Court’s Decision
The Patna High Court set aside the Indian Oil Corporation Limited’s (IOCL) decision rejecting the petitioner’s complaint and forfeiting her fee concerning the selection of a Kisan Sewa Kendra (Retail Outlet Dealership) in East Champaran. Justice G. Anupama Chakravarthy directed IOCL to conduct a fresh draw of lots for the dealership in a transparent manner, ensuring the petitioner’s participation and proper video recording. The earlier allocation made in favor of the private respondent was suspended pending the new draw.
The Court held that the petitioner’s right to fair participation was denied, and that the investigation conducted by IOCL violated principles of natural justice.
“Transparency and fairness are fundamental to any selection process; even a draw of lots must inspire public confidence.”
Facts
The petitioner applied for an IOCL Kisan Sewa Kendra dealership (Location No. 644/1) in East Champaran following an advertisement dated 22 October 2014. A draw of lots was conducted on 23 September 2016 between the petitioner and one other candidate. The Block Development Officer, Minapur, was the chief guest and was asked to draw the slip. However, the selected slip was neither publicly displayed nor announced. The Divisional Retail Sales Manager declared the other candidate as the winner without showing the slip.
The petitioner immediately objected and subsequently filed a formal complaint dated 27 September 2016 along with a fee of ₹1,000, alleging serious irregularities and referring to videographic evidence of the draw. Despite repeated representations, she received no response.
Eventually, IOCL informed her that the investigation found her allegations unsubstantiated, dismissed her complaint, and forfeited her complaint fee through an order dated 23 January 2018. She challenged this decision before the High Court, contending that the inquiry was conducted behind her back, that the video was not provided, and that the process was manipulated to favor the other candidate.
Issues
- Whether the IOCL’s rejection of the complaint and forfeiture of the complaint fee was arbitrary and violated principles of natural justice.
- Whether the process of conducting the draw of lots lacked transparency and fairness.
- Whether the petitioner was entitled to a fresh draw and reconsideration of dealership allocation.
Petitioner’s Arguments
The petitioner contended that IOCL’s actions violated the principles of natural justice, as she was neither informed of the inquiry nor given a chance to present evidence. The alleged video recording of the draw was never shared despite repeated requests. She argued that the draw was manipulated to favor the private respondent since the slip was not displayed publicly and key moments were conveniently omitted from the video recording.
She maintained that the corporation’s inquiry, conducted ex parte, could not be considered impartial or fair, and that her legitimate expectations of transparency were defeated.
Respondent’s Arguments
IOCL’s counsel submitted that the draw was conducted in accordance with prescribed guidelines. The entire process was recorded from multiple angles, and the investigation found no irregularity. It was argued that although the slip was not clearly visible on camera, it was momentarily displayed, and the declaration of the winner was made by the authorized officer.
IOCL asserted that the complaint was disposed of per policy, that there was no mala fide, and that the petitioner’s allegations were unfounded. The corporation defended the forfeiture of the complaint fee as a routine action when allegations are unsubstantiated.
Analysis of the Law
The Court emphasized that procedural fairness and transparency are indispensable in public selections involving public resources or opportunities. Even in a random process like a draw of lots, there must be visible fairness, as the outcome affects livelihood rights. The Court reiterated that any inquiry conducted without giving the complainant an opportunity to participate violates natural justice, particularly when the inquiry outcome directly affects their interest.
The Court underscored that administrative actions by public corporations like IOCL must withstand the test of Article 14 of the Constitution, which mandates fairness, reasonableness, and absence of arbitrariness.
Precedent Analysis
Although the judgment does not cite specific precedents, the Court’s reasoning aligns with the settled principles laid down in:
- A.K. Kraipak v. Union of India (1969) — holding that administrative actions affecting rights must adhere to natural justice.
- Maneka Gandhi v. Union of India (1978) — affirming that arbitrariness is antithetical to equality under Article 14.
- Union of India v. Tulsiram Patel (1985) — reiterating that even administrative inquiries must follow fair procedure unless explicitly excluded.
These cases reinforce the Court’s view that procedural fairness cannot be compromised, particularly where livelihood or economic rights are involved.
Court’s Reasoning
The Court found that IOCL’s inquiry suffered from grave procedural infirmities. The petitioner was not given an opportunity to participate or to access the investigation materials. The video recording had gaps at crucial moments, especially the actual display of the slip, casting serious doubts on the transparency of the draw.
The Court observed that IOCL’s failure to share the investigation report and video denied the petitioner a fair chance to contest the findings. Such actions, the Court held, erode public faith in the integrity of public processes.
Hence, the Court concluded that the selection lacked the transparency expected of a public undertaking, warranting judicial intervention.
Conclusion
The Patna High Court quashed the IOCL’s order dated 23 January 2018 and directed the corporation to conduct a fresh draw of lots for the concerned dealership at East Champaran. The fresh draw must be conducted in the petitioner’s presence, with proper video recording, and ensuring full access to all relevant documents.
Pending this fresh draw, the earlier selection in favor of the private respondent shall remain suspended.
The Court thus reinforced that “natural justice is not a formality—it is the foundation of legitimacy in public administration.”
Implications
This judgment reiterates that transparency and procedural fairness are essential in public selections, even when they rely on random methods like draws. Public corporations like IOCL must ensure visible fairness, complete participation, and documented transparency to avoid judicial interference.
The decision strengthens the accountability framework for state-run enterprises, especially in dealership and distributorship allocations where livelihood opportunities are at stake.
FAQs
1. Why did the Patna High Court order a fresh draw for IOCL dealership allocation?
The Court found that IOCL’s earlier draw lacked transparency, the petitioner wasn’t given a chance to participate in the inquiry, and video evidence was incomplete, violating natural justice.
2. What does this judgment mean for IOCL’s selection procedures?
It compels IOCL and similar corporations to ensure transparent, fair, and participative selection procedures, particularly when allegations of manipulation are raised.
3. Can a court interfere with administrative decisions like IOCL’s draw of lots?
Yes. When administrative actions are arbitrary or violate natural justice, courts can quash them under their writ jurisdiction.
