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      REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  9101    2012. (Arising out of SLP(C) No.31932 of 2010)  

SR. DIVISIONAL RETAIL SALES MANAGER,  INDIAN OIL CORPORATION LTD. THROUGH POA HOLDER & ORS.    . . APPELLANT(S)

VERSUS

ASHOK SHANKARLAL GWALANI        . .RESPONDENT(S)

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

Leave granted.

2. The present appeal has been filed against  

the impugned order dated 29th  September, 2010  

passed by the Bombay High Court in Writ Petition  

No. 5032 of 2010 wherein the High Court has  

granted the Writ of Mandamus directing the Indian  

Oil Company to allot the dealership of the site  

located  at  Thane  Belapur  Road, Village  Mahape,  

Navi Mumbai, Maharashtra to Shri Ashok Shankarlal  

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Gwalani (hereinafter referred to as the  

“respondent”)

3. The relevant facts as pleaded by the appellant  

are as follows:

On 11th  June, 2005, the Indian Oil  

Corporation Limited (hereinafter referred to as  

the “Company”) published a proclamation in  

leading newspapers and invited applications for  

grant of petrol/diesel retail outlets  

(dealership) for various locations in the State  

of Maharashtra.   The respondent on 14th  July,  

2005, amongst others applied for the same.  

Interviews were conducted on 9th­10th  December,  

2005.  One Mr. Nilesh L. Kudalkar was placed at  

the top of the merit panel while the respondent  

was placed second and one Mr. K. Srinadha Rao was  

third.  However, since the difference between the  

marks of the top three candidates was within 5%,  

the result of the interview was kept in abeyance  

in accordance with the policy of the company  

dated April 7, 2005.     A   Screening Committee  

was established which reviewed the markings and  

carried out another interview of the three  

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candidates.  The result was declared on 4th April,  

2006 and Mr. Nilesh L. Kudalkar was first in the  

merit panel.

4. Being aggrieved respondent and Mr. K. Srinadha  

Rao both made complaints on 10.4.2006 and  

19.4.2006 respectively to the company alleging  

irregularities in the selection process.   In  

accordance with the policy dated 1st September,  

2005, an investigation was made by the Company  

into the allegations made by them.   It was  

found, among other things, that the respondent  

and Mr. Srinadha Rao had not been marked  

correctly as regards their financial capability  

and that both had failed to provide the  

attested documents as had been specifically  

required under the advertisement.   Since the  

allegations in the complaints were found to  

have merit, the selection was cancelled and all  

the candidates were to be called for re­

interview.   In the meantime, on 28th  April,  

2006,  one Mr. Pritesh Chhajed,  who was an M&H  

Contractor operating on the site filed Civil  

Suit No. 230/2006 before the Thane Sr. Division  

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Court seeking an injunction against the company  

from terminating the contract and evicting him  

from the land.  He was unsuccessful in the same  

and filed an appeal before the Bombay High  

Court which was dismissed by the High Court on  

27th June, 2008 and he was asked to vacate the  

site by December 31, 2008.

5. Re­interviews were conducted on 22nd  and 24th  

December, 2008.  The respondent was found to be  

the only candidate in the merit panel.  

However, complaints were received from Mr.  

Pritesh Chajjed (who had also appeared in the  

interviews) on 26th December, 2008 and from Mr.  

K. Srinadha Rao on 16.12.2008, 23.12.2008,  

30.12.2008, 2.01.2009 and 10.02.2009.   Again  

on 30.12.2008, a one man Inquiry Commission was  

appointed to investigate the allegations  

contained in the complaints.   Also on  

14.1.2009, Mr. Nilesh L. Kudalkar filed a Writ  

Petition vide no. 113 of 2009 against the  

company for cancelling the merit list and  

declaring him to be the no.1 candidate.   The  

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High Court of Bombay was pleased to dismiss the  

aforementioned writ petition in April, 2009.

6. In the meantime, the inquiry instituted by the  

Company revealed that the complaints made by  

various persons had merit.   

7. Therefore, on 6th  August, 2009, the appellants  

sought approval from their management for re­

advertisement of the location.  On 18th August,  

2009, the Company management advertised for re­

interview of all the candidates including  

scrutiny of all documents from the initial  

stage in order to remove all errors from the  

selection process. Since the code of conduct  

for elections was in force, the re­interview  

was deferred till its withdrawal.

8. In December, 2009, the L­1 Committee was  

appointed before which the applications along  

with other documents of all ten eligible  

candidates were placed. The Committee submitted  

its report. The candidature of the respondent  

was rejected on the ground that the  

‘Relationship Affidavit’   was not as per the  

format.

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9. On 3rd  June, 2010, respondent was communicated  

about the rejection of his application.

10. Being aggrieved respondent filed a writ  

petition being WP(C) No. 5032 of 2010 before  

the Bombay High Court on 17.6.2010 praying  

inter alia for issuing of an appropriate writ  

directing the appellants to allot the  

dealership at the site as per the advertisement  

dated 11.6.2005 and setting aside the letter  

dated 3.06.2010 to enforce the decision of the  

Selecting Committee dated 24.12.2008, which was  

allowed by the impugned order.

According to the appellants, considering that all  

the former merit panels were vitiated on account  

of grave errors, including complaints received  

with regard to all the interviews, the Company is  

desirous of undertaking the selection process de  

novo by re­advertising the location.

11. Learned counsel for the appellant submitted  

that  on 8th December, 2009, L­I Committee was  

nominated in view of  the complaints filed by  

one Srinadhrao and Shri Pritesh Chajed.  These  

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complaints were thoroughly investigated and  

report dated 24th  March, 2009 was received by  

the Company.  Pursuant to the said report the  

Company decided to look into the matter from  

the scrutiny level and to re­interview all the  

candidates so as to remove the defects in the  

selection process.   Re­scrutiny of all the  

applications was made and during that process  

the documents including the application  

submitted by the respondent found to be  

suffering from deficiencies.  It was contended  

that the affidavit submitted by the respondent  

was not as per the format and, therefore, his  

application was liable to be rejected as per  

the policy. Consequently, the impugned letter  

was issued to the respondent.

12. The aforesaid fact was disputed by the  

learned counsel appearing on behalf of the  

respondent.   They invited the affidavit filed  

by the Company in Writ Petition No. 113 of 2009  

wherein they supported the selection process as  

well as the merit list prepared by the  

Selection Committee on 24.12.2008.  In the said  

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affidavit, the allegation that the respondent  

was less meritorious was denied by the Company.  

The  stand of the Company was that the decision  

to award dealership to the respondent did not  

suffer from any manifest error, equity, fair  

play and justice.   In the said case, the  

Company pleaded that the decision in favour of  

the respondent was transparent and was not  

motivated on any consideration other than  

probity.   The said case was filed by second  

person challenging the selection of the  

respondent. The Division Bench of the Bombay  

High Court after hearing both the parties vide  

order dated 17th  April, 2009 in Writ Petition  

No. 113 of 2009 held that the High Court could  

not sit in appeal over the decision of the  

selection committee and the decision is not  

arbitrary.   The Court further held that the  

writ petitioner of the said case (Writ Petition  

No. 113/2009) having participated in the  

subsequent selection without any protest, could  

not revert back to the earlier selection  

process.  

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13. On 17th  September, 2012, after hearing both  

the parties, this Court requested   the learned  

Attorney General who was appearing on behalf of  

the Company to give us the reasons in detail  

for cancellation of the first and second rounds  

of the selection process held by the  

authorities concerned. The   learned Attorney  

General after meeting with the representative  

of the Company in his office on 22nd September,  

2012 and after going through the relevant  

papers of interviews submitted a report;   the  

relevant portion of which reads as under:­

“ In respect of the first round of  the selection process,   in which  interviews were conducted on 9th  land  10th  December, 2005,   the Screening  Committee had released the results on  4.4.2006 subsequent to which complaints  received from Shri Ashok Shankarlal  Gwalani on 10.04.2006 and from Shri K.  Srinadha Rao on 19.4.2006.  The General  Manager, Maharashtra State Office of the  Indian Oil Corporation appointed an  inquiry committee to investigate the  complaints.   Based on the Inquiry  Report, which was submitted  on October  7, 2006,   the Maharashtra State Office  prepared a Note dated 17.10.2006 which  was finally approved and endorsed on  November 7, 2006 by   which a decision  was taken in   accordance with existing  guidelines to re­interview   eligible  candidates as the merit panel had been  vitiated due to errors in   evaluating  

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financial parameters of the  candidates  in the merit panel which resulted in a  change in the merit panel.     A typed  copy of the Note dated 17.10.2006 has  been annexed by the petitioner in the  Application to bring on record facts,  subsequent events and documents, marked  as Annexure P­5 thereto.

4. In respect of the second round of the  selection process, in which interviews  were conducted on December 22­24, 2008,  two complaints were received from Shri  Pritesh Chhajed on  26.12.2008 and from  Shri K.Srinadha Rao on 16.12.2008 with a  reminder on 10.1.2009.   An inquiry  report was prepared by   investigating  officer on 24.3.2009 which was finalized  by the Maharashtra State Office vide  Note dated 13.4.2009.   In relation to  the complain of Shri Pritesh Chhajed, it  was found that  after giving benefit to  the complainant, the following position  emerged:

“a) Even if it is considered  giving benefits to the complainant  candidates Sri Pritesh J. Chajjed  as eligible based on enquiry  findings, the number one empanelled  candidate remains unchanged as 1st  

in the Merit Panel, however, the  panel will get changed by adding  other qualified candidates in 2nd  

rank at least.

b) The other two complainant  candidates would be ranked  hypothetically as below”

Name of  the  candidat e

Marks by  the   L1  committee

Marks by  the L2  committee

% marks  allotted  by  intervie w  committe e (out  

Empanelme nt by  interview  committee

% marks  evaluate d if  deviatio ns taken  into  consider

Empanelmen t after  deviations  taken into  considerat ion  (analysis)

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of total  65  marks)

ation

Shri  Ashok  Gwalani

41.78 5.2 72.38 %

1 NA

Shri  Pritish  Chhajed

35.67 7.4 Ineligibl e (42.07)  (66.26)

Inelig ible

66. 26%

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Shri K.  Shrinadhar ao

31.00 6.9 58.30 Not  qualifi ed

NA

Shri  Keshavra o  Gopairao  Shinde  

32.85 5.8 59.46 Not  qualif ied

NA

Based on evaluation by L1 (Annexure A)  and L2 (Annexure B) committee the mark  sheet as   complied by the interview  committee (Annexure C), the marks  awarded to the complainant Sri Pritosh  Chhajjed is computed   in the above  table, though the same was not declared  by the committee due to his  ineligibility.)

Considering that the marks allotted by  L1 (35.67) and L2 (7.4) to Sri Pritish  Chajjed is added, he gets 66.26% marks  (i.e. 43.07 out of 65) and would have  become 2nd  in the merit panel   whereby  the original merit  panel dated 23.12.08  undergoes a change with two candidates  in the merit panel instead of one  empanelled candidate and thus the  selection gets vitiated.  Hence, as per  policy in vogue, since the above  referred selection gets vitiated and  also there are other eligible candidates  available,   the location should be  reinterviewed with all the   eligible  candidates.

c) From the records, it is also  observed that the location Mahape had  been originally advertised on 11.6.2005  against which based on interview,   the  first merit panel was declared on  4.4.4006,   thereafter there were  complaints and after investigation as  per grievance   redressal procedure and  the decision by the competent authority,  re­interview of all the eligible  candidates was conducted on 22.12.08 to  

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24.12.2008 and accordingly the above  referred merit panel dated 24.12.2008  was declared by the interview committee.  The selection process for this location  remained inconclusive for the last four  years and is yet to be concluded.  Further it is   also observed that this  will be a case of 2nd re­interview with  all the eligible candidates for the same  location.  In all likelihood,  based on  the above investigation details and  analysis,  there may not be any further  change in the merit panel in  respect of  the first   empanelled candidate.  Additionally, there may be other  candidates who may come in the panel in  the 2nd  and 3rd  position.     Though as  per policy in vogue   re­interviews  recommended.”

5. In view of this,   the following  recommendations were put up for final  verdict by the competent authority in the  matter:­

“  1.   Since the above referred  selection process on investigation gets  vitiated and also there are other  eligible candidates available, the  location should be re­interviewed with  all the eligible candidates as per  selection guidelines in  vogue.    2.     However,   the competent  authority, i.e. State Head, MSO while  giving the final order in the above  investigation (vide report dated  6.2.2009 and 24.3.2009 by Sri R.  Ganeshan as placed below), may also like  to take a view on the facts given in  para (c) above,   whether to continue  with the existing merit panel dated  24.12.08 with the lone candidate whose  position is not disturbed as per above  analysis remaining   as 1st  empanelled  candidate or to go for re­interview as  per extant guidelines.

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 3. Action is recommended in view of  the lapses by the DO Coordinating  officer and interview   committee (L2)  for not accepting the duplicate of  original marksheet as detailed above in  the IO’s report in tabulation.

6. These recommendations were  studied/reviewed by the new Retail team at  the MSO and comments were prepared on  29.07.2009, which were approved on  3.08.2009:

1. Since vitiation in the selection  process has been established, as  recommended, it is agreed/recommended  that the location should be re­ interviewed as per the extant policy  guidelines.

2. In view of Sr. No.1 above, in which  vitiation in the selection process  has been established and re­interview  recommended, in order to have  transparency in selection it is  recommended that re­interview be done  with all the eligible candidates as  per the extant policy guidelines.

3. Chief Manager (RS), MSO has proposed  action against the DO Co­ordinating  and the L2 Committee.   Our comments  are as under:

In this case the candidate had  brought the Duplicate copy of the  original, which in its strictest  sense is not the original.  Logically duplicate copy of the  documents should have been  considered as original for the  purpose verification.   This  could/should have been got  confirmed by the coordinating  officer and implemented.

However it appears that the DO  coordinating officer/L2Committee  

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has strictly gone by the policy  guidelines in this regard to  verify the attested copy of the  document submitted with the  application, from the Original to  be brought by the candidate at  the time of interview.  Therefore technically the DO  coordinating Officer/L2 Committee  has strictly followed the  guidelines.  

ED MSO has detailed his views &  finally opined as follows in:

“In order to avoid any further  complication and to give fair  chance to everyone, in my opinion  this selection process should be  cancelled and the location should  be Re­advertised.  Since there is  no specific policy in this regard  it is suggested that HO opinion  may be sought.”

14. From the pleading of the parties as noticed  

above and the record, the following facts  

emerges:­

(a) The proclamation was made on 11.6.2005  

i.e. more than seven years ago but till  

date no person has been granted the  

dealership in question.   

(b) The first interview was conducted on  

9th­10th  December, 2005 in which one Mr.  

Nilesh L. Kudalkar was placed at the top of  

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the merit panel while the respondent was  

placed second and one Mr. K. Srinadha Rao  

was third.   When complaints were made  

against the selection as well as an  

allegation of irregularity in the process,  

after investigation, the Company found that  

the respondent and Mr. Srinadha Rao had not  

been marked correctly and both failed to  

provide the attested documents as had been  

specifically required under the  

advertisement and therefore the first  

selection was cancelled.

(c) The second re­interview was called for  

and conducted on 22nd  and 24th  December,  

2008.   In the said re­interview the  

respondent was the only eligible candidate  

in the merit panel.   On the basis of the  

complaints made by other persons a one man  

Inquiry Commission was appointed.   On the  

basis of the report of the   Investigating  

Officer dated  6.2.2009  and 24.3.2009, it  

was found that there were lapses by the DO  

Coordinating Officer and the interview  

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committee (L2), in not accepting the  

duplicate of the original mark­sheet of a  

candidate as detailed in the Inquiry  

Officer report in tabulation.   

(d) The record further shows that the  

respondent submitted a representation  

before the Chairman of the Company on  

24.8.2009 with the reminder filed on  

different dates including the one dated  

23.1.2010. The Senior Divisional Retail  

Sales Manager by communication dated  

3.06.2010 informed the respondent that “on  

perusing the application and the  

accompanying documents it is observed that  

Relationship Affidavit not as per format.  

We regret that in view of the same your  

application is found ineligible.”   

In the aforesaid background, the DGM (RC)  

by its note dated 13.8.2009 rejected the opinion  

submitted by the Office for re­interview.

15. It is not clear as to how the assessment  

was made by the authorities as apparent from the  

investigation report (Annexure­R6).   The  

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Investigating Officer in the summary of  

investigation submitted his conclusion, the  

relevant potion of which reads as follows:

“Summary of Investigation:

Based on documents provided/handed  over by DO, as also application the  policy guidelines RO/6002 dt. 7.4.2005 &  4.4.2006 the following is the  conclusion:

A) L­1 Committee has not strictly  followed the guidelines  regarding signing of all  documents for assessment.  However, irrespective of this  deviation, L­1 Committee has  considered all documents for  assessment.

B) In case of ‘Liquid Cash in the  form of Bank Fixed Deposit etc. and  ‘Fixed and Movable Assets” as detailed  in my report, for financial capability,  the L­1 Committee, Screening Committee  has given weight­age to documents of  family members/ relatives even though  ‘No Consent’ affidavit/letter is  available. Therefore, in my final  assessment, in line with the policy ‘No  weight­age has been given to documents  without consent.  Therefore final marks  have undergone change.   Hence in line  with the above the final result is as  under:

As per Interview Committee (in line  with merit):

Sr.N o.

Name of candidate Total  marks

1 Shri Nilesh Laxmikant  Kudalkar

56.50

2 Dr Ashok Shankarlal  Gwalani

55.33

3 Shri K. Srinadharao 54.33

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As per Screening Committee (in line  with merit):

Sr.N o.

Name of candidate Total  marks

1 Shri Nilesh Laxmikant  Kudalkar

59.0

2 Shri K. Srinadharao 57.0 3 Dr Ashok Shankarlal  

Gwalani 52.0

As per Investigation (in line with  merit):

Sr.N o.

Name of candidate Total  marks

1 Dr Ashok Shankarlal  Gwalani

56.78

2 Shri K. Srinadharao 53.63 3 Shri Nilesh Laxmikant  

Kudalkar 48.52

From the aforesaid report, it is clear that  

the Interview Committee, Screening Committee and  

the Investigation Officer assessed the three  

candidates in three different groups due to which  

the position of the candidates changed in the  

merit list prepared by the Interview Committee,  

Screening Committee and the investigation  

Officer.  

16. In the present case, the High Court has not  

noticed and discussed the aforesaid facts and  

without discussing the further developments as  

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taken place after 24.12.2008, directed the  

appellants to issue the Letter of Intent in  

favour of the respondent.  Though the High Court  

noticed the stand taken by the appellants that  

the ‘relationship affidavit’ submitted by the  

respondent was not as per format, it failed to  

discuss the effect of such an incomplete  

affidavit in the matter of selection.

17. Generally, if an irregularity is detected  

in the matter of selection or preparation of a  

panel it is desirable to have a fresh selection  

instead of re­arranging the panel which is found  

to be vitiated.   The Authority empowered to  

appoint, is the competent authority to decide as  

to whether the panel should be discarded and  

there should be a fresh selection in view of the  

facts narrated above.  In such circumstances, the  

High Court under Article 226 of the Constitution  

of India ought to not have interfered with the  

decision of the competent authority in canceling  

the selection.  

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18. For the reasons aforesaid, we have no other  

option but to set aside the order of the High  

Court.  Accordingly, the order and judgment dated  

29.9.2010 passed by the High Court of Bombay is  

set aside with a liberty to the Competent  

Authority to re­advertise the petrol/diesel  

retail outlets in question and to make a fresh  

selection in accordance with law. The appeal is  

allowed with aforesaid observation and  

directions.  There shall be no order as to costs.

………..………………………………………..J.       ( SWATANTER KUMAR )

………………………………………………….J.         (SUDHANSU JYOTI  

MUKHOPADHAYA)

NEW DELHI, DECEMBER 14, 2012.

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