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PETITIONER: COMMON CAUSE A REGD. SOCIETY

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT:       04/11/1996

BENCH: KULDIP SINGH, FAIZAN UDDIN

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      The question  before this  Court in  Common  Cause  Vs. Union of  India and  Ors. Writ  Petition (C)  No. 26/95  was whether the  allotments  of  retail  outlets  for  petroleum products (Petrol  Pumps) were  illegal and as such liable to the quashed.  This Court by the judgment dated September 25, 1996 came  to the  conclusion that  the allotments  made  by Capt. Satish  Sharma were  arbitrary, discriminatory,   mala fide, wholly  illegal and as such were liable to be quashed. This Court  reached  the  said  findings  on  the  following reasoning :      "All the  15 allotments - discussed      above  -  have  been  made  by  the      Minister in  a stereotyped  manner.      The Petroleum   Ministry.  There is      no receipt  - entry  on any  of the      applications. The  applicants  seem      to have  approached dealt  with  in      any  of   the   branches   of   the      Ministry. There  is nothing  on the      record   to   indicate   that   the      Minister kept  any criteria in view      while making  the allotments.   How      the applicants  came  to know about      the  availability   of  the  petrol      pumps    is     not    known.    No      advertisement was  made  to  invite      the applications.  There is nothing      on the  record  to  show  that  any      other  method   of   the   inviting      applications was  adopted. There is      no  indication  in  the  allotment-      orders or  any where  in the record      to show  that the Minister kept any      guidelines  in  view  while  making      these  allotments.  The  allotments      have  been  made  in  a  cloistered      manner. The  petrol pumps  - public      property - have been doled out in a      wholly arbitrary manner." .....

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    "All these  allotments  are  wholly      arbitrary   nepotistic    and   are      motivated       by       extraneous      consideration."      ...................................      "We have  no hesitation  in holding      that Capt.  Satish  Sharma  in  his      capacity   as    a   Minister   for      Petroleum    and     Natural    Gas      deliberately acted    in  a  wholly      arbitrary and   unjust  manner.  We      have no  doubt in   our  mind  that      Capt. Satish  Sharma knew  that the      allottees  were  relations  of  his      personal staff,  sons of Ministers,      Selection Boards and the members of      the    Oil     Selection     Boards      themselves. The allotments  made by      him were  wholly mala  fide and  as      such cannot be sustained.      We are  further of  the  view  that      Capt.  Satish  Sharma  acted  in  a      wholly biased manner inasmuch as he      unfairly regarded  with favour  the      cases of  15 allottee  before  him.      The     relevant      circumstances      available from record and discussed      by us  leave no  manner of doubt in      our mind  that Capt.  Satish Sharma      deliberately  acted   in  a  biased      manner to  favour  these  allottees      and as  such the  allotment  orders      are wholly  vitiated and are liable      to be set aside."      "Mr. Satish  Sharma  has  acted  in      utter violation  of the  law  laid-      down by  this Court  and  has  also      infarcted   Article   14   of   the      Constitution of  India. As  already      stated  in   a  minister  in    the      Central Government is in a position      of a  trustee  in  respect  of  the      public property  under his agencies      are a  kind  of  wealth  which  the      Government  must  distribute  in  a      bona fide  manner and in conformity      with law.  Capt. Satish  Sharma has      betrayed the  trust reposed  in him      by    the    people    under    the      Constitution."      One of  the  directions  issued  by      this Court was an under :      "5. Capt. Satish Sharma shall show-      cause  within  two  weeks    why  a      direction  be  not  issued  to  the      appropriate  police   authority  to      register  a   case   and   initiate      prosecution   against    him    for      criminal breach  of  trust  or  any      other offence  under law.  He shall      further show-cause  within the said      period  why   he  should   not,  in      addition, be  made  liable  to  pay      damages for his mala fide action in      allotting petrol pumps to the above

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    mentioned fifteen persons."      Pursuant to  the above  quoted direction,  a show cause notice was  issued   to Capt.  Satish Sharma.  He has  filed affidavit in reply to the show cause notice.      We have  heard Mr. Salve, learned counsel appearing for Capt. Satish  Sharma. There  are two parts of the directions quoted above. This Court has called upon Capt. Satish Sharma to  show  cause  why  a  direction  be  not  issued  to  the appropriate police authority to register a case and initiate prosecution against  him for criminal breach of trust or any other offence under law.      The findings  of this  Court, quoted  above, and    the conclusion reached in the Common Cause case, leave no manner of doubt  that  an investigation by an independent authority is called  for in  this  case.  We,  therefore,  direct  the Central Bureau  of Investigation  (CBI) to  register a  case against Capt.  Satish Sharma  in respect  of the  allegation dealt with  and the  findings reached  by this  Court in the Common Cause  case. The  CBI shall  hold investigation   and proceed in  accordance with  law. There shall be no limit on the power,   scope  and sphere of investigation by the  CBI. We, however,  make it  clear  that  the  CBI  shall  not  be influenced by  any observations  made by  this Court  or the findings reached  in Common  Cause case,  for  reaching  the conclusion  as   to    whether  any  prima  facie  case  for prosecution/trial is made out against Capt. Sharma. It shall have to  be   decided on the basis of the material collected and  made  available  with  the  CBI  as  a  result  of  the investigation.  We   direct  the   CBI   to   complete   the investigation within  three months  of the   receipt of this order. The  CBI shall  file interim  report to  indicate the compliance of   this  order. This  shall be to  indicate the compliance of this order. This shall be done  by January 20, 1997 and  this matter  shall be  listed on  January 22, 1997 before a  Bench of  which   Mr. Justice  Faizan Uddin  is  a member.      Mr. Harish  Salve has  addressed elaborate arguments on the question of damages. We place on record our appreciation for Mr. Harish Salve for assisting this Court in a very fair and independent manner.      According   to Mr.  Salve this  is  not  a  case  where compensatory  or   exemplary  damages   should  be  imposed. According   to him  nominal damages  would meet  the ends of justice.      This Court  has authoritatively  laid  down in Nilabati Behera (Smt.)  Alias Lalita  Behera Vs.  State of Orissa and Ors. 1993  (2) SCC  746 that  damages can be awarded by this Court in  proceedings   under Article 32 of the Constitution of India.  Mr. Salve has taken  us through the Privy Council judgment in  Rookes Vs.  Barnard and  Ors. 1964 Appeal Cases 1129. Lord  Devlin in  his opinion  has held  that exemplary damages  can  be  awarded  for  "oppressive,  arbitrary  and unconstitutional action  by the servants of the Government". Mr. Salve  has also  taken   us through  the judgment of the Court of  Appeal in  A.B. and  Ors.  Vs.  South  West  Water Services  Ltd.   1993  Queen’s   Bench  507.  Broome’s  case elaborately discussed  and relied upon  in this judgment. It would be useful to quote the relevant part of the opinion by Stuart-Smith L.J.      "This  first  category  is  "oppressive,  arbitrary  or unconstitutional action  by the servants of the government." It is  common ground  that this  category of  persons is not limited to  the servants of central government, but includes servants of local government and the police.      In Broome v. Cassell & Co. Ltd. (1972) A.C. 1027, 1077-

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1078,  Lord Hailsham of St. Marylebone L.C. said :      "... I would be surprised if  it included only servants of the Government if the strict sense of the word. It would, in my view, obviously apply to the police ... and  almost as certainly  to   local  and   other     officials  exercising improperly rights  of search  or arrest without warrant, and it may  be that  in   the future  it will be held to include other abuses  of power without warrant by persons purporting to exercise legal authority."      Lord Reid said, at pp. 1087-88 :      "With regard  to the  first I  think that  the  context shows that  the category was never intended to be limited to Crown servants.  the   contrast is  between "the Government" and  private   individuals.  Local  government  is  as  much government as  national government,  and the police and many other persons  are exercising governmental functions. It was unnecessary in Rookes v. Barnard to define the  exact limits of  the category. I should certainly read it as extending to all those  who by  common  law  or  statute  are  exercising functions of a governmental character."      Lord Wilberforce said at p.1120 :      "There is  not perhaps much difficulty about category 1 : it is well based on the cases and on a principle stated in 1703 -  ’if public officers will infringe men’s rights, they ought to  pay greater  damages than  other men  to deter and hinder others from the like offences:’ Ashby v. White (1703) 2 Id.  Raym. 938, 956, per  Holt C.J. Excessive and insolent use of  power is  certainly something against which citizens require as much which I understand your Lordships to endorse would correspond  with Holt  C.J.’s  ’public  officers’  and would partly correspond with modern needs."      Lord Diplock said of the first category, at p.1130 :      "It would  embrace all  persons purporting  to exercise powers of  government, central or local, conferred upon them by statute or at common law by virtue of the official status or employment which they held."      In the said case Thomas Bingham M.R. further elaborated the concept in the following  words :      "In the  first category  there  had      been what he variously described as      an "arbitrary and outrageous use of      executive power:’ (see p. 1223) and      "   oppressive,      arbitrary   or      unconstitutional  action   by   the      servants of the government:" see p.      1226. Minute  textual analysis   of      these expressions is inappropriate.      This was a judgment, not a statute.      But there  can be  no doubt    What      Lord Devlin was speaking  about. It      was gross misuse of power,involving      tortious  conduct,   by  agents  of      government.   According    to   the      traditional classification   of the      law of  tort, such  misuse of power      could give  rise to  any one  of  a      number of  causes of  action, which      Lord Devlin   was  not at  pains to      identify."      The Court  of Appeal  also relied  upon the judgment of the House  of Lords  in Broome  Vs. Cassell  & Co. Ltd. 1972 Appeal Cases 1027.      We are  of view  that the legal position that exemplary damages can  be awarded  in a  case where  the action  of  a public servant  is oppressive, arbitrary or unconstitutional

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is unexceptionable. The question for consideration, however, is whether  the action  of Capt.  Satish  Sharma  makes  him liable to  pay exemplary damages. In view of the findings of this Court  in Common Cause Case - quoted above - the answer has to  be in  the affirmative. Satish Sharma’s actions were wholly arbitrary, mala fide and unconstitutional. This Court has given   clear  findings to   this  effect in  the Common Cause case. We, therefore, hold  that Capt. Satish Sharma is liable to pay exemplary  damages.      We have  heard Mr. HN Salve on the question of quantum. Mr. Salve  has vehemently  contended that Capt. Sharma was a part of the system which was operating before his joining as a Minister. According  to him the types of wrongs were being committed  even   earlier  on   the  assumption   subjective satisfaction. He  has further  contended  that  since    the concept  of   absolute  liability  of  public  servants  for misfeasance has  been of  recent origin in this country even while awarding  exemplary damages  leniency should be shown. There is some plausibility in the  contentions raised by Mr. Salve. After  examining all  the facts  and circumstances of this  case  and  giving  thoughtful  consideration  to  this aspect, we  direct Capt.  Satish Sharma  to pay a sum of Rs. 50 lac  as exemplary  damages to  the Government  Exchequer. Since the  property with  which Capt. Sharma was dealing was public property, the Government which is "by the people" has to be compensated. We further direct Capt. Sharma to deposit the  amount   with  the   Secretary,  Ministry  of  Finance, Government of  India within  nine  months  from  today.  The amount if  not paid, shall be recoverable as arrears of land revenue.