P.R. Sathyabama vs Indian Oil Corporation

E. Padmanabhan, J.—The petitioner prays for issue of a Writ of Declaration declaring that the selection of the fifth respondent for award of

Retail Outlet Dealership for petrol and diesel in respect of Peria Negamam Town, Coimbatore District, pursuant to the selection made on

03.02.2001 by the third respondent is illegal and contrary to the guidelines prescribed by respondents 1 and 2 and consequently, to direct

respondents 1 to 3 to make selections by taking into account the relevant considerations and by adhering to the prescriptions laid down by acting

in a just, fair and reasonable manner.

This Court ordered notice of motion to the respondents. The respondents have been served. Pending Writ Petition, this Court granted interim

injunction for four weeks.

Heard Mr. Mohan Parasaran, Senior Counsel appearing for the petitioner, Mrs. Meera Gupta, Additional Central Government Standing

Counsel for respondent Nos. 1 to 3 and Mr.A.Sankarasubramanian, Counsel for the fifth respondent. None appeared for the fourth respondent.

Respondent Nos.1 and 2 originally called for applications for appointment of Retail Outlet Dealers for sale of petrol and diesel at Periya

Negamam on 18.05.1999. On the earlier occasion, on 26.03.1999, a publication was made in Daily Thanthi inviting applications. The Outlet at

Periya Negamam is reserved only for women. As seen from the terms and conditions of the eligibility, the petitioner, being eligible in all respects,

submitted her application. The petitioner had the advantage of owning a site located in the heart of Periya Negamam Town at Survey No.273/4.

Originally, an outlet was being operated and necessary infrastructure was available. One of the criteria for the selection being preference for

owning a site and considering the location of the land from the point of view of the commercial angle and willingness to transfer the land on

ownership/long lease for Indian Oil Corporation is also a preference for the selection. The petitioner owns a site in the heart of the town at the

commercial centre and therefore, she is entitled to preference. The petitioner appeared for the selection before the third respondent on 03.02.2001

and the third respondent-Board shortlisted three candidates. It is contended that the selection is in total violation of the norms prescribed by

respondents 1 and 2, besides the selection is arbitrary, in that very many conditions and preferences have been ignored or brushed aside. The

selection is wholly illegal and arbitrary. Hence the present Writ Petition challenging the selection. According to the petitioner, respondents 1 to 3,

being instrumentalities of the State, have to act reasonably and fairly and not arbitrarily in the matter of grant largess. The decision to select and

confer LOC to the fifth respondent is vitiated by arbitrariness which is writ large and tantamount to an illegality. The non-selection of the petitioner

is per se illegal and contrary to the guidelines. Preferences as notified when possessed by the petitioner had been brushed aside and the selection of

the fifth respondent is arbitrary and liable to be quashed.

Per contra, respondents 1 and 2, while denying the allegations set out in the affidavit, contended that the third respondent has followed the

detailed guidelines in the manual for selection of dealers/distributors periodically issued by the Ministry of Petroleum and Natural Gas, Government

of India, as amended from time to time in the matter of selection. The guidelines have enough built-in safeguard to ensure fair and suitable selection

of the candidates as dealers. Earlier advertisement was cancelled and re-advertisement has been issued as per the guidelines issued by the Ministry

of Petroleum and Natural Gas. The third respondent-Board conducted interviews after the list of the eligible candidates was finalised by the

concerned oil company. The site offered by the petitioner is only one of the parameters for selection of the candidates for the dealership and it is

not the only guiding factor as averred by the petitioner. For selection of dealer, the advertisement was first released on 18.05.1999. The location

was re-advertised on 16.07.2000 along with the other locations. The location of the site is not the only criteria for suitability for Retail Outlet. The

site being in the heart of town may not be the sole deciding factor for the selection. The dimension of the site, its proximity to consumption centres

and distance from the other retail outlet would also have a bearing on its suitability. The petitioner''s claim that the petitioner is better suited, is a

self-serving allegation and devoid of merits. These allegations and suggestions made by the petitioner are imaginary and it is an attempt to mislead

the Court, besides confusing and factually incorrect. Respondents 1 and 2 prayed for dismissal of the writ petition.

The third respondent, the Chairman of the Dealer Selection Board for Indian Oil Corporation, has filed a counter affidavit. According to the

third respondent, the guidelines prescribed has enough built-in safeguards in order to provide transparent, uniform, fair and faster procedure for

selection of suitable candidates as Dealers and Distributors and to ensure absolute fairness in the selection. The Board is comprised of a retired

Judge of the High Court or a District Judge, besides two other members, one from the concerned Oil company and the other from any other Oil

company, whose ranks shall not be below the rank of a Chief Manager of the concerned Oil Company. During the interview of the candidates, the

third respondent-Board has taken into consideration the best suitability of the candidate for the dealership/distributorship in respect of his/her

personality, business ability, salesmanship, capability to arrange finance, education, general level of intelligence, capability to provide infrastructure

and facility and general management, by awarding marks prescribed in the guidelines in respect of each of those categories. The candidate is

selected on the basis of the highest marks secured among the interviewees and they will be graded as No.1 in the order of merit, the next in the

order graded as No.2 and the third as No.3 There is no arbitrariness or illegality in the selection of the candidates by the third respondent. It is

incorrect to say that the selection was made in a mechanical manner. Field Investigation Report will be conducted initially for the No.1 candidate in

the merit panel. If the candidate is found eligible, Letter of intent (LOI) will be issued to him. If No.1 candidate is found ineligible as a result of the

F.I.R., the matter will be referred to ED/GM by the concerned Oil Company to the Chairman of the DSB who will take a decision regarding

issuance of LOI to the 2nd empanelled candidate. According to the third respondent, the selection has been conducted fairly and there is no

arbitrariness.

The fifth respondent also filed a counter affidavit denying the various averments set out in the affidavit filed in support of the writ petition. The

fifth respondent points out that the site referred to by the petitioner is not suitable, as number of shops have been put up by the petitioner and the

space also had been reduced to 15 cents which is not suitable for running an Outlet. On 26.03.1999, the company called for offers from interested

persons offering sites for locating retail outlet in Periya Negamam town and other places. The fifth respondent''s husband offered his site. The fifth

respondent''s husband wrote a letter to the company agreeing the stipulations. The site was found suitable. The dealership is a full time job. The

petitioner is living at Pollachi which is 15 K.M. away from Periya Negamam, whereas the fifth respondent''s residence is adjacent to the site. The

fifth respondent is always available at the site and she can manage more efficiently. Dealership is a commercial venture and the Oil Company

considers the convenience of the public as well as the advancement of the business. There is no arbitrariness or illegality or bias in the selection of

the fifth respondent or in the norms of the selection.

The point that arises for consideration is:-

Whether the non-selection of the petitioner and selection of the fifth respondent are illegal and arbitrary and liable to be interfered?

The learned Counsel appearing for the respondents placed the file relating selection before the Court. This Court had the benefit of perusing

the selection file. Among twenty candidates appeared for the selection, marks have been awarded by the Committee Members under various

guidelines such as personality, business ability, salesmanship, capability to arrange finance, education, general level of intelligence, capability to

provide infrastructure facilities, general assessment. The three members of the Committee interviewed the candidates and selected the fifth

respondent R.V. Sathiyavathy who scored the highest marks, second being S.Padmavathi and third being P.R.Sathyabama, who is the petitioner

herein. It has analysed the comparative merit of the petitioner, who has appeared for the selection. This Court does not find any illegality warranting

interference with the selection of the candidates or awarding of marks by the selection committee.

On a perusal of the selection file and the awarding marks by the selection committee, this Court finds that only material aspects and criteria, as

prescribed, have been taken into consideration. The three Committee Members have awarded marks.

This Court sitting in writ jurisdiction cannot substitute its views to the decision of the selection committee. The Selection committee consists of

experts on the field. Law on the subject is well settled. In Common Cause, A Registered Society v. Union of India ( {1996} 6 S C C 530, the

Supreme Court has held as follows:-

The orders of the Minister reproduced above read: ""the applicant has no regular income to support herself and her family"", ""the applicant is an

educated lady and belongs to Scheduled Tribe community"", ""the applicant is unemployed and has no regular source of income"", ""the applicant is an

uneducated, unemployed Scheduled Tribe youth without regular source of livelihood"", ""the applicant is a housewife whose family is facing difficult

financial circumstances"", etc. etc. There would be literally millions of people in the country having these circumstances or worse. There is no

justification whatsoever to pick up these persons except that they happen to have won the favour of the Minister on mala fide considerations. None

of these cases fall within the categories placed before this Court in Centre for Public Interest Litigation v. Union of India, 1995 Supp (3) SCC 382

but even if we assume for argument sake that these cases fall in some of those or similar guidelines the exercise of discretion was wholly arbitrary.

Such a discretionary power which is capable of being exercised arbitrarily is not permitted by Article 14 of the Constitution of India. While Article

14 permits a reasonable classification having a rational nexus to the objective sought to be achieved, it does not permit the power to pick and

choose arbitrarily out of several persons falling in the same category. A transparent and objective criteria/procedure has to be evolved so that the

choice among the members belonging to the same class or category is based on reason, fair play and non-arbitrariness. It is essential to lay down

as a matter of police as to how preferences would be assigned between two persons falling in the same category. If there are two eminent

sportsmen in distress and only one petrol pump is available, there should be clear, transparent and objective criteria/procedure to indicate who out

of the two is to be preferred. Lack of transparency in the system promotes nepotism and arbitrariness. It is absolutely essential that the entire

system should be transparent right from the stage of calling for the applications up to the stage of passing the orders of allotment. The names of the

allottees, the orders and the reasons for allotment should be available for public knowledge and scrutiny. Mr. Shanti Bhusan has suggested that the

petrol pumps, agencies etc. may be allotted by public auction - categorywise amongst the eligible and objectively selected applicants. We do not

wish to impose any procedure on the Government. It is a matter of policy for the Government to lay down. We, however, direct that any

procedure laid down by the Government must be transparent, just, fair and non-arbitrary.

Applying the test laid down to the facts of the case on hand, it has to be pointed out that in the present case, the selection of the fifth

respondent and the non-selection of the petitioner in no way suffer with illegality or arbitrariness, nor any guidelines prescribed in this subject is

violated, nor any stipulations prescribed for appointment of dealers have been violated.

On perusal of the entire file of the third respondent, this Court holds that the selection of the fifth respondent is not liable to be interfered with

and consequently, Writ Petition is dismissed. W.M.P.No.8568 of 2001 is also dismissed. No order as to costs.