Govt was told what was wrong, point by point

In reality, they were virtually the opposite. For, Naik reconstituted all DSBs in such a way that they had no option but to do the bidding of his party—all veiled by the cloak of ‘‘official’’ discretion.

Not that no one complained to Naik. In fact, last December—when the allotment process was well under way—the Parliamentary Standing Committee on Petroleum and Chemicals pointed out glaring loopholes in Naik’s guidelines. It even mentioned how it had got complaints from some DSB chairmen, all retired judges, that they were ‘‘pressured for allotment by politicians.’’

When contacted in Bhopal, Mulayam Singh Yadav, chairman of the committee, said: ‘‘I have already constituted a team to visit every state and look into the complaints in allotments. The new facts that have come up now will also be studied by the team.’’

Naik, speaking to The Indian Express, had denied any interference from the Ministry and said that he would take action if complaints were brought to his notice.

But the committee’s devastating report presaged the scam. It found:

• Naik followed no ‘‘institutional system’’ to select DSB chairmen from among retired judges. This ‘‘absolute and unhindered’’ power to select chairmen became ‘‘a source of corruption…negating the objective of transparency.’’ The committee therefore recommended that the high courts should be requested to form the panel of suitable retired judges from which the chairmen may be selected.

• Naik’s guidelines gave no security of tenure to the chairmen, though they were appointed for a two-year term. Within a year of the working of the guidelines, the Government dispensed with the services of 13 out of 59 chairmen.

This, the committee said, shows ‘‘the Government used its power indiscriminately’’ and that it ‘‘wants such persons as chairmen who would follow the dictates of the authority not prescribed in the guidelines.’’

• The Govt virtually gave a veto power to the chairman by doubling the weightage of his vote. To ensure ‘‘the objective of uniformity,’’ the committee said, the chairman should have the same power as his two colleagues.

In other words, the DSB should have functioned like a three-judge bench where the head is only administrative.

• The guidelines prescribed that candidates would be judged on the basis of their personality, education, capability to arrange finance and provide infrastructure, the committee found that there were no parameters on how the marks were to be awarded for each of these criteria. ‘‘This has resulted in an abnormal situation where the assessment has been left entirely to the subjectivity of the members of the DSBs.’’

• The committee recorded it even came across cases where DSB chairmen complained that they were under pressure from ‘‘politicians’’ to make allotments to ‘‘specific persons recommended by them.’’

• It suggested that the Government’s ‘‘Anti-Adulteration Cell,’’ set up in March 2001, which was meant to take note of complaints should be given ‘‘full functional autonomy.’’ The cell, between March and September last year, had received 810 complaints and ‘‘was able to report on 30.’’

• The committee didn’t buy the Govt’s claim that it had retained the power to allot dealerships of PSU oil companies with the intention of serving certain social objectives. The committee pointed out that ‘‘commercially strong’’ companies can alone serve ‘‘social objectives.’’ It took the view that in the deregulated era, retail outlets and distributorships should be auctioned.

Significantly, in the ’96 Satish Sharma case that first brought out abuse of discretion in petrol pump allotments, the petitioner, Common Cause, suggested public auction as a solution in much the same manner as the committee did. But the SC declined to ‘‘impose any procedure on the Government’’ as it is a matter of executive policy. ‘‘We however direct that any procedure laid down by the Government must be transparent, just, fair and non-arbitrary.’’