two weeks why a direction be not issued to the appropriate police authority to register a case and initiate prosecution against him for criminal breach of trust or any other offence under law. He shall further show-cause within the said period why he should not, in addition, be made liable to pay damages for his mala fide action in allotting petrol pumps to the above mentioned fifteen persons."

2. Pursuant to the above quoted direction, a show cause notice was issued to Capt. Satish Sharma. He has filed affidavit in reply to the show cause notice.

3. We have heard Mr. Salve, learned counsel appearing for Capt. Satish Sharma. There are two parts of the directions quoted above. This Court has called upon Capt. Satish