1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR O R D E R (1) S.B.Civil Writ Petition No. 5119/2008 (Udaipur Tanker Owners Association Vs. Union of India & Ors.) (2) S.B.Civil Writ Petition No. 5622/2008 (Kishan Gopal Atal & Ors. Vs. Union of India and Ors.) ......... Date of Order : 23/09/2008 P R E S E N T HON'BLE MR. JUSTICE H.R.PANWAR Mr. Mukesh Rajpurohit & Mr. Rajesh Shah for the petitioner. Mr. M.S.Singhvi for the respondents. BY THE COURT REPORTABLE Both these writ petitions involve common questions of law and facts and therefore, with the consent of learned counsel for the parties, they are heard and decided together taking the facts of S.B.Civil Writ Petition No.5119/08 as a leading case. The petitioner Udaipur Tanker Owners Association filed the instant writ petition stating therein that the petitioner Association is a registered Association and carrying on the business of tanker transportation of petroleum products. The respondent Indian Oil Corporation invited tenders for awarding 2 contracts for the road transportation of bulk petroleum products like MS/HSD/ Branded fuels etc. from the Bulk Oil Storage and handling location in Rajasthan State to locations within the State and outside the State vide Notice Inviting Tender Annex.1. Some of the members of the petitioner association submitted tender forms. The date of opening of the tender forms was scheduled to be 04.08.2008, however, in the meantime the petitioner Association filed writ petition before this Court and by order dated 30.07.2008 opening of the tenders was stayed and therefore, the tenders have not yet been opened. The petitioner association challenges the conditions enumerated in the tender form on the ground that they are discriminatory. According to the petitioner association, the earnest money for tanker owners has been fixed as Rs.5000/- whereas for retail outlet dealers the earnest money has been fixed as Rs.1000/-. So far as security deposit is concerned, for the tanker owners, a sum of Rs. 5,00,000/- has been fixed, whereas for the retail outlet dealers, only Rs. 50,000/- per contract has been fixed towards security deposit irrespective of the number of tank trucks. So also with regard to number of vehicles, the minimum vehicles required for tanker owners are two owned and three others whereas for the retail outlet dealers the minimum vehicles required are one owned and can supply to other dealer as a consortium with other retail outlet dealers. Apart from these 3 discriminatory conditions, according to the petitioner association, the other conditions imposed are that the carrier shall ensure that the truck-tanker is painted and maintained as per the colour scheme advised by the Oil Company from time to time and carrier shall also ensure that the name of Oil Company and Logo is prominently displayed on the tank of Truck-Tanker and the name of the base location in the information panel as per the directions of the Oil Company. The members of the petitioner association have raised objection with regard to such terms and conditions of the notice inviting tender on the ground of being discriminatory, impractical and inconsistent with the Act and the Rules. Hence these writ petitions. A reply to the writ petition has been filed by the respondents raising a preliminary objection that the writ of mandamus is not maintainable by an Association, only an individual if aggrieved by any act of the respondents can seek the writ of mandamus. Learned counsel for the respondent Corporation has relied on two decisions of Hon'ble Supreme Court in Shri Mahinder Kumar Gupta etc. Vs. Union of India, Ministry of Petroleum and Natural Gas, JT 1995 (1) SC 11 and in Federation of Bar Associations in Karnataka Vs. Union of India (2000) 6 SCC 715. 4 It has further been stated that the petitioners have concealed the material facts in the writ petition inasmuch as prior to issuance of notice inviting tender (for short 'the NIT' hereinafter), the respondent Corporation had organized pre bid meeting inviting objections and suggestions with regard to the proposed terms and conditions of the NIT and the meetings were held at various locations during the months of April 2008 and May, 2008 and were attended by various transporters and retail outlet dealers and in those meetings the revised terms of transportation contract which are impugned in the writ petition were also explained and various transporters participating in the said meeting agreed thereto as they did not raise any objection. The respondents have placed on record the attendance sheet of the pre bid meeting as Annex.R.2/1 and print out of the terms and conditions made known in the meeting as AnnexR.2/2. The petitioners have failed to disclose these material and important facts in the writ petition. It has further been submitted that it is a matter of policy decision and the respondent Corporation has taken a policy decision on the basis of their past experience including the complaints against small transporters who were found to be indulging in malpractices, pilferage and adulteration of petroleum products supplied by the respondent Corporation before it is delivered to the destination of the Retail outlet dealers. The details of the transporters /vehicles blacklisted 5 during the years 2005-06, 2006-07 and 2007-08 have also been annexed with the reply as Schedule-R. It has further been stated that so far as the question of Earnest Money and Security Deposit qua the persons like the petitioner and in favour of Retail Outlet Dealers is concerned, earlier also similar tenders were invited by the respondent company in the year 2005 having same conditions of earnest money and security deposit, but neither the petitioner association nor the members of the petitioner association choose to challenge those conditions. A copy of the tender inviting notice for the year 2005 has been placed on record as Annex.R.2/3. According to learned counsel for the respondent Corporation, since the petitioners having accepted the terms and conditions for the year 2005 which are same in the tender inviting notice in question, and therefore, they are estopped from challenging the same. The petitioners cannot be permitted to approbate and reprobate. Lastly it was submitted that none of the fundamental rights of the petitioner association has been infringed. I have heard learned counsel for the parties. Carefully gone through the pleadings of the parties. It is contended by learned counsel for the petitioners that the respondent Corporation has adopted double standard in between the tanker owners and the retail outlet dealers with regard to earnest money, security deposit and minimum 6 requirement of vehicles which infringes the right to business of the members of the petitioner association. It has further been submitted that by NIT in question, the respondent Corporation has prescribed minimum and maximum rates and prescribing rate 10 plus or minus is unreasonable and arbitrary. Learned counsel for the petitioners has challenged certain terms and conditions of the price bid more particularly the technical bid and submits that the Condition No.8.1.1 (c) provides that upon second incidence of the proven malpractice during the tenure of the contract of a particular carrier's TTs, the whole contract comprising all the TTs belonging to the concerned carrier shall be terminated and the concerned carrier and their all TTs shall be black listed on industry basis, even though, the complicity of the carrier is not proved during the investigation as also the condition requiring an agreement on non-judicial stamp with regard to the Bulk Petroleum Products Road Transport Agreement providing a condition therein that Tank Trucks covered by this Agreement shall operate at the sole risk of the carrier. In no case, company would be held responsible for any loss or damage done to/ by the Tank Truck while on the company's work or parked in their premises or anywhere else. Learned Counsel submits that no such condition has been prescribed for the retail outlet dealers owing truck tankers. Similarly, a condition No. 10 (n) that if the consignee so desire 7 and is permitted by the company, the carrier shall allow such representative of the consignee to travel along with the Tank Truck, according to learned counsel, this condition is onerous to the extent that if a representative of the consignee is to be allowed along with the Tank Truck and for any mischief including happening of accident, the owner of the such Tank Truck has to bear the compensation since in such matter the insurance company of the tank truck would not be liable under the provisions of the Motor Vehicles Act, 1988. According to learned counsel for the petitioners, the price bid providing the tender to quote within plus and minus 10% of the estimated rate is arbitrary. Learned counsel for the petitioner has relied on decisions of Hon'ble Supreme Court in Union of India and Ors. Vs. Hindustan Development Corporation and Others (1993) 3 SCC, 499, in Tata Cellular Vs. Union of India (1994) 6 SCC, 651, in Kumari Shrilekha Vidyarthi etc. etc. Vs. State of U.P. And Others AIR 1991 SC 537, in Dutta Association Pvt. Ltd. Vs. Indo Merchantiles Pvt. Ltd. and Others (1997) 1 SCC 53 and in State of Rajasthan and Others Vs. Basant Nahata 2005 AIR SCW 4456. In SBCW No. 5622/08, Mr. M.S. Singhvi, learned Counsel appearing for the respondent Corporation adopts the 8 reply filed by the Corporation in SBCW No.5119/08. Learned counsel for the respondent Corporation has relied on decision of Hon'ble Supreme Court in AIR India Ltd. Vs. Cochin International Airport Ltd. and Others, (2000) 2 SCC, 617, in Directorate of Education and Others Vs. Educomp Datamatics Ltd. and Others (2004) 4 SCC, 19, in Global Energy Ltd. and Another Vs. Adani Exports Ltd. and Others (2005) 4 SCC, 435, in G.B.Mahajan and Others Vs. Jalgaon Municipal Council and Others (1991) 3 SCC 91, a Division Bench decision of Allahabad High Court in M/s Laxmi Transport Co. Mathura and Ors. Vs. Chief Operation Manager, Lucknow and Anr. Civil Misc. Writ Petition No.38215/05 decided on 10.05.2005, a Division Bench decision of Madras High Court in M/s Bharat Petrolum Corporation Ltd. and Anr. Vs. M/s S. Palaniappan and Ors. W.A. No.310/07 and 311/07 decided on 12.4.2007 and a Division Bench decision of Punjab and Haryana High Court in Didar Masih and Others Vs. Union of India and Others C.W.P. No.12048/08 decided on 16.07.2008. It is contended by learned counsel for the respondent Corporation that the writ petition has been filed by Udaipur Tankers Association through its Secretary Devilal who was party to the pre bid meeting held vide Annex.R.2/1 which is evident from Annex.R.2/1 attendance sheet of pre bid meeting. So far as question of maintainability of the writ of mandamus by an 9 Association is concerned, learned counsel for the respondent Corporation submits that this controversy is covered by the decision of Hon'ble Supreme Court in Mahinder Kumar Gupta etc. Vs. Union of India (Supra) wherein Hon'ble Supreme Court held that the writ petition stands liable to be dismissed on the sole ground that the Association cannot file a writ petition as it has no fundamental right under Article 32 of the Constitution of India. In Federation of Bar Association, Karnataka (supra) it was held that there was no infringement of any fundamental right, nor any scope for enforcement of any fundamental rights. The petitioner Federation is not the accredited representative of the litigants of Karnataka. Learned counsel for the petitioner submits that even otherwise, if a writ petition is not maintainable by the Association then also petitioners Kishan Gopal Atal and Ors. have filed a writ petition in their individual capacity being S.B.C.Writ Petition No.5622/08 involving the similar question of law and facts as also challenging the very notice inviting tender and terms and conditions including the conditions for the earnest money, security deposit and requirement of number of vehicles and therefore, the writ petition filed by Kishan Gopal Atal and Ors. can be independently examined involving the controversy raised in the writ petition filed by Tanker Owners Association. 10 In Union of India and Others Vs. Hindustan Development Corporation and Others (supra), the Hon'ble Supreme Court considered the question of dual pricing policy. In that case the tender for supply of cast steel bogies to railways by tenderers comprising big as well as small manufacturers came to be considered. While considering the question of formation of a cartel as also the question of legitimate expectation, the Apex Court held that the Government while entering into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant. In the matter of awarding contracts inviting tenders is considered to be one of the fair ways. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory. In that case the validity of the conditions in the tender as such were not questioned and as such the Apex Court held that the Govt. had the right to either accept or reject the lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. The test of reasonableness, which pervades the constitutional scheme particularly in the context of Arts. 14, 19 and 21, finds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and 11 animates the Directive Principles and Article 14 strikes at arbitrariness in State action. While considering the question of legitimate expectations in para 35 of the Report, the Apex Court held that legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. Legitimate expectation gives the applicant sufficient locus standi for judicial review. The doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Therefore, even if substantive protection of such expectation is 12 contemplated that does not grant an absolute right to a particular person. It was further held that a case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfill. It is also held that even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. If it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision. If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the 13 courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It was further held that concept of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits, particularly when the element of speculation and uncertainty is inherent in that very concept. The Courts should restrain themselves and restrict such claims duly to the legal limitations. The Hon'ble Apex Court further held that an aggrieved person was entitled to invoke judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal. While examining the question of dual pricing, the submission before the Hon'ble Supreme Court was that in respect of same set of manufacturers, some of them cannot be made to supply at a lower price and the others namely smaller manufacturers cannot be given advantage to supply at a higher price and such 14 dual pricing is unreasonable and arbitrary. In that case, the Tender Committee worked out an upgraded price and taking other relevant factors like cost of the material etc. into consideration and applying the formula as was being done in the past and particularly taking into consideration the two concessions in respect of custom and freight fixed Rs. 76,000/- as the reasonable price. This was very close to the price quoted by the three big manufacturers. But at a post-tender stage, they entered into correspondence offering a lower price and ultimately the three big manufacturers committed themselves to supply at the rate of Rs. 67,000/- per bogie and on these premises, Hon'ble Supreme Court held that these big manufacturers formed a different category namely that they may be in a position to supply at that rate as is evident from their own commitment but to apply the same price which is much lower than the reasonable and workable price fixed by the Tender Committee to other smaller manufacturers would again result in ending the competition between the big and the small which ultimately would result in monopoly of the market by the three big manufacturers. In that case, the Apex Court had already directed the Tender Committee to consider the matter afresh and even if it results in dual pricing, it would not be bad in the circumstances mentioned therein. 15 In Dutta Associates Pvt. Ltd. Vs. Indo Merchantiles Pvt. Ltd. and Others (supra), the Apex Court held that the consideration of the tenders received and the procedure to be followed in the matter of acceptance of a tender should be transparent, fair and open. Any abuse of power for extraneous reasons would expose the authorities concerned liable to appropriate punishment. In that case, the entire procedure followed by Commissioner and the Government of Assam in accepting the tender of the appellant Dutta Associates Pvt. Ltd. was found to be unfair and opposed to the norms which the Government should follow in such matters. In Tata Cellular Vs. Union of India (supra), the Apex Court held 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. 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 16 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. Kumari Srilekha Vidyarthi etc. etc. Vs. State of U.P. and Others (supra) while considering the State actions in contractual matter and the power of judicial review, the Apex Court held that the personality of the State, requireing regulation of its conduct in all spheres by requirements of Art. 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Art. 14 and contractual obligations are alien concepts, which cannot co-exist. The Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. Exclusion of Art. 14 in contractual matters is not permissible in constitutional scheme. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. In State of Rajasthan and Others Vs. Basant Nahata (supra), Hon'ble Supreme Court held that public policy is not capable of being given a precise definition. What is 'opposed to 17 public policy' would be a matter depending upon the nature of the transaction. The pleadings of the parties and the materials brought on record would be relevant so as to enable the Court to judge the concept as to what is for public good or in the public interest or what would be injurious or harmful to the public good or the public interest at the relevant point of time as contra- distinguished from the policy of a particular Govt. A law dealing with the rights of a citizen is required to be clear and unambiguous. Doctrine of public policy is contained in a branch of common law, it is governed by precedents. The principles have been crystallized under different heads and though it may be possible for the Courts to expound and apply them to different situations but it is trite that the said doctrine should not be taken recourse to in 'clear and incontestable cases of harm to the public though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world'. In Shri Mohinder Kumar Gupta Vs. Union of India, Ministry of Petroleum and Natural Gas (supra), the question came to be considered by Hon'ble Supreme Court as to whether the Govt. is justified in imposition of eligibility restrictions in the award of retail outlets, and it has been observed that the distribution of the largesse of the State is for the common good 18 and to subserve the common good of as many persons as possible. The Govt. of India intended to group together certain near relations as to unit and one among that unit alone was made eligible to apply for and claim for grant of dealership. Further, economic and social justice as envisaged in the preamble of the Constitution is sought to be achieved. Therefore,