Allahabad High Court
Ramakant Paswan & 3 Others vs Indian Oil Corporation Ltd. Thru' ... on 30 July, 2014
Bench: Amreshwar Pratap Sahi, Vivek Kumar Birla
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 21 AFR Case :- WRIT - C No. - 38522 of 2014 Petitioner :- Ramakant Paswan & 3 Others Respondent :- Indian Oil Corporation Ltd. Thru' Chairman & 4 Others Counsel for Petitioner :- Murli Manohar,M.D. Singh Shekhar Counsel for Respondent :- A.S.G.I.,Shri Prakash Padia Hon'ble Amreshwar Pratap Sahi,J.
Hon'ble Vivek Kumar Birla,J.
Heard Sri M.D. Singh Shekhar learned counsel for the petitioners and Sri Prakash Padia for the respondent-Corporation.
The petitioners own truck tankers for supply of petroleum products. The petitioners claim themselves to be existing transporters engaged in the business of transporting petroleum products of various oil companies including the Indian Oil Corporation. They ply mostly from the Oil Depot at Mughalsarai, District Chandauli, U.P. They are now aggrieved by the new e-tender system and the terms and conditions thereof which is to be brought into effect from 1.1.2015. The tenders have been invited and the petitioners feel aggrieved by the new eligibility criteria as contained in Clause IV (5) read with VI (4) in relation to the manner of bid offers with 10% variation. They are also aggrieved by the alteration of the conditions of security deposit whereby the security deposit to be offered by transporters is much higher than that of the retail outlet owners.
Sri M.D. Singh Shekhar learned Senior Counsel contends that by the impugned terms and conditions two classes of competitors have been created for a common business which does not have any rational nexus with the object sought to be achieved and to the contrary it virtually amounts an indirect method of eliminating the petitioners from the business of transportation. He contends that the terms and conditions in respect of the petitioners is rigid and excessive inasmuch as previously 50 tankers could be offered by the petitioners who had purchased a considerable number of tankers for the said purpose. Under the new policy the petitioners would now be entitled only to offer 15 truck tankers whereas for the Retail Outlet owners it is unlimited. It is further stated that tax liability for example payment of octroi, municipal taxes etc was reimbursable earlier, but now it has to be paid by the petitioners. If the petitioners are given a contract there is a likelihood that they will be given contracts for far away distances which will entail more expenses and octroi and other taxes, whereas the Retail Outlet owners would not be burdened with any such extra expenditure. The age of vehicles has now been made effective from the date of manufacture instead of the date of registration. This also would eliminate many of the truck tankers of the petitioners and which is contrary to the earlier policy. Further, this policy has been introduced almost midway when the contract of the petitioners is yet to expire. The supply of equipment to be fixed on such tankers has now been made compulsory through the corporation for which the petitioners will have to bear the payment.
He has further invited the attention of the Court that any dispute arising out of the tender will be subject to the jurisdiction of the Court at Mughalsarai which is not possible as there is no Court at Mughalsarai. Sri Singh submits that the Courts are at the district headquarters at Chandauli and therefore such an inclusion in Clause 17 clearly reflects a complete non application of mind while drafting the new e-tender guidelines.
Replying to the said submissions Sri Prakash Padia submits that a change of policy is within the powers of the various Corporations and unless it can be shown that the tenders are tailored to suit any particular person or a monopolised group of persons it cannot be said that the change of policy is arbitrary or is hit by Article 14 of the Constitution of India. He has relied on several judgments including that in the case of M/s Michigin Rubber India Limited Vs. State of Karnataka reported in 2012 SCC (8) page 216 and another decision in the case of Maa Binda Express Carrier Vs. North East Frontier Railway reported in 2014 (3) SCC page 760.
He contends that the change of policy brings about facilities to all Retail Outlet owners in the shape of a consortium which would reduce existing burdens of transportation as also expenses. Thus, the Retail Outlet owners who are retailing petroleum products definitely form a class amongst themselves and which is a rational classification whereas the petitioners are only transporters. He, therefore, submits that such a policy is permissible to facilitate the retail outlet dealers for transportation of petroleum supply to their outlets. It is for this reason that in order to do away with any form of inconvenience that a new policy has been introduced. He further submits that the petitioners cannot claim to trade in a particular manner as they have no such fundamental or legal right. This policy has been made uniformly applicable. The tax liability which has been altered is also a matter of policy and it is open to the Corporation to fix security deposits separately for Retail Outlet dealers who are permanently in business with the petroleum Corporation as against the transporters who are only contract transporters.
He submits that so far as the word Mughalsarai occurring in Clause 17 is concerned that appears to be a mistake and it refers to the district of Chandauli itself. He further submits that the supply of equipments is in order to ensure security and quality with which the petitioners can have no possible complaint. He therefore contends that the claim of the petitioners for striking down the new policy and the system of e-tendering is misplaced and the writ petition deserves to be rejected.
Having considered the submissions raised, we find that the petitioners are now finding it difficult to operate their business under the new terms and conditions. The grounds that have been taken for raising a challenge to the new terms and conditions and the policy cannot be accepted by this Court inasmuch as it is for the respondents to find out the best methods of executing their plans for securing the business prospects of the company and their retailers. The primary object is to secure the supply of petroleum products and in order to consolidate the same that the new scheme has been unfolded.
The main contention of Sri M.D. Singh Shekhar is that this has resulted in the artificial creation of two class of businessmen for the same nature of business.
We are unable to agree inasmuch as the Retail Outlet dealers are directly in the business of dispensing petroleum products on behalf of the company and are not mere contractors. Their class is therefore obviously different from that of the petitioners who operate their truck tankers on contract basis. They therefore cannot claim any vested right or any indefeasible right to carry on trade with the respondent-Corporation on the old terms and conditions. The product is of the respondent Oil Corporation and it is free to choose the method of its transportation. Even otherwise in order to ensure that the Retail Outlets secure their supplies safely and timely, if a policy has been brought to allow them to have their tankers for their Retail Outlets, the same cannot be treated to be an act of discrimination. The operational field in limited by Clause IV (4) (b) and (c) as follows:-
"(b) RO Dealer/ Direct Customer may offer tank trucks (any number of Tts, i.e. one or more) as per requirement for their own supplied only and all such tank truck should be owned by the RO Dealer/ Direct Customer.
(c) RO Dealer, who owns tank truck/s and has part utilization of offered tank truck/s considering own supplies, can form consortium with only two other IOC RO dealers who are not having tank trucks and in that even specific terms mentioned in this tender document shall be applicable."
To the contrary it is in order to facilitate supplies which is in the larger public interest and in the interest of the Corporation's business as well as the Retail Outlet dealers.
On account of this new policy, if the petitioners' business is being reduced, then reduction in such business cannot be termed as an arbitrary act on the part of the respondents. The petitioners have neither any fundamental or legal right to force upon the respondents their own terms and conditions.
In the background aforesaid, it is clear that the terms and conditions which have been introduced are with the object to ensure supplies of petroleum through various methods that clearly falls within the realm of policy. Nothing has been demonstrated except the inconvenience which is being caused to the petitioners, that may establish any act of arbitrariness. It is always open to the contracting parties to run their business on such terms and conditions that may be fair and reasonable. It is not for the Court to read any unfairness in matters of public contract unless a violation of Article 14 or Article 19 (1) (g) is established. It is not for the Court to formulate a convenient policy.
We have considered all the submissions raised by Sri M.D. Singh Shekhar pointwise and we do not find any of the issues raised which may indicate an arbitrary act on the part of the respondents in introducing the new policy. Merely because the petitioners transporters may have to bear expenses over and above that were being previously reimbursed, and merely because their number of trucks might get reduced, the conditions imposed do not appear to be in any way violative of the fundamental rights guaranteed under the Constitution of India. If the petitioners are being asked not to have trucks and tankers more than 15 years old from the date of manufacture, the same is in consonance with the Motor Vehicles Act, 1988 and the rules framed thereunder and also in the interest of road safety and the supply of petroleum products.
Sri Shekhar has been unable to point out as to why such conditions are arbitrary. Similarly the reduction in the number of tankers and unlimited tankers in favour of the Retail Outlet dealers also does not create any disparity in the sense that contractors would be called upon to supply only when the dealers are unable or incapable to engage their own tankers. In this background, as a matter of fact, neither on a close scrutiny nor even broadly there is any constitutional violation so as to strike down the policy. The writ petition lacks merit and is accordingly dismissed.
Order Date :- 30.7.2014 Lalit Shukla