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.

The committee examined each case and concluded: “The correctness of this proposition cannot be disputed. Merely because a person has a political connection should not operate as a handicap in his/her being considered for allotment on his/her own merits. But, if from other surrounding circumstances, it is apparent that the political connection of an applicant has weighed in the matter of consideration of the application by the DSB and an allotment has been made in his favour, then such an allotment would be open to challenge on the ground that it is not made on merits but on extraneous considerations.”

The committee in all scrutinised 409 cases of alleged tainted allotments in Himachal Pradesh, Haryana, Rajasthan, Uttar Pradesh, Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh, Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka. Out of these, in 297 allotments, it found, “the selection could not be said to have been made on merits.” The allottee either did not fulfill the eligibility requirements or had incurred disqualification on account of suppression/concealment of material information relating to their eligibility for consideration or other extraneous considerations. Almost 73 per cent of tainted allotments examined by the committee were found to be improper.

The findings of the committee, holding certain allotments being not made on merits and therefore were not sustainable, led the applicants approach the SC.