Himachal Pradesh High Court
M/S Vikrant Oil Carrier vs Hindustan Petroleum Corporation Ltd on 4 January, 2021
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .
CWP No.628 of 2019 Reserved on: 14.12.2020 Decided on: 04.01.2021 M/s Vikrant Oil Carrier ....Petitioner.
Versus Hindustan Petroleum Corporation Ltd.
& others ... Respondents.
Coram
Hon'ble Mr. Justice Ajay Mohan Goel, Judge. Whether approved for reporting? Yes _______________________________________________________ For the petitioner : M/s Kshitij Sharma, Prashant Sharma and Balwinder Singh, Advocates.
For the respondents : Mr. Sumesh Raj, Dinesh Thakur and Mr. Sanjeev Sood, Additional Advocates General, with Ms. Divya Sood, Deputy Advocate General, for respondents No.1 and 2. M/s Anshul Bansal, Anshul Attri and Manju Datwalia, Advocates for respondents No.3 to 5. Mr. Rajesh Kumar Sharma, Advocate, for respondent No.6.
Mr. K.D. Sood, Senior Advocate, with Mr. Het Ram Thakur, Advocate, for respondent No.7.
(Through Video Conferencing).
Ajay Mohan Goel, Judge By way of this petition, the petitioner has, inter alia, prayed for the following reliefs:-
::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 2" A writ in the nature of mandamus seeking a direction to comply with the eligibility criterion as prescribed in .
the tender notice (Annexure P-1), and strictly enforcing the requirement of calibration certificates, which is an essential document in light of the fact that the petitioner has received categorical information on 04.02.2019 under the Right to Information Act (Annexure P-5) that the tank trucks tendered by the private respondents as mentioned in Annexure P-9, have not been issued the calibration certificates on the alleged date of inspection yet they have been selected wrongly.
And/or Direct that a proper enquiry be conducted into the matter of validity/ truthfulness of the alleged calibration certificates tendered by the private respondents as tabulated in Annexure P-9, because the same are prima facie invalid in light of the information supplied to the petitioner on 04.02.2019 (Annexure P-5) and hence the said tank trucks deserved to be rejected out rightly since they were open bodied tank trucks which could not have been tendered at all as per the DNIT.
And /or Direct that bid/tender of the private respondents be cancelled in view of forged/fictions calibration certificates so provided by them and deviation from the D.N.I.T. is arbitrary, illegal and unfair as held in the case of W.B. S.E.B. V. Patel Engineering Ltd. 2001 2 SCC 451. And/or Direct the official respondents to permit the petitioner to replace two tank trucks of 12 KL with 2 tank trucks of higher capacity as per Clause 5 (Pg. 22 of the Tender Notice), and in reference to the application of the petitioner dated 18.02,.2019 (Annexure P-7).
And/or Stay the issuance of any work orders to the tank trucks in question until an enquiry/inspection of the said tank trucks is carried out in accordance with the discipline ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 3 guidelines, which contemplate/permit an inspection by the Oil Company since the calibration shall surely vary .
as the figures quoted in the calibration certificates are dummy figures and not actual figures".
2. Brief facts necessary for the adjudication of this petition are as under:-
Respondent No.1-Corporation invited digitally signed e-
tenders for road transportation of bulk white petroleum products w.e.f.
01.10.2018 upto 30.09.2023, vide tender notice (Annexure P-1). This Notice Inviting Tenders was published on 28.07.2018. The scope of work was road transportation of bulk white petroleum products like Motor-Spirit (MS)/High Speed Diesel (HSD)/and Branded Fuels from Nalagarh IRD to locations within the State of Himachal Pradesh and outside the State. The anticipated Volume to be moved for the first 3 years, 4th and 5th years of the contract was as under:-
" Sr. No. Sector Volumn in KL
White Oils
1 to 3 year 4th & 5th year
st rd
1.Within FDZ ("Free Delivery Zone", that is, upto 39 RTKM) 75284 69601
2. Beyond FDZ 760996 700946
3. Polhilly2 44156 42873
4. Polhilly3 343520 347863"
::: Downloaded on - 04/01/2021 20:18:13 :::HCHP
4
The estimated tank trucks requirement for first 3 years, 4th & 5th years as .
mentioned therein was as under:-
" Sr. No. DESCRIPTION White oils
1st to 3rd year 4th & 5th year
1. Tank trucks with Capacity of 12 KL & above 48 31
and less than 18 KL
2. Tank trucks with Capacity of 18 KL and above 135 40"
Online payment of Earnest Money Deposit (EMD) prescribed in the Notice Inviting Tender was as under:-
Description HPCL
For Transporters Rs.5,000/- per Tank Truck in physical
possession.
For all Transporters offering Tank Trucks Rs.1,00,000/- per Tank Truck.
With temporary registration & affidavit (For 18 KL & above only) For SC/ST Transporters offering Tank Rs.5,000/- per Tank Truck." Trucks with Booking Slip
3. A Note appended under Condition No.1, contained in "Instructions to Tenderer", which can be found at page 33 of the Paper Book, provided as under:-
"Note: Tank trucks on Temporary registration means new chassis, with chassis number, engine number, fitted with ABS and with the provision ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 5 for installing tank of capacity of 18 KL and above at a later date. No .
open body Truck will be accepted. Tank trucks offered under Temporary Registration to be owned by the bidder".
4. Rejection criteria mentioned in Condition No.5 therein, provided as under:-
" 5. Rejection Criteria: Tenders/Tank trucks will be rejected in the event of the bidders not complying with any of the following tender conditions. HPCL may ask the bidder to submit/ resubmit/uploads any document(s) required to be submitted as a part of the Tender document or as a part of Technical evaluation within the stipulated time. In case the required document is not submitted/ uploaded within stipulated time, HPCL reserves the right to take decision as deemed fit basis the available documents submitted by the bidder.
a) Tenders not submitted in E-mode.
b) Non-payment of online EMD/Insufficient EMD/non-submission of MSE certificate( on or before due date & time of the tender). In case of shortfall in EMD paid with respect to the number of trucks offered, Tank trucks (TT) will be rejected till the EMD is in accordance with number of Tank trucks. Attached TT will be rejected first following by Own TT.
In both the cases lower capacity TT of older age will be rejected first. The tender will be then evaluated with the balance Tank trucks subject to meeting the minimum tender Tank trucks criteria.
c) Number of tank trucks offered is not in line with the tender minimum ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 6 tank trucks requirement.
.
d) Ration of Own to Attached TT is not as per Tender Criteria. In such cases lower capacity attached TT of older age will be rejected first following by higher capacity attached TT is as per the tender criteria for ration of Own to Attached tank trucks offered.
e) Age of the tank trucks offered is not meeting tender tank trucks age requirement. In such case the tank trucks not meeting the age criteria will be rejected & the tender will be evaluated with the balance tank trucks criteria.
f) Tenders without the required valid documents for the tank trucks as given below:-
Description Documents Required
Tank Trucks RC Book, PESO Licence &
Celibration Certificates
Tank Trucks with Temporary Temporary Chasis Registration
Registration Certificate & affidavit in the
Prescribed format.
TT offered under Booking slip Chassis Booking Slip & (For SC/ST Tenderers) affidavit in the prescribed format.
In such case the tank trucks without the relevant documents will be rejected & the tender will be evaluated with the balance tank trucks subject to meeting the minimum tender tank trucks criteria.
g) Mismatch between capacity as per PESO license and calibration certificate of the tank trucks. The tank trucks having celibrated capacity higher than that mentioned in PESO license TT will be rejected and the tender will be evaluated with the balance tank trucks subject to meeting ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 7 the minimum tender tank trucks criteria.
.
h) The Micro & Small Enterprises tenders are not permitted to attach tank trucks of non-Micro & Small Enterprises entries. In such case the tank trucks belonging to non MSE entries will be rejected and the tender will be accordingly evaluated with the balance tank trucks subject to meeting the minimum tank trucks criteria.
i) Tenders not meeting the tender terms & conditions or incomplete in any respect or with any additions/ deletions/ deviations or modifications are liable to be summarily rejected without any further communication to the tenderers and decision of HPC in this regard will final and binding.
j) Undertaking for willingness to participate in the e reserve auction process if Reserve Auction is applicable for the tender".
5. In terms of Condition No.8 of the "Instructions to Tenderers", the Technical Bid was to comprise of the following:-
" 8. Technical Bid.
1. Covering letter listing all enclosures.
2. Category Declaration for the bid (Attachment-2).
3. Particulars of Tenderer (Attachment-3)
4. Particulars of T/T's offered (Attachment-4).
5. Affidavit/s from the Owners of the attached (hired) Tank Trucks/ Proposed purchase of T/Ts (Annexure to Attachment-4).
6. Details of relationship with Directors of HPC & Declaration 'I' 'II' and 'III' (Attachment-5).::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 8
7. Attested copy of Registration under Micro & Small Enterprises, if .
applicable.
8. Caste certificate (Wherever applicable) issued by Competent Authority as per format (Attachment-6).
9. Attested copies of Company Registration Certificate (if applicable).
10. Attested copies of Partnership Deed/Certificate of Incorporation.
11. Attested copies of valid Registration Certificate, CCOE License and Calibration Certificate for each of the tank trucks offered.
12. Power of Attorney (Attachment-7).
13. Undertaking for the tank trucks offered (Attachment-8).
14. Integrity pact (Attachment-1).
15. Undertaking for recovery for installation of VTS (Attachment-10).
16. Undertaking for conversion of tank trucks to bottom loading & VRS (Attachment-10).
17. Declaration from tenderer for not in the Blacklisting/Holiday list of any Government or quasi Government agencies or PSUs.)Attachment-
11)".
6. The Techno Commercial Bid as per the Notice Inviting Bid was to include the following:-
"a. Integrity Pact duly signed & witnessed b. Attachments/ Annexures only as sought thru the e-tender duly filled, signed & stamped needs to be uploaded as per requirement. c. Copies of Tax Registrations.
d. Copies of Registration Certificate under MSE etc. ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 9 e. Declarations- Delisting, Particulars of Tenderer for GST, Pan No. .
f. particulars of Bidder & Organization details g Bidders have to ensure that Rates/Prices are not mentioned anywhere in Techno Commercial bid, falling which the bid is liable to be rejected".
7. Clause-1 of Condition No.40, which dealt with miscellaneous issues, provided as under:-
"1. Successful bidders will be issued Letter of Acceptance (LOA).
Bidders will have to comply with all formalities as specified in the LOA, failing which the LOA may be cancelled, EMD forfeited and the action taken as per HPCL Holiday Listing Guidelines. The Guidelines for Holiday Listing (banning of business dealing) are available on HPCL website (http:// www. Hindustanpetroleum.com/TendersAnd Contracts) Verification of documents submitted by the successful bidders will be carried out after the issuance of LOA during induction of TT at the respective terminal/depot for which the tender is floated. In case of any discrepancy between the documents submitted in the bid with respect to the originals or failure to produce the original document for verifications and make available the TT for induction, HPCL reserves the right to:
1. Take action against the bidder(s) as per HPCL Holiday Listing Guidelines.
2. Black List the TTS offered.
3. Both of the above".::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 10
8. As per the Notice Inviting Bid, a successful tenderer was .
required before undertaking the contract, to execute agreement within 15 days of the issue of LOA/work order and was to physically place the tank trucks at the location within 15 days from the issue of LOA/work order. It was further provided that HPCL may allow additional time upto 15 days for execution of agreement and in case of failure, HPCL was to have the right to cancel the LOA/work order.
9. The Due Date of tender was 14.08.2018, Technical Evaluation of the same was uploaded on 22.09.2018 and Commercial evaluation thereof was completed on 15.10.2018. Thereafter, LOAs were given on 17.12.2018.
10. The petitioner as well as the private respondents participated in the said process and this petition stands filed by the petitioner inter alia on the ground that the award of tender and issuance of LOA to the private respondents by respondent No.1 is bad in law, inter alia, on the ground that the " Calibration Certificates" as submitted by the private respondents, at the time of participation in the tender process were procured. Though, there are other issues also, which stand ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 11 raised by way of this writ petition, by the petitioner, but as learned .
counsel for the petitioner had primarily argued on the point of "Calibration Certificates", therefore, this Court is deciding this issue in this petition.
11. The contention of learned counsel for the petitioner is that the technical bid in terms of the Notice Inviting Tender, was to, inter alia, consist of attested copies of valid Registration Certificate, CCOE Licence and Calibration Certificates of each of the tank trucks offered.
As per him, this was an essential condition of the tender. Calibration Certificates of the tank trucks are issued by respondent No.6. By referring to Annexure P-5, which is the information obtained under Right to Information Act, as well as reply which has been filed to the writ petition by respondent No.7, learned counsel for the petitioner has argued that the tanks of private respondents were never physically inspected in the concerned and required premises for the purpose of issuance of the Calibration Certificates and said Calibration Certificates were thus procured, which sets at naught the allotment of work in favour of the private respondents as the same was obtained by them on the basis of invalid Calibration Certificates. Learned counsel has argued ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 12 that there is no record of entry, exit or receipt of fueling charges placed .
on record either by the private respondents or respondent No.7 to demonstrate that the tanks of the private respondents ever visited the premises of respondent No.7 for their physical verification for the purpose of issuance of the Calibration Certificates, which speaks volume of the manner in which the said certificates have been issued in favour of the private respondents, thus, rendering the process as void ab initio. Learned counsel has also argued that open bodied tank trucks of the private respondents have been accepted by respondent No.1 in violation of the provisions of the Notice Inviting Bid. He has submitted that the tank trucks as stand specified in Attachment-4 (Annexure P-2 to P-5 appended with the petition) were open tank trucks, i.e. trucks with no exit at the rare. He has submitted that Rule 14 of the Legal Metrology General Rules, 2011, read with 9th Schedule thereto provides for the procedure which has to be followed in the calibration facility in the course of issuing a Calibration Certificate. He has argued that the tank trucks of the private respondents in fact never went to the IOCL calibration facility, as information sought from IOCL does not demonstrates any entry, exit and fueling charges etc. deposited with ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 13 regard to 22 Trucks by the private respondents.
.
12. By referring to Annexure P-5, learned counsel has submitted that respondent No.7 through this document has confirmed that 22 Trucks in issue never visited the Depot on the date of their alleged calibration, which as per him leads to only one conclusion that said Calibration Certificates were procured. It is in this backdrop, petitioner has prayed for the reliefs already enumerated hereinabove.
13. In their reply, filed to the petition, respondents No.1 and 2, in para-4 of the preliminary submissions have mentioned as under:-
"With regards to the petitioner's misconceived, incorrect and misplaced allegation against the answering respondent that respondent has wrongly considered fictitious calibration certificates, the answering respondent submits that the answering respondents have technically evaluated the TTs offered by checking the certificates issued by statutory bodies like RTO, PESO, Legal Metrology. These certificates are uploaded by the tenderers. Thereafter, the answering respondents chick if the TT offered is whether an oil tanker or not i.e. not an open bodied truck and this is ascertained by the answering respondents by checking the RC BOOK (issued by ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 14 Regional Transport Office), PESO License (issued by .
Petroleum & Explosives Safety Organization), Calibration certificates (issued by Department of Legal Metrology) all of which are issued by Government bodies. It is germane to note that at the time of Technical Evaluation, the answering respondent only checks the scanned copies of the certificates which were prima facie found to be alright, as they were issued by Government bodies. Further in the present case, as a precautionary measure the answering respondents have gotten all the 22 TTs calibration certificates verified from the officer of respondent no.6 i.e. Legal Metrology. Further, on prima facie perusal of the RC, it is clearly evident that TTs are mentioned as tanker in all the 22 cases."
14. In reply, on merit to the petition, the stand of these respondents with regard to Calibration Certificates is that the answering respondents have got the certificates cross-verified from the concerned Inspector of Legal Metrology Department, i.e. respondent No.6 and hence, the plea of the petitioner against said certificates does not holds goods.
15. In its reply, filed to the petition, the stand of respondent ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 15 No.6, as borne out from para-3 of the preliminary submissions is as .
under:-
"That the petitioner has malafidely and on the basis of false information alleged the answering respondent to be responsible for not checking the vehicles as per the rules and regulations. It is submitted that before the calibration (verification/stamping) work is started the licensee of weights and measures check the same and if it is found in order he puts the same for calibration/stamping to the Inspector Legal Metrology.
In the present case also the licensee had checked the vehicles on different dates and has also received labour fees according to the capacity of vehicles tank. It is also submitted that the Oil Depot do not charge any calibration fees and that they charge for water usage only. Therefore the alleged vehicles were properly checked and the present petitioner in order to get more of his tankers in business with the oil company has framed a false story trying to dislodge the other tenderers and demerit the answering respondent. Thus the present petition is false and devoid of any merit and thus deserves to be dismissed."
16. In its reply, filed to the petition, respondent No.7, in para-1 ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 16 of the preliminary submissions has stated that as per the record of the .
respondent-corporation, "there is no entry of these vehicles in Ambala Terminal of the Indian Oil Corporation as has been so stated by the PIO of the Indian Oil Corporation, under the Right to Information Act".
17. In a joint reply filed to the petition by respondents No.3 to 5, the stand taken by the said respondents is that the tender was awarded to them after duly verifying their documentation and by strictly adhering to the terms of the Notice Inviting Tender. It is further their stand that the tank trucks were inspected by one Shri Kamal Sarin, Inspector, Legal Metrology Ambala of the Indian Oil Corporation Terminal/Depot Ambala in terms of Annexure RA-2 appended with their reply.
18. It is pertinent to mention, at this stage itself, that in terms of the order passed by this Court, respondents No.6 and 7 have produced before the Court the original record for the purpose of ascertaining the fact as to whether the vehicles in issue actually visited the premises of respondent No.7 for the purpose of issuance of the Calibration Certificates or not.
19. I have heard learned counsel for the parties and have gone ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 17 through the record of the case.
.
20. Before proceeding further, this Court would like to dwell upon the scope of the power of judicial review of this Court under Article 226 of the Constitution of India in contract matters as settled by Hon'ble Supreme Court of India. In a recent judgment, i.e. Silppi Constructions Contractors Vs. Union of India and another 2019 SCC OnLine SC 1133, Hon'ble Supreme Court of India has taken note of the previous judgments of the Hon'ble Court in this regard and observed and held as under:-
"7. In Tata Cellular vs. Union of India, it was held that judicial review of government contracts was permissible in order to prevent arbitrariness or favouritism. The principles enunciated in this case are :-
(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the administrative decision. If a ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 18 review of the administrative decision is .
permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-
administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 19 arbitrariness not affected by bias or .
actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
8. In Raunaq International Ltd.
vs. I.V.R. Construction Ltd., this Court held that superior courts should not interfere in matters of tenders unless substantial public interest was involved or the transaction was mala fide.
9. In Air India Limited vs. Cochin International Airport Ltd., this Court once again stressed the need for overwhelming public interest to justify judicial intervention in contracts involving the State and its instrumentalities. It was held that Courts must proceed with great caution while exercising their discretionary powers and should exercise these powers only in furtherance of public interest and not merely on making out a legal point.
::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 2010. In KSIIDC Ltd. vs. Cavalet .
India Ltd.4 it was held that while effective steps must be taken to realise the maximum amount, the High Court exercising its power under Article 226of the Constitution is not competent to decide the correctness of the sale affected by the Corporation.
11. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd.5 it was held that while exercising power of judicial review in respect of contracts, the Court should concern itself primarily with the question, whether there has been any infirmity in the decision-making process. By way of judicial review, Court cannot examine details of terms of contract which have been entered into by public bodies or State.
12. In B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd.6 it was held that it is not always necessary that a contract be awarded to the lowest tenderer and it must be kept in mind that the employer is the best judge therefor; the same ordinarily being ::: Downloaded on - 04/01/2021 20:18:13 :::HCHP 21 within its domain. Therefore, the court's .
interference in such matters should be minimal. The High Court's jurisdiction in such matters being limited, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record.
13.
r In Jagdish Mandal vs. State of
Orissait was held:
"22. Judicial review of
administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 22 power of judicial review will not be permitted to be invoked to protect private .
interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold........"
14. In Michigan Rubber (India) Ltd. vs. State of Karnataka & Ors. it was held that if State or its instrumentalities acted reasonably, fairly and in public interest in awarding contract, interference by Court would be very restrictive since no person could claim fundamental right to carry on business with the Government. Therefore, the Courts would not normally interfere in policy decisions and in matters challenging award of contract by State or public authorities.
::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 2315. In Afcons Infrastructure Ltd. vs. .
Nagpur Metro Rail Corporation Ltd. it was held that a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision-making process or the decision. The owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given.
16. In Montecarlo vs. NTPC Ltd.10 it was held that where a decision is taken that is manifestly in consonance with the language of the tender document or ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 24 sub-serves the purpose for which the tender .
is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.
17. In Municipal Corporation, Ujjain and Another vs. BVG India Ltd. it was held that the authority concerned is in the best position to find out the best person or the best quotation depending on the work to be entrusted under the contract. The Court cannot compel the authority to choose such undeserving person/company to carry out the work. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 25 either in correcting mistakes or in .
rectifying defects or even at times in re-
doing the entire work.
18. Most recently this Court inCaretel Infotech Limited vs. Hindustan Petroleum Corporation Limited observed that a writ petition underArticle 226of the Constitution of India was maintainable only in view of government and public sector enterprises venturing into economic activities. This Court observed that there are various checks and balances to ensure fairness in procedure. It was observed that the window has been opened too wide as every small or big tender is challenged as a matter of routine which results in government and public sectors suffering when unnecessary, close scrutiny of minute details is done.
19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 26 decisions has cautioned time and again .
that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning ofArticle 12of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 27 reluctant because most of us in judges' .
robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 28 authority; the court must realise that the .
authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal.
The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
21. Similarly, in Bharat Coking Coal Ltd. and others Vs. AMR Dev Prabha and others 2020 SCC Online SC 335, the Hon'ble Supreme Court has been pleased to reiterate as under:
29. The scope of judicial review in tenders has been explored in-depth in a catena of cases. It is settled that constitutional courts are concerned only with lawfulness of a decision, and not its soundness. Phrased differently, Courts ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 29 ought not to sit in appeal over decisions of .
executive authorities or instrumentalities.
Plausible decisions need not be overturned, and latitude ought to be granted to the State in exercise of executive power so that the constitutional separation of powers is not encroached upon.5 However, allegations of illegality, irrationality and procedural impropriety would be enough grounds for courts to assume jurisdiction and remedy such ills. This is especially true given our unique domestic circumstances, which have demonstrated the need for judicial intervention numerous times. Hence, it would only be the decision-making process which would be the subject of judicial enquiry, and not the end result (save as may be necessary to guide determination of the former)."
22. To begin with, the tender notice (Ext.P-1) invited tenders for road transportation of bulk white petroleum products like Motor-
Spirit (MS)/High Speed Diesel (HSD)/and Branded Fuels from ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 30 Nalagarh IRD to locations within the State and outside the State. The .
award of "contract", as envisaged in the tender notice for road transportation of bulk white petroleum products was w.e.f. 01.10.2018 upto 30.09.2023. The rejection criteria as envisaged in the tender notice, provided that tenders of tank trucks will be rejected in the event of the bidders not complying with tender conditions envisaged therein. This inter alia included tenders without required valid documents for the tank trucks, which included R.C. Book, PESO Licence and Calibration Certificate. Technical bid as envisaged in the tender notice, provided for attested copies of valid Registration Certificate, CCOE Licence and Calibration Certificates for each of the tank trucks offered.
23. There is in force the Legal Metrology Act, 2009. As per the preamble of the said Act, the purpose of enacting the same is to establish and enforce standards of weights and measures, regulate trade and commerce in weights, measures and other goods which are sold or distributed by weight, measure or number and for matters connected therewith or incidental thereto. Section 52 of the said Act confers upon the Central Government Power to make rules by notification for carrying out the provisions of the Act. In exercise of the said power, the ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 31 Central Government has framed the Legal Metrology General Rules, .
2011. Rule 14 thereof reads as under:-
"Procedure for carrying out calibration of vehicle tanks, etc.-The procedure for carrying out calibration of vehicle tanks, etc., shall be as is specified in Ninth Schedule."
24. The Ninth Schedule of the said Rules deals with the procedure for carrying out calibration of vehicle tanks etc.. Part-1 of the same deals with CALIBRATION OF VEHICLE TANKS FOR PETROLEUM PRODUCTS AND THEIR LIQUIDS. Clause-4 thereof prescribes the calibration procedure, which reads as under:-
" 4. Calibration Procedure
(a) Vehicle tanks used as measures shall be calibrated as capacity measures. In the case of meter equipped tanks the meter shall be treated as a separate measuring instrument for purpose of calibration.
(b) The compartment capacity or capacities shall be taken as including the capacities of the delivery lines leading from the emergency, safety or master valve to the outlet valve (discharge valve) provided that in the case of vehicle compartment terminating in a single delivery pipeline fitted with an outlet valve, the ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 32 compartment capacity or capacities shall be taken as .
excluding the capacity of the delivery pipeline. A notice shall be prominently exhibited on the vehicle tank indicating clearly and indelibly the following:-
Marked capacity includes capacity of delivery line; or Marked capacity excludes capacity of delivery line (as the case may be).
The safety or master valve shall be positioned at the lowest point of outlet from the compartment.
(c) The proving measure or bulk meter should be mounted on an overhead gantry or a separate framework in a convenient position above a firm and level platform, preferably of concrete on which the vehicle stands during calibration.
(d) the vehicle shall be placed in a level position before commencing calibration as the accuracy of calibration depends on the level of the tank; the sequence in which compartments are calibrated should be such as to minimize unequal spring deflection on the axles of the vehicle.
(e) The front and rear tyres of the vehicle should be at the correct pressures. The tyres should be inspected for wear which should be reasonably even and there should not be excessive difference in the tread between the font set of tyres and the rear set at the time of calibration.::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 33
(f) The interior of the compartment should be inspected .
and cleaned where necessary.
(g) Before starting calibration, the pipelines, outlet valves and other connections shall be tested against leakage by partially filling and draining each compartment in turn through the outlet valve. During the process sufficient quantity of the testing medium should be introduced inside the compartment to wet the internal surface of the tank and pipelines.
(h) After taking the precautions mentioned above, the compartment to be calibrated shall be filled with appropriate proving measures or bulk meters to the marked capacity of the compartment with the delivery lines leading to the outlet valve full or empty as provided in (b) above. The dip/ullage mark shall be taken carefully and the line shall be cut on the dip/ullage stick at right angles to the axis with the help of try-square and scriber. If an ullage indicator is used, it shall be correctly set and sealed.
(i) A mark shall also be made on the dipstick to indicate the 'proof level'. In the case of ullage stick, the distanced from the ullage point to the T-joint shall be marked on the stick.
Note- The sequence for calibrating compartments should be sequence of filling them. The sequence of ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 34 discharge shall be in the reverse order to that of filling.
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(j) Each compartment should be left full before proceeding to the next in sequence."
The above Rules and Clauses of the Schedule quoted hereinabove demonstrate that there is an elaborate statutory procedure prescribed with regard to the calibration of vehicle tanks of petroleum products and other liquids.
25. to Coming back to the facts of this case, the allegation of the petitioner is that the calibration certificates appended with the tender by the private respondents were procured, because in reality no calibration of the tanks of the said respondents was done in terms of the provisions of Legal Metrology General Rules, 2011 and Schedule appended thereto in the calibration facility of respondent No.7.
26. It is not in dispute that the procedure for issuance of a calibration certificate can be carried out only in a calibration facility which is well equipped in terms of the Legal Metrology Act and Rules framed there under. It is also not in dispute that for the purpose of this particular petition, the calibration facility was the Oil Depot of respondent No.7 at Ambala.
::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 3527. With regard to the query for providing the time when the .
vehicle numbers mentioned in said annexure came to the Depot of respondent No.7 and when had they left the Depot on the dates in issue alongwith draft number and calibration fee etc., the response of respondent No.7 vide Annexure P-5, dated 04.02.2019, is to the effect that none of the vehicles mentioned in the query have entered/gone out by Ambala Terminal on the dates mentioned in Annexure P-5 and no calibration fee has been paid. The details of the vehicles and dates as are mentioned in Annexure P-5 are stated hereinbelow:-
"1. Vehicle No.HR39B7000 dated 09.08.2018
2. Vehicle No.HR39D8346 dated 09.08.2018
3. Vehicle No.HR39B1152 dated 08.08.2018
4. Vehicle No.HR39D1894 dated 08.08.2018
5. Vehicle No.HR39D0946 dated 09.08.2018
6. Vehicle No.HR39D1784 dated 09.08.2018
7. Vehicle No.HR39D4369 dated 09.08.2018
8. Vehicle No.HR39D4696 dated 09.08.2018
9. Vehicle No.HR25F0141 dated 04.07.2018
10. Vehicle No.HR39A6688 dated 10.08.2018
11. Vehicle No.HR39A7505 dated 10.08.2018"
28. The response filed to the writ petition by respondent No.7 ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 36 demonstrates that it is the specific stand of the said respondent that there .
is no entry of the vehicles of the private respondents in Ambala Terminal for the purpose of issuance of calibration certificates. The records which have been produced by the said respondent, are also to this effect.
29. Now, when the reply to the writ petition by respondent No.6 is harmoniously read with the response filed by respondent No.7, one fails to understand as to how the officer concerned has issued the calibration certificates to the tanks of the private respondents without these tanks actually visiting the calibration facility of respondent No.7.
From this, the only inference which can be drawn is that issuance of calibration certificates in favour of tanks of private respondents by Inspector Legal Metrology is nothing but a farce, as neither these tanks visited the calibration facility of respondent No.7 as there is no record to substantiate this fact, nor the tanks actually underwent the calibration procedure prescribed in the Ninth Schedule of the Legal Metrology General Rules, 2011, which deals with the calibration of vehicle tanks for petroleum products and other liquids.
30. The arguments of respondents No.3 to 5 as well as ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 37 respondent No.6 that no record in this regard is maintained by .
respondent No.7, cannot be accepted because this is not the stand of respondent No.7. The stand of respondent No.7 in the short reply filed by it to the writ petition is very candid that as per the record available with the said respondent, there is no entry of the vehicles in the Ambala Terminal of the Indian Oil Corporation on the dates on which purportedly they were inspected by the Inspector concerned for the purpose of issuance of calibration certificates. The record produced by respondent No.6 also does not demonstrates that there is any contemporary material on record to substantiate that the vehicles were actually inspected at the site by the Inspector and calibration procedure was followed before issuance of calibration certificates.
31. Therefore, in these circumstances, the only conclusion which can be arrived at is that the calibration certificates appended with the tender form by the private respondents, on the strength of which their tenders were accepted by respondents No.1 and 2, were procured ones as the tanks of the private respondents never actually visited the calibration facility of respondent No.7, nor they underwent any calibration procedure on the strength of which calibration certificates ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 38 could have been issued to the said tanks.
.
32. This Court is aware of its limitations while deciding disputed questions of fact in its writ jurisdiction. The contention of the petitioner that the tanks of the private respondents never visited the calibration facility of respondent No.7, undoubtedly is a question of fact which in their respective replies has been denied by the private respondents. However, as no material has been placed on record by respondents No.3 to 5 to demonstrate that the tank trucks in issue ever visited the calibration facility of respondent No.7 and further, as respondent No.7 in its reply has nowhere expressly mentioned that the tank trucks visited its calibration facility for the purpose of calibration verification, therefore, in the peculiar facts of this case, this question of fact does not becomes seriously disputed question of fact when the annexures on record placed by the petitioner and record produced by respondents No.6 and 7 corroborates the fact that the tank trucks of private respondents never visited the calibration facility of respondent No.7 for calibration verification on the dates in issue.
33. Accordingly, this petition is allowed to the extent that acceptance of the tenders of the private respondents for the purpose of ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 39 work allotted to them by respondents No.1 and 2 based upon Notice .
Inviting Tenders ( Annexure P-1), is held to be bad and the same is also ordered to be quashed and set aside having been obtained on the basis of procured calibration certificate.
34. At this stage, the Court also wants to refer to the submission made by Mr. Bipin Negi, learned Senior Counsel appearing for respondents No.1 and 2, that if the Court comes to the conclusion that the calibration certificates were procured by the private respondents and the tanks have never actually visited the calibration facility of respondent No.7, then also the contract entered into between respondents No.1 and 2 and respondents No.3 to 5 may not be disturbed, as respondents No.1 and 2 bonafidely acted upon the calibration certificates submitted by respondents No.3 to 5. This submission of learned Senior Counsel appearing for respondents No.1 and 2 cannot be accepted. Respondent No.1 is a public corporation. The work of transportation of bulk of petroleum products etc. is in the nature of government largessees and the process of allotment of the said work by way of tender etc. has to be completely transparent. The parties which indulge in sharp practice for the purpose of obtaining such like ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP 40 work, cannot be allowed to take the benefit of their own wrongs.
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However, in the interest of justice, it is ordered that respondents No.1 and 2 can continue with the present arrangement of transportation of bulk petroleum products etc. in terms of the contract entered with respondents No.3 to 5, upto 31.01.2021 and in the interregnum, if so advised, respondents No.1 and 2 may invite fresh tenders for transportation of the said products.
35. Writ petition stands disposed of in above terms. Other reliefs prayed for by the petitioner have not been adjudicated upon by this Court and in case the petitioner so desires, it shall be at liberty to press them by way of independent petition(s). Pending miscellaneous applications, if any, also stand disposed of. No order as to costs.
(Ajay Mohan Goel) Judge January 04, 2021 (Rishi) ::: Downloaded on - 04/01/2021 20:18:14 :::HCHP