The Supreme Court took cognizance of a news report in The Indian Express edition dated August 2, 2002 alleging political patronage in allotment of retail outlets of petroleum products, LPG distributorship and SKO-LDO dealership. Further reports between August 2 and August 5, 2002 brought to light how dealers/distributors were appointed on the basis of political patronage/linkage, sidelining the norms.

Consequent criticism by the Press and even Parliament led to cases being reviewed on August 5, 2002 by the then Prime Minister Atal Behari Vajpayee, who directed the Ministry of Petroleum & Natural Gas to cancel all allotments made with effect from January, 2000.

A formal order, cancelling all allotments, was issued on August 9, 2002 by the Ministry of Petroleum & Natural Gas.

However, the order was challenged by allottee in several High Courts. Transfer petitions were filed in the apex court, which on December 20, 2002, in case titled Onkar Lal Bajaj, disposed of all the petitions by setting aside the Government’s order of August 9. The SC appointed a committee comprising Justice S.C. Agrawal, a retired SC Judge and Justice P.K. Bahri, a retired Judge of the High Court of Delhi, to examine 413 cases of allotment. The Ministry of Petroleum and Natural Gas and the four oil companies were directed to render full, complete and meaningful assistance to the committee and place all the relevant records before the committee within five days.

The Ministry was also directed to appoint a nodal officer not below the rank of a Joint Secretary for effective working of the committee. The order also said that if the Committee, on preliminary examination of any case, thinks that the allotment was made on merits and not as a result of political connections or other extraneous considerations, it would be open to the committee not to proceed with probe in detail.

... contd.