Quashing of ex-Minister's discretionary quota valid: SC

By T. Padmanabha Rao

NEW DELHI, OCT. 22. ``When a State property as distinct from a private property is being dealt with by a Minister, then it is of paramount importance that such public property must be dealt with for public purpose and in the public interest,'' the Supreme Court has reiterated.

``The disposal of a public property undoubtedly partakes the character of a trust and, therefore, in the matter of such disposal, there should not be any suspicion of a lack of principle,'' the Bench said adding that ``the exercise of discretion must not be arbitrary or capricious or for any extraneous considerations''.

Delivering the judgment, Mr. Justice G.B. Pattanaik affirmed the verdict of August 1997 of the Delhi High Court canceling certain allotments of LPG-distributionships, petrol retail outlets and dealerships in kerosene products made to the concerned persons (appellants) under the `discretionary quota' of the then Minister (Captain Satish Sharma) between January 1993 and 1996.

The High Court found, in these instances, that ``either there were no materials before the concerned Minister in support of the applications filed to justify the exercise of power for allotment under the discretionary quota or such allotments had been made on account of political patronage or some other extraneous considerations''.

The Bench, which included Ms. Justice Ruma Pal, while dismissing a large group of connected appeals from the appellants (allottees concerned), directed that ``the appellants shall be allowed to wind up their respective business by December 31, 2001'' as they ``are operating the allotments made in their favour since 1993-94 and even after the judgment of the High Court, they are continuing by virtue of an interim order of this court (apex court)''.

``If the initial order of allotment by exercise of discretion is vitiated on the ground of absence of any materials or verification by the concerned authority who has exercised the discretion, then the so-called subsequent inquiry by the oil company which operates in different fields cannot make the so- called arbitrary order of the Minister a legal or just order,'' the Bench observed.

The Bench noted that ``the impugned judgment also indicates that, in each and every case, the High Court had considered the original file, dealing with the allotments in question and it cancelled only those allotments where there was not an iota of material in support of the claim made by the applicant, whereas it sustained several other cases of discretionary allotments made during that period, wherever materials were available in the original file''.

The apex court had, in 1995, on a public interest litigation (PIL) from the Centre issued ``a set of guidelines'' for ``discretionary allotment'' of petroleum products' agencies to ensure that the ``exercise of discretion in making such allotments are in conformity with the rule of law and by excluding the likelihood of arbitrariness and minimising the area of discretion''.

Subsequently, on a petition from `common cause', the apex court in September 1996, cancelled certain allotments ``on a finding that the Minister, without keeping in view any guidelines, allotted in exercise of his discretion in a cluster manner and the public property have been doled out in wholly arbitrary and discriminatory manner''.

The apex court, therefore, held that its 1995 judgment ``cannot be construed by any stretch of the imagination to be a tacit approval of the discretionary allotment made (during 1993- 1996) prior to that judgment''.

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