Public interest litigation and discretionary allotments: prior guidelines did not validate earlier arbitrary dealership grants.

Prior guidelines framed for future discretionary allotments of petroleum and LPG/SKO dealerships did not validate earlier allotments already made, and public interest litigation could still examine their legality. Constructive res judicata and Order II Rule 2 were treated as inapplicable in this context because PIL is not governed by the same inter partes rigidity and the High Court had been directed to decide the pending challenges on merits. Individual notice and hearing to the affected allottees satisfied the purpose of Order I Rule 8. Post-allotment verification by the oil company could not cure an arbitrary ministerial exercise of discretion, and no equitable or prospective-protection principle was applied to save the allotments.

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Issues: (i) Whether the earlier judgment laying down guidelines for future discretionary allotments of petroleum dealerships and LPG/SKO dealerships amounted to tacit approval of allotments already made; (ii) whether constructive res judicata or Order II Rule 2 barred the challenge to prior allotments in public interest litigation; (iii) whether the review judgment in the related matter overruled the earlier decision so as to prevent scrutiny of the allotments; (iv) whether non-issuance of notice under Order I Rule 8 vitiated the High Court proceedings; (v) whether verification by the oil company could substitute for a proper exercise of discretion by the Minister; and (vi) whether equitable considerations or the later Haryana land-allotment principle required protection of the allotments.

Issue (i): Whether the earlier judgment laying down guidelines for future discretionary allotments of petroleum dealerships and LPG/SKO dealerships amounted to tacit approval of allotments already made.

Analysis: The earlier judgment was confined to framing norms for future exercise of discretion and did not decide the legality of past allotments. The later public interest litigation specifically concerned arbitrary allotments already made, and the Court had previously directed the High Court to examine those allotments in accordance with law. The subsequent cancellation of allotments in the later public interest matter showed that no implied approval had been granted to the earlier discretionary grants.

Conclusion: The earlier judgment did not confer tacit judicial approval on prior allotments, and the challenge to those allotments remained open.

Issue (ii): Whether constructive res judicata or Order II Rule 2 barred the challenge to prior allotments in public interest litigation.

Analysis: The doctrine of constructive res judicata is rooted in adversarial litigation, whereas public interest litigation serves a wider public purpose and is not governed with the same rigidity. The Court relied on the nature of public interest litigation, the absence of inter partes adjudication, and the express direction previously issued to the High Court to examine the pending writ petitions on merits. The earlier proceedings did not bar the later scrutiny of illegal allotments, nor did the related observations in the review matter alter that position.

Conclusion: Constructive res judicata and Order II Rule 2 did not bar the High Court from examining and cancelling the allotments.

Issue (iii): Whether the review judgment in the related matter overruled the earlier decision so as to prevent scrutiny of the allotments.

Analysis: The review judgment was concerned with the criminal prosecution and exemplary damages directions against the Minister, not with the validity of the individual allotments. The reference to overruling did not extend to the earlier direction requiring the High Court to decide the legality of the allotments. The later review decision therefore had no bearing on the merits of the allotments under challenge.

Conclusion: The review judgment did not overrule the earlier directions in a manner that barred the High Court's scrutiny of the allotments.

Issue (iv): Whether non-issuance of notice under Order I Rule 8 vitiated the High Court proceedings.

Analysis: Each affected allottee was individually noticed, allowed inspection of the relevant files, and heard before any final order was passed. The purpose of Order I Rule 8 is to secure notice and hearing to persons likely to be affected, and that object was achieved through individual notice in each case. In the circumstances of public interest litigation, the absence of a formal Order I Rule 8 procedure did not cause prejudice or vitiate the proceedings.

Conclusion: The proceedings were not vitiated for want of notice under Order I Rule 8.

Issue (v): Whether verification by the oil company could substitute for a proper exercise of discretion by the Minister.

Analysis: Verification by the oil company operated only at the stage of final implementation and could not cure a flawed or unsupported exercise of ministerial discretion at the stage of allotment. The Court distinguished between post-allotment verification and the Minister's obligation to base his discretion on relevant material. Where the allotment was made without material, inquiry, or verification, the subsequent company-level verification could not validate the initial arbitrary decision.

Conclusion: The oil company's verification did not substitute for a lawful exercise of discretion by the Minister, and the cancellations were upheld.

Issue (vi): Whether equitable considerations or the later Haryana land-allotment principle required protection of the allotments.

Analysis: The Court declined to extend equitable protection to beneficiaries of allotments found to be arbitrary and based on extraneous considerations. The later Haryana land-allotment ruling on prospective application concerned a different factual and legal setting, where prior allotments had been made under an existing regime later tightened by a subsequent decision. That principle did not apply where the allotments under scrutiny had been made without governing norms and were found invalid on merits.

Conclusion: No equitable relief was warranted, and the Haryana land-allotment principle did not protect the allotments.

Final Conclusion: The Court upheld the High Court's cancellation of the discretionary allotments, found no procedural or doctrinal bar to such scrutiny, and declined to interfere on equitable or prospective-application grounds.

Ratio Decidendi: In public interest litigation, prior guidelines for future conduct do not validate earlier arbitrary allotments, and doctrines such as constructive res judicata cannot defeat judicial scrutiny where public property has been allotted on irrelevant or extraneous considerations without a lawful exercise of discretion.

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