// 1 // IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR ORDER IN S.B. Civil Writ Petition No.7124/2008 Rajasthan Tanker Transporters Association through its President Shri Ram Prakash Choudhary and Others Versus Indian Oil Corporation Limited through its General Manager Date of Order ::: 29.09.2008 Present Hon'ble Mr. Justice Narendra Kumar Jain Shri S.M. Mehta, Sr. Advocate, with Shri Anil Mehta, Counsel for petitioners Shri Sudhanshu Kasliwal with Shri K. Verma, Counsel for respondent #### By the Court:- Admit. Shri Sudhanshu Kasliwal with Shri K. Verma, Advocates, appears for the respondent. Heard learned counsel for the parties. The petitioners have preferred this writ petition with following prayer:- “It is, therefore, most respectfully prayed that in the interest of justice, your Lordships may graciously be pleased to accept and allow this writ petition. It is also prayed that Your Lordships may be further pleased to issue an appropriate writ, order or direction in the nature thereof declaring the impugned tender document as illegal, arbitrary, discriminatory and unconstitutional. In the alternative the terms and conditions Nos.11(a), 11(c), 11(d), 11(e), E.1(a), C.1, 3.2, 4.1.7 and 8.3 be declared as // 2 // illegal, arbitrary, discriminatory and may kindly be quashed. The demand of EMD and SD more than the R.O. Dealers be declared illegal and may kindly be quashed. Category of R.O. Dealers be declared illegal and unconstitutional. The respondent be directed to disclose the minimum work it will guarantee to each tanker. Any other appropriate order or direction which this Hon'ble Court may consider just and proper in the facts and circumstances of the case may also kindly be passed in favour of the humble petitioners. Cost of this writ petition may also kindly be awarded in favour of the petitioners.” The aforesaid conditions of the tender, which are under challenge, are reproduced as under:- “11(a) Tenderer should offer minimum five number of tank trucks out of which minimum two tank trucks should be owned by the tenderer in their name i.e. Firm or Partner or Company or Proprietor. Additional tank trucks offered may be owned or attached. 11(c) RO Dealer/Direct Customer may offer tank trucks as per requirement for their own supplies only and all the tank truck should be owned by the RO Dealer/Direct Customer. 11(d) RO Dealer, who owns tank truck/s and has part utilization of offered tank truck/s considering own requirement, can form consortium with other IOC RO dealers who are not having tank trucks and in that event following additional terms shall be applicable: (i) The tank truck/s offered by the tenderer shall be utilized only for the supplies to RO dealers of the consortium under the arrangement. (ii) No change in the consortium // 3 // shall be permitted during the entire contract period. However, IOC at its sole discretion may allow reconstitution in the consortium considering operating feasibility on prior written request of the tenderer or on its own at any time during the contract period. (iii) It is the responsibility of the tenderer to obtain an undertaking from the other consortium RO dealers as per the performa enclosed in this tender document and submit the same along with the tender. (iv) It shall be entirely responsibility of the tenderer to resolve the disputes, if any, amongst the consortium RO dealers. (v) In case of any dispute or difference amongst members of the consortium for any reason whatsoever, IOC shall not be responsible for non-utilization of the tank truck/s offered by the tenderer. (vi) IOC shall have the discretion to make alternative arrangement for supplies to consortium members in the event of any exigency subject to any condition that IOC may prescribe. 11(e) RO Dealer desirous to offer tank trucks more than their own requirement shall fulfill the norms of minimum offer of tank trucks and minimum owned tank trucks as per clause 11(a) above. These RO dealers shall earmark the owned tank trucks as per requirement for their own supplies and these tank trucks shall not be used for other transportation work. In case the RO dealer not earmarking tank trucks for their own supplies, the supplies to their retail outlet shall be made at the discretion of IOC. C.1. General Tenderer/Schedule Caste/Schedule Tribe tenderer who is applying as general tenderer should submit along with tender EMD of Rs.5,000/- for each tank truck offered or // 4 // Rs.1000/- for each Tank Truck offered by RO dealers/customer. Tenders not accompanied with requisite EMD shall be rejected Concessional EMD shall be applicable only to the RO dealers/customers who are applying in the name of their dealership/Firm. EMD should be paid by Demand Draft drawn on any Scheduled Bank in favour of 'Indian Oil Corporation Ltd. (M.D.)” payable at respective location for which tender is submitted. Those tenderers who have downloaded the tender documents from website, while submitting tender should also enclose DD (Non-refundable) of Rs.1,000/- per set drawn on any scheduled bank payable in favour of “Indian Oil Corporation Ltd. (M.D.)” payable at respective location for which tender is submitted. Tender documents, which are downloaded from website, but a DD of Rs.1000/- is not enclosed, shall be rejected. The tenderer who has purchased tender document shall submit a photocopy of cash receipt towards purchase of tender documents and shall be enclosed in Technical Bid envelope 'A'. Non-compliance of this requirement shall result in rejection in case the tenderer fails to submit any other proof of purchase of tender document from the Company. E.1. Successful tenderers shall be required to furnish SD within 15 days of issuance of LOI/Work Order at the following rates: (a) The security deposit shall be Rs.5,00,000/- per contract for general tenderers. Minimum of Rs.50,000/- shall be paid in the form of Demand Draft drawn on any Scheduled Bank in favour of “Indian Oil Corporation Ltd. (M.D.)” and balance amount may be deposited in the form of Bank Guarantee strictly in specified performa, valid for six months beyond the maximum possible tenure of the contract. 3.2. Sealing/Locking of Tank Lorry 3.2.1 Security Locking of the TT shall be done in accordance with the guidelines of the Oil Company. // 5 // 3.2.2. Carrier to ensure that the integrity of the security locking system is intact at all times. 3.2.3 Carrier shall ensure that the security locks are in place while effecting delivery and on its return journey. Any act of tampering with the security locking system shall be construed, as malpractice and action shall be taken against the carrier. 4.1.7 If the product sample drawn from the retail outlet is found failing in the marker test then the “Retained Tank Lorry Samples” kept at the retail outlet shall be tested for marker test. The marker test of “Retained Tank Lorry samples” shall be carried out after giving prior notice to the dealer & the concerned carrier so that they can be present at the test venue if they so desire for witnessing the testing. Field offer or the representative of the divisional office/regional office/ territory office shall also be present & conduct/witness the marker test. This team shall submit its report in the approved industry format. If the “Retained Tank Lorry samples” is also failing in the marker test then the corresponding location sample shall be tested. If the location samples is passing in the marker test then it shall be construed as a malpractice done by the carrier & action shall be taken as outlined hereunder on actions for malpractices/adulteration. 8.3 Penalties The transporters shall attract penalties for the undesirable actions as given below. The suspension/blacklisting of the TT mentioned in the following instances shall be along with TT crew. The learned counsel for the parties have argued the case at length. The main argument of the learned counsel // 6 // for the petitioners is that the terms and conditions, which are under challenge in this writ petition are discriminatory, arbitrary and violative of Articles 14, 19 and 21 of the Constitution of India. In support of his contentions, he referred to the following decisions:- 1. (2007) 8 SCC 1 – Reliance Energy Limited v. Maharashtra State Road Development Corporation Limited; 2. (2008) 2 SCC 672 – Delhi Development Authority v. Joint Action Committee, Allottees of SFS Flats; 3. (1994) 6 SCC 651 – Tata Cellular v. Union of India; 4. (2001) 2 SCC 451 – W.B. State Electricity Board v. Patel Engineering Company Limited; Learned counsel for the respondent contended that the authority calling for the tenders is the best Judge to determine terms and conditions of the tender. The terms and conditions of tenders are not arbitrary or discriminatory or violative of Articles 14, 19 and 21 of the Constitution. In support of his submissions, he referred to the following decisions:- 1. (2004) 4 SCC 19 – Director of Education v. Educomp Datamatics Limited; 2. (2000) 5 SCC 287 – Monarch Infrastructure Private Limited v. Commissioner, Ulhasnagar Municipal Corporation and Others; 3. (2000) 2 SCC 617 – Air India Limited v. Cochin International Airport // 7 // Limited and Others; 4. (2002) 8 SCC 481 – T.M.A. Pai Foundation v. State of Karnataka. Learned counsel for the respondents further contended that similar terms and conditions of the tender, which is impugned in this writ petition, were challenged by the Udaipur Tanker Owners Association in S.B. Civil Writ Petition No.5119/2008 (Udaipur Tanker Owners Association v. Union of India & Others) filed at the Principal Seat of this Court at Jodhpur, along-with one another Writ Petition being S.B. Civil Writ Petition No.5622/2008 ( Kishan Gopal Atal & Others v. Union of India and Others), and the learned Single Judge, vide its order dated 23rd September, 2008, dismissed both the writ petitions upholding the said terms and conditions of the tender. The learned counsel for the petitioners does not dispute that the writ petitions, filed at the Principal Seat of this Court at Jodhpur, were similar and identical, but his contention is that the learned Single Judge, while deciding the aforesaid writ petitions vide order dated 23rd September, 2008, did not consider the law laid down by the Hon'ble Supreme Court in the cases reported in (2007) 8 SCC 1 – Reliance Energy Limited v. Maharashtra // 8 // State Road Development Corporation Limited and (2008) 2 SCC 672 – Delhi Development Authority v. Joint Action Committee, Allottees of SFS Flats. I have considered the submissions of the learned counsel for the parties and examined the impugned terms and conditions of the tender in the light of their submissions. In Reliance Energy Limited's case (Supra) their Lordships' of the Hon'ble Supreme Court, while considering the scope of right under Article 19(1)(g) & (2) read with Article 14 of the Constitution, in Para 36 of the Judgment, held as under:- “36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of "non-discrimination". However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to "right to life". In includes "opportunity". In our view, as held in the latest judgment of the Constitution Bench of nine-Judges in the case of I.R. Coelho vs. State of Tamil Nadu (2007) 2 SCC 1, Article 21/14 is the heart of the chapter on fundamental rights. It covers various aspects of life. "Level playing field" is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said // 9 // doctrine of "level playing field". We may clarify that this doctrine is, however, subject to public interest. In the world of globalization, competition is an important factor to be kept in mind. The doctrine of "level playing field" is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally-placed competitors are allowed to bid so as to subserve the larger public interest. "Globalization", in essence, is liberalization of trade. Today India has dismantled licence-raj. The economic reforms introduced after 1992 have brought in the concept of "globalization". Decisions or acts which results in unequal and discriminatory treatment, would violate the doctrine of "level playing field" embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of "equality" should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of "level playing field". According to Lord Goldsmith - commitment to "rule of law" is the heart of parliamentary democracy. One of the important elements of the "rule of law" is legal certainty. Article 14 applies to government policies and if the policy or act of the government, even in contractual matters, fails to satisfy the test of "reasonableness", then such an act or decision would be unconstitutional.” In Delhi Development Authority's case (Supra), their Lordships of the Hon'ble Supreme Court, while considering the scope of judicial review in the contractual matters, held as under:- “When a contract emanates from a statute or is otherwise governed by the // 10 // provisions thereof, the superior court can also exercise the power of judicial review. Although the superior courts ordinarily would not interfere in the price fixation but there does not exist any absolute ban. In a case where fixation of price is required to be made in a particular manner and upon taking into consideration the factors prescribed and if price is fixed de hors the statutory provisions, judicial review would be permissible.” The Hon'ble Apex Court in Director of Education's case (Supra), after considering the judgments in Monarch Infrastructure's case, Air India Limited's case & Tata Cellular's case (Supra), held that the terms of tender are not open to judicial scrutiny, the same being in the realm of contract. The authority must have a free hand in setting the terms of the tender. The courts cannot strike down the terms of the tender prescribed by the authority because it feel that some other terms in the tender would have been fair, wiser or logical. The Hon'ble Apex Court in Monarch Infrastructure Private Limited's case (Supra), held that authority calling for the tenders is the best judge to determine terms and conditions of tender. The Hon'ble Apex Court in T.M.A. Pai Foundation's case (Supra) held that reasonable classification is permitted. The Hon'ble Apex Court in Air India Limited's case (Supra) held that the award of a // 11 // contract, whether it is by a private party or by 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. The learned Single Judge at the Principal Seat of this Court at Jodhpur, while deciding the above referred two Writ Petitions - S.B. Civil Writ Petition No.5119/2008 (Udaipur Tanker Owners Association v. Union of India & Others) and S.B. Civil Writ Petition No.5622/2008 (Kishan Gopal Atal & Others v. Union of India and Others), considered all submissions of the learned counsel for both the parties including the violation of Articles 14, 19 and 21 of the Constitution, and held that it is open for the Corporation to choose its own method to arrive at a decision. The Court cannot interfere unless the policy decision is arbitrary or mala fide. The learned Single Judge observed that in that writ petitions neither there was allegation of mala fide nor the case of arbitrariness, unreasonableness or irrational had been made out. The last // 12 // operative part of the Judgment of the learned Single Judge is reproduced as under:- “So far as the question of legitimate expectation of the petitioner while competing the bid in pursuance of the NIT Annex.1, it is settled law that the doctrine of legitimate expectation is to be confined mostly to right of 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 straightway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise as has been held by Hon'ble Supreme Court in Union of India and Others Vs. Hindustan Development Corporation and Others (supra). Even otherwise, in the instant case, as has been stated above, the respondent Corporation before issuing the notice inviting tender Annex.1 held the meetings at various locations during the month of April and May, 36 2008 and the petitioner and other truck-tanker owners as also other transporters and retail outlet dealers have participated and after deliberation a revised terms and conditions of the transportation contract has been arrived at and therefore, it cannot be said that right of fair hearing before taking a policy decision by the respondent Corporation has not been provided to the petitioner and such like transporters. The scope of judicial review, in the contractual matters while inviting bids by issuing tenders came to be examined by Hon'ble Supreme Court in Tata Cellular Vs. Union of India (supra) and one of the principles culled out therein as noticed herein before, provides that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. It has been // 13 // further provides that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. In M/s Bharat Petroleum Corporation and Anr. Vs. M/s S. Palaniappan (supra) while relying on the decision of Hon'ble Supreme Court in Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and Others (supra), a Division Bench of Madras High Court held that tender terms are contractual and it is the 37 privilege of the Government which invites its tenders and Courts did not have jurisdiction to judge as to how the tender terms would have to be framed. In that case the transportation of petroleum products of the Corporation is effected through the tank-lorries not only owned by the dealers but also by independent transporters and the Corporation has decided to explore new technique processes adopted by global companies and engaged the services of the consultants and on the basis of the detailed study, the terms and conditions of the tender were settled and the allegation therein that the Corporation intended to favour only few big fleet operators was found to be baseless and it was held that in arriving at a commercial decision, considerations which are paramount are commercial considerations. It is open for the Corporation to choose its own method to arrive at a decision. It is free to fix its own terms of invitation to tender and it is not permissible for this Court to sit in appeal over the decision of the Corporation and on these premises, similarly writ petition filed by private lorries owners for transportation of petroleum products challenging the NIT came to be dismissed. A similar view was taken by Allahabad High Court in M/s Laxmi Transport Company, Mathura Vs. Chief Operation Manager, Lucknow and Anr. (supra) and it was held that the Court cannot strike down the terms of the Tenders prescribed by the competent authority merely because it feels 38 that earlier term of contract could have served the purpose better or could be more fair. The Court cannot interfere unless the policy decision is arbitrary or mala fide. In the instant case, neither there is allegation of malafide // 14 // nor the case of arbitrariness, unreasonableness or irrational has been made out. In view of the aforesaid discussion, both the writ petitions are devoid of any merit and are dismissed accordingly. However, there shall be no order as to costs. Interim order dated 30.07.2008 is vacated and both the stay petitions also stand dismissed. The terms and conditions of the tender, which are under challenge in this writ petition, were challenged in the aforesaid two writ petitions at the Principal Seat of this Court at Jodhpur. This fact has not been disputed by the learned counsel for the petitioners also. The learned Single Judge while deciding those writ petitions upheld the same vide order dated 23rd September, 2008. After considering the submissions of the learned counsel for the parties, I am of the view that so far as the principles laid down in the two decisions of the Hon'ble Supreme Court in Reliance Energy Limited's case and Delhi Development Authority's case (Supra) with regard to scope of Articles 14, 19 and 21 of the Constitution are concerned, the same have been considered by the single Bench of this Court while dismissing the above referred two identical writ petitions. I have perused and examined the reasonings assigned by the learned Single Judge in the aforesaid judgments and I // 15 // am in full agreement with the same and I am of the view that the present writ petition is fully covered by the aforesaid judgment dated 23rd September, 2008 of the learned Single Judge at the Principal Seat of of this Court at Jodhpur. Consequently, I do not find any merit in this writ petition and the same is accordingly dismissed with no order as to costs. The learned counsel for the petitioner orally submitted that the interim order, passed in the matter, may be extended for a period of two weeks to enable the petitioners to file an appeal, but, in view of the order dated 23rd September, 2008 passed by the learned Single Judge at the Principal Seat of this Court at Jodhpur in identical S.B. Civil Writ Petitions No.5119/2008 and 5622/2008, I am not inclined to accept the prayer of the learned counsel for the petitioners and the same is rejected. The stay order passed in the matter stands vacated. In view of the above, the application dated 18.08.2008 filed by the respondent under Article 226 of the Constitution, also stands disposed of. (Narendra Kumar Jain) J. //Jaiman//