Karnataka High Court
Sri Chennakeshava Transport vs The Indian Oil Corporation Limited on 26 April, 2013
Author: S.Abdul Nazeer
Bench: S. Abdul Nazeer
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 26TH DAY OF APRIL 2013
BEFORE
THE HON'BLE MR.JUSTICE S. ABDUL NAZEER
WRIT PETITION NO.1813/2013
C/W W.P.NOS.1814/2013, 1815/2013, 2000-2001/2013
& W.P.NO.5074/2013 (GM-TEN)
W.P.NO.1813/2013
Between:
Sri Chennakeshava Transport,
Reptd. By its Proprietor,
Sri Ranga Swamy,
S/o Ramesh Shetty,
Aged about 39 years,
No.69, 2nd Main Road,
Bharathi LayOut,
Bangalore - 560 029. .... Petitioner.
(By Sri K.N.Subba Reddy & Vivek S. Reddy, Advs.)
2
And:
1 The Indian Oil Corporation Limited,
(A Company Registered under the
Companies Act, 1956, with its
Regd. Office at G-9, Ali Yawan Jung Marga,
Bandra (E), Mumbai - 400 051,
and its Karnataka State Office
at Indian Oil Bhavan, No.29,
P.Kalinga Rao Road, (Mission Road),
Bangalore - 560 027,
Reptd. By its DGM-Operations,
Shri Anbalagan.
2 M/s Rajarajeswari Service Station,
IOC Dealer Sy.No.34/1,
Reptd. By its Proprietor,
Sri Govindraj, Kulemepalya,
Visweshwarapura,
Nelamangala Main Road,
Bangalore District 562 123.
3 M/s Anjanadri Enterprises,
Reptd. By its Proprietor,
Sri Prasanna, No.113/1 To 7,
7th Cross, 5th Main, Chamrajpet,
Bangalore - 560 018.
4 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor,
Sri Prakash, Old Madras Road,
Indiranagar, Bangalore - 560 038.
3
5 M/s Varadaraja Service Station,
Reptd. By its Proprietor,
Sri Mahesh, No.596,
Dr.Rajkumr Road, Rajajinagar,
Bangalore - 560 010.
6 M/s Sri Banashankari Oils,
Reptd. By its Proprietor,
Smt.N.Susheela, Hongirana,
No.248/5, 53rd C Cross,
17th D Main, 3rd Y Block,
Rajajinagar, Bangalore - 10.
7 M/s Abhiman Service Station,
Reptd. By its Proprietor,
Sri Prashanth, Indian Oil Dealers,
B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor,
Sri Nagabushan, 100 Feet,
Industrial Estate Road,
Peenya, Bangalore - 58.
9 M/s Swathi Enterprises,
Reptd. By its Proprietor,
8th Mile Stone, Tumkur Road,
Nagasandra Post,
Bangalore - 73.
4
10 M/s Sri Sharada Enterprises,
Reptd. By its Proprietor,
Sri Jayaram, No.106/7, 10th K.M.,
N.H.7,. Bellary Road,
Amruthahalli, Bangalore - 560 092.
11 M/s Triveni Service Station,
Reptd. By its Proprietor,
Smt. Savithri, No.39,
Hesarghatta Main Road,
Bagalgunte, Bangalore - 73.
12 T.N.Shashikanth,
S/o G.Narasimha Shetty,
Aged about 47 years,
M/s Sharavani Service Station,
N.H.206, Rajatadripura,
K.B.Cross, Tiptur - 572 114,
Tumkur Dist.
13 K.R.Narayanaswamy,
S/o A.Rangappa,
Aged about 58 years,
M/s Sri Vanamala Service Station,
Hulikunte Road, Koratagere 572 129,
Tumkur District.
14 Nandeesha,
S/o late Honnanna,
Aged about 54 years,
M/s Sri Honnaganga Petroleum,
Mysore Road, Chelur - 572 117,
Gubbi Taluk, Tumkur Dist.
5
15 B.P.Aswathanarayana Gowda,
major, M/s Kondur Enterprises,
Indian Oil Dealer, Railway Station,
Thondebhavi - 561 213,
Gouribidanur Taluk,Chickballapur Dist.
16 H.V.Govindaraja Shetty,
S/o Venkatachalapathy Shetty,
Aged about 56 years,
M/s SLR Agencies,
J.C.Circle, Sira Road,
Huliyur - 572 118, Tumkur Dist.
17 Smt. K.Shamalamma,
major, M/s Raghu Agencies,
IOC Dealer, Kuvempu Road,
Pavagada - 561 202.
18 M/s Banashankari Service Station,
Reptd. By its Partner, Sri Mallesh Gowda,
S/o Sri Balaiah, Aged about 57 years,
IOC Dealer, No.27/1,
Kadirenahalli Cross, Gowdanapalya,
Subramanyapura Main Road,
Bangalore - 560 070. .... Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan
& Sri S.V.Angadi, Advs. For R1
R2 to R11 served
Sri S.V.Krishnaswamy, Adv. For R12 to R17
Sri S. Visweswaraiah, Adv. For R18)
6
W.P.NO.1814/2013
Between:
Sri Maruthi Transport,
Reptd. By its Proprietor,
Sri C.Ramesh S/o Channappa,
Aged about 48 years, Door No.113, 5th Cross,
Mahalaxmi Nagar,Manjunathanagar,
Nagasandra Post, Bangalore - 560 073. .... Petitioner.
(By Sri K.N.Subba Reddy & Sri Vivek S. Reddy, Advs.)
And:
1 The Indian Oil Corporation Limited,
(A Company Registered under the
Companies Act, 1956, with its
Regd. Office at G-9, Ali Yawan Jung Marga,
Bandra (E), Mumbai - 400 051,
and its Karnataka State Office
at Indian Oil Bhavan, No.29,
P.Kalinga Rao Road, (Mission Road),
Bangalore - 560 027,
Reptd. By its DGM-Operations,
Shri Anbalagan.
2 M/s Rajarajeswari Service Station,
IOC Dealer Sy.No.34/1,
Reptd. By its Proprietor,
Sri Govindraj, Kulemepalya,
Visweshwarapura,Nelamangala Main Road,
Bangalore District 562 123.
7
3 M/s Anjanadri Enterprises,
Reptd. By its Proprietor,
Sri Prasanna, No.113/1 To 7,
7th Cross, 5th Main, Chamrajpet,
Bangalore - 560 018.
4 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor,
Sri Prakash, Old Madras Road,
Indiranagar, Bangalore - 560 038.
5 M/s Varadaraja Service Station,
Reptd. By its Proprietor,
Sri Mahesh, No.596, Dr.Rajkumr Road,
Rajajinagar, Bangalore - 560 010.
6 M/s Sri Banashankari Oils,
Reptd. By its Proprietor,
Smt.N.Susheela, Hongirana,
No.248/5, 53rd C Cross,
17th D Main, 3rd Y Block,
Rajajinagar, Bangalore - 10.
7 M/s Abhiman Service Station,
Reptd. By its Proprietor,
Sri Prashanth, Indian Oil Dealers,
B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor,
Sri Nagabushan, 100 Feet,
Industrial Estate Road,
Peenya, Bangalore - 58.
8
9 M/s Swathi Enterprises,
Reptd. By its Proprietor,
8th Mile Stone, Tumkur Road,
Nagasandra Post,
Bangalore - 73.
10 M/s Sri Sharada Enterprises,
Reptd. By its Proprietor,
Sri Jayaram, No.106/7, 10th K.M.,
N.H.7,. Bellary Road,
Amruthahalli,
Bangalore - 560 092.
11 M/s Triveni Service Station,
Reptd. By its Proprietor,
Smt. Savithri, No.39,
Hesarghatta Main Road,
Bagalgunte, Bangalore - 73.
12 T.N.Shashikanth,
S/o G.Narasimha Shetty,
Aged about 47 years,
M/s Sharavani Service Station,
N.H.206, Rajatadripura,
K.B.Cross, Tiptur - 572 114,
Tumkur Dist.
13 K.R.Narayanaswamy,
S/o A.Rangappa,
Aged about 58 years,
M/s Sri Vanamala Service Station,
Hulikunte Road, Koratagere 572 129,
Tumkur District.
9
14 Nandeesha,S/o late Honnanna,
Aged about 54 years,
M/s Sri Honnaganga Petroleum,
Mysore Road, Chelur - 572 117,
Gubbi Taluk, Tumkur Dist.
15 B.P.Aswathanarayana Gowda,
major, M/s Kondur Enterprises,
Indian Oil Dealer, Railway Station,
Thondebhavi - 561 213,
Gouribidanur Taluk, Chickballapur Dist.
16 H.V.Govindaraja Shetty,
S/o Venkatachalapathy Shetty,
Aged about 56 years, M/s SLR Agencies,
J.C.Circle, Sira Road, Huliyur - 572 118, Tumkur Dist.
17 Smt. K.Shamalamma,major,
M/s Raghu Agencies, IOC Dealer,
Kuvempu Road, Pavagada - 561 202.
18 M/s Banashankari Service Station,
Reptd. By its Partner, Sri Mallesh Gowda,
S/o Sri Balaiah, Aged about 57 years,
IOC Dealer, No.27/1, Kadirenahalli Cross,
Gowdanapalya, Subramanyapura Main Road,
Bangalore - 560 070. .... Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan
& Sri S.V.Angadi, Advs. For R1
R2 to R11 served
Sri S.V.Krishnaswamy, Adv. For R12 to R17
Sri S. Visweswaraiah, Adv. For R18)
10
W.P.NO.1815/2013
Between:
Rajagopal Transport,
Reptd. By its Proprietor,
Sri Raja Gopal S/o Cheena Krishnan,
Aged about 54 years,
No.840, 8th Main, Yamuna Nadi Road,
Bangalore - 560 050. .... Petitioner.
(By Sri K.N.Subba Reddy & Sri Vivek S. Reddy, Advs.)
And:
1 The Indian Oil Corporation Limited,
(A Company Registered under the
Companies Act, 1956, with its
Regd. Office at G-9, Ali Yawan Jung Marga,
Bandra (E), Mumbai - 400 051,
and its Karnataka State Office
at Indian Oil Bhavan, No.29,
P.Kalinga Rao Road, (Mission Road),
Bangalore - 560 027,
Reptd. By its DGM-Operations,
Shri Anbalagan.
2 M/s Rajarajeswari Service Station,
IOC Dealer Sy.No.34/1,
Reptd. By its Proprietor,
Sri Govindraj, Kulemepalya,
Visweshwarapura, Nelamangala Main Road,
Bangalore District 562 123.
11
3 M/s Anjanadri Enterprises,
Reptd. By its Proprietor,
Sri Prasanna, No.113/1 To 7,
7th Cross, 5th Main, Chamrajpet,
Bangalore - 560 018.
4 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor,
Sri Prakash, Old Madras Road,
Indiranagar, Bangalore - 560 038.
5 M/s Varadaraja Service Station,
Reptd. By its Proprietor,
Sri Mahesh, No.596,
Dr.Rajkumr Road, Rajajinagar,
Bangalore - 560 010.
6 M/s Sri Banashankari Oils,
Reptd. By its Proprietor,
Smt.N.Susheela, Hongirana,
No.248/5, 53rd C Cross,
17th D Main, 3rd Y Block,
Rajajinagar, Bangalore - 10.
7 M/s Abhiman Service Station,
Reptd. By its Proprietor,
Sri Prashanth, Indian Oil Dealers,
B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,
Reptd. By its Proprietor, Sri Nagabushan, 100 Feet,
Industrial Estate Road, Peenya,
Bangalore - 58.
12
9 M/s Swathi Enterprises,
Reptd. By its Proprietor,
8th Mile Stone, Tumkur Road,
Nagasandra Post,
Bangalore - 73.
10 M/s Sri Sharada Enterprises,
Reptd. By its Proprietor,
Sri Jayaram, No.106/7, 10th K.M.,
N.H.7,. Bellary Road,
Amruthahalli,
Bangalore - 560 092.
11 M/s Triveni Service Station,
Reptd. By its Proprietor,
Smt. Savithri, No.39,
Hesarghatta Main Road,
Bagalgunte, Bangalore - 73.
12 T.N.Shashikanth,
S/o G.Narasimha Shetty,
Aged about 47 years,
M/s Sharavani Service Station,
N.H.206, Rajatadripura,
K.B.Cross, Tiptur - 572 114,
Tumkur Dist.
13 K.R.Narayanaswamy,
S/o A.Rangappa,
Aged about 58 years,
M/s Sri Vanamala Service Station,
Hulikunte Road, Koratagere 572 129,
Tumkur District.
13
14 Nandeesha, S/o late Honnanna,
Aged about 54 years, M/s Sri Honnaganga Petroleum,
Mysore Road, Chelur - 572 117,
Gubbi Taluk, Tumkur Dist.
15 B.P.Aswathanarayana Gowda,
major, M/s Kondur Enterprises,
Indian Oil Dealer, Railway Station,
Thondebhavi - 561 213,
Gouribidanur Taluk, Chickballapur Dist.
16 H.V.Govindaraja Shetty,
S/o Venkatachalapathy Shetty,
Aged about 56 years, M/s SLR Agencies,
J.C.Circle, Sira Road,
Huliyur - 572 118, Tumkur Dist.
17 Smt. K.Shamalamma, major,
M/s Raghu Agencies, IOC Dealer,
Kuvempu Road, Pavagada - 561 202.
18 M/s Banashankari Service Station,
Reptd. By its Partner, Sri Mallesh Gowda,
S/o Sri Balaiah, Aged about 57 years,
IOC Dealer, No.27/1, Kadirenahalli Cross,
Gowdanapalya, Subramanyapura Main Road,
Bangalore - 560 070. .... Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan
& Sri S.V.Angadi, Advs. For R1
R2 to R11 served
Sri S.V.Krishnaswamy, Adv. For R12 to R17
Sri S. Visweswaraiah, Adv. For R18)
14
W.P.NOS.2000-2001/2013
Between:
1 M/s N.Shankarachary Transport,
Reptd. By its Proprietor N. Shankarachary,
No.13, 21st Main Road, BSK 2nd Stage,
Near BDA Complex, Bangalore - 70.
2 M/s K.K.Manje Gowda Transport,
Reptd. By its Proprietor K.K.Manje Gowda,
No.214, Lakshmaiah Building,
Kattamnallur, Virgonagar Post,
Bangalore - 560049. .... Petitioners.
(By Sri B.K. Sampath Kumar, Adv.)
And:
1 Indian Oil Corporation Limited,
Karnataka State Office,
Indianoil Bhawan,
29, P.Kalingarao Road (mission Road),
Bangalore - 560 027.
2 Mr.V.Velu Murgan, major.
3 Mrs. Mallarkodi,
W/o Mr.V.Velu Murgan, major.
R2 and R3 are r/a No.199,
Ramgopal Layout, Subbannapalya,
Banaswadi, Bangalore - 33.
15
4 M/s Anjanadri Enterprises,
No.113/1 to 7, 7th Cross, 5th Main,
Chamrajpet, Bangalore - 18.
5 M/s Sree Venkateshwara Service Station,
1, Old Madrs Road, Indiranagar,
Bangalore - 38.
6 M/s Vardaraja Service Station,
No.596, Dr.Rajkumar Road,
Rajajinagar, Bangalore - 10.
7 M/s Abhiman Service Station,
Indian Oil Dealers, B.H.Road,
Tiptur- 572 201.
8 M/s Triveni Service Station,
No.39, Hesaraghatta Main Road,
Bagalgunte, Bangalore - 73.
9 M/s Swathi Enterprises,
8th Mile Stone, Tumkur Road,
Nagasandra Post,
Bangalore - 73.
10 M/s Sri Sharadah Enterprises,
No.106/7, 10th KM, NH-7,
Bellary Road, Amruthally,
Bangalore - 92.
16
11 M/s Rajarajeshwari Service Station,
IOC Dealer, Sy.No.34/1,
Kulumepalya Viswesharapura,
Nelamangala Main Road,
Bangalore Dist. 562 123.
12 M/s Sri Banashankari Oils,
Srimati N. Susheelaa, Hongirana,
No.248/5, 53rd Cross, 17th D Main,
3rd Y Block, Rajajinagar, Bangalore - 10.
13 M/s Sre Venkateshwara Service Station,
100 Feet Industrial Estate Road,
Peenya, Bangalore - 58.
14 M/s M.K.Prakash Transports,
C/o M/s Subadra Transport,
Near Big Bazar, Kolar - 563 101.
15 M/s A.Kavitha Transport,
No.27, K.R.Puram, Cocks Town Extension,
Vijanahalli, Bangalore - 5.
16 M/s Pragathishwara Nanda Transport,
No.29, Mariamma Temple Street,
16th Cross, Jayabharathnagar,
Bangalore - 33. .... Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan
& Sri S.V.Angadi, Advs. For R1
Sri Krishna S. Dixit, Adv. For R2, R3, R15 and R16
R6 to R14 served
Notice to R4 & R5 served through hand summons)
17
W.P.NO.5074/2013
Between:
B.S.Indu Shekar Singh,
S/o late B.S.Bagwan Singh,
Aged about 50 years,
Prop: Bagwan Sri Balaji Fuels,
No.4, Yammerahally, Sira,
Tumkur District - 572 137. .... Petitioner.
(By Sri S.V.Krishna Swamy, Adv.)
And:
Indian Oil Corporation,
By General Manager (Operations),
Indian Oil Bhavan,
No.29, P. Kalingarao Road,
(Mission Road), Bangalore - 27. .... Respondent.
(By Sri A.K. Lakshmanan, Adv.)
---
18
W.P.No.1813/2013 is filed under Articles 226 & 227 of the
Constitution of India, praying to quash the letter of indent dated
23.11.2012 as illegal and discriminatory, etc.
W.P.No.1814/2013 is filed under Articles 226 & 227 of the
Constitution of India, praying to quash the letter of indent dated
23.11.2012 as illegal and discriminatory, etc.
W.P.No.1815/2013 is filed under Articles 226 & 227 of the
Constitution of India, praying to quash the letter of indent dated
23.11.2012 as illegal and discriminatory, etc.
W.P.Nos.2000-2001/2013 is filed under Articles 226 & 227
of the Constitution of India, praying to direct the first respondent to
issue work order vide tender dated 14.8.2012, etc.
W.P.No.5074/2013 is filed under Articles 226 & 227 of the
Constitution of India, praying to direct the respondent to consider
and grant the licence required for transportation of petroleum
products from the terminal at Devanagondi to his bunk at Sira, etc.
These Writ Petitions coming on for Further Orders this day,
the Court passed the following:
19
ORDER
In W.P.Nos.1813/2013, 1814/2013 and 1815/2013, the petitioners have sought for quashing the Letter of Indent at Annexures 'C1' to 'C10' dated 23.11.2012 issued by the first respondent in favour of the private respondents and for a mandamus directing the first respondent not to issue work orders and for certain other reliefs.
2. In W.P.Nos.2000-2001/2013, petitioners have sought for a writ of mandamus directing the first respondent to issue the work order vide tender notification at Annexure 'A' dated 14.8.2012 to the petitioners as they have quoted the lowest price and for certain other reliefs.
20
3. In W.P.No.5074/2013, the petitioner has sought for a direction to the respondent to consider and grant the licence required for transportation of petroleum products from the terminal at Devanagondi to his bunk at Sira and to the consortium members.
4. The pleadings in W.P.Nos.1813/2013, 1814/2013, 1815/2013 and 2000-2001/2013 are more or less similar. These petitions have been filed by the unsuccessful bidders for the transportation of bulk petroleum products. The first respondent published tender for bulk transportation of petroleum products to various locations in Karnataka. The notice inviting tender was issued on 14.8.2012 from the Karnataka State. The offers were sought from interested parties and the same was opened on 24.9.2012. The first respondent has completed the process of issuance of letter of indent (LOI) on 23.11.2012. 21
5. The contention of the petitioners is that they are the owners of certain number of trucks and are presently carrying on contract of supplying tank trucks to the first respondent. It is their case that the tender documents contain two parts, viz., technical/commercial bid and price bid. In the price bid, rate schedule for road transportation of bulk petroleum products estimated rates were given at page No.71 of the tender document at Annexure 'A'. The technical bids were opened by the first respondent and petitioners were declared as eligible in the technical bid along with other eligible bidders.
6. Respondent No.1 has also furnished the schedule date for opening up of the price bids and the place/venue of the opening of the price bid. As per the tender notification, evaluation of tenderers shall be decided on minimum financial outgo to the IOCL by considering the rates quoted in both the items and expected 22 volumes of the business. The bidders are categorised as L1, L2, L3 etc., as per Clause B(4) of the evaluation of tenderers, which is the criteria for deciding as the lowest bidder in the said tender procedure. Petitioners were present on the day fixed for opening the price bid of the aforesaid tender and price bids were announced. The petitioners came to know that their price was lowest along with some other participants. Sri Velumurugan was also a successful bidder in technical bid and when his price bid was opened, he was ranked as L2. As against this, the petitioners were ranked as L1. It is further submitted that a complaint has been filed against Velumurugan for stealing of diesel. Velumurugan and Smt.Malarkodi are husband and wife. The police have mentioned that there was a route diversion taken by the tanker to enable the tanker to steal diesel. Despite the above facts, tenders have been granted in favour of Velumurugan and his wife.
23
7. The petitioners in W.P.Nos.2000-2001/2013 have raised similar contentions. It is contended that despite the first respondent knowing that a case against respondent No.2 for stealing of the diesel is registered against him, it has approved the tender without any regard to his past conduct. The petitioners have an unblemished record and are in the business for close to 30 years. The first respondent is trying to monopolise the transport industry by favouring few tenderers, who do not deserve the tender and are trying to throw out the petitioners from the business. The second respondent-V.Velumurugan and his wife Smt.Malarkodi has been awarded the tender without any rhyme or reason.
8. In W.P.No.5074/2013, the petitioner contends that recommendation has been made to award the tender in his favour. However, the licence has not been issued for carrying bulk supplies.
24
9. The first respondent has filed objections in W.P.Nos.1813/2013, 1814/2013, 1815/2013 and 2000-2001/2013 contending that the terms and conditions of the public tender covered under tender No.KASO/OPS/POL/2012-15/Bangalore Terminal/01 dated 14.8.2012 read with corrigendum dated 15.8.2012 are the All India policy of Indian Oil Corporation, which got evolved over a period of years and other stake holders for the purpose of ensuring uninterrupted and smooth supplies of essential petroleum products to the general public with a view to avoid malpractices and quantity and quality issues. The terms and conditions of the public tender revised and effective from 27.7.2012 is applicable for the POL tenders to be floated by the POL locations of Indian Oil Corporation Limited on all India basis. The public tender was floated on 14.8.2012 and the offers were sought from interested parties and the same was opened on 24.9.2012. Thereafter, respondent No.1 has completed the process 25 of issuance of Letter of Indent strictly following the tender conditions on 23.11.2012 and the activities of physical verification of tank trucks and relevant documents were taken up for another period during which time respondent No.1 has not received any representations or objections.
10. It is further contended that the petitioners without any objections have accepted the tender conditions in full and submitted their tender documents for consideration. Objection is raised only on their tenders not found to be successful as per tender conditions at much a later stage. The contract is not for supplying tank trucks as mentioned in the petition but for transportation of petroleum products. The tender applicants have submitted the tenders in line with the public tender conditions. They have accepted all the terms and conditions of the public tender, which were made available in the public domain, without any objections. 26 The petitioners have participated in the tender process. Now after becoming unsuccessful, they cannot challenge the terms and conditions of the tender.
11. The categorization of L1, L2, L3, etc., have been established in line with the tender conditions. Further evaluation and issuance of Letter of Indent has been undertaken in line with clauses B6 to B9 of the public tender document. Letter of Indent has been issued to successful tenderers after evaluation of the tenders in line with the terms and conditions of the public tender by strictly evaluating all successful tenders as per the ranking procedures enunciated in the tender conditions and after approvals from competent authority in line with the policy of the Corporation Letter of Indents were not issued to the petitioners in line with the terms and conditions of the tender as they have participated in the tender under General Transporter category and have quoted L2 27 rates in their price bids.
12. Letter of Indents have been issued in the first instance only for the tenderers under the category of dealers/consortium/direct customers only for their own use and who have subsequently accepted the L1 rates finalised for the tender. These conditions were also deliberated and explained to the prospective tenderes during the pre-bid meeting conducted at Devanagunthi Terminal on 7.9.2012, much before the last date of submission of the tender, which was on 24.9.2012. The petitioners were also present during this pre-bid meeting where the terms of tender were clarified. Similar terms and conditions were also adopted for the previous tender finalised during October, 2009 for Bangalore Terminal during which the petitioners were some of the successful tenderers and they were awarded contract at that time. Letter of Indents have been issued to other than L1 bidders only for 28 own use requirement by tenderers who have participated under the category of dealers/consortium/direct customers only and not for general transportation even though such tenders were received from IOC dealers, which is again strictly in line with the tender conditions as the entire POL transportation contract is finalised for ensuring the over all interest of IOC dealers and customers to receive correct quality and quantity of products without giving room for any kind of malpractice for which the self-transportation for own requirement was found to be ideal.
13. It is pointed out that no discrimination has been resorted to during the evaluation of the tender. No unfair and inequitable treatment was given to any of the tenderers and all have been treated equally in accordance with the terms and conditions of the tender and Letter of Indents have been issued in accordance with the public tender conditions.
29
14. I have heard Sri Vivek S. Reddy, Sri B.K.Sampath Kumar and Sri S.V.Krishnaswamy, learned Counsel for the petitioners and Sri Ashok Haranahalli, learned Senior Advocate for Sri S.V.Angadi, Sri S. Visweswaraiah and Sri Krishna S. Dixit, learned Counsel for the respondents.
15. Sri Vivek S. Reddy, learned Counsel appearing for the petitioners in some of the petitions submits that in the evaluation of the technical bid, the petitioners have been qualified. However, in the next stage of evaluation under Clause B(9), the tenderers were not qualified because of the number of tank trucks owned by them. Clause B(9) of the tender is itself arbitrary. Relying on the decision of the Apex Court in MEERUT DEVELOPMENT AUTHORITY VS. ASSOCIATION OF MANAGEMENT STUDIES AND 30 ANOTHER - (2009) 6 SCC 171, he submits that though the terms of the invitation tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.
16. It is further argued that policy of the Government from the point of view of public interest is to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in social and economic justice. In this connection, he has relied on the decision of the Apex Court in UNION OF INDIA AND OTHERS VS.
HINDUSTAN DEVELOPMENT CORPORATION AND 31 OTHERS - (1993) 3 SCC 499. It is further contended that though the Madras High Court has upheld the terms of the tender notification, this question has not been considered by the said Court. It is argued that discrimination based on person having more number of trucks is unconstitutional. He has also relied on the decision of the Apex Court in NATURAL RESOURCES ALLOCATION, IN RE, SPECIAL REFERENCE NO.1 OF 2012
- (2012) 10 SCC 1 and has drawn my attention to different paragraphs in this judgment.
17. It is further argued that Velumurugan had a complaint filed against him for stealing of diesel. The first respondent despite knowing that the said respondent had a complaint filed against him has awarded the tender in his favour. Velumurugan and Smt.Malarkodi are husband and wife.
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18. Sri B.K.Sampath Kumar, learned Counsel submits that FIR has been registered against respondent No.2. Despite the same, he has been awarded the contract, which is not permissible in law. In this connection, he has taken me through various clauses in the tender document.
19. The contention of Sri Krishnaswamy, learned Counsel for the petitioner in W.P.No.5074/2013 is that though there is a recommendation to award the tender, allotment letter has not been issued so far.
20. On the other hand, Sri Ashok Haranahalli, learned Senior Counsel appearing for respondent No.1 submits that the petitioners having submitted the bid cannot now challenge different clauses in the tender. It is further submitted that if the applicants are blacklisted then only they are barred from applying for the tender. 33 The procedure has been prescribed in the tender document for blacklisting. Merely because FIR has been registered against some of the respondents, will not bar them from participating in the tender.
21. It is further argued that none of the conditions of the tender are in violation of the fundamental rights of Part III of the Constitution of India. The ranking procedures dealt by clause No.9 of Part B of tender evaluation in case for particular ranking, the tank trucks offered are more than the requirement, then tenderers in that particular ranking will be further ranked based on the orders of priority. It is further argued that granting contract to tenderers having highest number of 18/20/24 KLs are given preference in case of tie in evaluation in the previous stage. This again to take commitment of major and big operators who have invested more in the high capacity tank trucks as compared to those who have 34 invested less in small capacity tank trucks ('TTs' for short) to say 12 KL capacity TTs. The granting of contract to tenderers, who possess more trucks is to ensure commitment of tenderers in their business to avoid malpractice as punishment for any malpractice will be highly prohibitive and the same will also grossly improve safety and administrative effectiveness as a promising business proposition to the first respondent as all TTs of all L1 tenderers cannot be accepted as the requirement for viable operation is 265 TTs as against 440 TTs offered by eligible L1 tenderers.
22. I have carefully considered the arguments of the learned Counsel made at the Bar and perused the materials placed on record.
23. It is settled that the Courts can scrutinise the award of contract by the Government or its agencies in exercise of its powers 35 of judicial review to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of power of judicial review in such matters. The Apex Court in TATA CELLULAR VS. UNION OF INDIA - (1994) 6 SCC 651 has laid down the principles with regard to the power of judicial review by the Courts. They are as under:
"The principles deducible from the above are:
(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 administration decision is permitted, it will be 36 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 all administrative sphere or quasi-
administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias 37 or actuated by malafides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
24. In DIRECTORATE OF EDUCATION VS. EDUCOMP DATAMATICS LTD. - AIR 2004 SC 1962, the Apex Court has held that the terms of invitation to tender are not open to judicial scrutiny the same being in the realm of contract. The Government must have free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The Courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, malafide or actuated by bias. The Courts cannot strike down the terms of tender prescribed by the Government because it feels that some other terms in the tender 38 would have been fair, wiser or logical.
25. In GLOBAL ENERGY LTD. AND ANOTHER VS.
ADANI EXPORTS LTD. AND OTHERS - (2005) 4 SCC 435, the Court has reiterated the principles as under:
"10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition and allowed the appellants to deposit the earnest money by furnishing a Bank guarantee or a Bankers' cheque till three days after the actual date of 39 opening of the tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench."
26. In ASSOCIATION OF REGISTRATION PLATES VS.
UNION OF INDIA AND OTHERS - 2004 AIR SCW 7074, the Apex Court was considering the terms and condition of notices inviting tenders for supply of high security registration plates to motor vehicles. A contention was raised that the tender conditions are discriminatory being aimed at excluding indigenous manufacturers from the tender process. The Court held that the State as an implementing authority has to ensure that scheme of high security plates is effectively implemented. Keeping in view the enormous work involved in switching over to new plates within two years for existing vehicles of such large numbers in each State, resort to 'trial and error' method would prove hazardous. Its concern to get the right and most competent person cannot be 40 questioned. It has to eliminate manufacturers who have developed recently just to enter into the new field. The insistence of the State of search for an experienced manufacturer with sound financial and technical capacity cannot be misunderstood. The terms and conditions are so formulated to enable the State to adjudge the capability of a particular tenderer who can provide a fail-safe and sustainable delivery capacity. Only such tenderer has to be selected who can take responsibility for marketing, servicing and providing continuously the specified plates for vehicles in large number. Capacity and capability are two most relevant criteria for framing suitable conditions of any notices inviting tenders. The impugned clauses by which it is stipulated that the tenderer individually or as a member of joint venture must have an experience in the field of registration plates in atleast three countries, a common minimum net worth of Rs.40 crores and either joint venture partner having a minimum annual turnover of atleast Rs.50 crores and a minimum of 15% turnover of registration plates business have been, as stated, 41 incorporated as essential conditions to ensure that the manufacturer selected would be technically and financially competent to fulfil the contractual obligations, which looking to the magnitude of the job requires huge investment qualitatively and quantitatively. The Court has repelled the argument that the terms of notice inviting tenders deliberately exclude domestic manufacturers and new entrepreneurs in the field.
27. In M/S MICHIGAN RUBBER (INDIA) LIMITED VS.
STATE OF KARNATAKA AND OTHERS - (2012) 8 SCC 216, the Apex Court has held that judicial review is not permissible with regard to the Government contract in the absence of any malafides or arbitrariness in the process of evaluation of bids and determination of the eligibility of bidders.
28. A limited judicial review may be available in cases 42 where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. In MEERUT DEVELOPMENT AUTHORITY''s case (supra), the Apex Court has held as under:
"A tender is an offer. It is something which invites and is communicated to notify acceptance. It must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process."43
29. This view has been reiterated by the Apex Court in NATURAL RESOURCES ALLOCATION's case (supra).
30. It is also to be noticed here that the invitation to tender impugned herein was a subject matter of challenge before the Madras High Court in W.P.Nos.32166 to 32171/2012 (between SRI NAVAJEVAN TRANSPORTS AND OTHERS VS. THE INDIAN OIL CORPORATION LIMITED AND OTHERS). A learned Single Judge of the said Court has dismissed the writ petitions on 1.3.2013. In the said case, even clause B(9) was also under challenge. The contention has been negatived by holding as under:
"In so far as the petitioners, who have filed the writ petitions praying for a writ of declaration are concerned, I am of the view that they have no locus standi to file these writ petitions now and they are estopped from questioning the tender conditions as arbitrary, not followed properly, etc., that too, after 44 participation in the tender process and failing to get the contract. The petitioners after having read and understood the tender conditions and signed and sealed each page of the tender document challenge the same after participation and failing to get the contract. Further, the preferential treatment has a meaning to ensure uninterrupted supply in the public interest. RO Dealers/Direct Customers and the petitioners are not equals and therefore, there is no question of offending Article 14 of the Constitution of India. RO Dealers/Direct Customers are already under the control of the first respondent Corporation and the same is not the case of the petitioners who are just transporters. Therefore, it is reasonable classification and the question of discriminatory treatment does not arise."
31. Therefore, the writ petitions challenging the various clauses in the tender document have to fail on the ground that they have participated in the tender process.
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32. Be that as it may. I am of the view that condition B(9) is not violative of the fundamental rights of Part III of the Constitution of India. The ranking procedures dealt by Clause No.9 of Part B of tender evaluation in case of particular ranking, the tank trucks offered are more than the requirement, then the tenderers in that particular ranking will be further ranked based on the orders of priority as elaborated therein. The Dealers/Direct Customers are given preference over others as they are the total beneficiary of tender to receive uninterrupted quality and quantity supplies in time so as to supply to the customers and face competition in the markets. They are the permanent feature of business relations,unless any malpractice is committed by them. Hence, utilizing their tank trucks and encouraging them in transportation is highly essential to protect the supply of essential petroleum product supplies from vagaries of en-route malpractices in quantity and quality.
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33. Maximum number of owned TTs offered is given with next preference in the tender to promote transporters having more number of owned TTs instead of depending on the TTs of the other owners on attachment basis as the control over these TTs will be more difficult and challenging and they are also not the direct beneficiary. It involves the commitment of transporters as they own more number of Tank Trucks in the contract. Maximum number of TTs offered by the tenderer is given next preference in case of tie in above evaluation to involve more commitment and for utilizing their business acumen and commitment in the business as it was the practical experience of the company that the tenders with less number of TTs were indulging in malpractice and even if any action is taken they are not much affected as affected by big operators due to which the services of big operators are found to be good. There is no merit in the contentions of the petitioners that this clause is against public interest and has the effect of concentrating economic power on some persons. Materials on 47 record would disclose that the contract has been awarded in favour of several bidders, who satisfy the eligibility criteria. I do not find any arbitrariness in the aforesaid clauses.
34. Coming to the other contention that since FIR has been filed against Velumurugan, he should not have been granted any contract and that his wife has also been granted the contract is without any merit. It is needless to say that both of them had the eligibility to apply for the grant of contract. The wife of Velumurugan has been granted contract under the quota reserved for Scheduled Caste and Scheduled Tribe. Velumurugan has been ranked on the basis of the maximum number of owned TTs. It is not the case of the petitioners that Velumurugan has been blacklisted. The tender document provides procedure for the blacklisting of the contractors. Mere filing of FIR does not amount to blacklisting under the tender document. Therefore, the 48 contention of the petitioners that Velumurugan should not have been granted the contract is hereby rejected.
35. In the light of the above discussions, I pass the following:
ORDER
(i) W.P.Nos.1813/2013, 1814/2013, 1815/2013 and 2000-
2001/2013 are dismissed.
(ii) The Indian Oil Corporation is directed to consider the case of the petitioner in W.P.No.5074/2013 for grant of licence in accordance with law. This writ petition is disposed of accordingly.
36. In view of the disposal of the writ petitions as above, I.A.Nos.3/2013, 4/2013 and 6/2013 in W.P.Nos.1813/2013, 1814/2013 and 1815/2013 and I.A.No.2/2013 in W.P.Nos.2000- 49 2001/2013 do not survive for consideration. They are accordingly dismissed. No costs.
Sd/-
JUDGE.
BMM/-