Plot re-allotment between two oil PSUs without notice-status quo ante restored after earlier direction recalled, rival claim dismissed

Government re-allotted a plot earlier allotted to one public sector oil company to another without notice, and later re-allotted it back, again without notice, raising breach of natural justice. The SC held that where its earlier direction underlying the re-allotment was subsequently recalled, restitution and restoration of status quo ante became mandatory on admitted facts; the party benefiting from the withdrawn order could not retain an advantage, especially after regaining its original plot. Applying the exception in S.L. Kapoor, the Court treated the position as one where only one lawful outcome was possible despite lack of notice. The application seeking restoration to the original allottee was allowed and the rival application was dismissed.

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Issues Involved:
1. Breach of principles of natural justice.
2. Restoration of status quo ante.
3. Discretion of the court under Article 32 and Article 226.

Summary:

1. Breach of Principles of Natural Justice:
The dispute arose when the Land & Development Officer allotted a plot at San Martin Marg to Bharat Petroleum Corporation (BPC) without notifying Hindustan Petroleum Corporation Ltd. (HPCL) or its dealer, the applicant. This allotment was based on a Supreme Court order dated 28.4.1997, which was later recalled on 7.4.1998. Consequently, the plot was restored to HPCL without notifying BPC, leading to claims of violation of natural justice by both parties.

2. Restoration of Status Quo Ante:
The Supreme Court's order dated 7.4.1998, which recalled its earlier order, necessitated the restoration of the status quo ante. The Government's subsequent order dated 10.3.1999 restored the San Martin Marg plot to HPCL, which was initially allotted to it on 10.7.1996. This restoration was challenged by BPC on the grounds of lack of notice, but the court emphasized that restitution was mandatory to undo the effects of the recalled order.

3. Discretion of the Court under Article 32 and Article 226:
The court deliberated whether it was bound to declare an order void solely due to a breach of natural justice or if it could refuse relief based on the facts. The court cited precedents where relief was refused despite breaches of natural justice, emphasizing that the court's discretion could be exercised if no de facto prejudice was shown or if restoring the earlier order would perpetuate another breach of natural justice. The court concluded that on the admitted and indisputable facts, it was mandatory to restore the status quo ante, thus dismissing BPC's IA and allowing the applicant's IA 481.

Conclusion:
The court held that HPCL should retain the San Martin Marg plot, and BPC could not claim both the Ridge and San Martin Marg plots. The decision was based on the principle of restitution and the lack of de facto prejudice to BPC, aligning with the exception laid down in S. L. Kapoor v. Jagmohan.

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