ONKAR LAL BAJAJ ETC. ETC. versus UNION OF INDIA AND ANR. ETC. ETC.

Citation: [2002] SUPP. 5 S.C.R. 605 · Decided: 20-12-2002 · Supreme Court of India · Bench: Y.K. SABHARWAL · Disposal: Disposed off
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Judgment (excerpt)

ONKAR LAL BAJAJ ETC. ETC. 
A 
v 
UNION OF INDIA AND ANR. ETC. ETC. 
DECEMBER 20, 2002 
B 
[Y.K. SABHARWAL AND H.K. SEMA, JJ.] 
Constitution of India, 1950 : 
Article 14-Al/otment of Petrol Pumps by Government-Controversy C 
raised regarding some allotments-Cancellation of all the a/lotments-
Chal/enged as arbi1ra1y and violative of lhe provisiotr-Held, equal lreatmenl 
of unequals is inequalily-To put bolh categories, /he tainted and the res/ al 
par is unjustified, arbitrary and unconslitutional-Alleged lainted allotments 
required lo be scrutinized by independenl Commillee-Direction for constilulion 
of Commillee-Cancellation order quashed except in respect of cases referred D 
lo the Committee. 
Ar1icle 226--Judicia/ Review-Scope of-Arbitrary exercise of executive 
power-Deserves 10 be quashed-Bui if two views are possible and the 
Government lakes one of it, ii would not be.amenable to judicial review on the E 
ground that other view, according to the Court is a heller view. 
Adminislra/ive law : 
Governance-Principle of-Held, governance has to be tested on the 
/ouchstone of justice, equityandfai1play and if it is not based thereon, but to F 
achieve popular accolade, 1he decision cannol be allowed 10 operate. 
Words and Phrases-"Public inleres/'' and "probily in governance"-
Meaning of 
Since January 2000, allotments were made with respect to retail 
outlets of diesel and petrol, LPG distributorship, Superior kerosene Oil G 
(SKO) and Light Diesel Oil (LDO) dealerships, to 3760 intending persons, 
on the recommendation of Dealer Selection Boards (DSB). Media exposed 
417 names as tainted allotments. The controversy regarding 160 out of 
these names were raised upto Sth August, 2002 and regarding the rest it 
605 
H 
606 
SUPREME COURT REPORTS (2002) SUPP. S S.C.R. 
A was raised between 6th and 24th August, 2002. In view of the controversy 
raised by the media, Prime Minister reviewed the matter on 5th August, 
2002 and directed the Ministry of Petroleum and Natural Gas to initiate 
steps to cancel all the allotments made w.e.r. January 2000 till 5th August, 
2002. Thereafter formal order was passed by the Ministry on 9th August,' 
B 2002 for cancellation or all the· allotments except the allotments made to 
the allottees under Operation Vijay Scheme. 
Writ Petitions were filed in various High Courts challenging legality 
of the order dated 9th August, 2002. Union of India filed transfer petitions 
and this Court directed transfer of certain writ petitions to itself. Writ 
C petitions filed by allottees whose cases were highlighted by the media, were 
transferred as another category of representative cases. A large number 
of intervention applications were also filed by different categories of 
persons. 
Petitioners and interveners contended that en masse cancellation of 
- D allotments was an arbitrary exercise of executive power and the same was 
unconstitutional being violative of Article 14 of the Constitut.ion. 
Respondent-State contended that the order was justified as the same 
was taken in order to uphold the probity in governance, ensure fair play 
in action and in larger public interest; that allotments could en masse be 
E legally cancelled without individually examining each case and without 
affording any opportunity to the concerned .to ~epresent their cases; that 
the petitioners had no legal right which could be enforced u/s 226 of the 
Constitution as the same was only a contractual right; that the petitions 
were only a disguise suits under Specific Relief Act despite the fact that 
F the contract was not· enforceable even under the Act because the 
agreements could be cancelled without assigning any reason. 
G 
Disposing oft.he petition, the Court 
HELD: I.I. The mere reason that a controversy has been raised by 
itself cannofclothe the Government with the power to pass such a drastic 
order which has a devastating effect on a large number of people. In 
governance, controversies are bound to arise. In a given situation, 
depending upon facts and figures, it may be legally permissible to resort 
to such en masse cancellation where executive finds that primafacie a large 
number of such selections were tainted and segregation of good and bad 
H would be difficult and time consuming affair. In the present situation 
ONKAR LAL BAJAJ v. U.0.1. 
607 
where the controversy raised was in respect of 5 to 10%, en masse A 
cancellation would be unjustified and arbitrary. Impugned order was a 
result of
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