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Indian Oil Corporation Ltd. & Ors. v. Shashi Prabha Shukla & Anr.

Civil Appeal · 2017 INSC 1237Decided 15 Dec 2017
Civil Appeal No. 5565 of 2009
Justice N.V. Ramana · Justice Amitava Roy

Background

The respondent had originally been allotted a petrol pump dealership on compassionate grounds under a Minister's discretionary quota in the 1980s, investing over Rs. 14 lakh of her own money to develop the site. This allotment, along with many others, was later cancelled by the Delhi High Court in 1997 after a PIL found widespread favouritism in such discretionary allotments. When Indian Oil Corporation failed to properly re-auction the site as directed, the respondent kept running it under interim court orders, and the Allahabad High Court eventually directed IOC to convert her arrangement into a fresh dealership under IOC's new 2004 policy, restraining IOC from disturbing her possession. IOC appealed this to the Supreme Court.

Decision Breakdown

The Supreme Court set aside the Allahabad High Court's direction, holding that since the respondent's original dealership had already been finally cancelled by the 1997 Delhi High Court judgment (which attained finality), there was no legal basis for treating any dealership as still "subsisting" that could be "converted" into a new one, doing so would effectively let her keep the benefit of an allotment that courts had found tainted by favouritism. The Court was also sharply critical of IOC itself, finding its own conduct, issuing a defective re-auction advertisement that never specified a genuinely new location as required, and then wrongly claiming the land lease still subsisted, to be in contumacious disregard of the Delhi High Court's 1997 directions. The appeal was allowed, the respondent's dealership was confirmed as cancelled from December 1997, IOC was directed to run a fresh, lawful auction process if it wished to allot the dealership elsewhere, and, because the Court suspected IOC's own lapses may not have been fully bona fide, IOC was separately directed to hold an internal inquiry into its officials' conduct and report back to the Court.

Lesson Learnt

A benefit that courts have already finally cancelled for being tainted by favouritism cannot be revived later through an administrative policy change, even if the beneficiary has continued occupying the premises for years under interim orders; and public authorities that drag their feet in complying with a court's directions risk being held to account personally, not just institutionally.

Official source (sci.gov.in)View Judgment (PDF)

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