Madhya Pradesh High Court
Rajesh Kumar Rathore vs Indian Oil Corporation Limited on 6 April, 2015
Author: K.K. Trivedi
Bench: K.K. Trivedi
HIGH COURT OF MADHYA PRADESH :
JABALPUR.
Writ Petition No.10938/2014
Rajesh Kumar Rathore & others.
Vs.
Indian Oil Corporation Limited and others.
PRESENT :
Hon'ble Shri Justice K.K. Trivedi. J.
Shri R.N. Singh, learned Senior counsel assisted by Shri
Abhishek Arjariya, learned counsel for the petitioner.
Shri Aditya Adhikari, learned Senior counsel assisted by
Shri Ritvik Parasar, learned counsel for the respondent
No.1.
Shri Vaibhav Tiwari, learned Panel Lawyer, for the
respondent No.2-State.
Shri Jayant Neekhra, learned counsel for the
respondent No.3.
Shri Manikant Sharma, learned counsel for the
respondent No.4.
ORDER
(6.04.2015) This writ petition under Article 226 of the Constitution of India, takes exception to the order dated 7.5.2014, passed by the Chief Area Manager of the respondent No.1, by which the LPG distributorship at Ashta, has been granted to the respondent No.4, inter alia on the ground that the said grant was violative of the Scheme made by the respondent- Indian Oil Corporation (hereinafter referred to as the Corporation for brevity) as the respondent No.4 was not fulfilling the criterias 2 laid down in the said guidelines. It is contended that since the eligibility criteria have not been fulfilled by the respondent No.4, in fact, the application filed by the respondent No.4 for grant of such distributorship should have been rejected at the threshold. On the other hand, putting it for the Field Verification of Credential (hereinafter referred to as the FVC for short), wrong reports were submitted by the officials of the respondent No.1 to ensure that the respondent No.4 be granted such distributorship. In fact, the false information was given by the respondent No.4 in his application and in terms of Clause-11 of the Scheme, such an application of the petitioner was required to be rejected. When the petitioner came to know about such an application, they issued the notices to the respondents and complained before the authorities on 9.4.2014 through the counsel, which application was not considered by the respondents. Repeated representations were made and since on 7.5.2014, the fact was notified that the distributorship is being allotted to the respondent No.4, this writ petition was required to be filed. According to the petitioners, the land offerred by the respondent No.4 for construction of the godown for storage of the LPG cylinder was not in terms of the provisions made in the Scheme and as it was short of requirements, the respondent No.4 was ineligible to grant of such LPG distributorship. However, with malafide intentions since such a claim of respondent No.4 was considered and allowed, the present writ petition was required to be filed.
2: By way of amendment in the writ petition, further discrepancies in the application of respondent No.4 have been pointed out by the petitioners. The reliefs claimed in the writ petition are to the effect that the respondent No.1 be restrained to award LPG distributorship at Ashta to the 3 respondent No.4, to quash the impugned order dated 7.5.2014 and the entire selection process of distributorship at Ashta commenced by the respondent No.1 and to issue a direction to the respondent No.1 to convene another meeting to finalise the lot after declaring the respondent No.4 as disqualified amongst remaining participant for LPG distributorship at Ashta.
3: On receipt of the notice of the writ petition, the respondent No.1 has filed a return contending inter alia that the petition is not maintainable in view of the fact that proceedings were rightly done by the respondent- Corporation and after receipt of 23 applications in all, in response to the advertisement issued by the respondent No.1, 12 applicants were declared eligible. Out of 12 applications, when the draw was held, the respondent No.4 was declared as winner. The FVC conducted a field verification and since it was found that in fact the respondent No.4 has given the right information, was fulfilling all the criterias mentioned in the Scheme for allotment of distributorship, the letter of indent was issued to the respondent No.4 on 29.3.2014. On receipt of the applications/representations/notice from the petitioners, all facts were verified and rightly the order was communicated to the petitioners that selection of respondent No.4 was just and proper. In fact, as per the requirement prescribed in the Scheme, the respondent No.4 has not only furnished the information about the ownership of the plot, but has also indicated that there is a motorable road connecting the said plot with the main road for the purposes of transportation of gas cylinders. On a verification, the Tahsildar after obtaining the field map has also certified that the road was available to approach the main road from the land of the respondent No.4. On being satisfied with all these 4 requirements, and the fact that the No Objection Certificate was issued by the revenue authorities, the letter of indent was issued to the respondent No.4. It is contended that since the selection of LPG distributorship for an advertised location is done by draw from all the eligible applicants, who have applied for the said location, if in a draw a particular candidate is selected, only his credentials are to be verified and the comparative merits of other applicants are not to be prepared. Such a condition prescribed in the mode of selection under the guidelines or Scheme have not been said to be arbitrary, illegal or otherwise bad in law. No error whatsoever was found in such proceedings and, as such, the allegations made by the petitioners about the arbitrary action of respondent No.1 are wholly misconceived and misleading. It is contended that the writ petition sans merit and deserves to be dismissed.
4: The return of respondent No.3 is that on making of an application, the license under the Explosive Act, 1887, was issued to the respondent No.4, in Form-F, which is required to be issued to store compressed gas in cylinders for 8000 kg LPG. Such a license is granted on 2.7.2014 by Joint Controller of Explosive Agra under Rule 50 of Gas Cylinder Rules, 2004. The license is valid upto 30.9.2023.
5: The respondent No.4 has filed an exhaustive return and has categorically contended that petitioners were in fact the participants in the said selection process. They did appear in the proceedings for selection and interview. They are co-related to each other. However, since the petitioners were not selected and the respondent No.4 was selected, to wreck vengeance, the present writ petition has been filed. The fact that they have appeared before the Selection Committee on 17.1.2014, is proved by the documents of 5 their attendance placed on record. Since the petitioners were unsuccessful bidders or participants in the proceedings, they have taken it as a issue to see that any how the respondent No.4 may not be allowed to construct the godown and to get the LPG distributorship. For the said purposes of construction of the godown, the respondent No.4 has purchased the land as per the requirement. In the sale deed itself, a categorical declaration is made that from the said land, the road is made available by the seller. Not only in the sale deed, the said fact was duly recorded while giving the details in sale map, but an affidavit to that effect was produced by the respondent No.4 from the said seller Smt. Asha Vohra. The respondent No.4, thereafter made an application for grant of diversion of the land for the purposes of construction of godown. He has also applied for grant of No Objection Certificate. After obtaining the reports from the revenue authorities, order was passed on 30.5.2014 by the Sub Divisional Officer in that respect. The Gram Panchayat of the area has also given no objection in case any construction of godown is done by the respondent No.4. The competent authority of the Town and Country Planning have also sanctioned the map of the respondent No.4 for construction of the said godown. The Petroleum and Explosive Safety Organisation of the Government of India has also issued a license under the Explosive Act to the respondent No.4. All these documents categorically indicate that no illegality whatsoever was done in the matter of grant of distributorship to the respondent No.4. It is, thus, contended that the writ petition is nothing, but an attempt to restrict the claim of the respondent No.4. Since the order of diversion of land issued in favour of the respondent No.4 was coming in the way of the petitioners, they filed an appeal against the said order before the Additional Collector and this shows that malafidely the 6 petitioners are trying to restrict the claim of the respondent No.4. It is, thus, contended that the writ petition is devoid of any substance and deserves to be dismissed.
6: Heard learned counsel for the parties at length and perused the record.
7: First of all, it has to be examined that what are the circumstances and conditions in which the Court can exercise its extraordinary power in the matter of allotment of distributorship. No much debate is necessary as time and again the Apex Court has held that the Courts should not ordinarily exercised the extraordinary jurisdiction vested under Article 226 of the Constitution of India in such matters, particularly, in the contractual matters. While holding such in the case of Sanjay Kumar Shukla Vs. Bharat Petroleum Corporation Limited [(2014) 3 SCC 493], it has been held in paragraphs 15 to 19, which read thus :-
"15. We cannot help observing that in the present case exercise of the extraordinary jurisdiction vested in the High Court by Article 226 of the Constitution has been with a somewhat free hand oblivious of the note of caution struck by this Court with regard to such exercise, particularly, in contractual matters. The present, therefore, may be an appropriate occasion to recall some of the observations of this Court in the above context.
16. In Raunaq International Ltd. Vs. I.V.R. Construction Ltd. & Ors. 1 , (paragraphs 9, 10 and
11) this Court had held as follows :-
" 9. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations. These would be:
(1) the price at which the other side is willing to do the work;
(2) whether the goods or services offered are of the requisite specifications;7
(3) whether the person tendering has the ability to deliver the goods or services as per specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfil the requirements of the job is also important;
(4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality;
(5) past experience of the tenderer and whether he has successfully completed similar work earlier;
(6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow-up action, rectify defects or to give post-contract services.
Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there could be, in a given case, an element of public law or public interest involved even in such a commercial transaction.
10. What are these elements of public interest? (1) Public money would be expended for the purposes of the contract. (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfilment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work -- thus involving larger outlays of public money and delaying the availability of services, facilities or goods, e.g., a delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation.
11. When a writ petition is filed in the High 8 Court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into malafide, the court should not intervene under Article 226 in disputes between two rival tenderers."
17. In Air India Ltd. Vs. Cochin International Airport Ltd. & Ors., there was a further reiteration of the said principle in the following terms (SCC pp.623-24 para 7) "7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India, Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, CCE v. Dunlop India Ltd.,Tata Cellular v. Union of India, Ramniklal N. Bhutta v. State of Maharashtra and Raunaq International Ltd. v. I.V.R. Construction Ltd. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, 9 instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene."(Emphasis supplied).
18. A Similar reiteration is to be found in Master Marine Services (P) Ltd. Vs. Metcalfe & Hodgkinson (P) Ltd., Tejas Constructions and Infrastructure Private Limited Vs. Municipal Council, Sendhwa and several other pronouncements reference to which would only be repetitive and, therefore, is best avoided.
19. We have felt it necessary to reiterate the need of caution sounded by this Court in the decisions referred to hreinabove in view of the serious consequences that the entertainment of a writ petition in contractual matters, unless justified by public interest, can entail. Delay in the judicial process that seems to have become inevitable could work in different ways. Deprivation of the benefit of a service or facility to the public; escalating costs burdening the public exchequer and abandonment of half completed works and projects due to the ground realities in a fast changing economic/market scenario are some of the pitfalls that may occur."
8: In view of the aforesaid pronouncement of law, this Court is required to test whether it is a case where the extraordinary power under Article 226 of the Constitution of India is required to be invoked by this Court. For the said purposes, the allegations leveled in the writ petition are to be looked into. It is not in dispute that eligibility criteria for 10 individual applicants are indicated in the guidelines for selection (hereinafter referred to as brochure for short). In Clause (6), it is specifically prescribed that all the applicants fulfilling the eligibility criteria will become eligible for the draw for selection of the LPG distributorship. The first part of this criteria prescribed in Clause - 6.1 deals with the personal requirements of the applicants such as the citizenship, the educational qualification, the age etc. The relevant part which is in dispute in the present writ petition is in clause - 6.1 (vii) which for the convenience is reproduced hereunder :-
"6.1(vii). Should own as on the last date for submission of application as specified in the advertisement or corrigendum (if any) :
a plot of land of minimum dimensions 25 M x 30 M (within 15 km from municipal/town/village limits of the location offered in the same State) for construction of LPG Godown for storage of 8000 Kg of LPG in cylinders. The plot of land for construction of godown not meeting the minimum dimensions of 25 M x 30 M will not be considered.
Or.
a ready LPG cylinder storage godown (within 15 km from municipal/town/village limits of the location offered in the same State) of 8000 KG capacity.
In case there are any state specific requirements/ norms applicable for construction of the LPG Godown, then the same will be applicable for the respective Regular Distributorship locations and revised minimum dimensions of plot of land will be required as specified in the Advertisement of that respective State.
The plot of land or ready LPG cylinder storage godown should be freely accessible through all weather motorable approach road (public road or private road connecting road connecting to the public road). In case of private road connecting to the public road, the same should belong to the applicant/member of Family Unit (as per the 11 multiple dealership/distributorship norm of eligibility criteria) as per the ownership criteria defined below. In case of ownership/co-ownership by family member(s) in respect of such private road, consent letter from respective family members (s) will be required.
The land should also be plain, in one contiguous plot, free from live overhead power transmission or telephone lines, Canals/Drainage/Nallahs should not be passing through the plot. The land for construction of LPG godown should also meet the norms of various statutory bodies such as PWD/Highway authorities/Town and Country Planning Department etc. In case an applicant has more than one suitable plot for construction of godown for storage of minimum 8000 Kg of LPG in cylinders or ready LPG cylinder storage godown as on the last date for submission of application as specified in the advertisement or corrigendum (if any), the details of the same can also be provided in the application."
The main allegation is with respect to non-compliance of this particular criteria where it is prescribed that the plot of land or ready LPG cylinder storage godown should be freely accessible through all weather motorable approach road. The emphasis is put on this particular requirement, reference of which is available under Clause 6.1(viii) which read thus :-
6.1(viii). Own a suitable shop of minimum size 3 metres by 4.5 metre in dimension or a plot of land for construction of showroom of minimum size 3 metres by 4.5 metre as on the last date for submission of application as specified in the advertisement or corrigendum (if any) at the advertised location or locality mentioned in the advertisement. It should be easily accessible to general public through a suitable approach road.
Reference vii & viii above :
12"'Own' means having ownership title of the property or registered lease agreement for minimum 15 years in the name of applicant/ family member (as defined in multiple distributorship nor of eligibility criteria) as on the last date for submission of application as specified in the advertisement or corrigendum (if any). In case of ownership/co-ownership by family member (s) as given above, consent in the form of a Notarized Affidavit from the family member(s) will be required.
In case the land is jointly owned by the applicant/member of 'Family Unit' (as defined in multiple dealership/distributorship norm) with any other person(s) and the share of the land in the name of applicant/member of the 'Family Unit' meets the requirement of land including the dimensions required, then that land for godown/ showroom will also qualify for eligibility as own land subject to submission of 'No Objection Certificate' in the form of an Notarized Affidavit from other owner(s)."
9: The respondent No.4 has purchased the plot as has been referred to herein above under a registered sale deed. It is not in dispute that ownership of plot/land is available to the respondent No.4. The main dispute is with respect to availability of the free accessibility to said land by all weather motorable approach road. It is the case of the petitioners that though the plot is available to the respondent No.4, but it is not connected with all weather motorable roads. Much emphasis has been placed on the reports submitted by the authorities contending that such reports were managed. It is the contention that since the approach road is a private road connecting to the public road, the same should belong to the respondent No.4 or member of his family unit or in terms of the ownership criteria defined. Since the land of the road is not owned by the respondent No.4, he was not fulfilling the criteria and was, thus, ineligible to be allowed to take part in the 13 selection. For the purposes of appreciating such contentions, which has been pressed home emphatically by learned Senior counsel for the petitioners, it would be appropriate to look into documentary evidence produced in that respect by the respondent No.4.
10 : In the return, the respondent No.4 has produced a sale deed of the land said to be executed on 11.5.2012 and thus ownership on the land is not in dispute. The sale deed itself described that the land purchased by the respondent No.4 is connected by a private road and is situated about 200 ft away from the public road commonly known as 'Paladiya' road. It is specifically recorded that on the western side of the sold land, there is a temporary road. Further, in proof of the said fact, the seller of the land Smt. Asha Vohra has sworn an affidavit contending that she had mad 40 ft wide road for connecting the private land to the public road and though the land of the road is recorded in the name of the said seller, she will not claim any right over the said land and will not be restraining the use of the land by the purchaser like respondent No.4. Not only the respondent No.4, there was yet another purchaser Ramesh Kumar son of Ratanlal Jain, who too was allowed the use of the said land on which the road was constructed. Therefore, the requirement as prescribed in the eligibility criteria with respect to the availability of the plot was fulfilled. These facts have not been controverted by filing any rejoinder or producing any document in rebuttal by the petitioners.
11 : Yet, another aspect is that the respondent No.1 has very categorically contended that the report has been given by the revenue authorities about the availability of the connecting road. While giving no objection to the proposed layout for construction of the godown by the respondent 14 No.4, the Sub Divisional Officer, Public Works Department, Ashta, has also indicated that there is a prescribed 25 ft wide road to approach the said plot and on this also, the department has no objection. The revenue authorities on application of the respondent No.4 have conducted the survey and the Revenue Inspector has given his report categorically saying that there is a road available to approach the public road. This fact is also proved by the Gram Panchayat by giving a Panchnama. All these aspects have been mentioned in the sanctioned map. The facts have been considered by the revenue authorities and other Town and Country Planning Authorities while granting sanction to construct the godown to the respondent No.4.
12 : As against these documentary evidence produced by the respondent No.4, even when the amendment was sought in the writ petition, not a fact was brought to the notice of this Court by the petitioners that how such an application of the respondent No.4 was incorrect or misleading. Thus, the respondent No.4 was fulfilling all the requirements of eligibility criterias and his application was rightly considered by the respondent No.1. In light of this, and in absence of the material in proof of contentions raised in the writ petition, it is to be held that the application of the respondent No.4 was rightly accepted by the respondent No.1.
13 : In the well considered law laid down by the Apex Court in the case of Sanjeev Kumar Shukla (supra), no scope is left to interfere in such a selection. The Apex Court has further held that in such cases it has to be seen whether the bonafide exercise on the part of petitioners was there or not and whether the litigation was driven only by the desire to deny the fruits of selection in which the respondent No.4 15 was found to be most eligible candidate or not. In the considered opinion of this Court, this exercise of filing of the writ petition and challenging even the order of diversion of the land passed by the competent authority of the Revenue Department by the petitioners, as is proved by filing additional documents by the respondent No.4 is nothing, but the desire to forestall the claim of the respondent No.4 in any manner. In these circumstances, this Court would not be required to exercise its extraordinary power under Article 226 of the Constitution of India.
14 : As a result, the writ petition fails and is hereby dismissed with costs. Since on account of grant of interim relief by this Court, the respondent No.4 was put to financial inconvenience inasmuch as despite making construction as is certified by the photographs produced, he could not start the function, he is required to be compensated by imposition of cost. The petitioners are, therefore, liable to pay Rs.10,000/- (Rupees Ten Thousand) as costs of this litigation.
(K.K. TRIVEDI) Judge A.Praj.