Barragkpore Central Zone Wholesale Consumers'' Co-operative Society Ltd. vs Indian Oil Corporation

Satyabrata Sinha, J.—The Petitioner No. 1 which is a Central Wholesale Consumers'' Co-operative Society registered under the Bengal Co-operative Societies Act, 1940, has filed this writ application, inter alia, praying for issuance of a writ of mandamus directing the Respondents to cancel the selection of the Respondent No. 6 as the distributor of Indian L.P. Gas for Barrackpore by the Oil Selection Board.

The fact of the matter shortly stated in as follows:

An advertisement was issued on June 23, 1993 inviting applications for distributorship specifying the eligibility criteria as also special conditions. The eligibility clause as stated in the said Advertisement is as follows:

(a) must be Indian Citizen,

(b) not less than 21 years and not more than 50 years of age on the date of the application,

(c) should be at least a Matriculate or holder of recognised equivalent qualification.

(d) should be a resident of North 24-Parganas,

(e) the family income during the last financial year should not be more than Rs. 50,000,

(f) should not be a Dealer or Distributor of an Oil Company,

(g) no near relative should be a Dealer or Distributor of any Oil Company.

The aforementioned clauses are, however, not applicable in relation to any Co-operative Society and/or any State Government or. undertaking or a company managed and controlled by the State Government.

It was further provided that other things being equal the Co-operative Society would get preference to the unemployed graduates and unemployed graduates may be preferred to other applicants.

In the said advertisement there was no indication that ultimate selection would depend on performance in any interview. The Respondent No. 6 and other candidates filed their applications in the prescribed forms. The eligibility criteria for awarding for dealership or distributorship in CI. 5(a) states:

No person or Co-operative Society shall be awarded a new dealership/distributorship if he/she/ they already hold a Letter of Intent or a dealership/distributorship of MS/HSD/Kerosene/LDO/LPG/Lubri-cating Oil of any Oil Company.

Clause 8 of the eligibility criteria states:

The Co-operative Society must be registered. Only Co-operative Societies making a net profit for the previous three consecutive financial years to the date of application as certified by a Chartered Accountant will be eligible.

Other things being equal, preference may be given to Consumer Co-operative Societies, which fulfill the prescribed criteria compared to Unemployed Graduates.

Restrictions relating to annual income, residence and multiple dealership/distributorships would not be applicable to Corporations owned and controlled by State Government.

Clause 8 aforementioned appears to be contradictory to and inconsistent with cl.3(a) of the Advertisement as contained in Annexure ''A'' to the writ application. It is not in dispute that the Petitioner was the only cooperative society which applied for distributorship in question nor is it disputed that it fulfilled the prescribed criteria.

In its application the Petitioner as against the column ''Extra Curricular Activities'' stated:

Distributor of Consumer goods under ''Public Distributor Scheme'' wholesaler of Ration Commodities, Retail outlet of consumer goods, Medicine, Textiles, Baby foods, Mobile van shop, Samavayeeka & Wholesaler of consumer goods to the member Societies.

Not applicable being Co-operative Society.

Relevant Clauses of the said application filed by the Petitioner No. 1 are as follows:

Do you have business/selling experience? If yes, give full details chronologically.

Wholesale Consumers'' Co-operative Society working since the year 1964 involving Rs. 8.5 crores annual transaction at present.

Do you have any experience of supervision of personnel ? If yes, give full details chronologically.

This is a Central level Wholesale Consumers'' Cooperative Society having participation in share capital by the State Government and employing more than 42 regular personnel�s under supervision, control and direction of a deputed Government Official of the rank of Assistant Registrar of Co-operative Societies, distribution administration & finance. The Society is managed by a elected Board of Directors under Cooperative Societies Act and Rules.

Brief Note on plans to run the distributorship: Please give a brief note indicating your plans as to how you purpose to run the dealership/distributorship (in the event of the same being offered to you) and whether you would devote yourself as a whole time working dealer/distributor, treating this business as your main source of income.

In the event, the Society is offered the distributorship it will have a separate wing and department of distribution of L.P.G. to the Consumers. The society is having sufficient space in its owned premises of the society for establishment of ''show-room'' and office for the purpose. The society is having sufficient number of Personnel�s for day to day working, supervision, administration and control.

The dealer/distributorship requires an approximate investment of Rs. 3,00,000 (three lakhs) excluding the value of land for the construction of:

a) Retail outlet

b) 2-3 Wheeler MS outlet

c) Bulk Storage facilities for SKO/LDO

d) LPG Godown.

The Petitioner has also furnished details of source of funds stating that it had a bank deposit of Rs. 2,35,931.01 p. and a fixed deposit of Rs. 71,400, Rs. 36,400 and Rs. 16,700 in the West Bengal Co-operative Bank, Barrackpore. It further stated that in the event of additional requirement of funds, the Society can borrow from its Bankers, and in support thereof a copy of resolution passed by the ''Annual General Meeting'' was enclosed. The Petitioner in para. 23 of its application as against the column, ''Any other information'' stated:

The members of the Society and general public residing within the operational jurisdictions of this Society time to time demanded that this wholesale society should undertake the distribution of L.P.G. copies of the following letters are also submitted herewith for ready reference (i) Letter from R.C.S., W.B. (ii) our appeal dated 23.12.88 (iii) Letter from Mr. Sukhram Hon''ble Minister, Food Civil Supplies, Govt, of India, (iv) Letter from Mr. Chitta Basu, M.P. (v) Letter from Mr. Bhajan Lai, Minister of Agriculture, Govt, of India (vi) Letter from the Chairman, North Barrackpore Municipality (vii) Letter from Indian Oil Corporation Ltd. to the Chairman of the Society (viii) Paid Electric Bill (ix) Advance Income Tax receipt, 1993-94 and (x) Assessment case receipt 89-90.

The Petitioner contended that the Co-operative Directorate of the Government of W.B. issued a memo dated December 18, 1987 to Consumers'' Co-operative Societies pointing out that Consumers'' Co-operatives are now playing pivotal role in public distribution system in West Bengal which has been recognised by the Central Government''s recent reports in implementing 20 point programme and thus there exists an excellent opportunity of expanding the Co-operative net-work in the field, giving the needed and direct service to the Consumers by L.P. Gas distribution system. The Petitioner allegedly has been making representations for grant of such dealership to the Indian Oil Corporation and to Central Government for about five years. The then Minister of State for Food and Civil Supplied, Government of India, informed the then Minister of Agriculture, Government of India, that the Ministry of Petroleum had issued guidelines in November, 1987, by which the Indian Oil Corporation would give preferential treatment to Co-operative Societies provided they fulfill the prescribed criteria. By a letter dated June 2, 1994 the Oil Selection Board requested the Petitioner to appear at the interview on July 7, 1994 wherein the Petitioner was asked to bring all the original documents in the prescribed form. It was further directed to produce the balance-sheet, profit and loss account for the years 1990-91, 1991-92 and 1992-93. It was further required of the Petitioner that a resolution empowering the applicant of the Co-operative Society to appear on behalf of the Co-operative Society should also be brought.

It is stated that the Petitioner''s society produced the documents in support of their applications as also further additional documents in support of their candidature. It also produced Balance-sheet, Profit & Loss Account for the financial years 1990-91, 1991-92 and 1992-93 Certificates regarding earning of profit, resolution of authority and other documents in support of each fact mentioned in the application as sought for by the Board.

However, admittedly the Petitioner was not selected.

In its affidavit-in-opposition the Oil Selection Board did not deny or dispute the aforementioned factual assertions of the Petitioner. It was, however, stated that the Oil Selection Board comprises of three members, viz. Mr. Sachi Kanta Hazari, a retired Judge of this Court, Professor Monoranjan Haider, an ex-member of Parliament and Mr. K.L. Sharma. The Respondent No. 3 after screening the applications and being prima facie satisfied regarding the eligibility of the applicants forward the list of the applicant to the Oil Selection Board, which in turn takes interview of all the applicants and/or authorised representatives thereof. Marks are given against their interview performance on different criteria wise as follows:

Marks

(i) Personality, business ability, Salesmanship 30

(ii) Capacity to arrange finance and capability to provide facilities 20

(iii) Full time working dealer 30

(iv) General Assessment and extra curricular activities 20

Total: 100

It is further stated that the interview conducted by the Oil Selection Board and the marking thereof is based on subjective satisfaction on the basis of impression gathered by each eminent member of the Board. It is stated that the Respondent No. 6 obtained a total mark of 70% being the average of the total marks awarded by the three members of the Board. One Smt. Munna Chakraborty obtained 66% marks whereas the Petitioner obtained 65.3% marks. It is stated that there is no provision to record reasons for choosing a particular candidate.

In view of the fact that the Petitioner in this application has questioned the selection process by the Oil Selection Board, it is not necessary to consider the affidavit-in-opposition of the other Respondents at this stage.

Mr. Saktinath Mukherjee, learned Senior Counsel appearing on behalf of the Petitioner submitted that from the records produced by the Oil Selection Board it would appear that the selection was made only on the basis of making in the interview and it is claimed that the same being subjective no reason was required to be recorded, although it is admitted that statements made in the applications and documents furnished in support of its claim were on records, the same must be held to be arbitrary. Mr. Mukherjee further urged that from the affidavit-in-opposition it would also appear that the Oil Selection Board has relied upon alleged business experience gathered by the Respondent No. 6 while working in his mother''s shoe shop, which could not have been done. It was further submitted that the Respondents authorities committed illegality as they acted only on the basis of markings in the interview performance and there is nothing to indicate that consideration for awarding dealership was made on the basis of all the facts disclosed in that application. It was contended that in any event as it was not stated in the advertisement that such an interview will be taken and the dealership would be granted on the basis of performance of the said interview, the entire process rust be held to be vitiated in law.

It has further been submitted that interview must be held to be wholly irrelevant for selection of a distributor in L.P 3as.

Mr. Mukherjee in this connection has relied upon a decision in D.V. Bakshi and others etc. etc. Vs. Union of India and others,

Mr. Mukherjee relying upon a decision in Tata Cellular Vs. Union of India, that the facts which are required to be taken into consideration are such that nothing can be left to the sub active impression of the Board. It is submitted that a bare comparison of the documents filed by the respective parties before the board, it would appear t the Respondents have acted on wholly irrelevant and extraneous considerations and its findings are mala fide, unreasonable and perverse. It was further submitted that as the selection did not involve appointment in a higher post but for an appointment for a dealer in L.P.G. such selection could not have been on the basis of interview performance alone without any record of comparative assessment of facts which make the selection arbitrary. According to the Learned Counsel recording reasons is obligatory on the part of administrative authorities. Reliance in this connection has been placed on S.N. Mukherjee Vs. Union of India, Star Enterprises and Others Vs. City and Industrial Development Corporation of Maharashtra Ltd. and Others, ; Mahabir Prasad Santosh Kumar Vs. State of Uttar Pradesh and Others, and Travancore Rayon Ltd. Vs. Union of India (UOI),

It was further submitted that the procedure adopted is a mockery of the preference clause inasmuch as a Consumers Co-operative Society cannot be equated with any natural person. According to the Learned Counsel the Co-operative Society is bound to get preference of title decisions of the Supreme Court of India in Madhya Pradesh Ration Vikreta Sangh Society and Others Vs. State of Madhya Pradesh and Another, and Sarkari Sasta Anaj Vikreta Sangh Tahsil Bemetra and Others Vs. State of Madhya Pradesh and Others,

It was further submitted that allotment of 100% marks in interview must be held to be bad in law. Reliance in this connection has been placed on Ajay Hasia and Others Vs. Khalid Mujib Sehravardi and Others,

Mr. Sanjib Banerjee, Learned Counsel, appearing on behalf of the Oil Selection Board submitted that the Co-operative Societies are not treated on a separate footing which was the sole basis of the claim of the Petitioner. It was submitted that the Petitioner cannot have any legitimate expectation in view of the preference clause contained in the Advertisement and reliance in this connection has been placed on The Gujarat State Sales Tax Non-Gazetted Employees'' Association v. The State of Gujarat and Anr. 1977 A S.L.R. 452. The Learned Counsel contends that the Petitioner did not object to the eligibility clauses at the time of filing any application nor did it raise any objection when it received the letter of interview. It is submitted that objectivity of selection lies in various heads whereas subjectivity lies in allotment of marks by the members. It was further submitted that in the writ application the Petitioner has not made out any case of wrongful classification and thus the Petitioner cannot be permitted to raise the contention that in this case unequal have been treated as equals. Mr. Banerjee urged that the Petitioner has not alleged any bias or mala fide in the selection by the members of the Board. The Learned Counsel submitted that in this view of the matter this Court should not exercise its discretionary jurisdiction Reliance in this connection has been placed on Chinmoy Sarkar and etc. Vs. Md. Shaniat Hossain and etc., and an unreported judgment of a division bench of this Court in Barun Kumar Bose v. Shiva Prosad Bhakat and Ors. being F.M. A. No. 946 of 1987.

Mr. S. Pal, Learned Counsel, appearing on behalf of Indian Oil Corporation submitted that grant of dealership is neither automatic nor the selection is an empty formality. It was submitted that exercise for selection is not futile. The Learned Counsel contends that a distinction has to be made between a provision for reservation and provision for preference. According to the Learned Counsel, in this application the Petitioner did not have any unqualified preference. The Learned Counsel further submitted that the criteria ''Extra Curricular activity'' has to be read with general assessment and as the Petitioner has got the highest marks therein, it has not suffered any prejudice. It is submitted that the world ''inter-view'' has a definite connotation particularly in view of the fact that no written test was to be held.

Mr. Neogi, the Learned Counsel appearing on behalf of the Respondent No. 6 adopted the submission of Mr. Banerjee and Mr. Pal and added that recording of reasons for selection of candidates is not necessary. Reliance in this connection has been placed on National Institute of Mental Health and Neuro Sciences v. Dr. K. Kaiyan Raman and Ors. AIR 1992 S.C. 1802.

Mr. Neogi submitted that keeping in view of the fact that preference was to be given to a-Co-operative Society, in the event of other things are found to be equal, the Respondent No. 4 could not have gone beyond the stipulations expressed in the Advertisement in view of the decision of the Supreme Court of India in Hoshiar Singh Vs. State of Haryana and Others, It is further submitted that even grant of preference was discretionary as it would be evident from the fact that the Indian Oil Corporation in its advertisement has used the expression ''may'' in contradistinction to the word ''shall''. Mr. Neogi further submits that the Petitioner did not have any legal right and thus no writ of mandamus can be issued by this Court. With regard to the question of legitimate expectation the Learned Counsel relied upon a decision in Shankarsan Dash Vs. Union of India, reported and submitted that doctrine of legitimate expectation is inapplicable in a case of selection of a distributor. It was further submitted that the Petitioner after appearing at the interview is estopped from challenging the very process of selection. The Learned Counsel has also submitted that this Court cannot substitute its opinion to that of Oil Selection Board and in support of the aforementioned contention relied upon State Bank of India and others Vs. Mohd. Mynuddin, ; Union Public Service Commission y. Shri Hiranyalal Dev and Ors. 1988 (2) S.L.R. 148; Dalpat Abasaheb Solunke and Others Vs. Dr. B.S. Mahajan and Others, and: Indian Airlines Corporation v. Capt. K.C. Shukla and Ors. 1992 (2) S.L.R. 519. It was further submitted that the Petitioner has no existing legal right to be appointed as an L.P.G. distributor particularly in view of the fact that even a concession granted in favour of person by the State does not enable to others to obtain writ of mandamus. Reliance in this connection has been placed on K.V. Rajalakshmiah Setty and Anr. v. State of Mysore and Anr. AIR 1967 S.C. 993, Dr. Umakant Saran Vs. State of Bihar and Others, ; Rai Shivendra Bahadur Vs. The Governing Body of the Nalanda College, He further submitted that even a successful candidate cannot acquire an indefeasible right to be appointed and in this connection reliance has been placed on Shankarsan Dash v. Union of lndia {Supra).

The question which, inter alia, arises for consideration is as to whether the Petitioner was entitled to be selected for grant of L.P.G. dealership in preference to Respondent No. 6.

The question relating to grant of dealership by the Oil Selection Board came up for consideration before this Court in Chinmay Sarkar and etc. v. Md. Shaniat Hossain and etc. (Supra) wherein P.D. Desai, C.J. speaking for the Division Bench held that this Court in exercise of its jurisdiction under Article 226 of the Constitution of India cannot act as of an appellate authority over the decision of the Oil Selection Board. The Division Bench laid down the law in the following terms:

However, the exercise of such jurisdiction and the judicial reviewability of such selection are subject to the well-known limitations, if the selection is vitiated by an arbitrary or irrational exercise of power or by mala fides or is based on no materials .of made on the basis of irrelevant materials or by ignoring relevant factors including eligibility, the Writ Court would and should, on proof of the relevant facts, grant an appropriate relief. However, it is not for the Writ Court to delve deep into the records of the Board or the Corporation and to examine the validity of the rival, claims upon appreciation afresh of the materials on such record and, on the basis of such reappraisal, to decide whether the selection was properly made and to give effect to such decision by the issue of a Writ. It cannot be overlooked in this connection that the Board, which is vested with the function of selection, is an independent entity.

The matter was again considered by a Division Bench of this Court in Barun Kumar Das v. Shiba Prosad Bhakat, and Ors. being F.M.A. No. 946 of 1987 disposed of on May 14, 1986. In the said writ application the writ Petitioner challenged the validity of a selection made by a Selection Board for the purpose of appointment of dealer for kerosene and light diesel oil. In the said application except ''the extra curricular activities'' all other criteria�s for appointment was the same. In that case also a Selection Board was set up consisting of a retired Judge of Jammu and Kashmir High Court and a senior civilian. A learned Single Judge of this Court allowed the writ application, inter alia, on the ground of grant of uniform marks by both the members of the Board was initiated.

The Division Bench while setting aside the said judgment on question of facts also observed that the High Court in disposing the writ application is not supposed to act as an appellate tribunal in respect of the decision of the Selection Board holding:

Next it is said by the learned trial judge that there was no objective standard indicated by the Board to support the basis of the marking. We have already pointed out that the Board proceeded to award marks on four heads. When marks are awarded on an interview, the assessment part must necessarily be subjective although based on the objective standards having regard to the heads on which the marks were being allotted. The Selection Board is not expected to give reasons for its markings and, therefore, it is not just and proper for the Court to find fault with such marking on the ground as alleged by the learned trial Judge. After all we must repeat that this Court is not the authority to review the assessment made by the Selection Board as an appellate tribunal.

There cannot be any dispute whatsoever that this Court while exercising its jurisdiction under Article 226 of the Constitution of India cannot act as an appellate authority. However, in my opinion, it would not be correct to throw out a writ application only on the ground that the selection Board is chaired by a former Judge of this Court. In Delhi Transport Corporation v. D.T.C. Mazdoor Congress and Ors. AIR S.C. 101 the Supreme Court observed:

There is need to minimize the scope of the arbitrary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals, however, high-placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however, high they may be. There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal or rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law.

In Re: In Re: The Special Courts Bill, 1978, the Supreme Court refuted the contention that a tribunal to be set up made the said Bill was to be headed by a retired Judge stating that although retired Judges occupy a position of honour and respect in society, but one cannot shut one''s eyes to the constitutional position that whereas by Article 217 a sitting Judge of a High Court enjoys security of tenure until he attains a particular age, the retired Judge will hold his office as a Judge of the Special Court during the pleasure of the Government which is subversive of judicial independence. It was observed that a retired Judge presiding over a Special Court, who displays strength and independence may be frowned upon by the Government and there is nothing to prevent it from terminating his appointment as and when it likes.

In Y. Srinivasa Rao Vs. J. Veeraiah and Others, the Apex Court held:

The impugned appointment was made by the authority after holding an interview and it is the case of the Appellant that the Revenue Divisional Officer merely enquired from him about his bio-data without putting any further question by which the merits could have been judged. On that sole basis the shop was allotted to the Respondent. Considering the criteria, as mentioned in the advertisement, the Collector accepted the claim of the Appellant, pointing out that the Appellant was a better candidate from every angle. The High Court has quashed his judgment by condemning it as perverse but without indicating any reason for such view.

There cannot, therefore, any doubt that this Court may exercise its jurisdiction in a proper case, in the event, it is found that any illegality, irrationality or procedural impropriety had been committed by the Oil Section Board.

In Tata Cellular v. Union of India Supra the Supreme Court observed:

The duty of the Court is to confine itself to the question of legality. Its concern should be:

Whether a decision-making authority exceeded its powers ?

Committed an error of law.

Committed a breach of .the rules of natural justice.

Reached a decision which no reasonable tribunal would have reached, or 5. Abused its powers.

Therefore, it is not for the Court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly, put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:

(i) Illegality: This means the decision-maker must correctly the law that regulates his decision-making power and must give effect to it.

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

The Supreme Court considered the charming principle of unreasonableness and referred to the decision in R. Askew 1768 (4) Burr 2186 : 98 ER 139 wherein it was stated:

But their conduct in the exercise of this trust thus committed to them ought to be fair, candid and unprejudiced ; not arbitrary, capricious, or biased; much less, warped by resentment, or personal dislike.

The Supreme Court referred to R. v. Tower Hamlets London Borough Council, ex p Chetnik Developments Ltd. 1988 A.C. 858, 873 :1988 (1) A.E.R. 961 wherein it has been held:

The Court is entitled to investigate the action of the local authority with a view to seeing whether or not they have taken into account matters which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so; unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the Court can interfere. The power of the Court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which Parliament has confided in them.

It also noticed the other facets of irrationality in the following terms:

(1) It is open to the Court to review the decision maker''s evaluation of the facts. The Court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary of State for Environment 1980 (41) P & CR 255, the Secretary of State referred to a number of factors which led him to the conclusion that a nonresident''s bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analyzed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion.

(2) A decision would be regarded as unreasonable if it is impartial and unequal in its operation as between different classes. On this basis in R. v. Barnet London Borough Council, ex p Johnson 1989 (88) L.G.R. 73 the condition imposed by a local authority prohibiting participation by those affiliated with political parties at events to be held in the authority''s parks was struck down.

There cannot be any doubt that selection of a candidate for appointment by an expert body and selection of a dealer for the purpose of carrying on business stand absolutely on different footings. The criteria of business ability, salesmanship, capacity to finance and capability to provide facilities are very relevant but such relevant facts are to be gathered from the documents furnished by the parties. It may be noted that the practice of field report being submitted before the Oil Selection Board for the purpose of scrutinising the statements made in the applications for dealership and the documents furnished therewith and/or before the Oil Selection Board so as to enable the Oil Selection Board to consider the said reports has been abolished leaving the entire matter at the discretion of the Board.

Mr. Banerjee when questioned could not state as to on what basis the aforementioned heads like ''personality'', full time working dealer and ''general assessment'' and ''extra-curricular activities'' have been formulated. The personality of a body corporate has to be judged from its records and not from the appearance of its representative.

it may be recorded that adjournment was sought for and was granted to produce before this Court the records and/or affidavit as to the basis of selection, but unfortunately the Learned Counsel appearing on behalf of the Board of the Indian Oil Corporation did not appear despite the fact that on more than one occasion, when the case was called out, suo motu pass over was granted. The Learned Counsel for the concerned Respondents failed to answer the queried made by the Court. As recorded earlier, when the hearing was taken up on the adjourned dates, the Learned Counsel did not appear to assist the Court.

The Oil Selection Board while considering the candidature for dealership, in my opinion, is not concerned with the knowledge of Science, History or Geography of the candidate nor is it concerned with his other activities, its motto being to chose the best available person having a business ability and capability to provide facilities to the consumers.

So far as the Co-operative Society or other body corporate are concerned, it is neither expected to have any personality nor it can be said to have any extra curricular activities which can be judged in an interview, in the advertisement, as noticed herein before, it was stated that preference would be given to the Cooperative Society if other things are found to be equal. For the purpose of applicability of that clause alone, common criteria ought to have been laid for judging the merits of the candidates. Equal consideration of a private citizen and a Co-operative Society and other body corporate cannot be made in a vacuum. As noticed hereinbefore, most of the clauses which are applicable in the case of natural persons are not applicable in the case of Co-operative Societies and/or other body corporate. By way of illustration it may be pointed out that in the case of a citizen the income of the family should not exceed Rs. 50,000 per annum, whereas the Co-operative Societies are required to make a net profit in the previous three consecutive financial years as certified by a Chattered Accountant. The aforementioned clause also demonstrates that whereas in case of a citizen, emphasis is on low income which had been made evidently so as to help an educated unemployed person; emphasis in relation to the Co-operative Societies is earning of profit.

It is difficult to understand as to how the criteria of full time working dealer is a relevant criteria inasmuch as all the dealers are required to be full time working dealers. The said clause, in my opinion, is also vague. If the said criteria has been laid down for the purpose of finding out as to whether the applicant can devote his entire time in running the business of distributorship or not. It appears that whereas the Petitioner in the said column had stated that it had 42 employees on its rolls who works under the supervision of a Deputy Assistant Registrar and an elected Director of the Board under the Act; the Respondent No. 6 merely stated that he was a temporary manager in a shoe shop; whereas Munna Chakraborty stated that his brother-in-law and his friends are to render helps. Thus under the said head the answers to the said query by the Respondent No. 6 and Smt. Munna Chakraborty does not appear to fit in with the object of such criteria.

Similarly in relation to the extra-curricular activities the Petitioner has stated its activities are same as in A(ii) which is under the head of personality, business ability and salesmanship. Smt. Munna Chakraborty has categorically stated that her extra-curricular activities was nil. Respondent No. 6 stated that his extra-curricular activity was social work although no document had been appended in support of such statement; Extra-curricular activities ex facie to my mind appears to be an irrelevant consideration as no guideline therefor had been fixed, by stating what would constitute an extracurricular activities.

There cannot be any doubt that the public bodies are required to follow certain principles and guidelines for consideration and acceptance of Tenders.

The Supreme Court of Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, observed --

It must, therefore, be taken to be the law that where the government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licenses or granting other forms of largess, the government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licenses etc., must be confirmed and structured by rational, relevant and non-discriminatory standard or norm and if the government departs from such standard or norm in any particular case or cases, the action of the government would be liable to be struck down, unless it can be shown by the government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

It is well settled that --

The government is not like a private individual who can pick and choose the person with whom it will deal, but the government is still a government when it enters into contract or when it is administering largess and it cannot, without adequate reason, exclude any person from dealing with it or take away largess arbitrarily. The State need not enter into any contract with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure.

Harminder Singh Arora Vs. Union of India (UOI) and Others, . However, the extent of the duty to act fairly will vary from case to case.

In Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, the Apex Court stated:

So far as the first limitation is concerned, it flows directly from the thesis that, unlike a private individual, the State cannot act as it pleases in the matter of giving largess. Though ordinarily a private individual would be guided Ay economic considerations of self-gain in any action taken by him, it is always open to him under the law to act contrary to him self-interest or to oblige another in entering into a contract or dealing with his property. But the Government is not free to act as it likes in granting largess such as awarding a contract or selling or lee sing out its property. Whatever be its activity, the Government is still the Government and is subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the Government can not be exercised by it arbitrarily or capriciously on in an unprincipled matter, it has to be exercised for the public good. Every activity of the Government has a public element in it and it must, therefore, be informed with reason and guided by public interest. Every action taken by the Government must be in public interest, the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.

Lord Greene M.R. in the case of Provincial Picture House Limited v. Wednesbury Corporation Limited 1947 (1) A.E:R. 780 stated the law thus:

The Court is entitled to investigate the action of the local authority with a view to seeing whether or not they have taken into account matters which they ought not to have taken into account or conversely, have refused to take into account or neglected to take into account matter which they ought to take into* account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four corners of the matters which they ought to consider, they have nevertheless come to the conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case again, I think, the Court can interfere. The power of the Court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which Parliament has confided in them.

Wednesbury''s reasonableness inter alia, therefore, proceeds on the theory that if a decision is perverse or where there has been a mis-direction in law it can be interfered with by the Court.

Wednesbury''s unreasonableness had recently been taken into consideration in F v. Secretary of State Transport, ex parte Richmond upon Thames London Borough Council and Ors. 1994 (1) A.E.R. 577, wherein it was observed:

Wednesbury and the 1988 policy Mr. Gordon''s alternative argument based on para 34 of the 1993 consultation paper is that, if it does not indicate an intended change of policy, then it shows at least that the Department misunderstood its own undertaking given in 1988, by confusing the motion of a continuing improvement in noise levels (which was, says Cordon, the substance of the undertaking) with the different notion merely that noise levels should be capped below those prevailing in 1988. For my part I cannot see that there is so concrete a difference between what the department was saying at the two different periods as to give rise to as inevitable inference or inconsistency between them. The 1987 consultation paper which is before me related only to Heathrow; the 1988 press notice was concerned with a five year period, and by its language drew some distinction between Heathrow and Gatwick. In short, the materials on which Mr. Gordon relies are not capable of giving rise to a finding of fact (which his submission requires) that in 1933 the Secretary of State had actually misunderstood either his past practice or what had been said on his behalf five years before. So there is nothing in this argument.

The case at hand has to be considered upon taking into consideration the well known parameters of the power of judicial review.

The Indian Oil Corporation Ltd. is a State within the meaning of Article 12 of the Constitution of India It, therefore, may enter into a contract as distribute \\he largess in terms of well accepted principles therefor as also keeping in view Article 14 of the'' Constitution.

Oil Selection Board has been appointed by the said Corporation for the purpose of selection of candidates for distributorship of one of its products.

Oil Selection Board is, therefore, bound to perform its function reasonably, fairly and impartially. In while taking its decision, cannot take into consideration irrelevant factors nor can it ignore relevant materials ''t cannot go beyond the condition for appointment a distributor beyond the terms of the advertisement.

Professor Wade in his Administrative Law, 6th edn. page 411 states:

There are many cases in which a public authority has been held to have acted from improper motives or upon irrelevant considerations, or to have failed to take account of relevant considerations, so that its action is ultra vires and void. It is impossible to separate these cleanly from other cases of unreasonable-ness and abuse of power, since the Court may use a variety of interchangeable explanations, as was pointed out by Lord Greene. Regarded collectively, these cases show the great importance of strictly correct motives and purposes. They show also how fallacious it is to suppose that powers conferred in unrestricted language confer unrestricted power.

It was, in my opinion, necessary to state definitely in the advertisement as to what type of activities would constitute extra-curricular activities. Oil Selection Board was bound to exercise its discretion within the prescribed norm, it does not have an unfettered discretion. The Indian Oil Corporation being a State within the meaning of Article 12 of the Constitution of India, the process of selection of L.P.G. Distributorship cannot but be in conformity with the letter and spirit of Article 14 of the Constitution.

In Gurdeep Singh Vs. State of Jammu and Kashmir and others, the Supreme Court while considering the matter relating to the reservation of seats for admission to MBBS Course held:

When this selection was challenged before the High Court the High Court understood the contention of the Appellant to amount to a plea that the mountaineering, by itself, was not an activity eligible to be recognised as a sporting activity. That was not the real question. The question was not that ''mountaineering'' - had it been in the original list of approved sports - was not eligible to be called a legitimate sporting activity. The real question was rather that such a sport not having been included in the list of approved sports at the cut-off date when the applications were invited and on the basis of which candidates responded, could. not later be introduced to provide eligibility retrospectively to a single candidate. That ''mountaineering'' could be such a sport, was not disputed, but what was urged was that after the, list. of sports for purposes of eligibility under the sports category had been determined and after the selections were made, only in order to accommodate Respondent No. 6 a new sporting activity was included and Respondent No. 6 chosen on that basis. It is also pointed put that ''mountaineering'' was included as an approved sporting activity for,. that year alone .and that it; was promptly dieted in the subsequent year. The Appellant''s contention was that the authorities had clearly acted on the basis: ''show me the man, I will show you the rule.

In M/s. Shri Sitaram Sugar Co. Ltd. and another Vs. Union of India and others, the Supreme Court while considering the economic policy of fixation of price of levy sugar observed:

A repository of power acts ultra vires either when he acts in excess of his power, in the narrow, sense or, when he abuses his power. by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness.

The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it.

In Ramji Dayawala and Sons (P) Ltd. Vs. Invest Import, the Supreme Court while considering the discretion of a Court which may be exercised u/s 34 of the Arbitration Act observed:

Discretion, said Lord Mansfield in R. v. Wlkes (1770) 98 ER 327, ''when applied to a Court of justice, means sound discretion guided by law. It must be Governed by rule, not by humor, it must not be arbitrary, vague and fanciful, but legal and regular'' (see Craies on Statute Law, 6th Edn., p. 273).

In Rohtas Industries Vs. S.D. Agarwal and Others, the Supreme Court while considering the power of. the Central Government under the provisions of Companies Act to investigate into affairs to the Company observed:

As long back as 1891 the House of Lords was called upon to consider the scope of some of the provisions of the Licensing. Act, 1872 which gave discretion to the Magistrates in granting certain licenses. The question for decision was as to the nature of the discretion granted. Lord Halsbury L.C sneaking for the House observed in Susannah S. Jup. v. Wakerfield 1891 AC 173 at. 179:

''discretion'' means when it is said that something is to be done within the discretion of the authorities that something is to be done according to the rules of reason and justice, not according to private opinion: Rook''s case according to law, and not humour. It is to be, not arbitrary, vague and fanciful, but legal and regular.

The apex Court further cited with approval the decision of House of Lords in Padfield v. Minister of agriculture Fisheries and Food 1968 (1) A.E.R. 604.

The supreme Court further held:

In Roncarelli v. Duplessis (1959) SCR (Can LR) 121 while dealing with the discretionary power of the Quebec Liquor Commission to cancel a liquor licence this is what Rand J. observed:

A decision to deny or cancel with a privilege lies within the ''discretion'' of the Commission ; but that means that decision is to be based upon a weighing of considerations pertinent to the object of the administration.

In public regulation of this sort there is no such thing as absolute and untrammeled ''discretion'' that is that action can be taken on any ground or for any reason that can be suggested to mind of the administrator; no legislative Act can. without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however, capricious or irrelevant, regardless of he nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions, ''Discretion'' necessarily implies good faith in discharging public duty; there is always- a perspective within which a statute is intended to operate ; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Could an applicant be refused a permit because he had been born in another province, or because of the colour of his heir ? The ordinary language of the legislature cannot be so distorted''. In particular we would like to emphasize the observation that ''there is always a perspective within which a statute is intended to operate.

From the decisions of Supreme Court of India thus it is clear that it was obligatory on the part of Respondents to categorically say as to what is meant by such extra-curricular activities. As noticed hereinbefore, in Y. Srinivasa Pao''s case( Supra), the Supreme Court clearly held that any fixation of any criteria without any guideline would be arbitrary and thus violative of Article 14 of the Constitution of India in the following terms: So far the interview fixed as the sole criterion in the present case according to the impugned judgment is concerned, the same in absence of a guideline leaves the matter to the whims of the individual officer holding the interview. The exercise of such unbridled power, will be clearly violative of Article 14.

The importance of maintaining all records: while taking the interview has been emphasized by the Supreme Court in different cases, it is no doubt true that the question of allotment of marks at the interview would depend upon the nature of interview namely as to whether the same is for grant of appointment or for selection of candidates for admission in any courses of studies or for grant of contract etc. In the matter of appointment, a different criteria may be adopted re-Sating to fixation of marks depending upon the nature of the job.

In Ajay Hasia (Supra) it was held:

We must, therefore, proceed on the basis that the interview of each candidate did not last for more than 2 or 3 minutes on an average and hardly any questions were asked having bearing on the relevant factors. If that be so, the oral interview test must be held to be vitiated and the selection made on the basis of such test must be held to be arbitrary, and it further held:

We think that it would also be desirable if the interview of the candidates is tape-recorded, for in that event there will be contemporaneous evidence to show that were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee.

In D.V. Bakshi and Ors. (Supra) the Apex Court held:-- As observed in Lila Dhar case a written examination assesses the man''s for a proper selection. !f an oral test is, therefore, a ''must'' as in this case, a heavy responsibility is cast on the examiners to maintain a proper record of the oral test in respect of each candidate and marks must preferably be assigned under each head considered relevant to evaluate the candidate. Once this care is taken the element of subjectivity will be largely checked and the marks assigned under different heads at the oral test will more or less faithfully reflect the fitness of the candidate. In the matter of evaluation some degree of honest error must be countenanced. However, if there is any allegation of nepotism or favoritism the same can be checked with reference to the record so maintained. Since the oral test is a highly subjective one and is susceptible to misuse, the degree of proof required for bringing home the charge of nepotism or favoritism may be light, it further observed:

That is why we have said that a heavy responsibility lies on those examining the candidates at the interview to ensure that proper record is maintained so that there is no room for suspicion in the minds of the unsuccessful candidates that the result of the oral test is tainted with-bias'' for or against any candidate because even light proof in support of the charge may upset the result of the oral test as a whole of quo a candidate, as the case may be.

However, I may notice that a long standing practice of the interview being the soie criteria for judging a candidate by the Public Service Commission, has been upheld by the Apex Court in Anzar Ahmed Vs. State of Bihar and others, I may further note that the Supreme Court recently in A.P. State Financial Corporation v. CM. Ashok Raju W., has held that allotment of 20% marks for the purpose of managerial post is valid.

In this case, as noticed hereinbefore, no exception can be taken to some of the criteria�s. Even for the purpose of verification of the documents furnished by the applicants and for other purposes an interview may also to be held but the Oil Selection Board cannot refuse to take into consideration the documentary evidences nor can it solely select a candidate only on the basis of performance of the interview particularly in a case where the performance of a candidate is to be judged vis-a-vis the performance of an authorised representative of a body corporate.

It is true that in Chinmoy Sarkar and etc. v. Md. Shaniat Hossain and etc. (Supra) as also in the decision of an unreported judgment of A.P. State Financial Corporation Vs. C.M. Ashok Raju and others, a division bench of this Court have upheld the validity of selection of such selection board but it must be remembered that a decision is an authority for a point which it decides and not what can logically be deduced there from.

In the The Regional Manager and Another Vs. Pawan Kumar Dubey, the Supreme Court observed:

(3) Supra It is the rule deducible from the application of law to the facts and circumstances of a case which constitutes its ratio decidendi and not some conclusion based upon facts which may appear to be similar. One additional or different fact can make a world of difference between conclusions in two cases even when the same principles are applied in each case to similar facts.

It is also now well known that a decision is not an authority for the proposition which was not canvassed before it.

Reference in this connection may be made to Good Year Ltd. v. State of Haryana and Ors. 1990 (2)S.C.C71.

In this view of the matter, in my opinion, the decision of the Selection Board cannot be upheld inasmuch as unique have been treated to be equals while considering the relevant merits of the candidates. The Selection Board has taken into consideration irrelevant factors not germane for the purpose of arriving at a correct decision. It failed to take into consideration the relevant facts. From the records, it is evident that it posed unto itself a wrong question so as to enable it to be acquainted with the relevant facts and thus committed a misdirection in law.

It is true that the Petitioner appeared in the interview on receipt of a notice as contained in Annexure ''C to the writ application but a bare perusal thereof would show that therein the Petitioner was asked to produce original documents appended with its application as also further documents. It was not stated therein that its representative would be subjected to a viva-voce test.

In this; view of the matter it is not a case where the principle of an estoppel may be made applicable as against the Petitioner. Moreover the Petitioner having questioned the very basis of selection on the touch stone of Article 14 of the Constitution of India, such a question being of great importance cannot be refused to be raised by invoking the principle of an estoppel. It is also pertinent to note that in the advertisement it has not been stated that interview would be the sole criteria for judging the merits of the candidates.

In Hoshiar Singh v. State of Haryna (Supra) upon which reliance has been placed by Mr. Neogi, it has been held that the Respondents connot go beyond the stipulation expressed in the advertisement.

There connot be any doubt whatsoever that this Court cannot substitute its opinion to that of the Selection Board unless its decision comes within one or the other criteria�s laid down by the Supreme Court of India in Tata Cellulafs case ( Supra). In view of the discussions made here in before. I am of the opinion, the selection of the Respondent No. 6 must be held to have suffered from the vices of both irrationality as also procedural irregularity.

In Union Public Service Commission v. Shri Hiranyalal Dev and Ors. (Supra), the Supreme Court was concerned with a service matter, even in that case it observed:

Besides the Tribunal has also committed an error in taking the view that the law enjoined the Selection Committee to record the reasons and failure to do so would vitiate the selection.'' It also observed:

It cannot be gain said that the Selection Committee could not have taken into consideration the adverse remarks entered in the records which had not been communicated to the Respondent No. 1, and in any case could not have taken into consideration these remarks which were subsequently set aside by the State Government. The legal effect of the setting aside of the adverse remarks would be that the remarks must be treated as non-existent in the eye of law. The Selection Committee had, therefore, fallen in error in taking into-account these adverse remarks which in try eye of law did not exist and which could not have been lawfully taken into consideration.

in Dalpat Abasaheb Soiunke v. Dr. B.S. Mahayon (Supra) wherein it has been held:

It is not the function of the Court to hear appeals over the decisions of the Selection Committees and to scrutinize the relative referees of the candidates. Whether a Candidate is fit for a particular post or not has to be decided by the duly constituted Selection Committee which has the expertise on" the subject. The Court has no such expertise. The decision of the Selection Committee can be interfered with only oh limited grounds, such as illegality or patent material irregularity in the constitution of the committee or its procedure vitiating the selection, or proved mala fides affecting the selection etc..

In Indian Airlines Corporation v. Capt. K.C, Shukla and Ors. (Supra) wherein the Supreme Court held:

So long as the rules are not violative either of the regulations or the Act or arbitrary the Courts will have little jurisdiction to interfere with it. Since in this case promotion or selection to the p6st of Deputy Operations Manager is governed by Rules they appear to be valid and do not suffer from any infirmity.

It is, however, difficult to accept the contention of Mr. Mukherjee to the effect that the Petitioner being a co-operative Society ipso facto was entitled it to obtain the dealership.

In M.P. Pation Vikreta Sangh Society v. State of M.P (Supra) a scheme was framed to give preference to the Consumers'' Co-operative Societies. It held:

Consumers'' Co-operative Societies form a distinct class by themselves. Benefits and concessions granted to them ultimately benefit persons of small means and promote social justice in accordance with the directive principles. There is an intelligible differentia between the retail dealers who are nothing but traders and consumers'' Co-operative societies. The position would have been different if there was a monopoly created in favour of the latter. The scheme only envisages a rule of preference. The formulation of the scheme does not exclude the retail traders from making an application for appointment as agents. It cannot be said that the State Government was not actuated with the best of intentions in bringing about a change in the system of distribution of foodstuffs through fair price shops. If further observed:

There is on fundamental right in any one to be appointed as an agent of a fair price shop under a Government Scheme.

In Sarkari Sasta Anaj Vikreta Sangh, Tehsil Bem-etra and Ors. v. State of Madhya Pradesh and Ors. (Supra) again there had been a scheme for grant of preference to the Cooperative Societies in the matter of distribution of an essential commodities through fair price shops. In that context the Supreme Court held:

No one can doubt the positive and progressive role which cooperative societies are expected to and do play in the economy of our country and most surely, in the fair and effective distribution of essential articles of food. There certainly was a reasonable classification and a nexus with the object intended to be achieved, which was a fair and assured supply of rations to the consumer. The fundamental right of traders like the Petitioners to carry on business in foodstuffs was in no way affected. They could carry on trade in foodstuffs without hindrance as dealers; only, they could not run fair price shops as agents of the Government. No one could claim a right to run a fair price shop as an agent of the Government. All that he could claim was a right to be considered� to be appointed as an agent of the Government to run a fair price shop. If the Government took a policy'' decision to prefer cooperative societies for appointment as their agents to run fair price shops, in the light of the frustrating and unfortunate experience gathered in the last two decades, we do not see how we can possibly hold that there was any discrimination.

In this case, however, no preference as such was to be given to the co-operative society. The scheme merely envisages that the co-operative societies may be given preference; other things being equal. In that view of the matter, the claim of the Co-operative Society arises if the other things are equal. It cannot get a preference only because of its being a Co-operative Society.

In the Gujarat State Sales Tax Non-Gazetted Employees'' Association v. The State of Gujarat and Anr.(Supra) P.D. Desai, J. (as His Lordship then was) observed:

The proviso, therefore, engrafts a rule of preference on the substantive provision had it required the appointing authority to give a preference, while considering direct recruits for appointment to the concerned post, to a candidate of the Commerce Faculty having accountancy as the subject, or to a Chartered accountant or to a person who possess a qualification recognised to be equivalent to such examination by the State Government. It is required to be borne in mind, however, that the preference is to be given in making appointment by direct selection and that though the preference clause does not say so in so many words, the question of giving preference can only arise when Graduates from the other faculties and the faculty of commerce are found to be to equal merit. This is implicit in the rule of preference and will have to be read into it in order to give it a reasonable construction.

The question which now arises for consideration in this application is as to whether the Selection Board was required to record reasons. In my opinion, it is not required to do so. M/s. Travancore Rayons Ltd. v. The Union of India and Ors. (Supra), the Supreme Court held: When judicial power is exercised by an authority normally performing executive or administrative functions, the supreme Court insists upon disclosure of reasons in support of the order on two grounds: one, that the party aggrieved in a proceeding before the High Court or the Supreme Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other that the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive authority invested with the judicial power

The exercise of power of Selection Board is not a judicial or quasi-judicial function. In Mahabir Prasad Santosh Kumar v. State of U.P. (Supra) the Supreme Court was considering the exercise of quasi-judicial power of an appellate authority under U.P. Sugar Dealers'' Licensing Order(1962) and in that context it held that the authority must give reasons while dismissing the appeal.

In Star Enterprises and Ors. v. City and Industrial Development Corporation of Maharashtra Ltd. and Ors. (Supra) the fact of the matter was absolutely different. The highest offer in response of invitation was rejected, and in that context the Supreme Court observed:

The submission of Mr. Dwivedi, therefore, commends itself to our acceptance, namely, that when highest offers of the type in question are rejected reasons sufficient to indicate the stand of the appropriate authority should be made available and ordinarily the same should be communicated to the concerned parties unless there be any specific justification not to do so.

In this case, the reasons for accepting the grant of dealership to the Respondent No. 6 has been stated in the Counter Affidavit and even the records have been produced. There is also no law which mandates the Board to assign reasons. It is not disputed that the said dealership was granted as the Respondent No. 6 obtained highest marks. The same, in my opinion, serves the requirement of law.

In S.N. Mukherjee v. Union of India (Supra) the Supreme Court was dealing with the matter relating to the grant of punishment to the Petitioner thereof in a Court-martial proceeding in terms of the Arms Act, 1950. It is in that context held that requirement to record reasons should govern the decisions of administrative authority exercising quasi judicial functions irrespective of the fact that, where the decision is subject to appeal, revision or judicial review. For grant of dealership, the Oil Selection Board in stricto sensu does not exercise judicial or quasi judicial function.

In Union Public Service Commission v. Shri Hiranyalal Dev and Ors. (Supra) the Supreme Court held that Selection Committee is not required to record the reasons.

In National Institute of Mental Health & Neuro Sciences v. Dr. K. Kalyan Raman and Ors. (Supra) the Supreme Court held that giving of reasons for decision is different from, and in principle distinct from the requirements of procedural fairness. Procedural fairness is the main requirement of the administrative action. The fairness in procedure in the administrative action ought to be observed. The selection Committee cannot be an exception of the principle. It must take a decision fairly without being guided by extraneous or irrelevant consideration.

The decision of the Supreme Court in Shankarsah Dash v. Union of India (Supra), upon which reliance has been made by Mr. Neogi, it was held that inclusion of a candidate''s name in the merit list does not confer any right to be selected.

In R. v. Higher Education Funding Council, ex parte Institute of Dental Surgery 1994(1) A.E.R. 651 ''it has been held:

But from the tenor of the decisions principles will come, and if the common law''s pragmatism has a virtue it is that these principles are likely to be robust. At present, however, this Court cannot go beyond the proposition that, there being no general obligation to give reasons, there will be decisions for which fairness does not demand reasons. It was further held:

It follows that an apparently inexplicable decision may be a sufficient but is not a necessary condition for requiring reasons; it may equally be fair to require them on other grounds. It is arguable that since the decision in Doody''s case the role of the inexplicable decision is to be regarded as evidential rather than legal, bearing principally on the discretionary decisions whether to grant leave and what her to grant relief by pointing to the need for reasons in the particular case. But we prefer the view that in the present state of the law there are two classes of ease now emerging: those case, such as Doody''s case, where the nature of the process itself calls in fairness for reasons to be given; and those such as Cun? Ningham''s case, where (in the majority view) it is something peculiar to the decision which in fairness calls for reasons to be given. This does not mean that differing tests of fairness are to be applied; only that, as always, the requirements of fairness will vary with the process to which they are being applied. In this context we unhesitatingly reject Mr. Beloff''s submission that the judicial character of the Civil service Appeal Board and the quasi-judicial function of the Home Secretary in relation to life sentence prisoners distinguish the cases requiring reasons from cases of purely administrative decisions such as the present one. In the modern state the decisions pf administrative bodies can have a more immediate and profound impact on people''s lives than the decisions of Courts, and public law has since Ridge v. Baldwin (1963) 2 All ER 66 : (1964) AC 40 been alive to that fact. While the judicial character of a function may elevate the practical requirements of fairness above what they would otherwise be, for example by requiring contentions evidence to be given and tested orally, what makes it ''Judicial'' in, this sense is principally the nature of the issue it has to determine, not the formal status of the deciding body.

There cannot be any doubt that grant of a writ of mandamus is a discretionary remedy. In K. V. Raja-jakshmiah Setty and Anr. v. State of Mysore and Anr. (Supra) the Supreme Court held that a writ of mandamus can be granted. In that case some concession had been shown to other person. The apex Court held:

The state of Mysore might have shown some indulgence to this batch of 63 persons but we cannot issue a writ of mandamus commanding it to do so.

In Dr. Imakant Sarany. State of Bihar and Ors. (Supra) the Supreme Court held that before a writ application is maintainable at the instance of a Petitioner, he must be eligible for being appointed in the post as on the date of the application.

Mr. Mukherjee''s submission that the Petitioner had a legitimate expectation of being appointed is stated to be rejected. No action is maintainable, as is well known, only on legitimate expectation.

In Union of India and others Vs. Hindustan Development Corpn. and others, the Supreme Court stated that the said doctrine of legitimate expectation is being pressed in many cases particularly in contractual matters while canvassing the implications underlying the administrative law, and posed the question who is the expectant and what is the nature of the expectation? And answered as to what are the duties of the administrative authorities while taking a decision in cases attracting the doctrine of legitimate expectation. It observed: Time is a three-fold present: the present as we experience it, the past as a present memory and future as a present expectation. For legal purposes, The expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However, earnest and sincere a wish, a desire or a hope may be and, however, confidently one may look to them to be fulfilled, they by themselves cannot amount to an assert able expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation can not amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or Custom5 or an established procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should be justifiably legitimate and protect able. Every such legitimate expectation does� not by itself fructify into a light and, therefore, it does not amount to a right in the conventional sense.

In Madras City Wine Merchants'' Association and Another Vs. State of T.N. and Another, it has been held:

From the above it is clear that legitimate expectation may arise:

(a) if there is an express promise given by a public authority ; or

(b) because of the existence of a regular practice which the claimant can reasonably expect to continue ;

(c) such, an expectation must be reasonable.

However, if there is a change in policy or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise.

In Ghaziabad Development Authority and State of U.P. Vs. Delhi Auto and General Finance Pvt. Ltd. and Maha Maya General Finance Co. Ltd. and another, the Supreme Court held:

It is difficult to appreciate how the change of land use of the area in the Master Plan from ''recreational'' to ''residential'' could give rise to a legitimate expectation in a private colonizer owning land in that area that he could construct a housing colony therein simply because he had submitted some plan for approval, when grant of the permission u/s 15 of the U.P. Act is not is not automatic and the statute permitted amendment of the Master Plan by change of the land use even there after. The mere fact that the area was shown originally as meant for recreational use, shows that reversion to the original land use is equally permitted by the statute. No legitimate expectation of the kind claimed by these private colonizers could arise on these facts and in a situation like clearly contemplated by the Statute itself.

In R. v. Secretary of State for Transport, ex parte Richmond upon Thames London Borough Council and Ors. 1994 (1) A.E.R. 577 it has been held:

Mr. Gordon''s submission is that these reference to ''the overriding public interest'' imply that where a public authority has effectively given an assurance that it would continue to apply a policy which it has adopted, there are two conditions which must be fulfilled before it may lawfully change tack: not only that a right to be heard must be accorded to those affected, but also that the change must be justified by reference to ''the overriding public interest''. But this latter condition Would imply that the Court is to be the judge of the public interest in such cases, and thus the judge of the merits of the proposed policy change. Thus understood/ Mr. Gordon''s submission must be rejected. The Court is not the Judge of the merits of the decision-maker''s policy.

In view of my findings aforementioned this writ application succeeds. However, before parting with this case, I would like to make the following observations:

A clear cut policy decision may be adopted by the Indian Oil Corporation specifying the criteria�s for grant of dealership and the requirements therefor so that the Oil Selection Board may take a decision on the basis thereof.

Such criteria�s may specifically be stated in the Advertisement.

In the event any preference has to be given to the Co-operative Society or any other person who may be directed on equal footing, it would be better if particular dealerships are ear-marked for such category so that in future in respect of the such dealership, unequal may not be asked to compete with each other.

Emphasize should always be laid, if any policy decision is taken, on adduction of documentary evidences in support of the respective claims of the applicants. Such documentary evidences may, if necessary, be verified.

The application is, therefore, allowed. Acceptance of tender in favour of the private Respondent by the Respondent No. 2 is set aside.

However, in the facts and circumstances of the case the Indian Oil Corporation or the Oil Selection Board may consider the matter afresh either on the basis of a policy decision which may be adopted by the former or upon taking into consideration the respective merits of the case in the light of the observations made hereinbefore but before doing so it will be open to the Oil Selection Board to ask for any other or further particular(s) or explanation or clarification from all the candidates who had applied pursuant to the said advertisement.

However, in the facts and circumstances of the case, the parties are directed to bear their own costs.