Kerala High Court
K.K.Narayanan vs The Union Of India on 1 December, 2020
Author: P.V.Asha
Bench: P.V.Asha
W.P(C).No.25178/2020-V 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE SMT. JUSTICE P.V.ASHA
TUESDAY, THE 01ST DAY OF DECEMBER 2020 / 10TH AGRAHAYANA, 1942
WP(C).No.25178 OF 2020(V)
PETITIONERS:
1 K.K.NARAYANAN
AGED 66 YEARS
S/O KALYANI AMMA, PROPRIETOR,
M/S NILESHWAR GAS AGENCIES,
NILESHWARAM (PO), KASARAGOD DISTRICT, PIN-671314.
2 K BABUJEE BHAT,
AGED 69 YEARS
S/O LATE K LAXMAN BHAT, PROPRIETOR, M/S MARUTHI
AGENCIES, BANK ROAD, KASARAGOD, PIN-671121.
3 RAMAKANTHA K
AGED 70 YEARS
S/O LATE K SEETHARAMA, PROPRIETOR,
M/S MALLIKA ENTERPRISES, KUMBALA (PO),
KASARAGOD DISTRICT, PIN-671321.
4 P M ABDUL BASHEER
AGED 52 YEARS
S/O AZEEZ.P, PROPRIETOR,
M/S K2 FLAMOGEN, UDMA (PO),
KASARAGOD DISTRICT, PIN-671319.
BY ADVS.
SHRI.JAWAHAR JOSE
SMT.CISSY MATHEWS
SRI.JAISON ANTONY
RESPONDENTS:
1 THE UNION OF INDIA
REPRESENTED BY THE MINISTRY OF PETROLEUM AND
NATURAL GAS, SHASTRI BHAVAN,
NEW DELHI, PIN-110001.
2 THE HINDUSTAN PETROLEUM CORPORATION LIMITED
REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR,
PETROLEUM HOUSE, 17, JAMSHEDJI TATA ROAD, MUMBAI,
MAHARASHTRA, PIN-400020.
W.P(C).No.25178/2020-V 2
3 THE REGIONAL MANAGER,
HINDUSTAN PETROLEUM CORPORATION LIMITED,
L P G REGIONAL OFFICE, 2ND FLOOR, DEO GRATIAS
BUILDINGS, CHILIMBI, MANGALORE,
DAKSHINA KANNADA DISTRICT, KARNATAKA, PIN-575006.
4 THE PLANT MANAGER,
HINDUSTAN PETROLEUM CORPORATION LIMITED,
L P G BOTTLING PLANT, KATTIPALLA (VIA), MANGALORE,
DAKSHINA KANNADA DISTRICT, KARNATAKA, PIN-575030.
R1 BY ADV. SRI.M.A.SHAJI
R2 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR
R2 BY ADV. SRI.K.JOHN MATHAI
R2 BY ADV. SRI.JOSON MANAVALAN
R2 BY ADV. SRI.KURYAN THOMAS
R2 BY ADV. SRI.PAULOSE C. ABRAHAM
ASGI ,SRI.P.VIJAYAKUMAR
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
01.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P(C).No.25178/2020-V 3
P.V.ASHA, J.
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W.P(c) No.25178 of 2020-V
---------------------------------------------
Dated this the 1st day of December, 2020
JUDGMENT
The petitioners, who are authorised dealers cum transporters of LPG cylinders, doing their business in northern districts of Kerala, are aggrieved by certain conditions fixed in the tender notification Ext.P1, in deviation from those fixed in the tenders notified on previous occasions.
2. As per Ext.P1 notification dated 30.10.2020, the 2nd respondent-the Hindustan Petroleum Corporation Ltd (HPCL), invited e-tenders under two bid system for award of LPG Cylinder contract for Ex-HPCL Mangalore LPG Bottling Plant by road for a period of 5 years with effect from 01.02.2021 to 31.01.2026. The tender due date and time was notified as 23.11.2020 at 14.30 and unpriced bid open date and time was notified as 23.11.2020 and 15.00. The work involved road transportation of packed LPG Gas Cylinders from the LPG plant at Managalore to HP Gas distributors/locations/customers within the State and outside the State through trucks. The petitioners state that LPG cylinders are distributed from Mangalore Plant of the HPCL to the districts of Dakshina Kannada, Uttara Kannada, Uduppi, Coorg, Hassan, Davangere, Shivamogga, Chikmagalur, Dharwad, Haveri, Belgaum and Karvar in Karnataka State and Kasaragod, W.P(C).No.25178/2020-V 4 Kannur and part of Kozhikode in Kerala State. It is stated that till Ext.P1 notification was issued, the tenderers from Kerala and those from Karnataka were being treated differently, taking note of various factors including requirement of national permit, distance from the plant, the expenditure etc. for transportation to the districts in Kerala; but in Ext.P1 notification they are treated as equals in a single unit. It is stated that in Ext.P2 notification issued by the 2 nd respondent on 23.11.2015, inviting tenders for the ongoing 5 year period ending on 31.01.2021, the tenderers for transportation of LPG to the districts in Kerala and to the districts in Karnataka were classified separately taking note of the requirement of interstate/national permit, the expenditure towards toll charges @ Rs.280/- to the National Highway Authority, etc. It is stated that in Ext.P2 notification, there was sector wise price band; whereas in Ext.P1 there is a single sector with a single price band. In Ext.P2, separate rate was fixed depending upon the number of kilometers transported like: from 101 km to 150 km, from 151 km to 300 km and beyond 300 kms; on account of the revised terms in Ext.P1, tenderers from the Kerala State would be losers compared to those from Karnataka State where they do not require any interstate permit for transporting the cylinders to a number of districts in the State. It is stated that in Ext.P2 notification higher kilometer charges were given for lesser kilometer classification and lesser charges were given for higher kilometer classification. On the other hand, the classification based on kilometers is stopped in Ext.P1 and there is a single sector. Therefore, the petitioners point out that the transporters from Kasaragod district are further W.P(C).No.25178/2020-V 5 discriminated from others including those from Kannur and Kozhikode districts because of this. It is pointed out that the loading and unloading charges as well as salary of transporting crew would be the same irrespective of the distance/kilometer transported. Therefore, according to them, persons like the petitioners, who are distributors as well as transporters within 100 km to 300 km, are discriminated as against those having more round trip kilometers. It is stated that the decision taken by the HPCL dropping the sector wise rate system is unreasonable and arbitrary. It is further stated that the respondents are adopting issuance of a loyalty card by virtue of clause 14 of Ext.P1 tender and thereby they insist every transporter to fuel their vehicles only from their petroleum outlets which is in violation of their right to choose the fuel dealers and hence violative of Articles 14 and 21 of the Constitution of India. The further grievance is against the provision for imposition of penalty in case transportation crew resort to strike. According to the petitioners, right to form a trade union is a fundamental right of the employees and for the reason that the employees resort to strike, the transporters cannot be found fault with without any adjudicative process. Therefore, it is stated that clause 7.2.2.1 of Ext.P1 notification is bad in law. It is stated that on coming to know about the modified price bands, the 1 st petitioner had as per Ext.P3 e-mail raised the grievance of the transporters. It is stated that though the respondents had as per Ext.P4 informed that their grievance would be considered, there was no such consideration before Ext.P1 notification was issued. The petitioners are therefore challenging the tender notification on the ground that W.P(C).No.25178/2020-V 6 by abolition of intelligible classification between the Kerala and Karnataka dealers, which was being adopted by the 2 nd respondent even in the previous tender notification Ext.P2, the respondent Corporation has treated unequals as equals in violation of the fundamental right of the petitioners under Article 14 of the Constitution of India; the said classification is arbitrary and unreasonable.
3. The 2nd respondent has filed a counter affidavit refuting the contentions raised by the petitioners and objecting to the maintainability of the Writ Petition as against the provisions in a commercial contract. It is stated that the petitioners did not resort to the grievance redressal mechanism available under clause 37 of the general conditions of contract. According to them, there cannot be any interference as against the conditions fixed in a tender notification and it is not for the participants like the petitioners to dictate the terms of tender in order to incorporate conditions to suit their convenience; but it is for the tendering authority which is the master of the tender, to determine the conditions of tender in accordance with its needs and requirements. It is also stated that the petitioners do not have any fundamental right to do business with the 2 nd respondent and there is no allegation of malafides. It is also stated that in case the petitioners are not satisfied with the terms of the tender, they would be free not to participate in the same. It is stated that the participants are given a price band for quoting for tenders; the distributors at different locations would be free to quote for the tender in this price band. It is stated that competitive bidding is a decision taken by the 2nd respondent to have operations which are more economical for it. It is stated that W.P(C).No.25178/2020-V 7 the present toll charges, national/interstate permit charges, truck related costs, loading unloading charges, driver charges etc. are taken into consideration for the estimation of furnished rates as published in the tender to arrive at the combined rate for transportation within the State as well as Interstate transportation using a scientific model developed by the 2nd respondent. It is stated that the differential amount on account of any revision of existing toll charges/taxes or introduction of taxes/toll subsequent to the closing date of the tender would be re-imbursed. The participants are free to quote rates for each category as per clause 6(i) of the Special Terms and Conditions of Ext.R1(a). It is stated that the Mangalore Bottling Plant faced several logistic issues, based on sector wise classification in the previous tender, as the trucks in one State could not be used in other States hampering the operational flexibility at plants resulting in backlog of distribution of LPG cylinders to distributors which affected the customers. In the present tender notice, the sectors are combined with a view to achieve logistic convenience and improve operational efficiency of the bottling plants which would improve the supply of LPG cylinders to customers. It is stated that the HP Gas distributors participating as dealer cum transporters would continue to cater to only their own requirement of cylinders for their respective distributorship as per existing contract terms in the respective States where they are operating unless they participate with more number of trucks and submit their tenders as transporters. According to the respondents, there is no requirement of multiple distance sectors and merging of sectors is done by the Corporation with due diligence. Regarding the loyalty card W.P(C).No.25178/2020-V 8 it is stated that the tender notice is issued for transportation of packed cylinders of the 2nd respondent to the distributors of the 2nd respondent. As fuel retailing is also one of the major parts of the 2 nd respondent's domain, tenders are floated to improve its over all profitability/market share in the business. It is stated that similar conditions were available in the previous tenders also. According to the respondents, participation in the tender is not mandatory for any of the existing transporters or distributors cum transporters. The public liability insurance cater to various needs like damages/injuries caused due to leakage of cylinders, resultant explosion etc. which are attributable to LPG being carried in the trucks, legal liability arising due to loss or damage caused to a third party or property by the motor vehicle, legal liability for actual and physical loss of or damage to consignment, loss of consignment in transit etc. It is stated that penalty has been imposed for strike by transportation crew in order to maintain discipline in LPG transportation since LPG is an essential commodity and its transportation is an essential service because general public will be put to serious prejudice on account of untimely strikes. Its transportation is essential and therefore strike by persons who engaged in it is prohibited by law.
4. Sri. Jawahar Jose, the learned counsel for the petitioner, explained the rate schedule for the transportation of cylinders which was made applicable as per Ext.P2 tender, pointing out the separate rates fixed for 100 to 150 km was in the price band of 0.1067 to 0.1174; for 150 to 300 km it was 0.970 to 0.1067 and for above 300 it was 0.0926 to 0.1018. The said price band was given at a time when W.P(C).No.25178/2020-V 9 the price of the diesel was Rs.47.91 per litre. Relying on the judgments in Indra Sawhney v. Union of India [1992 suppl.3 SCC 217], Union of India v. International Trading Co. [(2003) 5 SCC 437. Onkar Lal Bajaj v. Union of India [(2003) 2 SCC 673 etc. Sri Jawahar Jose argued that the conditions impugned, in Ext.P1 tender notification arbitrarily classify Karnataka and Kerala tenderers equally in a single sector and the impugned provisions are liable to be set aside
5. On the other hand, Sri Paulose the learned Standing Counsel relied on the Division Bench judgments of this Court reported in Kerala Feeds Limited v. Parumala Transport [2016 SCC online Ker 39315], the judgment dated 23.12.2011 in W.A.No.1986 of 2011, Michigan Rubber (India) Limited v. State of Karnataka [(2012) 8 SCC 216], Afcons Infrastructure Ltd. v. Nagpur Metro Bail Corpn. Ltd. [(2016) 16 SCC 188] and argued that the terms in an invitation to tender cannot be open to judicial scrutiny. It was argued that the organization concerned which invited the tender is the best authority to decide its needs, while inviting tenders. On the other hand, the learned counsel for the petitioners pointed out that in all these judgments an exception has been made in respect of the contract as well as the conditions of contract and this Court has ample power to interfere with the provisions which are arbitrary, discriminatory, actuated by bias etc. According to the learned counsel for the petitioners, when there is a deviation on various aspects and it is clear that the transporters of Karnataka alone would be benefited while those from Kerala would be prejudiced, the conditions contained W.P(C).No.25178/2020-V 10 in tender notification have to be declared arbitrary and unreasonable.
6. I have considered the contentions advanced by both sides. From the pleadings of both sides it is seen that the petitioners are dealers of LPG as well as transporters. It would appear that they were undertaking the work of transporting in tune with Ext.P2 tender notification. On a comparison of Exts.P1 and P2 it would appear that there is considerable variation in the terms. But whether the said variation is subject to judicial review is the question to be considered.
7. It is settled law that equals cannot be treated on par with unequals and vice versa. Article 14 of the Constitution of India guarantees equality before law and equal protection of law. In the judgment in Indra Sawney's case (supra), relied on by Sri. Jawahar Jose, the Apex Court while considering the question of reservation in appointments under the State for backward classes has held that equality contemplated by Article 14 of the Constitution of India would be secured not only when equals are treated equally but also when unequals are treated unequally. In the present case the contention is that transporters from Karnataka State and those from Kerala State are unequals, who were treated differently in Ext.P2 notification; but in Ext.P1, they are treated equally.
8. In International Trading Co's case (supra), relied on by Sri. Jawahar Jose, the Apex Court was considering a case relating to renewal of permit for operating foreign deep sea fishing vessels taken on lease. The permit which was initially granted for a period of 15 years was not renewed. 15 years' permit was W.P(C).No.25178/2020-V 11 granted in accordance with the Government of India's policy relating to fishing of deep sea resources in Indian Exclusive Economic Zone by leased foreign deep-sea fishing vessels. The petitioners in those cases claimed that there is marked distinction between chartered vehicle and a leased vehicle when even the duration of permit being granted were for different duration. The Division Bench of the High Court found that policy decision not to renew the permit cannot be one overriding the statute and defeating the legitimate expectation of the licensees and directed to pass orders on renewal applications. At the same time it was also found that thirty two vessels which were second-hand deep-sea fishing vessels were given permits to operate. In para. 14 and 15 of the judgment, , the Apex Court held as follows:
"14. It is trite law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.
15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness."
The Apex Court allowed the appeal accepting the contention of the appellants that there was a change in policy, according to which no renewal can be granted. It is also pertinent to note that the Apex Court had also held as follows in that judgment:
W.P(C).No.25178/2020-V 12
"The courts are not very good at formulating or evaluating policy. Sometimes when the courts have intervened on policy grounds the courts' view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism."
9. In the judgment in Onkar Lal Bajaj 's case relied on by Sri. Jawahar, the Apex Court was dealing with the validity of an order passed by the Government of India on 09-08-2002 by which the allotments of retail outlets, LPG distributorship and SKO-LDO dealerships based on the recommendations of the Dealer Selection Boards made from 01-01-2000 onwards were decided to be cancelled. The decision was taken on the basis of media reports that selection was tainted with political patronage, though 3546 allotments were made after selection by the selection board. The contention raised on behalf of the respondents therein that writ will not lie in the matter to enforce the terms of contract and that the remedy is to file suit for specific performance was rejected observing that the cancellation was not on account of non-fulfilment of any of the terms of agreement. It was found that the complaints were received only against 360 selections out of which 242 were found baseless, 39 were subjudice and the remaining were forwarded for further enquiry. The Apex Court held as follows:
27. Article 14 guarantees to everyone equality before law. Unequals cannot be clubbed. The proposition is well settled and does not require reference to any precedent though many decisions were cited. Likewise, an arbitrary exercise of executive power deserves to be quashed, is a proposition which again does not require support of any precedent. It is equally well settled that an order passed without application of mind deserves to be annulled being an arbitrary exercise of power. At the same time, we have no difficulty in accepting the proposition urged on behalf of the Government that if two views are possible and the Government takes one of it, it would not be amenable to judicial review on the ground that the other view, according to the court, is a better view.
10. Taking note of the number of complaints received, the several number of complaints which were found baseless and the unsuccessful challenge against several of the selections, the Apex Court found that en-mass cancellation, W.P(C).No.25178/2020-V 13 without going into the facts and figures of the individual complaints was un-called for. In that circumstance, the Apex Court found that by cancellation of all the allotments without going into the merit of the complaints and thereby treating unequals as equals was violative of Article 14 of the Constitution of India.
11. It is pertinent to note that in none of these cases the terms of the tender conditions were the subject matter of challenge. Now I shall examine the judgments relied on by the learned Counsel for the respondents. In Michigan Rubber (India) Limited 's case (supra) the Apex Court was considering a case where the Karnataka State Road Transport Corporation floated a tender for supply of tyres, tubes, etc. specifying certain pre-qualification criteria. When the pre-
qualification criteria was challenged before the High Court, the KSRTC withdrew and floated another tender with modified pre-qualification criteria. The appellant Company again challenged it as arbitrary, unreasonable and contrary to public interest and such conditions were fixed for excluding the appellant from the bidding process on extraneous considerations. After analysing various judgments with respect to the scope of judicial review on conditions fixed in tenders, the Apex Court held as follows:
24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"and
(ii) Whether the public interest is affected?
If the answers to the above questions are in the negative, then there should be no interference under Article 226.
12. In Afcons Infrastructure Ltd's case (supra) relied on by Sri. Paulose W.P(C).No.25178/2020-V 14 the Apex Court held that even if there was an ambiguity or doubt, the High Court ought to have refrained from giving its own interpretation unless it had come to a clear conclusion that the interpretation given by the employer was perverse or mala fide or intended to favour one of the bidders. It was held that the constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts, but that by itself is not a reason for interfering with the interpretation given.
13. In the judgment dated 23.12.2011 in W.A.No. 1986 of 2011, a Division Bench of this Court declined interference where tender was challenged on the ground that different roads in different districts were clubbed, in deviation from the previous notifications inviting tenders separately. This Court held that the scope of judicial review in such matters is very limited. It was held that it is never open for the participant to dictate terms to the awarder of the contract and that it is always for the awarder to decide the terms and conditions for the tender and in what manner the desired results should be achieved. Another Division Bench of this Court has in Kerala Feeds Ltd's case (supra), while considering the challenge against the requirement of minimum number of trucks as a qualification stipulated in the NIT for participating in the tender, after discussing the law laid down by the W.P(C).No.25178/2020-V 15 Apex Court on the issue, held as follows in paragraph 19 :
19. It is a well settled law that the Organisation concerned, which invites tender is the best authority to decide its needs, while inviting tenders. It is needless to observe that the authorities would be guided by experts in the field and clauses will be framed in such a manner so as to transport finished cattle feeds to different places in tussle free atmosphere. If any problem arises in transporting the cattle feeds, naturally, not only the contractor but also the appellant Organisation will be answerable. Therefore, the Organisation will have to take utmost care in fixing stipulations in the tender notifications. It is not open for the intending bidders to say that one clause is unsuitable for them and therefore, it is illegal and arbitrary. As mentioned supra, this Court and various other High Courts including the Supreme Court have repeatedly made comments on the practice of court interfering in tender conditions. The courts have made clear that the Government and their undertakings must have free hands in setting terms of the tenders and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical.
14. It is relevant to note what the Apex Court has held regarding judicial review in such matters.
15. In Jagdish Mandal v. State of Orissa: (2007)14 SCC 517 it was held that the purpose of judicial review of administrative action is intended to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluation of tenders and awarding of contracts are essentially commercial functions. -xxxxx--. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out.
16. A three Judge Bench of the Apex Court in Municipal Corpn., Ujjain W.P(C).No.25178/2020-V 16 v. BVG India Ltd., (2018) 5 SCC 462, wherein appointment of an agency for collection of solid waste and its transportation based on tenders invited by Ujjain Municipality was under challenge, held as follows:
The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by this Court in Tata Cellular v. Union of India: (1994)6 SCC 651, wherein this Court observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.
The modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. 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. 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 a quasi-administrative sphere. However, the decision must not only be tested by the application of the Wednesbury principle of reasonableness, but must also be free from arbitrariness and not affected by bias or actuated by mala fides. [See the judgment in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.
xxxxxxxx
14. The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226.
xxxx The State, its corporations, instrumentalities and agencies have a 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 them 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 interfere. Xxxx
17. As held in Tata Cellular, the terms of the tender are not open to judicial scrutiny as the invitation to tender is a matter of commercial contract. W.P(C).No.25178/2020-V 17
18. As pointed out by Sri. Jawahar Jose this Court can interfere if the conditions are found to be arbitrary or irrational. But it should be so irrational if no authority would fix reasonably and when public interest is affected. In the present case the counter affidavit of the respondents would show that they have fixed these conditions in public interest for a hassle-free supply of LPG to customers. The petitioners have not raised any allegation as to malafides. There is no allegation that the respondents want to favour anybody. The 2 nd respondent has stated that the conditions are fixed in order to achieve logistic convenience and to improve operational efficiency.
19. Even though the petitioners have been continuing as dealers cum transporters it cannot be said that the conditions of contract should continue to be the same. It may be true that the transporters in Karnataka are likely to incur lesser charges than those in Kerala since the Bottling Plant is in Mangalore and they need not have national permit for the purpose of transportation within the State. It is also true that the dealers/transporters from Kerala who have national permits should meet expenditure towards toll. However, as pointed out on behalf of the respondents it is a matter completely within the realm of the oil company/the 2 nd respondent as to how to fix the terms of its tender. Just because the Karnataka and Kerala tenderers are treated differently, it cannot be said that the tender conditions are vitiated by any arbitrariness. If the respondent Corporation found it necessary to evolve a fresh policy, and to have a single sector unlike the previous policy, it cannot be said that the respondents shall continue to have the very same conditions W.P(C).No.25178/2020-V 18 as was being stipulated in the previous tenders. The inconvenience of persons like the petitioners alone can be a factor based on which the tender conditions can be interfered with. The ultimate purpose of the oil company is to see that there is regular supply of the LPG cylinders. In order to achieve the same, if they have modified the conditions, this Court is not expected to interfere with the same. As it is settled law that the Court under Article 226 of the Constitution is not equipped with the expertise in fixing the conditions and when it is for the Corporation to fix the tender conditions in accordance with its requirements, the conditions in Ext.P1 challenged by the petitioners are not liable to be interfered with.
20. Even though the learned counsel for the petitioners vehemently argued that there is unreasonable classification between the Karnataka transporters and the Kerala transporters, it is seen that there is no compulsion for any of the distributors to participate in the tender and their distributorship is not connected with the contract for transportation of cylinders. The tenders are invited from time to time. It is only on the basis of competitive bid that they are selected. Even if the petitioners submit bid, it cannot be said that they alone would be selected or that they would be selected. There is no statutory provision based on which the petitioners have raised their claim. From the averments it is seen that distribution is required in various districts in Mangalore and in Kerala only 3 northern districts. As pointed out by the learned Standing Counsel only those who have found the terms comfortable need submit their bid and they cannot insist that conditions shall not be changed.
W.P(C).No.25178/2020-V 19
21. Though the tender conditions in Ext.P1 are different from those in Ext.P2, I do not find that those conditions are contrary to public interest. It cannot be said that the respondents cannot fix any such conditions in case they wanted to improve their operational efficiency or that the conditions shall not be changed. It cannot also be said that the fundamental rights of the petitioners are infringed on account of such conditions. Even if this Court finds that there could have been better conditions in the place of the present conditions in Ext.P1 or that the conditions in Ext.P2 were better, that cannot be a ground for judicial review. As held in the aforesaid judgments, this Court is not equipped with the expertise to direct that the respondents shall not modify the tender conditions of Ext P2.
22. In the above circumstances of the case, I am of the considered view that the tender conditions in Ext.P1 are not liable to be interfered with under Article 226 of the Constitution of India.
The Writ Petition is accordingly dismissed.
Sd/- (P.V.ASHA, JUDGE) rtr/ W.P(C).No.25178/2020-V 20 APPENDIX PETITIONERS' EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE RELEVANT PAGES OF THE
TENDER NOTIFICATION PUBLISHED ON
30.10.2020.
EXHIBIT P2 TRUE COPY OF THE RELEVANT PAGES OF THE
TENDER NOTIFICATION PUBLISHED ON
23.11.2015.
EXHIBIT P3 TRUE COPY OF THE EMAIL COMMUNICATION SENT
BY THE 1ST PETITIONER TO THE COMPETENT
OFFICERS OF THE RESPONDENTS.
EXHIBIT P4 TRUE COPY OF THE EMAIL COMMUNICATION ISSUED
BY THE RESPONDENT CORPORATION TO THE 1ST
PETITIONER.
RESPONDENTS' EXHIBITS:
EXHIBIT R2(a) A TRUE COPY OF THE RELEVANT PAGES OF THE
TENDER FOR TRANSPORTATION OF PACKED LPG
CYLINDERS BY ROAD EX MANGALORE LPG BOTTLING
PLANT PUBLISHED ON 30.10.2020.