Punjab-Haryana High Court
Vishal Sharma vs Union Of India And Others on 8 August, 2012
Equivalent citations: AIR 2013 PUNJAB AND HARYANA 23
Author: G.S. Sandhawalia
Bench: Ajay Kumar Mittal, G.S. Sandhawalia
CWP No. 21361 of 2011 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No. 21361 of 2011
DATE OF DECISION: August 08, 2012
Vishal Sharma .........PETITIONER(S)
VERSUS
Union of India and others ......RESPONDENT(S)
AND
CWP No. 22692 of 2011
M/s. Kisaan Carrers .........PETITIONER(S)
VERSUS
Union of India and others ......RESPONDENT(S)
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE G.S. SANDHAWALIA
Present: Mr. Rakesh Gupta, Advocate,
for the petitioner.
Mr. Ashish Kapoor, Advocate,
for respondents no. 2 and 3.
G.S. SANDHAWALIA, J.
1. This order shall dispose of two writ petitions namely CWP No. 21361 of 2011 and CWP No. 22692 of 2011. The facts are being taken from CWP No. 21361 of 2011.
2. The present writ petition has been filed under Articles 226 and 227 of the Constitution of India for issuance of a writ in the nature of certiorari for quashing the unguided vast arbitrary discretion conferred on the tender evaluation authority for evaluation of the tenders and further prayer is made for issuing an appropriate writ in the nature of mandamus CWP No. 21361 of 2011 2 directing the respondents to consider the petitioner for acceptance of the petitioner's tender as the petitioner had quoted the lowest rate.
3. The pleaded case of the petitioner is that respondent no. 2, M/s. Indian Oil Corporation Ltd. is a public sector undertaking and the trade of oil is controlled by the State through its public sector undertakings and the entire administrative and financial control of the respondents is with the Union of India and, therefore, the present writ is maintainable as the respondent-corporation is an instrumentality of the State as envisaged under Article 12 of the Constitution of India and accordingly amenable to writ jurisdiction of this Court. The case of the petitioner is that applications were invited by way of advertisement in the newspaper for transporting petroleum products from its refinery at Panipat to different locations to cater to the needs of Haryana, Punjab and Delhi and a short public notice was issued in the newspapers and the detailed terms and conditions were contained in the technical bid tender form and price bid tender form. The last date for submitting the tenders was 29.07.2011 and the technical bid as well as the price bid was to be opened at 4.00 p.m. The petitioner submitted tender form no. 406 and the minimum rate settled by the respondents was 1.75 per kilo litre per kilometer and there could be variations of plus/minus 10% of the estimated rate and the estimated rate as per the price bid tender was 1.99 per kilo litre per kilometer. More than 500 tenders were received and tender forms were issued for two set of tenderers. One set of tenderers was those already operating retail outlets of the Indian Oil Corporation and owning bulk transport carriers and their vehicles could be used for carrying products for the dealer himself as well as for the other outlets. The other set of tenderers including the petitioner were purely transporters who had invested huge money in getting oil CWP No. 21361 of 2011 3 tankers with the capacity of 12 kilo litres to 20 kilo litres and were earning their livelihood through transport business.
4. The petitioners had submitted their tender forms and the tender forms were found to be in order and after the acceptance of the technical bid of the petitioner, price bid of all the eligible tenderers were opened. The petitioner had quoted the last price of `1.79 per kilo litre per kilometer. It has been averred that there were various tenderers who had quoted the lowest price but all the dealers had quoted the highest price of 2.19 per kilo litre per kilometer and instead of finalizing the bid at that moment, the matter was kept in abeyance and more documents were asked for vide letter dated 04.10.2011. The petitioner duly complied with all the requirements sought by the respondents within the period provided and was hopeful that the allotment would be made. The period of tender was two years starting w.e.f. 14.11.2011 with an option for extension upto a further period of one year. Subsequently, the petitioner came to know that the respondent had started issuing letter of intent to the dealers and the petitioner was verbally told that the tender period had been postponed w.e.f. 01.12.2011 to 30.11.2014 and, therefore, since the respondents were not finalizing the bid and accepting the tenders of the dealers by way of back-door entry, the petitioner was approaching this Court.
5. Reference was made to the guidelines issued by the Central Vigilance Commission and allegation made that the absolute monopoly has been created by the respondents in favour of the dealers to the exclusion of the other tenderers including the petitioner who are solely dependent upon the business of transport. It has further been averred that the dealers were fully aware that any lowest rate quoted by the transporter would be offered to them irrespective of the rate quoted by them and the purpose of CWP No. 21361 of 2011 4 inviting the tenders was a farce. It was contended that the petitioner was earning his livelihood from the transport business and monopoly was being created in favour of the dealers.
6. Written statement was filed by the Corporation wherein, it was pleaded that the petitioners have no vested right or accrued right to the award of a contract and the respondents are following a fair, methodical and transparent system of awarding the contract. It was further pleaded that the petitioner had participated in the tender proceedings and failed to get the work and the said tenderer could not challenge the tender notice after being unsuccessful. The tendering process was guided by the policies and principles/guidelines of the Corporation and all the terms and conditions including the eligibility criteria, all techno-commercial conditions of the tender and evaluation/selection criteria were clearly brought out in the tender document. The tenders had been evaluated strictly as per the terms and conditions and policy guidelines of the Corporation. It was submitted that the POL Transport tender of Panipat Terminal was issued under two bid system i.e. the technical bid and the price bid and firstly the technical bid was opened on the scheduled date and was evaluated and thereafter price bid of only technically qualified tenderers based on technical evaluation was opened on the notified date. Table was also reproduced to show that the L-1 had quoted the rate of `1.79 per kilo litre per kilometer whereas L-21 had quoted `2.19 and similarly for the rate in kilo litres, the rate was `84.09 for L-1 and L-21 had given a quotation of `102.77. It was submitted that as per the reservation policy, 24 technically eligible tenders of Scheduled Caste category with 89 tank trucks were separately evaluated and accepted and the balance required was 636 which had to be considered in terms of Clause B-6 of the terms and CWP No. 21361 of 2011 5 conditions "GENERAL" of the tender. Clause 6 was accordingly relied upon to plead that the L-1 rate established by the Tender Consideration Committee was offered to 388 dealer tenderers including dealers who had applied under Scheduled Caste category who were higher in ranking than L-1 and the step resulted in total 421 numbers of tenderers with 908 number of tank trucks in L-1 ranking. This included the original L-1 ranked tenders and tank trucks except the Scheduled Caste/Scheduled Tribe category tenders and tenders of those dealers who quoted higher rates but accepted the offered L-1 rate at first instance. Since the number of tank trucks in one single rank was higher than the balance requirement of 636 tank trucks, the Tender Consideration Committee applied Clause No. B-9 of "Terms and Conditions - GENERAL" of the tender. In the first set up, ranking as per sub clause 1 of tank trucks offered by the RO dealer, 382 dealer tenderers in General Category with 490 tank trucks were inducted and the balance requirement was 636-490=146 tank trucks and in order to select the same, further sub ranking was done from maximum number of owned tank trucks and the first five tenders from the list having 146 tank trucks were selected and the selection was completed. The tenderers remaining in the list below in the rank could not be considered.
7. Reliance was also placed upon the Division Bench judgment of Delhi High Court in Ravinder Singh vs. Indian Oil Corporation Ltd. 2010 (8) RCR (Civil) 1204 wherein, a similar controversy was decided on 19.01.2009. Accordingly, it was submitted that the procedure followed by the respondents was a fair and methodical and transparent system of awarding the contract and such a system having been followed within the framework, could not be challenged by the petitioner and there was no arbitrary use of the powers, as alleged. It was also alleged that the number CWP No. 21361 of 2011 6 of tank trucks to be inducted through the tender was given in the tender document in the NIT and it was also declared in the tender evaluation criteria as to how ranking/sub ranking would be done and the tender/tank trucks offered in the particular tender would be selected from the ranked list one by one till the number of tank trucks in the NIT were exhausted.
8. On the basis of the said pleadings, counsel for the petitioner has submitted that he had quoted the lowest rate at `1.79 per kilo litre per kilometer and, therefore, the authorities were wrong in rejecting their tender and the reservation in favour of the retailers was not justified. The petitioner herein is aggrieved against Clauses B-6 and B-9 of the notice inviting tenders which read as under:-
"6. In case rates offered by L-1 tenderers are acceptable to IOC, then this L-1 rate shall be offered to all the RO Dealers/ Direct Customers who are offering Tank Trucks only for their own supplies and RO Dealers offering tank trucks for supplies of consortium of RO Dealers and RO Dealers earmarking owned tank trucks for their own supplies and TTs offered shall be allocated on acceptance of L-1 rate at the first instance, and the TTs offered by L-1 tenderers shall be allocated up to the requirement. In case of RO Dealers who have earmarked owned tank trucks for their own supplies and also offered tank trucks for general transportation work, the tank trucks offered for general transportation work shall be evaluated as per original ranking.
9. In case, for a particular ranking, Tank Trucks offered are more than the requirement then the tenderers in CWP No. 21361 of 2011 7 that particular ranking shall be further ranked based on the following order of priority and allocations shall be made only till such time the full requirement of Tank Trucks is met and the tenderers who are ranked lower in that particular ranking may not get any allocation.
(i) Tank Trucks offered by RO Dealer/Direct Customer.
(ii)Maximum number of owned TTs offered.
(iii)Maximum number of TTs offered by the tenderer.
(iv)Tenderer offering highest number of 18/ 20/24 KL TTs."
9. A perusal of the above said clauses shows that the L-1 rate offered by the L-1 tenderers as acceptable to the corporation was to be firstly offered to the registered oil dealers/direct customers who were offering tank trucks for their supplies and other retail outlet dealers offering tank trucks for supplies to the consortium of other retail outlet dealers who were ear-marking owned tank trucks for their own supplies and tank trucks offered were to be allocated only on acceptance of the L-1 rate at the first instance. The tank trucks offered by the L-1 tenderers were to be allocated upto that stage and retail outlet dealers who had earmarked owned tank trucks for general transportation were to be evaluated as per original ranking. As per clause 7, rates offered by L-1 tenderers which were not acceptable to the Corporation had to be negotiated and after such exercise had been carried out, the process of allocation of tank trucks on the revised L-1 rate was to be done as per clause 6. It would also be useful to reproduce Clause 7 which reads as under:-
CWP No. 21361 of 2011 8
"7. In case rates offered by L-1 tenderers are not acceptable to IOC then IOC has the discretion to negotiate with L-1 tenderers and in such cases negotiations/ counter offer exercise shall be carried out with such tenderers, then the process for allocation of tank trucks on this revised L-1 rate accepted by L-1 tenderers shall be as per para 6 above."
10. These conditions were fully known to the petitioner, who had applied in pursuance of the said tenders and taken a chance while quoting the lowest rate. Once the petitioner had not been successful, he has approached this Court challenging the criteria fixed by the Corporation. It is a settled principle of law that after taking a chance in the criteria fixed, person having not been successful, is not entitled to urge that the criteria laid down was arbitrary.
11. A Division Bench of this Court in U.G. Hospitals Pvt. Ltd vs. State of Haryana and others, 2009 (1) OLR 329 has held that once a person had participated in the selection process for allotment, then he would lose the right to question the allotment on the ground of adopting irrational criteria and the principle of estoppel would be attracted in such cases. Similar view has been taken by Division Bench of the Bombay High Court in M/s. Mega Enterprises etc. vs. State of Maharashtra and others, AIR 2007 (Bombay) 156 and by the Delhi High Court in State Bank of India vs. Airports Authority of India and others, 96 (2002) DLT
299. The Apex Court in M/s. Tafcon Projects Pvt. Ltd vs. Union of India and others, AIR 2004 (SC) 949 also held to the same effect. The relevant para of the judgment reads as under:-
"16. We need express no view on this matter because in any event the respondent No. 3's offer of an CWP No. 21361 of 2011 9 upfront payment of 2.50 lakhs per year, which was much lower than that offered by the appellant-M/s. Tafcon. Therefore whichever meaning is accepted, ultimately M/s. Tafcon's offer was much better than that of the respondent No. 3 and its selection canot be faulted. Besides the respondent No. 3 had bid pursuant to the tender notice and participated in the proceedings before the Selection Committee. It cannot now take advantage of any alleged vagueness in the tender notice."
12. The Division Bench of Delhi High Court had upheld similar criteria and in Ravinder Singh's case (supra) wherein, similar four categories were created and preferences were to be given as under:-
"(i) Tank trucks offered by RO Dealer/Customer.
(ii) Maximum number of TTS offered by the tenderer.
(iii) Maximum number of owned TTs offered.
(iv) Tenderer offering highest number of 18/20 KL TTS."
13. The criteria adopted by the Corporation is a rational criteria and solely because the petitioner is a tank truck owner not having any retail outlets would not give him any right of award of contract. It has also been specified that the tenderers have to offer a minimum of 5 tank trucks and the ownership of the tenderer is to the minimum of 40% of the said offer and retail outlet dealers offering tank trucks for supplies to the consortium of other retail outlet dealers. The tank trucks age is not to exceed 15 years and replacement of the vehicle has to be done within 30 days with another eligible tank truck. The total number of tank trucks requirement was 725 which was specified in the notice inviting tender itself out of which 458 were of 12 KL capacity and 267 were of 18/20/24 KL and the said conditions CWP No. 21361 of 2011 10 have been drawn up to ensure free flowing supply to the retail outlets from the Panipat Refinery of the corporation. The purpose of giving preference to the retail outlet owners is to ensure that the supply of fuel pumps do not dry up and it is in the interest of the retail outlet owners itself that they are not held ransom at the hands of any other set of transporters. The Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 has laid down the following principles in tender matters:-
"(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 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 CWP No. 21361 of 2011 11 facts pointed out above) but must be free from 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."
14. In view of the above, there is no scope for interference in the action of the respondents and the writ petitions are accordingly dismissed.
(G.S. Sandhawalia) Judge (Ajay Kumar Mittal) Judge 08.08.2012 shivani