Important Point
If selection process is vitiated due to political considerations or patronage or other extraneous considerations, there is no automatic allotment in favour of second empanelled candidate when selection of first empanelled candidate is cancelled.

JUDGMENT

Madan B. Lokur, J.

1. Leave granted in S.L.P. (Civil) No. 313 of 2012.

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

The facts

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 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:-

1. Smt. Neelam Kumari

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

3. Kumari Anju Chaudhary

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 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 cancelling all allotments for dealerships in petroleum products with effect from 1st January, 2000 including of SKO-LDO dealerships.

7. The blanket cancellation led to a spate of writ petitions 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.

8. This Court then heard the allottees as well as the Government of India and in Onkar Lal Bajaj v. Union of India, (2003) 2 SCC 673 it was observed that the news item and subsequent news items in the Indian Express made a specific reference to 413 allegedly tainted dealership or distributorship allotments. After considering all aspects of the case, this Court appointed a 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.

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 India, (2007) 2 SCC 536. This Court also considered the allotment of 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 Bihar was considered by this Court Mukund Swarup Mishra v. Union of India, (2008) 15 SCC 243 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 stood cancelled.

11. Following the can