Kerala High Court
Indane Distributors Forum vs Indian Oil Corporation Limited ... on 5 December, 2012
Author: K.Vinod Chandran
Bench: Manjula Chellur, K.Vinod Chandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:-
THE HON'BLE THE CHIEF JUSTICE MRS. MANJULA CHELLUR
&
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
TUESDAY, THE 15TH DAY OF JANUARY 2013/25TH POUSHA 1934
W.A.No.75 of 2013
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(AGAINST THE JUDGMENT IN W.P.(C).11952/2012 DATED 05-12-2012)
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APPELLANTS/ PETITIONERS 1 TO 6 & 8 IN WP(C):-
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1. INDANE DISTRIBUTORS FORUM,
REPRESENTED BY ITS GENERAL SECRETARY BABU VARGHESE,
BABU GAS SERVICES, A.M.ROAD, PERUMBAVOOR, ERNAKULAM.
2. VENUGOPAL.A.T.,
INDANE DISTRIBUTOR, SUPER GAS AGENCY, PONEVAZHY ROAD,
EDAPPALLY P.O.,ERNAKULAM.
3. JAYAPRAKASH.K.,
INDANE DISTRIBUTOR, POOJA GAS, UNNICHIRA,
KOCHI-21.
4. GEORGE MATHEW,
INDANE DISTRIBUTOR, MATHSONS GAS SERVICES,
KOTHAMANGALAM - 686 691.
5. T.B.MOHAN,
INDANE DISTRIBUTOR, ARANI INDANE SERVICES,
KOOTHATTUKULAM P.O., KOCHI - 686 662.
6. CYRIAC KURIAKOSE,
INDANE DISTRIBUTOR, RASMI GAS, THRIPPUNITHURA,
KOCHI-682 301.
7. BABU VARGHESE
INDANE DISTRIBUTOR, BABU GAS SERVICES, A.M.ROAD,
PERUMBAVOOR.
BY ADVS.SMT.SUMATHY DANDAPANI (SENIOR ADVOCATE)
SRI.MILLU DANDAPANI.
W.A.NO.75 OF 2013
- 2 -
RESPONDENTS/ RESPONDENTS & PETITIONERS 7 & 9 IN WP(C) :-
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1. INDIAN OIL CORPORATION LIMITED (MARKETING DIVISION),
KERALA STATE OFFICE, PANAMPILLY AVENUE,
PANAMPILLY NAGAR, KOCHI-682036,
REPRESENTED BY ITS CHIEF LPG MANAGER.
2. UNION OF INDIA,
REPRESENTED BY THE SECRETARY TO GOVERNMENT,
MINISTRY OF PETROLEUM AND NATURAL GASES,
NEW DELHI - 110 001.
3. PANANGOTE TRANSPORTS,
ANAND OOMMAN THOMAS, PANANGOTE BANGLOW,
ALUMMOODE P.O., MUKKATHALA ,KOLLAM - 691 577.
4. BIJU MATHEW
MANNULLIL HOUSE, KUMARAPURAM P.O., ERNAKULAM - 683 565.
5. JOMY N.JOSE
NELLIKKATTIL HOUSE, KARINGAZHA, CHELADU P.O. - 686 681,
KOTHAMANGALAM.
6. SITHARA INDANE GAS,
SITHARA, THOPPUMPADY, KOCHI-582005.
7. MINI GEORGE,
INDANE DISTRIBUTOR, AMAR JYOTHI INDIANE SERVICES,
KOTHAMANGALAM, KOCHI - 686 691.
8. SREE VINAYAKA LOGISTICS,
SREE VINAYAKA INDANE SERVICES, NORTH NADA,
KODUNGALOOR P.O., THRISSUR - 680 664,
REPRESENTED BY ITS MANAGING PARTNER S.REJITHA.
R1 BY ADV.SRI.M.GOPIKRISHNAN NAMBIAR
R2 BY ASST. SOLICITOR GENERAL OF INDIA SRI.P.PARAMESWARAN NAIR
R3 & R4 BY ADV. SRI.G.SHRIKUMAR (SENIOR ADVOCATE)
R5 BY ADV.SRI.P.B.KRISHNAN
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 15-01-2013,
THE COURT ON THE SAME DAY PASSED THE FOLLOWING:-
APPENDIX
APPELLANT'S ANNEXURE:-
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ANNEXURE-A - TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE
7TH APPELLANT DATED 19.12.2012.
RESPONDENT'S ANNEXURES:-
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NIL.
( true copy )
Manjula Chellur, C.J. &
K.Vinod Chandran, J.
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W.A.No.75 of 2013
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Dated this, the 15th day of January, 2013
JUDGMENT
K.Vinod Chandran,J.:
This is a classic case in which, when a public authority resorts to certain measures for ameliorating the public grievances, the supposed defenders of public good, turn against the authority for reason only of commercial considerations. The shortage of Liquefied Petroleum Gas ("LPG" for short) and the travails to which the public are subjected to, due to the various problems faced by the Corporation, in the labour sector, starting right from the manufacture, bottling and the distribution chain finally culminating in the supply to the end consumer; needs no enumeration.
2. The petitioners, being a forum of distributors, individual distributors and the consortium of distributors, were earlier before this Court claiming right to transportation, police protection for loading and unloading, and so on and so forth; all for the professed object of public good. The appellants herein, who were the petitioners before the learned single Judge, have themselves produced orders of this Court, W.A.No.75 of 2013 - 2 - wherein directions were issued and police protection was granted to the said distributors in the matter of transportation, loading and unloading as also supply of LPG cylinders; all allegedly prompted by considerations of public good and alleviation of public hardship. They have now turned around on the Corporation holding it to ransom on the claim of a preference, which was essentially and primarily designed for the public good.
3. It is an admitted fact that for some years past, individual distributors were allowed to carry on transportation of LPG cylinders required for the distribution in their respective agencies granting relaxation of qualification in the tender conditions. Such relaxation is with respect to the stipulation of number of trucks owned by the tenderer. While a proposed tenderer to the tender floated by the Corporation was obliged to own 5 trucks, a distributor/reseller of the Corporation was granted relaxation in so far as enjoining them to have ownership of only one truck. In the context of frequent disruption of distribution and supply of LPG cylinders, the Corporation stepped in with a novel scheme, by which the distributors were permitted to form a consortium for the purpose of submitting tenders for transportation of cylinders; but confined to the area of supply of the distributors who W.A.No.75 of 2013 - 3 - form such consortium; such distributors being entitled to take supplies from the same plant. This was to facilitate smooth carriage of cylinders to such distributors, ensuring prompt supply to the end consumer. As is wont, the transporters were before this Court challenging the preference granted to the consortium.
4. The challenge by the transporters, was negatived by this Court in Exhibit P14 judgment. The petitioners therein made a two pronged attack against such relaxation in qualification prescribed under Clause 1.9 of Exhibit P12 regarding the number of trucks essential for submitting tenders. The contention with respect to a partnership firm losing the identity of a distributor and being disentitled from claiming a relaxation applicable to distributors, as also the apprehension of monopoly on transportation conferred on the distributors were both repelled by a learned single Judge of this Court. This Court specifically noticed the restriction to a distributor or a consortium of distributors to avail of the relaxation only for transportation and carriage of cylinders for their own business and from the same plant and also noticed the submission on behalf of the respondent-Corporation that the novel measure would, to some extent, be an answer to the disruption in supply, on account of strikes and other hurdles.
W.A.No.75 of 2013 - 4 -
5. It is this preference conferred on the distributors who submit tenders individually or by forming a consortium and the interpretation of the clauses incorporated in the tender invitation document that is now relied on by the appellants to claim exclusive rights to grant of contract of transport. The claim of the appellants is that by the terms stipulated in the tender invitation document, the distributors were obliged to either own their own trucks or form a consortium which owns trucks and also mandated compulsory submission of tenders. They having acted on such clear mandate of the Corporation and having altered their position by purchase of trucks in the name of the consortium (9th writ petitioner); had a legitimate expectation for preferential grant of contract. They were before this Court claiming preference, in exclusion to other tenderers, for transportation of the cylinders.
6. The learned single Judge noticed that Exhibit P14 judgment, by which the claim of arbitrariness and discrimination raised by the transporters were repelled, was relied on by both sides. It was held that on a reading of the judgment it cannot be held that there was exclusive preference granted to the consortium of distributors. The right to compete in the tender, availing the relaxation with respect to W.A.No.75 of 2013 - 5 - the number of trucks, but in open competition with other tenderers; only was upheld in Exhibit P14. Noticing the stand of the respondent Corporation that there was no direction or mandate to the distributors/dealers to participate in the tender; the preference under clause 5.08 was held as only being confined to those distributors who were ranked similarly with other tenderers. On a combined reading of the various clauses of the invitation for tender, the learned single Judge held that it cannot be gainsaid that the distributors/dealers, forming a consortium, have to be given preferential claim in exclusion to other tenderers and dismissed the writ petition.
7. Exhibit P12 is the invitation for tender for transportation of LPG cylinders, brought out by the respondent Corporation, with respect to Cochin LPG bottling plant. Writ petitioners 2 to 8 are all distributors securing cylinders from the Cochin plant. Clause 1.9 is the relaxation inter alia granted to the distributor/reseller mandating ownership of only 1 truck as against 5 trucks with respect to other tenderers. Such relaxation was extended to a group of distributors by clause 1.28.3. Clause 1.28.3 in itself contained a restriction that any consortium of distributors could submit a tender only for the purpose of effecting their own supplies and that too only if the members of the W.A.No.75 of 2013 - 6 - consortium take supplies from the very same plant.
8. What is attempted to be urged by the appellants is that the words "Corporation dealers/distributors should participate in this tender for award of transport contract" would show the mandatory nature of the directions issued by the Corporation. We are not impressed with the said argument. It cannot be said that the stipulation in the invitation for tender is in the nature of mandate on the distributors whose agency is controlled by a separate and distinct agreement. The clause in the invitation for tender cannot and does not result in the fear of termination of the distributorship. Though such fear is not stated in so many words, the argument of a mandatory direction and the anxiety propounded by the appellants to comply with the mandate can only emanate from a resultant anticipation of termination of agency.
9. A reading of clause 1.28.2 dispels the very ground of the mandatory direction pleaded and argued by the appellants. Clause 1.28.2 calls upon the distributors to earmark the owned trucks for their own supplies which shall not be used for other transportation work. This clearly demonstrate that in addition to the transportation of own supply, a distributor or a consortium of distributors can also submit W.A.No.75 of 2013 - 7 - tenders for general transportation of LPG cylinders. This is made further clear by the stipulation in clause 1.28.2 that the distributors who are not earmarking trucks for their own supplies shall be evaluated as general tenderers. Needless to say that no preference could be claimed by the distributor or a consortium so competing as a general tenderer. It is pertinent that clause 1.28.2 further speaks of supply to the distributor at the discretion of the respondent Corporation in the event of non-earmarking of trucks for their own supply. Hence a distributor who does not participate in the tender, and who does not qualify thereon will simply have to wait for his turn for supply.
10. It is trite that stipulations or essential conditions, just as a statute, have to be read together and words and sentences taken out of context cannot be the basis of interpretation. In the said circumstance, there can be no inference of a mandate, implied or express, on a distributor to submit tenders for transportation. It cannot also be inferred that the failure to do so would entail any disruption or termination of the agency. The respondent Corporation cannot be looked upon as having prescribed any requirement of purchase of trucks by the distributor or a consortium of distributors. Nor is there a consequential promise to grant the transportation contract to such W.A.No.75 of 2013 - 8 - persons, allegedly prevailed upon to purchase trucks.
11. The learned Senior Counsel would, however, urge that definitely a preference to distributors/consortium of distributors is expressed in the invitation for tender. We notice that the learned single Judge has elaborately considered the clause which is purported to grant preference, coming under the head "Evaluation of Tenders" in Clause 5.0 of Exhibit P12. Clause 5.02 provides for ranking of the tenderer as L-1, L-2, L-3 etc. depending upon the ascending order of the financial outgo to the Corporation. Clauses 5.03, 5.04 and 5.05 refer to allocation of the transportation work and refers to negotiations with the next ranking tenderer, in case of non-availability of sufficient trucks in the preceding lowest rank. The preference to distributors/consortium of distributors is spoken of by Clause 5.08. The preference is available only when a distributor by reason of the amount quoted in his tender is placed at par with the general tenderer in a particular rank. Distributors/consortium of distributors coming outside a particular ranking cannot be handpicked in preference to a tenderer having higher rank; by reason of his tender being lower.
12. Going by the various clauses under the head "Evaluation of Tenders" and the explanation offered by the Corporation W.A.No.75 of 2013 - 9 - in its counter affidavit, we are convinced that the preference granted is only when such distributors/consortium of distributors come within a particular rank along with other tenderers and the preferential choice can be exercised by the Corporation only from within the persons having the same rank. There cannot be any other understanding and the same is reasonable in all respects. The said preference to award transport contract to distributors/dealers is also, under Clause 1.28, subject to the acceptance of rates offered by the Corporation. We are of the view that the clauses in the invitation for tender; Exhibit P12, does not call for any other interpretation and there is no exclusivity conferred on the distributors/consortium of distributors. Nor is there an unconditional preference to the appellants or similarly placed persons for being picked and chosen at the whims of the Corporation. Such a preference evidently would not stand the test of arbitrariness and discrimination.
13. Distributorship/agency obviously, as is noticed above, is regulated by a separate and distinct agreement and Exhibit P12 invitation of tender cannot meddle with or in any way prejudice the distributorship/ agency by whittling down the terms of such separate and distinct agreement. No mandate can be inferred for purchase of W.A.No.75 of 2013 - 10 - vehicles or submission of tender in pursuance of Exhibit P12. The apprehension aired by the appellants on that count is misplaced and misconceived. There is also no promise held out for unconditional grant of contract, on purchase of own trucks; nor is there even a promise held out for unconditional preference in the event of purchase of such trucks. As has been found earlier, it cannot at all be said that the Corporation prevailed upon the appellants or similarly situated persons to purchase trucks and submit tenders. No claim of legitimate expectation can be sustained on the terms of Exhibit P12, as is evident from the interpretation given to it.
14. Reasonableness of decision can be interfered with only in instances of illegality, irrationality or irregularity in procedure adopted. None of these is apparent in the action of the respondent Corporation, which is rightly upheld by the learned single Judge. We do not find any plausible reason to interfere with the reasoning of the learned single Judge. The Writ Appeal is devoid of merit and is liable to be dismissed.
15. The learned Senior Counsel, however, would fervently plead for a direction to the Corporation to initiate negotiations with the dealers/distributors. Having found the action of the respondent W.A.No.75 of 2013 - 11 - Corporation to be reasonable, we are afraid, it would not be justified for this Court to issue any directions to the Corporation. The liberty conferred on the Corporation to act in accordance with law and the rules of fair play, not deviating from the express terms in Exhibit P12, and without discrimination or arbitrariness is always vested with the Corporation and does not depend upon our assertion or direction.
Writ Appeal, hence, is dismissed, however, with no costs.
Sd/-
Manjula Chellur, Chief Justice Sd/-
K.Vinod Chandran, vku/16.01. Judge.
- true copy -