Madhya Pradesh High Court
M/S Raghu Filling vs Indian Oil Corporation on 24 September, 2019
Equivalent citations: AIRONLINE 2019 MP 1240
Author: Subodh Abhyankar
Bench: Subodh Abhyankar
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HIGH COURT OF JUDICATURE MADHYA PRADESH,
JABALPUR
WRIT PETITION NO. 11823 OF 2019
M/s Raghu Filling
Vs.
Indian Oil Corporation Ltd. and another
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Shri Prakash Upadhyay, Advocate for the petitioner.
Shri Aditya Adhikari, learned Senior Advocate with Shri Satish
Chaturvedi, Advocate for the respondents.
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ORDER
(Passed on this the 24th day of September, 2019) This petition has been filed by the petitioner, a proprietorship firm under Article 226 of the Constitution of India being aggrieved of Clause no.7 of of the Expression of Interest (for short 'EOI') tender document dated 22.05.2019 issued by the respondent No.1-Indian Oil Corporation Ltd. The aforesaid EOI tender has been issued for road transportation of bulk petroleum products- MS/HSD/Branded fuel for dealers/consumers/Ex-Jayant depot and clause no.7 of which provides for the minimum eligibility criteria for the Tank Trucks which are to be plied for transportation of petroleum products.
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2. The case of the petitioner is that it has a retail outlet of Indian Oil Corporation and is also engaged in the business of transport since last more than 10 years plying as many as six truck tankers and at present also aforesaid trucks are engaged in the transportation of the petroleum products of the respondent company. The case of the petitioner is that on account of insertion of aforesaid condition No.7 in the said EOI tender document, the petitioner would be deprived of his right to ply as many as 4 vehicles and would be adversely affected by the aforesaid condition which provides as under:-
"No.7. Age/Model of Tank Truck (as reckoned from the date of manufacture in RTO Registration) offered should be necessarily BS- III or higher model (manufactured on or after April'2010). In case local laws of the particular location/State prescribes age/model limit for TTs (which is more stringent like BSIV/BSVI/8yrs/10yrs etc), the same shall prevail and the age/model of TT shall be valid on the date of closing of the tender. In case only year of manufacturing is mentioned in the RTO Registration, the age should be reckoned from 1st January of the year of manufacturing. In case both month and year of manufacturing is mentioned in the RTO Registration, the age should be reckoned from 1st day of the month of manufacturing."
3. Learned counsel for the petitioner has submitted that otherwise, there is no dispute so far as the eligibility of the vehicles of the petitioner is concerned, as they comply with the minimum standards or criteria as have been prescribed by the 3 Central Government/State Government as also the orders passed by the Supreme Court of India from time to time. It is further submitted that earlier, while transporting the petroleum products of the respondent company, no such condition was imposed which is also apparent from the document Annexure- P/1 dated 21.03.2015 in which condition No.IV Sub-clause 3 refers to the eligibility and provides that, " age of Tank Trucks occurred shall be as prescribed by local laws and in any case shall not exceed 15 years on the closing date of the tender submission".
4. Learned counsel for the petitioner has further submitted that the aforesaid condition was just and reasonable and had allowed the petitioner and the other similarly situated transporters to ply their vehicles. It is further submitted that on the basis of the aforesaid old condition the petitioner had already made a huge investment by purchasing the trucks of the aforesaid eligibility standards and thus, he is entitled to have a legitimate expectation in respect of the subsequent tender issued by the respondents. In support of his contention counsel has relied upon the judgments rendered by the Apex Court in the cases of Bannari Amman Sugars Ltd. Vs. Commercial Tax Officer And Others reported in (2005)1 SCC 635 and 4 Navjyoti Coop. Group Housing Society And Others Vs. Union of India And Others reported in (1992) 4 SCC 477.
5. Counsel has further submitted that so far as the objection raised by the respondent company about the environment is concerned, the same is already pending before the Hon'ble Apex Court, and the main case in which the orders have been passed by Apex Court is in the case of M.C. Mehta Vs. Union of India reported in (2017)7 SCC 243 and subsequently also the environmental issues have been periodically taken up by the Apex Court and various other orders have been passed. Counsel has also placed on record the judgment passed in the same case M.C. Mehta Vs. Union of India reported as 2018 SCC Online SC 2122.
6. Learned counsel for the petitioner has further submitted that as the life of the petitioner's vehicles would come to an end within 4-5 years in such circumstances the respondents ought to have allowed him to ply the aforesaid vehicles as these vehicles of the petitioner have been specifically modified to meet the purposes of the respondent company's requirement.
7. It is further submitted that the aforesaid condition no.7 has been included in the EOI document without any basis and rationale which is also reflected from the reply submitted by the respondents as they have not filed any documents to show 5 that before including the aforesaid condition any deliberations were made by the respondents to ascertain its effectiveness.
8. Learned counsel for the petitioner has further submitted that instead of abruptly introducing the aforesaid condition as mentioned in Clause 7, the respondent ought to have introduced a gradual system taking into account the orders passed by the Apex Court. Thus, it is submitted that the aforesaid condition No.7 be struck off from the tender document and the petitioner be allowed to participate in the same and be allowed to ply his vehicles as in line with the order passed by the Apex Court in the case of Sarvodaya Public School & Ors. Vs. the Transport Commissioner & Ors. passed in Civil Appeal Diary No.6146/2019, a copy of which has also been placed on record.
9. Shri Aditya Adhikari, learned Sr. Counsel for the respondent IOCL on the other hand has opposed the prayer and has submitted that no illegality has been committed by the respondent company in inserting the aforesaid condition in the EOI document as the respondent company is a public sector company and is well aware of its responsibilities towards the environment hence, with a view to reduce the pollution, the aforesaid condition has been imposed whereby it is directed that the trucks which could be plied by the respondent 6 company under the EOI shall necessarily be BS-III compliant or higher models. It is further submitted that in the aforesaid condition no.7 it is also mentioned that if the local laws of the particular location/State prescribes age/model limit for TTs (which is more stringent like BSIV/BSVI/8yrs/10yrs ect), the same shall prevail and the age/model of TT shall be valid as on the date of closing of the tender. Thus, it is submitted that the respondent company has only demonstrated its will to protect the environment which cannot be diluted by striking off the aforesaid environment friendly condition to facilitate the petitioner's business of transportation.
10. Learned Sr. counsel for the respondent company has further submitted that even otherwise, it is for the respondent only to decide the terms and conditions of the EOI and the same have been issued in the larger public interest hence no interference is called for. In support of his contention, Shri Adhikari has also relied upon a judgment rendered by the Apex Court in the case of Mishigan Rubber (India) Limited Vs. State of Karnataka And Others reported in (2012) 8 SCC 216 to submit that in a policy decision of a Public undertaking, no interference can be made by the courts unless it is arbitrary, discriminatory, malafide or actuated by bias.
11. Heard, counsel for the parties and perused the record. 7
12. It is not disputed that the petitioner is engaged the business of transporting the petroleum products for the Indian Oil Corporation. For this purpose the petitioner also has a fleet of truck tankers around eight in numbers.
13. The petitioner's grievance is that by way of the EOI tender document dated 22.05.2019 the respondent company has introduced an eligibility criterion in the form of clause No.7 of the said document which is much higher than the eligibility criteria of the earlier tender documents issued by the respondent company.
14. The contention of the petitioner firm is that acting upon the earlier contract it has made huge investments in the business and have purchased the truck tankers complying with the eligibility criteria of the respondent as provided earlier. In support of his contention a document dated 21.03.2015 has also been placed on record in which the petitioner has been given the work order by the Indian Oil Corporation wherein the eligibility criteria is that the age of the truck tankers offered shall be as prescribed by the local laws and in any case shall not exceed 15 years on the closing date of tender submission. Whereas, in the present expression of interest issued by the respondent on 22.05.2019 the aforesaid condition has been replaced by a new condition contained in clause No.7 as above 8 whereby much higher standards have been set for truck tankers to be eligible to transport the respondent's product.
15. Thus, the grievance of the petitioner is that since it has already invested in the business on the basis of the earlier tender conditions prescribed by the respondent company, it should be stopped from introducing a condition which would eliminate the petitioner from the business and deprive them from participating in the said expression of interest (EOI) tender document.
16. On a close scrutiny of the EOI document dated 22.05.2019 issued by the respondent company, this Court finds that it has been issued for the transportation of bulk petroleum products of the respondent company inviting applications from the prospective transporters. It is a tender for bulk POL (Petroleum, Oil and Lubricants) transportation tender 2020-25. It appears that Clause No.7 of the aforesaid EOI tender document provides for certain higher standards which have to be met by a truck tankers which is to be offered by the transporters requiring them to comply with the higher standards to counter the menacing problem of pollution. The respondent's commitment to emit less pollution in the atmosphere is also demonstrated by this condition, wherein it is also provided that although the standards as have been prescribed by them would 9 be applicable on the vehicles, however, if in any state, if higher conditions are imposed by the State the same shall prevail. The aforesaid condition, in the considered opinion of this Court cannot be said to be arbitrary, unjust or introduced with any malafide intentions. It is also not the case of the petitioner. The petitioner's grievance is that since it has already invested heavily in the truck tankers for the transportation of the respondent's product as has been provided under the earlier tender document, the respondent should be stopped from changing the conditions subsequently. This argument cannot be countenanced by this court as the respondent's bona-fide intentions to contribute in making the India less pollution free cannot be doubted. There is no document on record to demonstrate that respondents had earlier made any promise to the petitioner or any other person that the vehicles plied by them for the transportation of their products would be allowed to run in future also or any condition to change the eligibility criteria of the vehicles shall be imposed only after consultation with the petitioner.
17. The Apex Court in the case of Mishigan Rubber (India) Limited (supra) has held as under:-
"23. From the above decisions, the following principles emerge:10
(a) The basic requirement of Article 14 is fairness in action by the State, and non-
arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) .........
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the 11 safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre- qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide."
(emphasis supplied)
18. In view of the aforesaid judgment this Court is fortified in its view that as the petitioner has not been able to demonstrate any arbitrary or discriminatory action on the part of the respondent, no interference in the decision making process is called for.
19. So far as the judgment relied upon by the learned counsel for the petitioner in the case of Bannari Amman Sugars Ltd. (supra) the Hon'ble Apex Court in para 8 has held as under:-
"8. A person may have a 'legitimate expectation' of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The doctrine of legitimate expectation has an important place in the developing law of judicial review. It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial 12 review. It is generally agreed that 'legitimate expectation' gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negating a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation in not fulfilled by taking a particular decision then the decision- maker should justify the denial of such expectation by showing some overriding public interest. (See Union of India v. Hindustan Development Corporation.)"
(emphasis supplied)
20. Thus, even from the aforesaid dictum of the Apex Court in the case of Bannari Amman Sugars Ltd. (supra) it is clear that if it can be shown by the authority that its decision is actuated by an overriding public interest, then its decision/policy would not be hit by the doctrine of legitimate expectation.
21. In the case of Navjyoti Coop. Group Housing Society (supra) also relied upon by the petitioner, the same observations have been made by the Hon'ble Apex Court. In para 15 it is held as under:-
"15. ................ In the aforesaid facts, the Group Housing Societies were entitled to 'legitimate expectation' of following consistent past practice in the matter of allotment, even though they may not 13 have any legal right in private law to receive such treatment. The existence of 'legitimate expectation' may have a number of different consequences and one of such consequences is that the authority ought not to act to defeat the 'legitimate expectation' without some overriding reason of public policy to justify its doing so. In a case of 'legitimate expectation' if the authority proposes to defeat a person's 'legitimate expectation' it should afford him an opportunity to make representations in the matter. In this connection reference may be made to the discussions on 'legitimate expectation' at page 151 of Volume 1(1) of Halsbury's Laws of England, 4th edn. (re-issue). We may also refer to a decision of the House of Lords in Council of Civil Service Unions v. Minister for Civil Service. It has been held in the said decision that an aggrieved person was entitled to judicial review if he could show that a decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy either until he was given reasons for withdrawal and the opportunity to comment on such reasons."
(emphasis supplied)
22. In the present case, the respondent IOCL has taken upon itself the task of reducing the pollution on the roads which only demonstrates its concern over the menacing pollution threat caused by vehicles, which, in the considered opinion of this court is apparently an overriding public policy prevailing over any other policy.
23. Similarly, the decision in the case of M.C. Mehta Vs. Union of India reported in 2018 SCC Online SC 2122 is also of no help to the petitioner as the same is also distinguishable as in this case, the Apex court has laid emphasis on the 14 manufacturers of the automobile to introduce high standards of non-polluting engines and reduce the vehicular emissions.
24. In view of the same, this Court considers this petition to be devoid of merits and the same is hereby dismissed.
25. However, looking to the petitioner's investment in the truck tankers which were custom made according to the earlier eligibility criteria of the IOCL, petitioner is at liberty to make an appropriate representation to the respondent in respect of its future EOI and it would be entirely for the IOCL to decide the same as per its prevailing policy.
(Subodh Abhyankar) Judge sjk Digitally signed by SHARAN JEET KAUR JASSAL Date: 2019.09.25 10:40:06 +05'30'