Executive cancellation of allotments must adhere to Article 14 principles, ensuring fair play and individual case evaluations, rather than uniform actions based on controversy.

1The marketing of petroleum products has been quite a lucrative business. The four public sector oil companies - Indian Oil Corporation Limited (IOC), Bharat Petroleum Corporation Limited (BPC), Hindustan Petroleum Corporation Limited (HPC) and IBP Company Limited (IBP) control the marketing of the said products. We are concerned with the marketing of petrol and diesel, Superior Kerosene Oil (SKO), Light Diesel Oil (LDO) and Liquefied Petroleum Gas (LPG). The challenge in these matters is to the validity of the order of the Government of India dated 9th August, 2002 whereby all allotments made with respect to retail outlets, LPG distributorships and SKO - LDO dealerships on the recommendations of the Dealer Selection Boards (DSBs) since 1st January, 2000 were decided to be cancelled.

2 In past also allotments of retail outlets for petroleum products were cancelled by this Court after coming to the conclusion that the allotments made were arbitrary, on account of political connections / motivation and extraneous considerations. The tainted allotments were also cancelled by various orders of High Court of Delhi. The allotments which were on merits and not tainted were not ordered to be cancelled. It is a matter of coincidence that exactly seven years ago i.e. in August, 1995 on the front page of Indian Express a news item appeared regarding the grant of retail outlets for petrol pumps on account of political and other connections. Now, in August 2002, i.e. exactly seven years later again news item appeared on the front page of same newspaper about allotments to the near and dear ones of political functionaries attributing the same on account of political considerations. In Common Cause, A Registered Society v. Union of India and Others , 1996 (6) SCC 530 , this Court observed that for these allotments, a transparent and objective criteria / procedure has to be evolved based on reason, fair play and non arbitrariness.

3 Always, many have been in race for getting these dealerships / distributors. From September, 1977, a uniform procedure for selection of persons for appointment as dealers / distributors applicable to all the public sector oil marketing companies was introduced by the Government. The dealers were earlier selected from amongst the applicants by a selection committee comprising senior officials of the oil companies. The applications were invited from interested persons by advertising the available dealerships in the newspapers.

4 In the year 1983, the Central Government constituted two member Oil Selection Boards comprising of a retired High Court Judge as Chairman and a retired Civil Servant as a member. In the year 1990, one prominent member of public importance was also included in the said boards. In January 1993, the composition of the Oil Selection Board was - a retired High Court Judge as Chairman and a representative of Scheduled Castes / Scheduled Tribes / Other Weaker sections and a prominent public figure as members. The name of the board was later changed to 'Dealer Selection Board'. The guidelines were updated and notified in October 2000 by Ministry of Petroleum and Natural Gas in terms of Office Memorandum dated 9th October, 2000. According to these guidelines, the DSBs have the following composition.
"i) A retired judge of a High Court / retired District Judge / retired Additional District Judge / retired Officer who had held an Equivalent judicial post -- Chairman
ii) An Officer of the concerned Oil Company not below the rank of Deputy General Manager or Chief Manager depending on Availability -- Member
iii) An officer of another Oil Company not below the rank of Deputy General manager or Chief Manager depending on availability -- Member"

5 The guidelines provide detailed procedure for selecting candidates for appointment as dealers / distributors. A total of 59 DSBs were constituted in June - July 2000 and afterwards. These DSBs were entrusted the task of selections for the retail outlets, LPG distribut