The Hindu : Ordinance on petrol pump allotments likely

Online edition of India's National Newspaper
Friday, Aug 23, 2002

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National

Ordinance on petrol pump allotments likely

By Our Special Correspondent

NEW DELHI Aug. 22. Faced with a legal quagmire, the Government is considering issuing an ordinance to terminate dealerships of petrol pumps, kerosene and gas agencies allotted since January 1, 2000. The proposal is likely to be examined by the Cabinet in the next few days before a final decision is taken.

Highly-placed sources here said the ordinance would help in giving strong legal backing to the cancellation of petrol pump allotments made since January 2000. With a large number of allottees having sought legal recourse, the Government may find it difficult to justify the mass cancellations.

Sources say the proposed ordinance may also include provisions for auctioning off these agencies as well as deal with the ticklish compensation issues. The Government has already asked the Supreme Court to club all the cases in the various High Courts relating to the oil dealership cancellations. This request will be taken up at a hearing on August 26.

However, legal opinion so far appears to be that the Government case is not strong and it would be advisable to issue an ordinance. The Petroleum Ministry had advised the oil companies to file caveats in various High Courts even before any of the allottees could seek stay orders against the cancellations. In many cases, the courts have already passed interim orders on these cases.

Out of the 3,565 allotments cancelled, as many as 2131 pumps and agencies have already been commissioned. In the case of those where letters of intent alone have been issued, there is not much of a problem but in the case of commissioned outlets, the Government will have to pay compensation. Sources say the proposed ordinance may deal with many of these issues apart from giving legal backing to the cancellation of the dealerships.

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