COMMON CAUSE A REGD. SOCIETYversusUNION OF INDIA AND ORS.

                 COMMON CAUSE A REGO. SOCIETY                              A
                                      v.
                      UNION OF INDIA AND ORS.

                           NOVEMBER 4, 1996

              [KULDIP SINGH AND FAIZAN UDDIN, JJ.]                         B

     Arbitrary Allotment of Petrol pumps by the then Minister-Reply to
show cause notice issued by this Court-CBI to register a case and
investigate-To complete investigation within 3 months-To file interim
report-Exemplary damages-Award of-Rs.50 lacks to be deposited by
him to the Government Exchequer within 9 months-If not paid could be       C
recovered as arrears of/and revenue-Directions-Issued.

     Common Cause v. UOI, (1996) 6 SCC 593, relied on.

      Ni/abati Behera (Smt.) Alias La/itha Behera v. State of Orissa and   D
Ors., {1993] 2 sec 746, referred to.

      Rookes v. Barnard. and Ors., 1964 Appeal Cases 1129; A.B. and
Ors., v. South West Water Services Ltd., (1993) Queen's Bench 507; and
Broome v. Cassell and Co. Ltd., (1972) Appeal Cases 1027, referred to.
                                                                           E
        CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 26 of
1995.

        (Under Article 32 of the Constitution of India.)
                                                                           F
     H.D. Shourie, In-person, Prashant Bhushan and Jayant Bhushan for
the Petitioner.

      H.N. Salve, P.H. Parekh, E.R. Kumar and Sarneer Parekh for Capt.
Satish Sharma.
                                                                           G
     P. Narasimhan, C.V.S. Rao, D.M. Nargolkar, Ms. H. Wahi, Ms. Neetu
Singh, Ms. S. Hazanka and Ms. Nandini Mukherjee for the
Respondents.

        The following Order of the Court was delivered :                   H
                                   373
     374                           SUPREME COURT REPORTS [1996] SUPP, 8 S.C.R.


A          The question before this Court in Common Cause v, Union of India
    and Ors. Writh 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 be conclusion that the allotments made by Capt. Satish
    Sharma were arbitrary, discriminatory, male fidq, wholly illegal and as
B   such were liable to be quashed. This Court reached the said findings on
    the following reasoning:

           "All the l 5 allotments-discussed above-have been made by the
     Minister in a stereotyped manner. The applications have not been official
     received by the Petroleum Ministry. There is no receipt-entry on any of
C    the applications. The applicants seem to have approached the Minister
     directly. None ofthe applications have been 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 know. No
     advertisement was made to invite the applications, There is nothing on the
D    record to show that any other method of inviting applications was adopted.
     There is no indication in the allotment-<>rders 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
E manner." ........................................... .
          "All these allotments are wholly arbitrary, nepotistic and are motivated
     by extraneous considerations." ......... ,.,, ............. ,.,, .. , .......... .

            "We have no hesitation in holding that Capt. Satish Sharma in his
F 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, sons/relations of Chairman and members of the
     Oil Selection Boards and the members of the Oil Selection Boards
G    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 in as much as he unfairly regarded with favour the cases of
     l 5 allottees before him. The relevant circumstances available from record
H    and discussed by us leave to manner of doubt in our mind that Capt. Salish
              COMMON CAUSE A REGO. SOCY. v. U.0.1.                       375

Sharma deliberately acted in a biased manner to favour these allottees and A
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 infracted Article 14 of the Constitution of India.
As already stated a minister in the Central Government is in a position of       B
a trustee in respect of the public property under his charge and discretion.
The petrol pumps/gas 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."
                                                                                 c
      One of the directions issued by this Court was as under:

      "5. Capt. Salish 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         D
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 mentioned fifteen
persons-.".

      Pursuant to the above quoted direction, a show cause notice was            E
issued to Capt. Satish Sharma. He has filed affidavit in reply to the sh~w
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         F
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 conclusions reached G
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 B.ureau 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 H
    376                     SUPREME COURT REPORTS [ 1996] SUPP. 8 S.C.R.

A 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. Satish Sharma. It shall have to be decided
  on the basis of the material collected and made available with the CBI· as
B 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 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.

c          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
D 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 La/ita Behera v. State o/Orissa and Ors., [1993] 2 SCC 746 that
    damages can be awarded by this Court in proceedings under Article 32 of
E the Constitution oflndia. Mr. Salve bas taken us through the Privy Council
    judgment in Rookes v. Barnard and Ors., (1964) Appeal Cases 1129. Lord
    Devlin in his opinion bas 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
F   Court of Appeal in A.B. and Ors. v. South West Water Services Ltd., 1993
    Queen's Bench 507. Broome's case was elaborately discussed and relied
    upon in this judgment. It would be useful to quote the relevant part of the
     opinion by Stuard-Smith L.J.

G         "The 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 and Co. Ltd., (1972) A.C. 1027, 1077-1078.
H Lord Hai Isham of St. Marylebone L.C. said :
                COMMON CAUSE A REGD. SOCY. v. U.0.1.                        377


      " .... ! would be surprised if it included only servants of the               A
Government in 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 exercising legal authority."
                                                                                    B
      Lord Reid said, at pp. I 087-88

       "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            C
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.I 120:                                             D

      "There is not perhaps much difficulty about category I: it is well
based on the cases and on a principle stated in I 703-'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 (I 703) 2.        E
Id Rayrn, 938, 956, per Holt C.J. Excessive and insolent use of power is
certainly s01nething against which citizens require as
much protection today; a wide interpretation of 'government'
which l understand your Lordships to endorse would correspond with
Holtd C.J.s 'public officers' and would partly correspond with modern
needs."                                                                             F
      Lord Diplock said of the first category, at p. I I 30.

     "It would embrace all persons purporting to exercise powers of
government, central or local, conferred upon them by statute or at common           G
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                       H
    378                     SUPREME COURT REPORTS [1996) SUPP. 8 S.C.R.


A described as an ."arbitrary and outrageous use of executive power"
  (see p. 1223) and "oppressive, arbitrary or unconstituttional action
  by the servants of the government:" see p. 1226. Minute textual
  analysis of these expressions is inappropriate. This was a judg,,;ent,
  not a statute. But there can be no doubt, what Lord Devlin was
  speaking about. It was gross misuse of power, Involving tortious conduct,
B 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 v. Case/le and Co. Ltd., (1972) Appeal Cases
C 1027.

        We are of the view that the legal position that exemplary damages
  can be awarded in. a case where the action of a P.ublic servant is oppressive,
  arbitrary or unconstitutional is unexceptionable. The question for
D 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. satisl) 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·
E 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
F the (Ypes of wrongs were being committed even earlier on the assumption
  that the Minister's discretion was to be exercised on his subjective
  satisfaction. He has further contended that since the concept of absolute
  liabili(Y of public servants for misfeasance has been or recent origin in
  this country even while awarding examplary damages leniency should be
  shown. There is some plausibil\(Y in thd contentions raised by Mr. Salve.
G 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
H compensated. We further direct Capt. Sharma to deposit the amount with
             COMMON CAUSE A REGO. SOCY. v. U.0.1.                  379

the Secretary, Ministry ofFinance, Government oflndia within nine months A
from today. The amount ifnot paid, shall be recoverable as arrears ofland ·
revenue.

G.N.                                              Matter still pending.