Minister can't usurp state property, says SC

A public authority or minister cannot squander or fritter away state property as largesse and contracts by using power of discretion, the Supreme Court has said.

"A public authority in its dealings has to be fair, objective, non-arbitrary, transparent and non-discriminatory. The discretion vested in such an authority, which is a concomitant of its power is coupled with duty and can never be unregulated or unbridled," a bench of Justices N V Ramana and Amitava Roy said.

The top court ordered the Indian Oil Corporation to conduct an in-house inquiry to fix liability of errant officials for allowing Shashi Prabha Shuka, a woman, to run a petrol pump in Basti, Uttar Pradesh.

The Delhi High Court had in 1997, cancelled the allotment of 179 retail outlets of petrol pumps and 155 LPG distributorships granted between 1993 and 1996 by the then petroleum minister under his discretionary quota.

"We are greatly anguished and appalled by the manner in which the corporation and its functionaries have acted in the face of the judgment and order dated 29.08.1997 of the Delhi High Court. We have no hesitation to record that we are left with the impression that the failures on their part may not be wholly bona fide," the bench said.

The court sought an action taken report from the IOC within two months, saying any non-compliance of its directions would be treated as contempt in law.

It, however, allowed an appeal filed by the IOC against the Allahabad High Court's judgement in 2004. The  court granted her permission to carry on with her dealership.

Reversing the  high court's order, the top court directed for initiating a  process for allotment of fresh dealership in the area.

"The dealership of the respondent had been cancelled being vitiated by favouritism due to exercise of fanciful discretion of the departmental minister, which was neither approved nor condoned. Nevertheless, the corporation visibly did not act in initiating the fresh process for auction," the court noted.