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HC orders public auction to right Satish Sharma's wrongs

The Delhi high court has ordered a public auction by the year-end for selecting distributors to reallocate the 130-odd licenses for petrol pumps, standard kerosene outlets and liquid petroleum gas dealers that were cancelled by a legal order last year.

It has, thus, rejected the demand of the four major petroleum companies -- Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd, Indian Bharat Petroleum Co Ltd and Indian Oil Corporation Ltd -- that dealers be decided by the oil selection boards.

Last year, the high court had struck down more than 130 allotments, made by former Union petroleum minister Satish Sharma from his discretionary quota, ruling that these were made without any proper verification of claims. The process started on August 29, 1997 when the court scrapped the allotments of 69 petrol pumps, SKOs and LPG dealerships, affecting 77 persons, some of them relatives of senior politicians and bureaucrats, friends of the minister, and the voters of Amethi, Captain Sharma's constituency.

A division bench comprising Justices Y K Sabharwal and D K Jain said: ''Under the circumstances of the case, the public auction is the best mode to determine the valuation of the cancelled dealership and distributorship and not its evaluation by a committee as suggested by some of those whose dealership was cancelled. The public auction provides objective criteria for valuation.''

The judges said the auction of the cancelled dealerships should take place within the next three months and the new allottees/dealers be put into possession by January 1.

The companies have been allowed to run the dealership till the auction is complete.

The bench, however, allowed the four companies to incorporate certain eligibility criteria to participate in the auction.

In the 13-page judgment, the they said the corporations were free to include in the terms and conditions of auction ample safeguards to dispel their apprehensions that the highest bidders, who may be granted the dealership, may indulge in sharp and underhand practices to make quick money.

''It can be provided that the contravention of the terms and conditions would result in the cancellation of dealership or distributorship,'' the order said.

The oil corporations had stated that in case of a public auction, the most suitable person to undertake the job may not come forth as monetary considerations would be the paramount criterion.

They further said that the public auction would affect the right of the corporations to terminate the agency on non-fulfilment of requisite conditions, and that the highest bidder may resort to malpractice with a view to make good the returns on the bid amounts.

To this, the judges said, "We do not find much substance in the apprehensions that the highest bidder may indulge in malpractice simply because he has not been selected by the OSB.''

''The oil companies have not brought to our notice a single instance of sharp practice having been adopted by those who had been granted discretionary allotment although these persons had not been selected by the OSB,'' they added.

UNI

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