Punjab-Haryana High Court
Kirti Yadav vs Indian Oil Corporation Ltd. And Ors on 6 September, 2014
Author: Ritu Bahri
Bench: Ritu Bahri
Civil Writ Petition No.5398 of 2013 (O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
Civil Writ Petition No.5398 of 2013 (O&M)
Date of decision : 06.09.2014
Kirti Yadav
......Petitioner
versus
Indian Oil Corporation Ltd. & others
........Respondents
CORAM: HON'BLE MS. JUSTICE RITU BAHRI
Present: Mr. Kanwaljit Singh, Senior Advocate,
with Mr. Ashwani Talwar, Advocate,
for the petitioner.
Mr. Ashish Kapoor, Advocate,
for respondent No.2.
Mr. Chetan Mittal, Senior Advocate,
with Mr. Mohinder Singh Nain, Advocate,
for respondent No.3.
****
RITU BAHRI , J.
The petitioner is seeking a writ in the nature of certiorari for setting aside the order dated 20.02.2013 (Anexure P-8), vide which the retail outlet dealership, awarded to the petitioner, has been cancelled.
Vide advertisement dated 18.09.2011 (Annexure P-1), respondent-corporation invited applications for allotment of retail outlet dealerships. Twenty applications were invited under the open category. As per brochure dated 02.09.2011 (Annexure P-2), the petitioner was found eligible. On 17.04.2012, the result for allotment of retail outlet dealership was declared and the petitioner was found to be at serial No.1 with 61.83 marks (Annexure P-6). Thereafter, on a complaint made by a candidate at serial No.3 in the merit list, re-evaluation was conducted AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 2 and the petitioner was given 0.16 marks under the heading fixed and moveable assets. In this manner, her merit came down from 61.83 to 57.99. Copy of re-evaluated marks sheet has been annexed as Annexure P-7. On the basis of the same, she was informed vide order dated 20.02.2013 (Annexure P-8) that her merit has been revised. This order is under challenge in this petition.
Mr. Kanwaljit Singh, learned Senior Advocate, has referred to the brochure (Annexure P-2) to contend that as per para 18 of the same, a complaint against the dealership selection can be made within 30 days from the date of declaration of the result and thereafter, if a decision is taken to investigate the complaint, it will be done by a senior official of the Oil Company and a speaking order will be passed after giving due opportunity to the complainant etc. Copy of the speaking order will be given to all concerned. Thereafter, decision on the complaint will be taken. He has further argued that in the cases of involving error in evaluation process on interview based parameters, re-interview of all the candidates will be conducted. As per brochure (Annexure P-2), giving a show cause notice to the petitioner was mandatory, which has not been done in this case. He has referred to the Division Bench judgment of this Court in Sewa Ram Vs. Bharat Petroleum Corporation Ltd. & others, 2008 (2) RCR (Civil) 317, to contend that when an allotment is cancelled by the Oil Corporation in an illegal and arbitrary manner, the Court will not hesitate to quash the allotment made to another candidate, even if he has made substantial investment in installing the LPG distributorship. He has further made reference to the judgments AJAY PRASHER delivered in Mustaque Ahmad Vs. Union of India and others, 1995 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 3 AIR (Patna) 136 and Krishna Reddy Vs. Joint Collector, Chittoor and others, 1994 Cri LJ 1091.
Finally, he has argued that as per the language of Clause 18 of the brochure (Annexure P-2), on a complaint made against the declaration of the result, the Indian Oil Corporation is competent to conduct an investigation. The investigation has to be carried out in a manner to ascertain the facts and circumstances of the case by collecting evidence.
On the other hand, learned counsel, appearing on behalf of the respondent-corporation, has justified the decision taken by the respondent-corporation in re-evaluating the marks given to the petitioner. He has referred to regulation 18 of the brochure (Annexure P-2) and has argued that where in the case of selection process, it is found that the same is not in accordance with the laid down guidelines, the re- evaluation based on the documents available on record, will be carried out and after re-evaluation, the revised list shall be displayed on the notice board/IOC website and separate communications will be sent to all the candidates. On a complaint received from respondent No.3, the application form of the petitioner was again perused. In the application form, the petitioner had annexed the RCs of four vehicles i.e. three TATA 1613 vehicles and one Maruti Gypsy. However, TATA 1613 vehicles had been subject to hire purchase agreement with M/s IndusInd Bank Ltd. and were subject to hypothecation. The evaluation committee while evaluating the petitioner under the parameter "Fixed & Movable Assets", should have considered the value of Rs.4 lakhs with regard to the Maruti AJAY PRASHER Gypsy. The working capital advertised for the location in question was in 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 4 the advertisement dated 18.09.2011 was Rs.25 lakhs. Accordingly, the petitioner was entitled to only 0.16 marks instead of 4 marks. Thus, as per Clause 18 (B) (ii) (a) of the brochure, re-evaluation was based on the documents available on the record. The final mark sheet was prepared for the subject RO location and the letters were sent to all the applicants, who had appeared in the merit panel along with the revised mark sheets. The final result was declared as under:-
Sr. No. Name of Candidate Rank
1 Ms. Veena Chun Yin Lee Ist
2 Sh. Parvee Kumar 2nd
3 Ms Manju Pathania 3rd
In the written statement, it is clarified that the documents (Annexures P-4 and P-5), which show that clearance had been given by the bank with regard to hypothecation of aforesaid vehicles, were not attached with the application form. Therefore, while dealing with the complaint, re-evaluation was done on the basis of the documents available on the record. It was not a case of error involving in evaluation process. Hence, there was no reason to conduct re-interview of the eligible candidates. As per Clause 21.0 of the brochure, no additional documents, whatsoever, will be accepted or considered after the cut-off date o the application. Hence, re-evaluation on the basis of the documents annexed with the application form, was carried out as per the brochure (Annexure P-2) and change in the rank in the merit list, does not require any interference.
Since the re-evaluation has been done on the basis of the documents annexed with the application, no prejudice has been caused to the petitioner and the doctrine of legitimate expectation, in these AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 5 circumstances, cannot be agitated. Reference has been made to a judgment delivered by the Hon'ble supreme Court in M/s Sethi Auto Service Station & another Vs. Delhi Development Authority & others, 2009 (1) SCC 180, to contend that scope of writ jurisdiction is to be exercised only if the decision taken by the authority is found to be arbitrary, unreasonable or in gross abuse of power in violation of principle of natural justice. The scope cannot be extended on a claim made on mere legitimate expectation. The corporation has taken a decision, based upon the brochure and the documents, which were annexed with the application form. As per regulation 21 of the brochure, there is a complete bar that no additional documents, whatsoever, will be accepted after the cut-off date. Hence, re-evaluation of the marks does not require any interference. The petitioner made an application for allotment of another location in Gurgaon. She had been awarded only 0.52 marks under the parameters "Fixed & Movable Assets." Hence, the valuation certificate with regard to the RCs of the three vehicles, showing that the vehicles were hypothecated with IndusInd bak, was sufficient to alter 4 marks, allotted to the petitioner. She was eventually, give 0.16 marks.
In the written statement filed on behalf of respondent No.3, it has been reiterated that the petitioner had also applied or RO location in Gurgaon. She was awarded 55.82 marks in the interview conducted on 27.02.2012, whereas in the interview conducted on 29.02.2012, she was awarded total 57.8 marks. In the interview conducted on 27.02.2012, she was awarded 0.52 marks under the head "Fixed & Movable Assets." AJAY PRASHER On the other hand, she was awarded 0.62 marks under the head "Fixed 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 6 & Movable Assets" in the interview conducted on 29.02.2012 as per Annexure R-3/1 (Colly.). She has not challenged awarding of the said marks, which shows that she was satisfied by the valuation done by the Indian Oil Corporation. In the interview, which was held on 17.04.2012, she has been awarded 4 marks, which were subsequently re-evaluated on a complaint made by respondent No.3. It is further highlighted that hypothecation in respect of aforesaid three vehicles came to an end on 28.01.2013. Thus, on the date of advertisement i.e. 18.09.2011, all the three vehicles of the petitioner were under hypothecation with the financial institutions/banks.
During the pendency of this petition, the petitioner has sold her two vehicles bearing registration Nos. HR-47-A-8089 (transferred to Faridabad) and HR-47-A-8090 (transferred to Gurgaon on 10.06.2013). Since the aforesaid vehicles have now been sold, she cannot take benefit of the documents (Annexures P-4 and P-5) to contend that she is having requisite assets for grant of dealership. Moreover, as per Clause 21 of the brochure (Annexure P-2), no additional documents can be accepted after the cut-off date. The impugned order dated 20.02.2013 (Annexure P-8) has been passed by the Indian Oil Corporation in accordance with the terms and conditions of the brochure. The Court has limited powers of judicial review in the matter of allotment of marks to the candidates for commercial ventures.
After hearing learned counsel for the parties, the undisputed facts are that after submitting application pursuant to the advertisement dated 18.09.2011 (Annexure P-1), the petitioner's name figured at serial AJAY PRASHER No.1 in the merit list when the result was declared on 17.04.2012 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 7 (Annexure P-6). Thereafter, on a complaint made by respondent No.3 within 30 days, as contemplated in the brochure for re-evaluating the marks given to the petitioner under the "Fixed & Movable Assets", respondent-corporation re-evaluated the marks on the basis of the documents attached with the application form. The RCs with regard to three vehicles, attached with the application form, showed that those were hypothecated with M/s IndusInd Bak Ltd. Therefore, re-evaluation has been done as per Clause 18 of the brochure (Annexure P-2). Clause 18 of the brochure is reproduced as under:-
"18. GRIEVANCE/COMPLAINT REDRESSAL SYSTEM:
(A) An aggrieved person may send his/her complaint to IOC at the address of the customer service cell displayed at the nearest retail outlet of IOC. Complaints can also be lodged on the website of IOC.
Complaints against dealer selection received after 30 days from the date of declaration of the result of the interview will not be entertained under any circumstances.
(i) Anonymous/pseudonymous complaints will not be investigated and will be filed without taking any action on the same.
(ii)On receipt of a complaint a letter will be sent by IOC to the complainant through Registered Post, asking him to submit details of allegation with a view to prima facie substantiate the allegations along with supporting documents, if any, within 30 days. Response of the complainant will be examined by IOC and if, it is found that the complaint does not have specific and verifiable allegations, the same will be filed. The complainant will be clearly advised that the complaint will be examined by IOC and if it is established that the complaint does not have any substance, the same will be liable for legal action.
(B) When a decision is taken to investigate the complaint, the investigation will be done by a Senior Official of Oil Company and will pass speaking order after giving due opportunity to the complainant etc. Copy of the speaking order will be given to all concerned. Thereafter, decision on the complaint will be taken as under:-
(i) Complaints not substantiated: The complaint will be filed and the complainant will be advised accordingly.AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 8
(ii)Established complaint: Action will be taken as under:
a) In case the selection process for a location is found to be not in accordance with the laid down guidelines, the re-evaluation, based on documents available on record, will be carried out.
Wherever there will be a change of rankings in merit panel, the revised result will be displayed on the notice board/IOC website besides separate communication to all empanelled candidates.
In cases involving error in evaluation process on interview based parameters, affecting the merit panel, re-interview for all the eligible candidates, who have appeared in the interview earlier, will be conducted.
b) In case the dealer selection was done as per the laid down guidelines and the complaint against the first empanelled candidate is established, action will be taken to cancel the selection of the 1st empanelled candidate and issuance of LIO to the next candidate in the merit panel. Similar action will be taken in case of established complaint against second empanelled candidate also.
c) In case of established complaint against all the merit panel candidates, the merit panel will be cancelled and the location will be re-advertised, if found feasible by IOC."
In the complaint made by respondent No.3, it was stated that the petitioner had also made two earlier applications for allotment of retail outlet at Gurgaon. She had been allotted 0.52 marks under the head "Fixed & Movable Assets" in the interview held on 27.02.2012 and 0.62 marks were awarded under the said head in the interview conducted on 29.02.2012. No challenge has been made by the petitioner to these marks in any Court of Law. Therefore, Indian Oil Corporation took a decision to investigate the complaint made by respondent No.3. As per Clause 18 of the brochure (Annexure P-2), the established complaints could be entertained in two manners; (i) where the re-evaluation was based on documents, it was to be carried out and the change of ranking was to be displayed on the notice board/IOC AJAY PRASHERwebsite and (ii) In cases involving error in evaluation process on 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 9 interview based parameters, affecting the merit panel, re-interview for all the eligible candidates was to be conducted. The petitioner's case falls in category No.(i), as the re-evaluation had been done with regard to the documents available on record. Therefore, there was no occasion to re- interview or call the petitioner again for re-interview.
The first question for consideration is that after taking a decision to investigate the complaint, "whether the IOC was required to give a show cause notice to the petitioner or not."
Reference can be made to a recent judgment delivered by the Hon'ble Supreme Court in Sanjay Kumar Shukla Vs. Bharat Petroleum Corporation Ltd. & others, Civil Appeal Nos. 1871-1872 of 2014 (decided on 07.02.2014). In this case, Sanjay Kumar Shukla had been allotted a dealership of retail outlet pursuant to an advertisement dated 30.05.2010. On a complaint made by an unsuccessful candidate, the corporation proceeded to investigate the allotment made in his favour. However, the complaint was dismissed. This order was challenged before the High Court, where the Court came to a conclusion that the allotment, which was made in favour of Sanjay Kumar Shukla was not carrying the requisite NOC from the District Magistrate in respect of the land offered for this dealership. Keeping in view that the corporation cannot be expected to wait indefinitely for grant of NOC, a direction was given to redo the selection procession. However, during the pendency of the LPA before the High Court, the Sub Divisional Officer submitted a report dated 18.08.2011, recommending the NOC. Even the land, which was subject matter of litigation in partition suit No.7 AJAY PRASHER of 2006. This land, on filing of an amendment application, was deleted 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 10 from the purview of the suit. Subsequently, the partition suit was dismissed as withdrawn on 07.01.2014. Hence, there was no litigation pending, involving the said land. On appeal, the LPA Bench directed that the allotment be made in favour of the complainant. The Hon'ble Supreme Court set aside the order passed by the LPA Bench of the High Court and directed that the outlet be given to the applicant Sanjay Kumar Shukla while completing the requisite formalities. While allowing the appeal, references have been made to various decision of the Hon'ble Supreme Court, whereby the Courts have been directed that the discretionary powers should only be exercised in furtherance of public interest and not on the ground of making out a legal point. Larger public interest has to be kept in mind. It was further observed as under:-
"11. 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. In Raunaq International Ltd. v. I.V.R. Construction Ltd. and others, MANU/SC/0770/1998: (1999) 1 SCC 492, (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 off the requisite specifications;
(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 AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 11 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 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 AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 12 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 for 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 mala fide, the Court should not intervene under Article 226 in disputes between two rival tenderers.
12. In Air India Ltd. v. Cochin International Airport Ltd. and others, MANU/SC/0055/2000: (2000) 2 SCC 617, there was a further reiteration of the said principle in the following terms:
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, MANU/SC/0048/1979; (1979) 3 SCC 489, Fertilizer Corporation Kamgar Union (Regd.) v. Union of India, MANU/SC/0010/1980: (1981) 1 SCC 568, CCE v. Dunlop India Ltd. MANU/SC/0169/1984 : (1985) 1 SCC 260, Tata Cellular v.
Union of India, MANU/SC/0002/1996 : (1994) 6 SCC 651, Ramniklal N. Bhutta v. State of Maharashtra, MANU/SC/0279/1997: (1997) 1 SCC 134 and Raunaq International Ltd. v. I.V.R. Construction Ltd., MANU/SC/0770/1998 : (1999) 1 SCC 492. 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 ay 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 AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 13 corporations, instrumentalities and agencies are bound to adhere to the norms, 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."
The petitioner, as per the selection process, was kept at serial No.1. After entertaining the complaint made by respondent No.3, the respondent-corporation had decided to investigate the complaint. Grievance of the petitioner is that, she has not been given an opportunity of hearing.
The grievance of the petitioner is ill founded. Procedure with regard to re-evaluation, based on documents available on record, has been prescribed in Clause 18 of the brochure (Annexure P-2). As per Clause 18 (B) (ii) (a), when re-evaluation is based upon documents and the change of rankings in merit panel is there, the revised result is to be displayed on the notice board/IOC website and separate communication is to be sent to all the empanelled candidates. As per this clause, there is no requirement of giving show cause notice to the empanelled candidates. However, if a correction is to be made in evaluation process on interview based parameters, affecting the merit panel, a provision of re-interview of all the eligible candidates is made. AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh Civil Writ Petition No.5398 of 2013 (O&M) 14
In the case of the petitioner, initially she had been granted 4 marks under the category "Fixed & Movable Assets" as per Annexure P- 6, on the ground that she was having three vehicles and her total marks were 61.83. Thereafter, on a complaint made by respondent No.3, the marks were re-evaluated, as the vehicles were hypothecated with IndusInd Bank Ltd. The marks given to the petitioner were reduced to 0.16 and her grand total came to 57.99. By making correction/re- evaluation as per Clause 18 of the brochure, she was duly informed vide letter/order dated 20.02.2013 (Annexure P-8).
Moreover, another fact, which requires consideration is that during the pendency of this petition, the petitioner has sold her two vehicles bearing registration Nos. HR-47-A-8089 (transferred to Faridabad) and HR-47-A-8090 (transferred to Gurgaon on 10.06.2013). Therefore, now she cannot take benefit of RCs (Annexures P-4 and P-5) pertaining to those vehicles. Hence, in view of the guidelines issued by the Hon'ble Supreme Court in Sanjay Kumar Shukla's case (supra), there is no public interest involved in setting aside the impugned decision of the Indian Oil Corporation for re-evaluating the marks given to the petitioner, which has been done as per the procedure prescribed in Clause 18 of the brochure (Annexure P-2).
Resultantly, the writ petition is dismissed.
(RITU BAHRI) 06.09.2014 JUDGE ajp AJAY PRASHER 2014.09.11 15:16 I attest to the accuracy and integrity of this document High Court Chandigarh