TaxTMI 
TaxTMI 
1996 (9) TMI 646
X X X X Extracts X X X X
X X X X Extracts X X X X
....ol and Patronage Flow Together". The solicitor general who was present in Court, took notice of the news item and stated that he would have the matter examined in the Ministry concerned and file an affidavit giving Ministry's response to the news item. The news item, inter alia, stated as under: Not only the relatives of most of the officials working for Captain Satish Sharma but even his own driver and the driver of his additional Private Secretary have been allotted a petrol pump and a gas agency respectively. The wives of two clerks and a stenographer in the Ministry have similarly been allotted petrol pumps. Some of these allotments have been made from the discretionary quota with the Petroleum Minister while others have been made through an ostensibly objective selection process undertaken by the Oil Selection Boards (OSBs).... A Mr. Poda Rajshekar, a relative of Mr. G. Gurusharan, Private Secretary to Captain Sharma has been allotted a petrol pump at Banjara Hills, Hyderabad out of the Minister's discretionary quota taking pity on the "financial circumstances that the family finds itself in. Ms. Madhuri Safaya, a relation of the Additional Private Secr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....OSB, West Bengal), Mr. R.S. Nautiyal (Member OSB, Punjab), and Mr. Harbanslal Gupta (member OSB, Haryana). Two relations of Mrs. Satya Bahen (Member OSB, Haryana)were allotted a gas agency in Etah and a petrol pump at Itmadpur near Tundla, respectively. The son of a former Home Minister who is currently a Cabinet Minister; the son of a present Minister of State from the North East; the brother-in-law of former Janata Dal office-bearer and now a Congressman from Eastern UP; the of a Dalit leader who was with the late H.N. Bahuguna at one time and is now in the Congress; the son of a former Congress Councillor of the Municipal corporation of Delhi; the wife of an ex-Congress MP from the UP hills; the wife of a prominent Dalit leader in the Opposition and several political hacks from Amethi are among the hundreds who have been gifted petrol pumps or gas agencies during the tenure of Captain Satish Sharma as the Petroleum Minister. Mr. Vijay L. Kelkar, Secretary in the Ministry of Petroleum and Natural Gas, Government of India, filed affidavit dated October 9, 1995. The relevant part of the affidavit is as under: It may be relevant to point out here that under the approved Guideli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the son of a present Minister of State from North-East, has been allotted a petrol pump,... It is correct that the said allottee is the son of a Minister namely, Shri K. Hollahan, in the State Government of Nagaland. B. ALLOTTEES SAID TO BE RELATED TO THE MEMBERS OF OSBs OR THE MEMBERS THEMSELVES. (i) With reference to the allegation that Shri Syed Shaukat Hasan Abidi is the son of Justice S.H. Abidi (retd.), who is the Chairman of the OSB for Uttar Pradesh.... Discretionary allotment was made in favour of the applicant in January, 1995. It is correct that the said allottee is the son of the said Chairman of OSB for U.P. (ii) With reference to the allegation that Shri Shiv Balak Passi is a member of the OSB for Madhya Pradesh and he is himself an allottee from discretionary quota,.... A discretionary allotment was sanctioned in his favour in December, 1994. It is correct that Shri Passi is a Member of the OSB for Madhya Pradesh. (iii) With reference to the allegation that the allottee, Shri Pradeep Kumar, is the son of Shri Krishna Swaroop who is a Member of OSB for Delhi and Chandigarh,.... It is correct that the allottee is the son of the said Shri Krishna Swaroop. (i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Secunderabad was sanctioned to Shri Rajasekhar on compassionate grounds. It has been ascertained that the said allottee is a relative of the said Shri Gurucharan. (iii) With reference to the allegation that Ms. Madhuri Safaya is a relative of Shri B.N. Safaya, Additional Private Secretary to the Minister, to whom a Retail Outlet has been allotted,.... It has been ascertained that she is related to the said Shri B.N. Safaya. (iv) With reference to the allegation that Ms. Monica Malla is also related to Shri B.N. Safaya,.... A Retail Outlet was allotted to her in November, 1994 out of discretionary quota. It has been ascertained that the said Ms. Malla is related to the wife of Shri B.N. Safaya. (v) With reference to the allegation that the allottee, Mrs. Daya Rani, is the wife of Shri H.R. Verma, Personal Assistant to the Additional Private Secretary to the Minister, Shri B.N. Safaya,.... It is correct that the allottee is the wife of Shri H.R. Verma. (vi) With reference to the allegation that Mrs. Vijaya Nair, who has been sanctioned a Retail Outlet, is that the wife of Shri D.V. Pillai, Additional Private Secretary to the Minister of State,.... It has been ascertained t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Sharma) Minister of State Thereafter, the matter was processed in the office and in one of the notes by an officer of the Ministry it was mentioned that the allottee "is son of Shri Buta Singh, Minister of Civil Supplies". No one took notice of this fact and the allotment order was issued. 4. In all the cases discussed hereinafter the pattern of allotment and the method and procedure followed was the same as in Sarbjot Singh's case. 5. Benjamin K. Hollohon stated in his application that he was an educated unemployed youth and also active party worker in the area. He belonged to scheduled tribe from Nagaland State. He requested in the application for allotment of petrol pump in Purana Bazar area of Dimapur town, Nagaland. The application was sent to Captain Satish Sharma by Mr. K. Hollohon, Minister, Industry and Commerce, Nagaland (Father of the applicant) along with a d.o. letter which reads as under: My dear Capt. Satish Sharma, Kindly recall our discussions of date regarding allotment of one retail outlet petrol pump (petrol & Diesel) in the Purana Bazar area of Dimapur town in Nagaland in favour of my son Benjamin K. Hollohon. As you may be aware, tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ollowing order: Office of the Minister of State (P&NG) ************ Placed below is an application of Shri Syed Hasan Shaukat Abidi for allotment of a Retail Outlet for MS-HSD. The applicant has stated that he has completed his post Graduation in Business Administration and has not been able to find any suitable employment. The applicant has also stated that he has no other source of income and is dependent on his parents for sustenance. Submitted for kind orders. Sd/- (G. Gurucharan) PS to MOS (P&NG) 16/12 Minister I have examined the application carefully. The applicant is a professional qualified man without any regular employment. The applicant has no other source of income and is entirely dependent on his parents for support and sustenance. The case deserves sympathetic consideration. Therefore, a Retail Outlet for MS-HSD at Fatehpur (80 Km. Mile Stone) in Uttar Pradesh is allotted to Shri Syed Hasan Shaukat Abidi r/o 50/1, Dariyabad, Allahabad, Uttar Pradesh. Orders may be issued accordingly. Sd/- (Capt. Satish Sharma) Minister of State It is obvious from Mr. Kelkar's affidavit that Syed Hasan Shaukat Abidi is the son of justice S.H. Abidi (ret....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Minister I have examined the application carefully. The applicant is a young man from Scheduled Caste Community with no source of regular income. The case deserves sympathetic consideration. Therefore, a Retail Outlet for MS-HSD in the Union Territory of Delhi is allotted to Shri Pradeep Kumar, r/o 18/7, Punjabi Bagh Extension, New Delhi - 110 026. Orders may be issued accordingly. Sd/- (Capt. Satish Sharma) Minister of State While processing the order, noting on the file is as under: Reference notes on pre-page. MOS has sanctioned a retail outlet dealership at Delhi on compassionate grounds to Shri Pradeep Kumar who is belonging to SC Category. He has stated in his application vide p-1/c that he is appearing in BA final year. He is son of Shri Krishna Swaroop member of OSB, Delhi. The allowances and perks of the Member of OSB exceed ₹ 5000 per month. 2. However, in view of the sanction by MOS, file is put up with a fair sanction letter for signature, if approved. Sd/- 27/6 Allotment of a dealership to the son of a sitting Member of the OSB will invite adverse criticism. It will also create an avoidable impression that govt. is influencing the OSB in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rdingly. Sd/- (Capt. Satish Sharma) Minister of State While processing the Minister's order the office put up the following note on the file: Ref. note above. Sh. G.A. Mir, has furnished his bio-data vide pp 3-4/C. In his bio-data he has stated that he working as Member of Oil Selection Board and is getting ₹ 250 per sitting of the Board as honorarium. 2. In view of the above, file is put up for orders whether we may issue sanction to Oil Company for award of RO dealership, to Sh. G.A. Mir as per sanction letter placed below if approved. Despite the above quoted note, the allotment order was issued. Mr. Kelkar in his affidavit has stated that Shri Mir is a member of the Oil Selection Board for Delhi and Chandigarh. 9. Mrs. Neena Nautiyal addressed a three lined application to the Minister. It is stated in the application that she is an educated lady and belong to Scheduled Tribe Community. Being an unemployed, she wished to install a retail outlet in the Union Territory. Delhi. The following order was passed by the Minister: Office of the Minister of State (P&NG) ******* Placed below is an application of Smt. Neena Nautiyal for allotment of a Retail Outle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ucharan) PS to MOS (P&NG) 22/X/93 Minister I have examined the application carefully. The applicant is a graduate in Production Engineering and is without any regular employment. The case deserves sympathetic consideration. Therefore, a Retail Outlet for MS-HSD is allotted to Shri Arun K. Gupta, s/o Shri Harbans Lal r/o H. No. 68, Sector 8-A, Chandigarh at Sector-20 C, Chandigarh. Orders may be issued accordingly. Sd/- (Capt. Satish Sharma) Minister of State While processing the above order, Mr. S.K. Singh, Under Secretary in the Ministry wrote on the file as under: A retail outlet dealership has been allotted to Shri Arun Kumar Gupta s/o Sh. Harbans Lal, At Chandigarh under discretionary powers of Govt. vide MOS's order at p-l/n and Government sanction at p-2/c. 2. Since the allottee has not mentioned anything about his father and since a similar named person is working as Chairman of one of the Oil Selection Boards, IOC was asked to check the detail from the allottee. A report now received from IOC is placed at pp 5-3/c for perusal. It may be seen the reform that the father of the allottee Shri Harbans Lal is a Retd. judge of the Punjab and Haryana High C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a Bahin." 13. Leela Devi in her application stated that her husband expired on 25th January, 1994. Two clerks of lawyers killed her husband in the premises of Patiala House. It is further stated that she is a housewife with no means of income to feed herself and her family since the death of her husband. The Minister allotted the petrol pump by the following order: Office of the Minister of State (P&NG) **************** Placed below is an application of Smt Leela Devi for allotment of a Retail Outlet for MS-HSD. The applicant has stated that her husband was murdered and ever since his death her family is left without any regular source of livelihood. Submitted for kind orders. Sd/ (G. Gurucharan) PS to MOS (P&NG) 19/5/95 Minister I have examined the application carefully. The applicant is a widow whose husband was murdered. The applicant has no regular income to support herself and her family. The case deserves sympathetic consideration. Therefore, a Retail Outlet for MS-HSD at NOIDA, UP is allotted to Smt. Leela Devi W/o. Late Shri Krishan Swaroop r/o. H. No. B-412/A, Sector No. 19, NOIDA, UP. Orders may be issued accordingly. Sd/ (Capt. Satish Sharma)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....jasekhar is a relative of Shri Gurucharan, Private Secretary to the Minister". 15. Madhuri Safaya has stated in her application that she is a native of Kashmir. She is a young lady and has been rendered homeless due to the increasing militancy in the Valley. Due to sudden migration to Delhi she has not been able to complete her education. On these grounds she requested the Minister to allot her a petrol pump. The Minister readily obliged her by the following order: Office of the Minister of State (P&NG) *********** Placed below is an application of Ms. Madhuri Safaya for allotment of Retail Outlet for MS-HSD. The applicant has stated that she belongs to Kashmir and her family has migrated to Kashmir. The applicant has also stated that she has not been able to get a suitable job and is without a regular source of livelihood. Submitted for kind orders. Sd/- (G. Gurucharan) PS to MOS (P&NG) 12.10 Minister I have examined the application carefully. The applicant is a young lady whose family has migrated from Kashmir and are dependent on their relatives for sustenance. The applicant has not been able to obtain a suitable job for herself and is without any regula....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing the following order: Office of the Minister of State (P&NG) ************** Placed below is an application of Smt. Daya Rani w/o. Shri H.R. Verma for allotment of a Retail Outlet for MS-HSD. The applicant has stated that she has a family of four school going children and is finding it difficult to make ends meet with the income being earned by her husband. Submitted for kind orders. Sd/- (G. Gurucharan) PS to MOS (P&NG) 10.10.94 Minister I have examined the application carefully. The applicant is a housewife whose family is facing difficult financial circumstances. The case deserves sympathetic consideration. Therefore, a Retail Outlet in the Union Territory of Delhi is allotted to Smt. Daya Rani w/o. Shri H.R. Verma r/o. C-183, Albert Square, Ramakrishna Ashram Marg, Gole Market, New Delhi. Orders may be issued accordingly. Sd/- (Capt. Satish Sharma) Minister of State Shri S.K. Singh, Under Secretary, while processing the Minister's order noted on the file as under: Smt. Daya Rani, the allottee is the wife of Shri Hari Ram Verma who is working in this Ministry as an Assistant and presently posted to Minister's Office. His annual income f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e applicants seem to have approached the Minister directly. None of the applications have been dealt with in any of the branches of the Ministry. There is nothing on the record to indicate that the Minister kept any criteria in view while making the allotments. How the applicants came to know about the availability of the petrol pumps is not known. No advertisement was made to invite the applications. There is nothing on the record to show that any other method inviting applications was adopted. There is no indication in the allotment-orders or anywhere in the record to show that the Minister kept any guidelines in view while making these allotments. The allotments have been made in a cloistered manner. The Petrol pumps - public property - have been doled out in a wholly arbitrary manner. This Court in Ramana Dayaram Shetty v. International Airport Authority of India and Ors. (1979)IILLJ217SC , held as under: 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 licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet wil....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... wife of R.S. Nautiyal, who was member of Oil Selection Board, Punjab. Dharmesh Kumar was the recommended of Satya Bahin, Ex. Member of Parliament and Member of the Oil Selection Board for Haryana. Shiv Balak Passi and Ghulam Ahmad Mir were themselves members of the Oil Selection Board. It is obvious that Capt. Satish Sharma was personally interested in making allotments of petrol pumps in favour of all these 15 persons. He made allotments in favour of relations of his personal staff under the influences of the staff on wholly extraneous considerations. The allotments to the sons of Ministers were only to oblige the Ministers. The allotments to the members of the Oil Selection Boards and their/chairmen's relation have been done to influence them and to have favours from them. All these allotments are wholly arbitrary, nepotistic and are motivated by extraneous considerations. 22. The Government today - in a welfare State - provides large number of benefits to the citizens. It distributes wealth in the form of allotment of plots, houses, petrol pumps, gas agencies, mineral leases, contracts, quotas and licences etc. Government distributes largesse in various forms. A Minister w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cise 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 policy 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 portal 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 upto the stage of passing the orders of allotment. The n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es for malicious, deliberate or injurious wrongdoing. According to Wade "There is, thus, a tort which has been called misfeasance in public office and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury". With the change in socio-economic outlook, the public servants are being entrusted with more discretionary power even in the field of distribution of Government wealth in various forms. We take it to be perfectly clear, that if a public servant abuses his office either by an act of omission or commission, and the consequence of that is injury to an individual or loss of public property, an action may be maintained against such public servant. No public servant can say "you may set-aside an order on the ground of mala fide but you cannot hold me personally liable". No public servant can arrogate to himself the power to act in a manner which is arbitrary. 27. For the reasons indicated above, we conclude that the orders passed by Capt. Satish Sharma, the then Minister of State for Petroleum and Natural Gas, Government of India, allotting petrol pumps to Sarbjot Singh, Benjamin K. Hollohon, S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harma shall show-cause within two weeks why a direction be not issued to the appropriate police authority to register a case and initiate prosecution against him for criminal breach of trust or any other offence under law. He shall further show-cause within the said period why he should not, in addition, be made liable to pay damages for his mala fide action in allotting petrol pumps to the above mentioned fifteen persons. 28. We place on record our appreciation for Mr. H.D. Shourie, who, very ably, assisted us in this matter. He shall be entitled to costs which we quantify as rupees fifty thousand. The cost shall be paid by Capt. Satish Sharma personally. 29. Before parting with this judgment, we may mention about Civil Writ Petitions Numbers 4003/95 and 4430/95 which are pending before the Delhi High Court. In the said petitions, allotment of petrol pumps/gas agencies to various other persons during the period 1992-93, 1993-94 1994-95 and 1995-96 have been challenged. Transfer petition No. 127/96 has been filed in this Court seeking transfer of those writ petitions from Delhi High Court to this Court. We have issued notice in the transfer petition and have stayed further procee....