The Supreme Court on Friday quashed the government's August 9 order cancelling allotment of over 3000 petrol pumps and LPG dealerships since January 2000 in the wake of a controversy over their selection.

"The August 9, 2002 order, looked from any angle, cannot stand the scrutiny of law," a bench comprising Justice Y K Sabharwal and Justice H K Sema said while referring 417 of the 3760 cancelled allotments to a two retired-judge committee for scrutiny.

Assailing the prime minister's August 9 decision, the bench said the decision looked as if it was taken to gain popular accolade rather than in the interests of public probity.

Even if media allegations were made regarding political favouritism, the government was duty-bound to probe into it rather than take a decision to cancel the allotments en bloc, the bench said.

On August 9, 2002, it appears that the government did not have before it the total number of people selected as dealers
since January 1, 2000 nor the figure of the number of persons to whom the oil companies had issued Letters of Intent (LoI).

Hence, the government did not have the necessary data to consider en bloc cancellation of 3760 allotments, the bench said.

The bench said that the sole reason for the cancellation was a controversy that arose out of media allegations of favouritism in the allotments. This cannot be a reason to order en bloc cancellation of allotment of petrol pumps and other dealerships in petroleum products, it said.

The government cancelled the allotment of dealerships without applying its mind, the judges added.

The government admittedly examined no case even prima facie and did not keep in mind the enormous impact on the affected persons, several of whom had resigned jobs and made huge investments to set up the petrol pumps, the two-judge bench said.

"How can those against whom there is no whisper of allegation be clubbed with those against whom allegations of political nepotism was made?" it asked.

Referring the 417 cases in which there are alleged of political favouritism to a two retired judge-committee comprising Justice S C Agarwal and Justice P K Bahri, the court directed the government and all the four state-run oil companies to provide all relevant records within five days.

"If the committee, on prima facie consideration, finds no evidence of political favouritism, then it is open to the committee not to proceed against them," the bench said.

The Petrol Pumps Allotment Scam: Complete Coverage