Gujarat High Court
Sai Krupa Transport Service vs Dgm Operation Department & 2 on 22 December, 2015
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
C/SCA/16871/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 16871 of 2015
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SAI KRUPA TRANSPORT SERVICE....Petitioner(s)
Versus
DGM OPERATION DEPARTMENT & 2....Respondent(s)
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Appearance:
MR HR PRAJAPATI, ADVOCATE for the Petitioner(s) No. 1
MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2 - 3
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 22/12/2015
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The petitioner has challenged the decision of the respondents authorities of Indian Oil Corporation Limited ("IOCL" for short) of not considering the offer of the petitioner for supplying a fleet of tank trucks to the IOCL for transportation of its petroleum products.
2. Brief facts are as under :
3. On 19.11.2014, IOCL issued a public advertisement inviting interested agencies to apply for road transport of bulk petroleum products. The petitioner, a proprietary concern, which was involved in such work and had carried Page 1 of 8 HC-NIC Page 1 of 8 Created On Thu Dec 24 01:50:33 IST 2015 C/SCA/16871/2015 ORDER out such tasks in the past for various oil companies, applied in response to such advertisement on 18.12.2014. The contractor had to offer a minimum of five tank trucks of special specifications. The petitioner applied, offering 25 tank trucks for such purpose. On 17.4.2015, IOCL issued letter of intent tentatively accepting the petitioner's offer for all the 25 tank trucks.
4. The petitioner had earlier undertaken the task of transportation of petroleum products for and on behalf of Hindustan Petroleum Corporation Ltd. ("HPCL" for short) for which agreement was executed on 28.2.2013. HPCL issued notice to the petitioner with respect to the 14 of the trucks, 4 of which were also part of the fleet offered by the petitioners to IPCL. The objections listed by the HPCL were as under :
"1. Third party Inspection of all Tank Trucks not complied with till date.
2. Nonreporting of Tank Truck at Vadinar TOP.
3. Irregular and late reporting of your Tank Trucks at the location.
4. Tampering with Security locking system in TT No.GJ12AW1158."
5. On the premise that the petitioner did not respond to the show cause notice and reminders for filing reply, HPCL passed the blacklisting order on 4.3.2015, copy of which is produced at annexure R5 with the rejoinder. In such order, the HPCL blacklisted all these trucks for a period of two years with effect from 23.2.2015.
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6. On 30.7.2015, the petitioner informed to the IOCL that there are rumors that some three or four tank trucks of the petitioner are blacklisted by HPCL. However, the petitioner is not aware about any such order being passed. The petitioner therefore, requested that the IOCL may check the records for these tank trucks and work order may be issued for the remaining.
7. On 1.8.2015, IOCL wrote to the petitioner that question of blacklisting be resolved with HPCL. On 21.8.2015, the petitioner wrote to IOCL and gave registration number of the four tank trucks which were part of those offered by the petitioner to IOCL which were blacklisted by the HPCL. Since the IOCL did not award contract to the petitioner for other tank trucks, the petitioner filed Special Civil Application No.14951/2015 which came to be disposed of in the following manner :
"1. The petitioner had applied for giving contract for transportation of petroleum products for and on behalf of Indian Oil Corporation Ltd. The petitioner had responded to E tender floated by the said company. The petitioner offered 25 tankers for such purpose. It was later on, however, found that 4 out of these tankers were loaned to HPCL and on account of deficiencies in performance, these truck were blacklisted.
2. Counsel for the petitioner submitted that the petitioner has made two offers before the oil company. Firstly that the petitioner's offer may be considered for 21 tankers and secondly that the petitioner may replace the four tainted tankers by fresh ones.
3. If the petitioner makes such offers in writing to the oil company in form of representation, the same may be considered in accordance with rules, regulations and policy. With the above observations, petition is disposed of.Page 3 of 8
HC-NIC Page 3 of 8 Created On Thu Dec 24 01:50:33 IST 2015 C/SCA/16871/2015 ORDER Direct service is permitted.
8. Pursuant to such order of the High Court, the petitioner wrote two separate letters both dated 18.9.2015 to IOCL and made separate offers, one for replacement of blacklisted tank trucks and other for willingness for considering 21 remaining tank trucks for awarding contract. IOCL on 6.10.2015 conveyed to the petitioner that IOCL was unable to consider the requests in view of rules, regulations and policy of the company.
9. The petitioner therefore, filed this petition.
10. Having heard learned counsel for the parties and having perused the documents on record, we notice that the tender conditions required a contractor to offer a minimum of five tank trucks of which the tenderer must own a minimum of three trucks. If the offer is for more trucks than five, the ratio of owned versus hired trucks must atleast be 1:1. Clause (20) of the tender condition provides that tank trucks blacklisted by any of the oil companies would not be eligible to participate in tender. Clause(4) of the miscellaneous conditions in para.F reads as under :
"4 IOCL reserve the right to accept all or some of the Tank Trucks offered by the successful tenderers, without assigning any reason whatsoever. The decision of the IOCL shall be final and binding."
11. Likewise, clause (9) of the said para. reads as under :
Page 4 of 8HC-NIC Page 4 of 8 Created On Thu Dec 24 01:50:33 IST 2015 C/SCA/16871/2015 ORDER "If any of the information submitted by the tenderer is found to be incorrect at any time including the contract period, IOCL reserves the right to reject the tender/terminate the transportation contract without prejudice and any or all rights and remedies available. The Security Deposit (SD) will be forfeited."
12. Facts of the present case are somewhat peculiar. Four of the 25 tank trucks offered by the petitioner to IOCL came to be blacklisted after the offer was made and in fact, the letter of intent was issued by IOCL. As per the tender documents, therefore, such blacklisted trucks would not be eligible to participate in tender.
13. Would that however, mean that the petitioner's entire offer would become invalid. We have noted that as per clause(4) of miscellaneous conditions, IOCL had the right to accept all or some of the tank trucks offered by the tenderer. The fact that IOCL can therefore, accept only 21 trucks out of 25 originally offered by the petitioner is beyond doubt. As per clause (20) of the tender general conditions, the blacklisted tank trucks would be eligible to participate in the tender. We may notice that reference here is to blacklisted tank trucks and not to the agency. We are informed that on account of specialised equipments required for transportation of the petroleum products, this peculiar concept of blacklisting the trucks rather than the agency is evolved. Be that as it may, the blacklisting order passed by HPCL was confined to the offending trucks and not to the agency. Even the tender conditions in the present case, refer to making the blacklisted trucks Page 5 of 8 HC-NIC Page 5 of 8 Created On Thu Dec 24 01:50:33 IST 2015 C/SCA/16871/2015 ORDER ineligible for participating in the tender and not the agency itself.
14. In the present case, we have noticed that the petitioner had offered 25 trucks to IOCL. Four of these trucks were blacklisted by HPCL and, therefore, became ineligible for consideration in the present contract also. Nothing prevented IOCL however, to consider the remaining 21 trucks for awarding the contract in terms of rules, regulations and policy. To hold that by virtue of this subsequent development, the entire offer of the petitioner would get ineligible, would not only be too harsh and unreasonable, would be contrary to the tender terms and eventually amount to blacklisting the petitioner atleast for the present tender process.
15. Let us take a case where the order of blacklisting was not passed by HPCL when the contract was awarded to the petitioner and it was being executed. Midway through execution of such contract, six months or a year later, if HPCL had passed the order of blacklisting, we wonder whether the IOCL could terminate the contract for remaining tank trucks as well. At best, in terms of the tender conditions, such tank trucks may be considered ineligible to execute the contract.
16. Had the majority of the tank trucks or even large number of trucks offered by the petitioner being tainted with such blacklisting, perhaps it would have been open for the IOCL to suggest that substantially the offer now stands vitiated and it would thereafter, not be possible for Page 6 of 8 HC-NIC Page 6 of 8 Created On Thu Dec 24 01:50:33 IST 2015 C/SCA/16871/2015 ORDER IOCL to permit the petitioner to offer a new set of trucks replacing the blacklisted ones. This is not the situation in the present case.
17. Learned counsel Shri Bhatt for IOCL however, drew our attention to clause(4) of the Bulk Petroleum Products Road Transport agreement which forms part of the tender document and reads as under :
"4(a) The Tank Trucks listed in the LOI/Work Order shall be made available to the Company at all times during the Agreement period at the loading location. In case of non/irregular reporting action will be taken as per ITDG including blacklisting of Tts/Termination of contract.
(b) In case any of the Tank Trucks is not made available by the Carrier on any day, Company would be free to use the services of any other Tank Truck and recover the difference in transportation charges from the Carrier.
(c) In the event of breakdown or major repair of any of the Tank Truck, Company at its sole discretion, may accept any other Tank Truck of the Carrier for the period of breakdown/major repair. Further, in the event Carrier request for the replacement of Tank/Truck/s, company at its sole discretion may accept the same.
(d) Age of the Tank Trucks offered should not exceed 15 yeas on the closing date of tender submission or as prescribed by local laws whichever is less. Company shall remove the Tank Trucks attaining the age of 15 years during the contractual period.
Carrier shall ensure replacement with another Tank Truck having age of less than 15 years in 30 days. In case, Carrier fails to provide replacement within 30 days, Company shall be free to engage any other Tank Truck. Dispensation beyond 30 days can be with specific approval of State Operations Head."
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18. In terms of subclause(c) and (d) of clause (4), counsel would contend that replacement would not be permissible unless and until, situation envisaged therein arise. In the present case, we are not permitting the petitioner to replace the offered tank trucks. We are only requiring IOCL to consider the remaining tank trucks for awarding the contract in terms of rules, regulations and policy of IOCL.
19. Under the circumstances, the respondent shall consider on merits, the offer of the petitioner for remaining 21 trucks out of the original 25 so offered to IOCL ignoring the four which have been blacklisted by HPCL. Final decision be taken latest by 15.1.2016.
20. Petition is disposed of.
(AKIL KURESHI, J.) (MOHINDER PAL, J.) raghu Page 8 of 8 HC-NIC Page 8 of 8 Created On Thu Dec 24 01:50:33 IST 2015