Telangana High Court
Telangana Petroleum Dealers ... vs Union Of India And Another on 5 June, 2023
Author: K. Lakshman
Bench: K. Lakshman
1
THE HON'BLE SRI JUSTICE K. LAKSHMAN
WP NOs. 7607 AND 7499 OF 2021
COMMON ORDER:
The present writ petitions involve determination of same legal issues. Therefore, they were heard together and are being decided vide the following common order.
2. W.P. No. 7607 of 2021 is filed challenging tender notice bearing Tender No. TAPSO/OPS/POL/EOI/ 22-27/RAMAGUNDAM DEPOT dated 22.02.2021; W.P. No. 7499 of 2021 is filed challenging the tender notice bearing Tender No.TAPSO/OPS/POL/EOI/22-27/ HYDERABAD TERMINAL dated 22.02.2021 issued by the Indian Oil Corporation Limited as illegal, arbitrary and violative of Article 14 of the Constitution of India.
3. In both the writ petitions, heard Mr. D. Srinivas Prasad, learned counsel for the Petitioner, Mr. Dominic Fernandes, learned standing counsel for the Indian Oil Corporation Limited (hereinafter referred to as 'IOCL') appearing for Respondent No. 2 and Mr. Gadi Praveen Kumar, learned Deputy Solicitor General for the Union of India appearing for Respondent No. 1.
2Facts of the case:-
4. The Petitioner is an association comprising of retailed outlet dealers (hereinafter referred to as 'R.O. dealers') as its members. The said R.O. dealers deal with petroleum and oil products.
5. On 21.03.2021, IOCL issued the impugned tender notices calling for submission of expression of interest from dealers and consumers for transporting bulk petroleum products at Hyderabad Terminal and Ramagundam Depot. As per the said tender notices, interested R.O. dealers and consumers owning tank trucks can express their interest to transport the bulk petroleum products. However, according to the Petitioner, the following terms in the impugned tender notices dated 22.02.2021 are arbitrary and violative of Article 14 of the Constitution of India:
3. Validity of EOI: The EOI shall be valid till the finalization of transportation contracts for general transporter's category through public tender.
8. Although it has been mentioned to offer TTs in two capacity clusters, Transportation rates in the proposed transportation tender shall be offered for three capacity clusters in four types of RTKM categories as detailed below. Tenderers shall be required to offer single percentage in reverse auction and the same will be applicable for all the rate items mentioned below :3
Transportation Rates as per Departmental Estimate Capacity FDZ(Rs./KL) BFDZ up to BFDZ 501 to BFDZ Cluster 500 RTKM 1000 RTKM (Rs. Beyond (Rs. /KL/KM) /KL/KM) 10001 RTKM (Rs.
/KL/KM
12KL to 16 KL ** ** ** **
18KL to 25KL ** ** ** **
Above 25KL to ** ** ** **
40 KL
** Rates shall be mentioned by IOCL and tenderers to offer single % ge in allowable band of 0% to (-) 10% in reverse auction process, which shall apply to all the above rates.
9.The L-1 rates arrived at after reverse auction process or/and negotiations, during the finalization of the tender for the General Transporters category against the Public Tender shall be made applicable for RO Dealers/Direct consumers offering TTs through this EOI process. The RO dealers/customers shall have no right to question the L-1 rates arrived in the General Transporter tender.
10. In the event RO Dealer/Direct customer withdraws the EOI during or after finalization of tender or refuse to accept L-1 rates arrived in General Tender, then this EMD shall be fordeited and he will be disqualified from participating in existing tender. During the contract period of General Tender the RO dealer/Direct customers will not be allowed to induct any TTs to uplift his own load.
19. Any replacement of Dealer TT during the contract period for nay reasons (including replacement of TT after attaining the age specified by local Laws/Tender) shall have to be done with higher capacity TT (18KL or above) with BSIV and higher model only.
38. Resitement of an old top loading location to a new bottom loading location - In the event of re-sitement of a location, which was having top TT loading facility to a new location having bottom TT loading facility, Company reserves the right to direct the existing RO Dealer/Direct Consumer to convert their vehicle into bottom loading TT and utilize the TT with an incremental transportation rate of 4 Rs.0.20 per KL per KM in BFDZ rates as compared to prevailing transportation rate of old location with top loading TTs. FDZ rates will be new BFDZ rates (for up to 500 RTKM) X Break Even KMs.
42. VTS, ABS & SS LOCKING SYSTEM:
a. Any Vehicle Tracking System (VTS) (for e.g.: Global Tracking System) decided by the Company to track the movement of the Tank Truck shall be unconditionally accepted by the RO Dealer/Consumer on award of contract. Undertaking agreeing for recovery of charges towards implementation of VTS on TTs, viz., Instrument cost Web hoisting and monthly monitoring charges etc. as decided by company shall be submitted by RO Dealer/Consumer.RO Dealer/Consumer shall be responsible to upgrade VMUS and allied fittings/ system as and when directed by 10C RO Dealer/Consumer shall be entirely responsible for tampering of VMU or its fittings. In case of not working of VMUS, company reserves the right of not accepting such tank trucks for loading and utilizes the services of other tank trucks. Contractor shall be responsible for safety/maintenance of the equipment and in case the equipment is lost/damaged due to any reason, the Contractor shall replace the same at their own cost. This is in addition to action as per provisions in ITDG.
b. RO Dealer/Consumer shall be required to install Anti-Lock Braking System for all the TTs finally selected through this EOI. All tank trucks offered for carrying hazardous goods shall be fitted with Anti- Lock Braking System conforming to IS:11852:2003 (part 9). RO Dealer/Consumer shall provide certificate w.r.t. ABS provision on tank truck.
c. Any security system (including digital locking system) decided by company to guard against malpractices shall be unconditionally accepted by RO Dealer/Consumer. Cost of provision of equipment, modification/modifications of fittings if any on TT shall be borne by the RO Dealer/Consumer. RO Dealer/Consumer shall be responsible for safety/maintenance of such security systems. RO Dealer/Consumer shall be required to install SS non-magnetic grade locking system (Stainless Steel locking system-20 mm dia rod & as per the specifications from time to time) for all the TTS selected through this EOI.5
d. RO Dealer/Consumer shall comply to the Provision of Overspill Prevention Device In the chambers of the tank truck as specified by IOCL and shall be required to get overspill sensor provided for all his Tank Trucks thru' PESO approved tank lorry tank fabricator.
Tender No.: Indian Oil Corporation
TAPSO/OPS/PO Ltd.(Mktg.Div.) Page 24
L/ EO1/22-27/ EOI FOR ROAD of 59
HYDERABAD TRANSPORTATION OF
TERMINAL BULK PETROLEUM
PRODUCTS-MS/ HSD/
Due Date: Branded Fuels FOR
29.03.2021 & DEALERS/ DIRECT
Time : 11.00Hrs. CONSUMERS EX-
HYDERABAD
TERMINAL THROUGH
TOP LOADING TANK
i. Check whether all the jobs pertaining to branding viz painting, logo, promotion graphics & lettering etc. have been carried out as per the Corporation specifications.
ii. Check whether Original Warranty has been provided for the branding carried out.
iii. Check for tampering with the branded look of the Tank Truck. iv. Check whether the Tank Truck has been maintained in neat and clean condition.
6. According to the Petitioner, as per Clauses 8 and 9, the impugned tender notices state that the price payable to R.O. dealers and consumers is based on the L1 rate of another tender involving transportation through general transporters. Further, as per Clause 10, the R.O. dealers and consumers are bound by the L1 rate arrived in relation to another tender and if they do not accept such L1 rate there 6 EMD will be forfeited and they will be disqualified in participating in the tender. The said clauses do not give any say to R.O. dealers and consumers in terms of price fixation and the same is arbitrary.
7. The Petitioner contends that Clause 8, 9 and 10 make the impugned tender completely opaque as no price band payable is provided in it. Based on such condition, the R.O. dealers and consumers cannot effectively participate as they are unaware of the price payable and cannot reasonably judge the feasibility of the contract. It is also contended that IOCL by incorporating such clauses in the tender is abusing its dominant position and placing R.O. dealers and consumers in a disadvantageous position when compared to general transporters.
8. The Petitioner also contends that Clause 19 places a burden on the R.O. dealers and consumers by making it mandatory that existing tank trucks can only be replaced with BS IV tank trucks or with any other higher model. Further,Clause 41 of the special conditions of the impugned tenders makes it mandatory for the R.O. dealers and consumers to brand the trucks with approved design of the IOCL and the same is violative of HMC Act.7
9. The Petitioner also contended that Clause 42 of the special conditions of the impugned tenders makes it obligatory for theR.O. dealers and consumers to install a vehicle tracking system at their own expense which adds additional financial burden.
10. On the other hand, IOCL submitted that the price fixation for transport of bulk petroleum is based on a pan-India policy which takes into consideration various factors like cost of fuel, lubricants, tyers, salary and bonus for driver/helper, vehicle registration charges, road tax, insurance, etc. Further, 10% profit margin is also included in the price fixation policy. Therefore, it cannot be contended that price fixation is arbitrary and opaque.
11. IOCL also contended that the scope of judicial scrutiny in relation to tender matters is extremely limited and courts cannot interfere unless the action of the authority is arbitrary, mala fide and discriminatory. Reliance was placed on Jagdish Mandal v. State of Orissa1, Arun Kumar Agrawal v. Union of India2, Michigan Rubber (India) Ltd. v. State of Karnataka3 and Tata Cellular v.
Union of India4.
1 (2007) 14 SCC 517.
2(2013) 7 SCC 1.
3(2012) 8 SCC 216.
4(1994) 6 SCC 651.
8
12. It was contended by the IOCL that R.O. dealers essentially deal with sale of petroleum products and transportation is only an additional stream of revenue for them. However, general transporters are mainly involved in the transportation business. Therefore, the bids of general transporters are competitive and to maintain uniformity the same rates are made applicable to R.O. dealers and consumers. Further, the present terms price fixation have been in vogue since 2017 and has been implemented by IOCL throughout the country.
13. IOCL also contended that unlike general transporters various concessions are given in the impugned tender notices to the R.O. dealers and consumers in relation to security deposit and guaranteed assurance of contract to use their own tank trucks to supply their own products.
14. In relation to replacement of tank trucks with BS IV standard trucks, it was submitted by IOCL that such term is valid and was incorporated in view of the pollution control norms. Further, the tank trucks carry the logo of the IOCL for identification purposes and cannot be termed as advertisement. The vehicle tracking system was incorporated to check mal practices. Therefore, it was contended that 9 the said clauses were not arbitrary, irrational, mala fide and discriminatory.
Findings of the Court:-
15. It is relevant to note that there are two categories of petroleum suppliers i.e., the general transporters on one hand and the R.O. dealers and consumers on the other hand. The impugned tender notices dated 22.02.2021 were issued inviting expression of interest from R.O. dealers and consumers to supply bulk petroleum. The said tender notices dated 22.02.2021, in Clauses 8, 9 and 10 state that the price for supplying the bulk petroleum will be the L1 rate accepted by the IOCL in relation to the general transporters. In other words, the R.O. dealers and consumers submitting the expression of interest will be paid in accordance with the rate fixed for general transporters for whom a separate tender will be issued.
16. The main contention of the Petitioner is that the price fixation terms under the impugned tender notices dated 22.02.2021 are vague, arbitrary and onerous as the R.O. dealers and consumers have to necessarily accept the L1 rates. Further, IOCL is abusing its dominant position by incorporating such terms. 10
17. Before discussing the contentions of the Petitioner, it is pertinent to note that the scope of judicial interference in commercial matters involving award of tender is extremely limited. Courts cannot interfere in matters involving interpretation and effect of terms of a contract merely because an instrumentality of State is involved. The courts can only interfere if the decision of the authority awarding tender is so arbitrary and mala fide that no reasonable person could have reached such decision.
18. Further, the limitations of judicial scrutiny under Article 226 of Constitution of India in commercial matters does not permit the courts to examine the correctness and viability of terms of the tender. The courts cannot go into the aspect of fixation of price and value. In this context, it is apposite to refer some decisions of the Supreme Court.
19. In Air India Ltd. v. Cochin International Airport Ltd.5, the Supreme Court held that the it is for the authority to fix the terms of the tender. As such terms are based on commercial considerations, the courts cannot interefere with them. The relevant paragraph is extracted below:
5
(2000) 2 SCC 617.11
7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489] , Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India [(1981) 1 SCC 568] , CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC (Tax) 75] , Tata Cellular v. Union of India [(1994) 6 SCC 651] , Ramniklal N. Bhutta v. State of Maharashtra [(1997) 1 SCC 134] and Raunaq International Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC 492] The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities 12 and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.
20. In Michigan (supra), the Supreme Court summed up the principles relating to judicial interference in tender matters holding that fixation of value of the tender is the discretion of the authority and courts can only interfere if such value is fixed arbitrarily. The relevant paragraph is extracted below:
23. From the above decisions, the following principles emerge:
(a) 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. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose.
If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role 13 to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.
21. Likewise, in N.G. Projects Ltd. v. Vinod Kumar Jain6, the Supreme Court held that even if there is arbitrariness, the courts shall normally refrain from interference in the award of tender. The relevant paragraph is extracted below:
23. In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision 6 (2022) 6 SCC 127 14 of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.
22. At this stage, it is relevant to note that National High Speed Rail Corpn. Ltd. v. Montecarlo Ltd.7, the Supreme Court laid down a two-prong test to determine whether the court shall interfere in a contract matter. The Court held that unless the award of 7 (2022) 6 SCC 401.
15tender/contract was discriminatory, arbitrary and irrational that no person could have reached such decision, the courts shall not interfere. Further, the courts can interfere if the public interest is affected. The relevant paragraph is extracted below:
29. Thus, from the aforesaid decisions, it can be seen that a court before interfering in a contract matter in exercise of powers 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.
23. Since the main contention of the Petitioner in challenging the impugned tender notices is price fixation, it is relevant to note that the Supreme Court in Rayalaseema Paper Mills Ltd. v. Govt. of A.P.8held that the courts shall be slow in interfering with price fixation terms. It is for the concerned authority to determine the price based on relevant factors. Relevant paragraph is extracted below:- 8
(2003) 1 SCC 341.16
15. This Court was examining the scope of judicial scrutiny in the matters of price fixation where it was governed by statutory provisions. The scope of judicial scrutiny would be far less where the price fixation is not governed by the statute or a statutory order. Where the legislature has prescribed the factors which should be taken into consideration and which should guide the determination of price, the courts would examine whether the considerations for fixing the price mentioned in the statute or the statutory order have been kept in mind while fixing the price and whether these factors have guided the determination. The courts would not go beyond that point. In the present appeals, there is no law, or any statutory provision laying down the criteria or the principles which must be followed, or which must guide the determination of rates of royalty. No doubt, any arbitrary action taken by the State would be subject to scrutiny by the courts because arbitrariness is the very antithesis of rule of law. But this does not mean that this Court would act as an Appellate Authority over the determination of rates of royalty by the Government. The Government is the owner of the products. While it had agreed to supply a particular quantity every year for specified period, it had never agreed to supply at a particular rate; nor did it stipulate with the mill-owners the basis upon which it would determine the rates of royalty. It is open to the Government to fix such price as it thinks appropriate having regard to public interest, which inter alia, may include interest of revenue, environmental, ecology, the need of mills and the requirements of other consumers. The price is not to be fixed keeping in mind the requirements of the mills alone. 17 Likewise, the Supreme Court in Centre for Public Interest Litigation v. Union of India9held that fixation of price in government contracts is a technical procedure involving various factors. Courts cannot decide whether such price is fair or unfair. The courts shall only see if the process of fixing the price was proper. Unless the allegations of arbitrariness, discrimination, collateral interests, etc. are unassailable, the courts shall not interfere with price fixed in a contract. The relevant paragraphs are extracted below:
16. The price fixation in a contract of the nature with which we are concerned, is a highly technical and complex procedure. It will be extremely difficult for a court to decide whether a particular price agreed to be paid under the contract is fair and reasonable or not in a contract of this nature. More so, because the fixation of price for crude to be purchased by GOI depends upon various variable factors. We are not satisfied with the argument of the appellants that the nation has suffered a huge financial loss by virtue of this arbitrary fixation of crude price. As a matter of fact, the figure mentioned by the appellants of Rs 3000 crores as a loss under this head of pricing is based on incorrect fact that the consortium is charging $ 4 per barrel as premium. It is because of this factual error that the appellants came to the conclusion that under the contract GOI had agreed to purchase the crude from the consortium at an inflated price. We also take note of the fact that 9 (2000) 8 SCC 606.
18under the agreement the respondents are bound to give a discount of $ 0.10 per barrel on the price of the crude fixed on the basis of the international market rate which, prima facie shows that the fixation of price is reasonable since under all given circumstances the said will be less than the international market price for Brent crude.
***
20. It is clear from the above observations of this Court that it will be very difficult for the courts to visualise the various factors like commercial/technical aspects of the contract, prevailing market conditions, both national and international and immediate needs of the country etc. which will have to be taken note of while accepting the bid offer. In such a case, unless the court is satisfied that the allegations levelled are unassailable and there could be no doubt as to the unreasonableness, mala fide, collateral considerations alleged, it will not be possible for the courts to come to the conclusion that such a contract can be prima facie or otherwise held to be vitiated so as to call for an independent investigation, as prayed for by the appellants. Therefore, the above contention of the appellants also fails.
24. Now coming to the facts of the case, IOCL as a tendering authority, from a commercial point of view, was completely justified in fixing the price of transportation based on the L1 rates of general transporters. A body like IOCL while entering into a contract can fix the price by framing terms suitable to it. Such bodies inviting tenders 19 are guided by commercial interests and business considerations and the courts cannot interfere in financial viability and feasibility of terms of tender. Moreover, the terms of tender are akin to an invitation to offer, and the prospective participants have a choice to not participate in the tender, if they find such terms financially onerous. It is a settled position of law that nobody has a right to enter into a contract with the government. It is for the government to decide the terms including the prices and the court cannot sit in appeal over such terms.
25. IOCL framed the price fixation policy based on various factors. Further, the L1 rate of general transporters was made applicable to R.O. dealers and consumers to have uniformity.It is also relevant to note that the price fixation clauses are also valid considering the fact that R.O. dealers and consumers are not full-time petroleum transporters. They only seek to supply products for additional revenue. On the other hand, the general transporters are solely and fully involved in the transportation business of petroleum products. It is reasonable to expect that the bids from general transporters will be more competitive and profitable to the IOCL. Therefore, IOCL was justified in extending the L1 rate or the lowest rate of tender of general transporters to R.O. dealers and consumers. 20 As stated above, IOCL will be guided by commercial interests in fixing its terms. People seeking to participate in the tender have the option of not submitting their expression of interest.
26. It is relevant to note that the Patna High Court inGorakh Prasad v. The Indian Oil Corporation Ltd.10dealt with similar clauses of price fixation in the tender notice there and upheld the said clauses. The relevant paragraphs are extracted below:
68. Now, the second question has come for consideration, as has been claimed the R.O. dealer transporters should be given the identical privilege as has been given to the general transporters.
Primarily, the thrust has been laid on clause, whereby it has been stated that if sufficient number of L-1 transporters are not available, the Corporation would negotiate with L-2, L-3 and L-4 for transportation of petroleum products, in such situation, general transporters would be in better position, so the claim has been made same benefit would be made available to the R.O. dealers transporters. It has been argued that when the E.O.I. was circulated they were not knowing the L-1 rate or the proposed approximately base L-1 rate, after two and half months they floated the N.I.T. and fixed the estimated base rate, which was completely unknown to them. It has further been stated that the benefit of L-2, L-3 and L-4 rate has been given to the general transporters, but the R.O. dealers have been deprived, in such circumstance, the L-1 rate which has been mentioned in the terms 10 Order dated 12.09.2017 passed in Civil Writ Jurisdiction Case No.476 of 2017. 21 of the E.O.I. should be read in such a manner that it will vary as and when the rate of transportation fixed for the general transporters varies. The E.O.I. is invitation to the tender, stipulating terms and conditions, no compulsion was exerted to accept or opt E.O.I, it is the wisdom of R.O. dealer to participate in the E.O.I. as it was not compulsion from the Indian Oil Corporation to accept it, but it was made clear whoever are interested they may participate in the E.O.I. and in view of the judgment passed in Tata Cellular vs. Union of India (supra) and Jagdish Mandal v. State of Orissa (supra) the terms of the invitation to the tender is outside the judicial review unless the same is arbitrary, tailor-made to grant advantage to certain persons, violates Article-14 of the Constitution of India, in my view, there was no compulsion for the R.O. dealers to participate in the E.O.I. and when they accepted the terms of the E.O.I. knowing well L-1 rate will be declared later on in the event of public auction for general transporters, where estimated transportation rate would be decided, cannot be a ground for the Court to interfere in the matter inasmuch as the petitioners have not shown in what manner the public interest is being affected as the present matter is out and out a commercial venture falls squarely in the realm of contract and the Court should keep his hand off while exercising the power of judicial review.
***
71. It has been argued by the Indian Oil Corporation that the transportation rate is fixed on terminal to terminal basis, taking into account the several factors including loading system, top loading is based on different mechanism than to bottom loading, 22 in this system, the tanker owner is required to install special type of fitting, has to bear heavy cost of amount, which is kept in mind while fixing rate of transportation to compensate cost incurred in extra fitting.
72. In such view of the matter, it is very difficult to say that in the present case the fixation of the rate is based upon any irrationality. In view of the decision passed in the case of Cynamide India Ltd. and Anr (supra) and Rayalseem Paper Mill Ltd. (supra) this Court is required to see the fairness and rationality has been observed in fixing the rate of transportation, as also the fact that whether the essential elements which are necessary for fixation of the transportation rate has been taken into consideration or not. This Court does not feel any irregularity committed by the Indian Oil Corporation for fixating the rate of transportation for the reasons as stated hereinabove.
27. Similarly, a Division Bench of the Kerala High Court in Malappuram District Hindustan Petroleum Corporation Limited v. South Zone, Hindustan Petroleum Corporation Limited11 upheld a similar clause extending the L1 rate of general transporters to retail dealers. The relevant paragraph is extracted below:
5. Having carefully considered the contentions advanced before us, we are of the opinion that there are no grounds to interfere with the judgment appealed against. This is for the reason that, the issue that is 11 2019 SCC OnLine Ker 11788 23 raised is basically contractual in nature and the term of Ext. P3 tender notification is attacked as being violative of Article 14 of the Constitution. Though it is contended that there is no rationale behind accepting L1 rates of general transporters category and making the same applicable to the category of retail dealers also, we are not satisfied that there is any substance in the said contention. If the general transporters can transport the articles at a particular rate which is fixed as the lowest in the said category, there is no reason why the retail dealers who own their own lorries cannot transport at the said rate. Insistence on the said requirement would certainly bring in uniformity in so far as the rates of transportation are concerned, between the general transporters and retail dealers. Since the rates of transportation are added on to fix the rate at which the products are to be sold by the retail dealers, it is only appropriate that uniformity in transportation rates is maintained. Apart from the above, if the L1 rates arrived at in the process of finalizing the tender of the category of general transporters is unworkable in so far as retail dealers are concerned, it is always open to them not to take up the transportation contract themselves. We are told that retail dealers who do not own trucks of their own depend on general transporters for their transportation requirements. The above being the position, we do not find that there is any compulsion on the retail dealers to accept the L1 rates in accordance with Clause 1(vii) of Ext. P3. In the above view of the matter, we are not satisfied that, Article 14 is violated by the said clause.
28. As far as the other clause regarding advertisement, vehicle tracking system and upgradation to BS IV tank trucks are concerned, such clauses are valid in view of the explanation offered by the IOCL. 24 In any case, this Court cannot sit in judgment of the validity of such clauses merely because of alleged additional financial burden.
29. Given the test laid down in National High Speed Rail Corpn. Ltd. (supra), this Court cannot interfere and stall the tender process initiated in furtherance of the impugned tender notices dated 22.02.2021 as it does not find any arbitrariness in the decision-making process or the terms of tender. Further, no public interest in affected by the inclusion of the impugned clauses.
30. In light of the aforesaid discussion, the present writ petitions are liable to be dismissed and are accordingly dismissed.
Consequently, miscellaneous applications, if any shall stand closed.
_________________ K. LAKSHMAN, J Date:05.06.2023 vvr