1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T 1. SPL. APPL. WRIT No. 887 of 2008 UDAIPUR TANKER OWANERS ASSO., V/S UNION OF INDIA & ORS. 2. SPL. APPL. WRIT No. 920 of 2008 KISHAN GOPAL ATAL & ORS. V/S UNION OF INDIA & ORS. Date of Judgment : 15.10.2008 PRESENT HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. Mr. MC BHOOT & Mr. RAJESH SHAH, for the appellant. Mr. MS SINGHVI & Mr. JITENDRA CHOPRA, for the respondents. BY THE COURT : (PER HON'BLE GUPTA,J.) These two appeals have been filed seeking to challenge the common judgment of the learned Single Judge dt. 23.9.2008, dismissing the two writ petitions, being S.B. Civil Writ Petition No.5119/2008 and 5622/2008. Since both the writ petitions involve common question of law and fact, and have been decided by common order, these appeals are also being decided by this common order. Appeal No. 887 was filed on 27.9.2008, while the other Appeal No. 920 was filed on 13.10.2008, and thus they are heard at admission stage itself, as the respondents have appeared as caveator. For convenience we take up the facts from the 2 file of S.A.W. 887/08. The petitioners by the writ petition sought to challenge the notice inviting tenders for road transportation of bulk petroleum products vide tender notice Annex. 1, and also prayed that the respondents be directed to reframe the terms and conditions of the tender, while modifying/eliminating the conditions which are arbitrary, discriminatory, against the principles of natural justice, unconstitutional or inconsistent to prevalent law. The tender notice was challenged mainly on the ground that the terms and conditions are wholly inconsistent with the prevalent Act and the Rules in force, and also incorporated in a discriminatory manner, and are unconstitutional. It is alleged, that the intention of the respondents from very beginning had been malafide in respect to the tanker truck owners, and in view of this the different terms and conditions were incorporated for the tanker truck owners and retail outlet dealers. Different terms being terms IV-3.a., 3.b., 3.c and 3.d have been reproduced, and challenged, by contending, that respondents had floated the tender by imposing variable and separate conditions for different categories, which eventually and certainly effect technical and price bidding, to the extent that ensuring special benefits to one in comparison to others, and did not provide equal platform for all, and hence these are discriminatory. Then, the different stipulations with respect to security i.e. For retail outlet dealers it being Rs. 50,000/- while for others it being Rs. 5,00,000/- per contract, had been challenged for it being 3 discriminatory, arbitrary, unconstitutional. Then, the condition incorporated in the tender stipulating that the rates to be quoted should be within (+/-) 10% of the estimated transportation rates given in the tender, has been challenged as constitutes hurdle in the free trade, as it stipulates that the person quoting beyond these rates either upward or downward shall be disqualified. It is pleaded that the transporters are presently providing their services at the rate of 1.19 P.K.L.-P.K.M., and are ready to discharge the function and work at the existing rate, while now they have been restricted to give the minimum rates as fixed by the respondents, which is nothing but clubbing hands with the retail outlet dealers, to keep away the other transporters. It is also contended, that the conditions No. 8.3.4 and 8.3.7 cannot be said to be just and proper, in view of the business environment, rather they are intended to pollute the environment due to product spillage from titling or leaky vehicle. Interalia on these grounds the writ petition had been filed. Respondents submitted detailed reply enclosing the various documents. Certain preliminary objections were also raised, including that before issuance of notice inviting tender, meetings were held at various levels during April and May, 2008, and was attended by various transporters, in which meeting the terms of the transport contracts were revised, which are under challenge, were also discussed and explained in detail, and that, in the meeting held on 17.5.2008, at Chittorgarh, the signatory of Writ Petition No. 5119 himself also attended, apart from various other members of the petitioner association, 4 and no objection was raised about the impugned terms and conditions. The attendance sheet was produced as Annexure- R 2/1, but the petitioner has failed to disclose this material fact, which disentitles the petitioner to maintain the writ petition. Then, it is contended that the determination of eligibility conditions is essentially an administrative function, which is based on the policy decision of the respondents, and the said decision has been taken after due deliberations, keeping in view the past experience. The policy decision is applicable uniformly all over the country, and is in the larger interest of the public. Such policy decisions have always been declined to be interfered by the High Courts, as well as by the Hon'ble Supreme Court. Then, it is contended that the decision is out come of past experiences, as in the past, there had been complaints, mostly against small transporters, who were found to be indulging in malpractices, pilferage and adulteration of petroleum products, and on enquiry the complaints were found to be true, and with the result that respective transporters and vehicles were blacklisted, and the contracts awarded to them were cancelled. In this regard the respondents have produced the detail as Schedule-R, and that there was sharp increase in the instances of malpractice in the year 2007-2008, and resultantly 14 transporters were blacklisted, out of which 8 were having single vehicle, four were having two vehicles, and so on. Thus, for this reason, and to reduce the number of transporters, so as to have better control, the stipulations were incorporated which cannot be interfered with. Then, the ground of delay has been taken, by contending, that the writ petition has 5 been filed just at the nick of time which persuaded the court to grant interim stay, with the result, that in order to avoid inconvenience to the public, the existing contractor's contract had to be extended, which extended period has also expired on 30.9.2008, as such the delay is fatal. The allegation of discrimination was denied. It is contended that on earlier occasion, when the tenders were invited in the year 2005, the Earnest Money Deposit and Security Deposit were the same, which were never challenged. Then, para-wise reply has also been given, and while assailing the entitlement of the petitioner to challenge conditions of the tender notice, justification has also been pleaded for each and every altered condition. Regarding increase in the price also, it has been pleaded, that the respondents had undertaken a detailed study, and for the purpose of ensuring that the contract yields fair return, so as to avoid the contractor indulging in malpractice, for covering loss, the increased rate has been prescribed. Regarding discrimination, it was pleaded that the transporters and dealers form separate categories, and reasons have been given, as to why different stipulations have been provided for these two different categories of persons. Interalia with this it is prayed that the writ petition be dismissed. Then a rejoinder has been filed, wherein the factum of attending has been admitted, but the meeting has been sought to be decried on other ground, like want of proper publicity or notice etc., and other pleadings taken in the writ petition were reiterated. 6 Learned Single Judge in a very detailed judgment running into 38 pages, has discussed all the case laws cited at the Bar, and despite the conditions of the tender notice being not open to challenge, has devoted about 10 pages in discussing the various challenges and the grounds. Regarding difference in the amount of Earnest Money Deposit, Security Deposit it has been found to be the same as was in the earlier year 2005. Then, the requirement of Earnest Money and Security Deposit has also been examined on merits, and it has been found that they are not irrational, arbitrary or discriminatory. Then, the condition regarding requirement of display of logo was found to be not unreasonable. Then, the other requirement about entering into agreement has been found to be proper. Then, the risk to the owner of the goods has been found to be covered by the Insurance clause by virtue of Section 147 of the Motor Vehicles Act. Then, it has been considered, that meetings were held before issuance of notice, and that the change in the condition, in view of the past experience, has been found to be valid. Then, it has also been considered, that in view of various judgments of the Hon'ble Supreme Court, no crystallised rights of the petitioners are involved. Then the scope of judicial review of the notice inviting bids has been found to be very narrow, rather not open to the judicial scrutiny. Then, it was also considered, that the other High Courts have already examined these tender notice, and have declined to interfere. It was found, that there is no malafide, and therefore, no interference can be made. Assailing the impugned judgment, it was 7 submitted, that the learned Single Judge has noticed the contention about the respondents fixing the minimum and maximum rates being unreasonable and arbitrary, but then in the judgment this aspect has not been considered. It is submitted that by prescribing rates in this manner the very purpose of inviting tender is lost, as in that event everybody would quote lowest rate, and there would hardly be any healthy competition. On the other hand, learned counsel for the respondent supported the action, on the ground, that a detailed study has been undertaken by the respondents to find out viability, and the contract yielding reasonable returns to the contractors, and on that basis a rate has been determined, giving free play of (+/- 10%) so as to ensure, that any person who gets contract also finds the contract to be profitable. In our view, merely because the basic price has been determined by the respondents, giving free play of (+/- 10%), it cannot be said, that any healthy competition has been adversely affected, and thus, we do not find any illegality in fixing the price. The rate has been specified to ensure that the contract works profitable, and does not cast avoidable burden on the corporation. Then, the learned counsel for the appellant instead of showing any error in the impugned order, requiring interference by this Court, rather argued the matter as if the writ petition itself was being argued afresh, and thus long drawn submissions were made. 8 Making the ground of discrimination it was contended, that earlier persons owning one truck could give tender, while now tender is to be for five trucks at least, out of which two must be owned by him, and thus the business is sought to be monopolized. This aspect has been refuted by the learned counsel for the respondent, before the learned Single Judge, and before us also, by giving out detailed reasons, as to why policy of permitting persons holding one truck only has to be given up, and we find the reasons to be germane to the object sought to be achieved. It was then contended that in case of retail outlet dealers, discriminatory treatment is shown to them by permitting them to form consortium, and even in that case where the case is covered by para 11(e), he is not required to furnish guarantee, and security as is required to be furnished by the transporters apart from the fact that he can operate with only four additional trucks. In reply it was contended that the contention is misconceived inasmuch as the consortium is to be formed only where the requirement is not sufficient enough to use the vehicle, and if the dealer opts for receiving supply beyond his requirement then he is to fulfill the criteria of transport operator. So far security is concerned, the security is only Rs. 50,000/- cash otherwise is to be bank guarantee only. Therefore, it is not discriminatory. In our view, the contention of the learned 9 counsel for the appellant cannot be accepted. If the requirement of retail outlet dealer is not enough to make viable operating of truck tanker then consortium can be formed, and at the same time consortium is to be on very stringent terms as are being discussed hereinafter, apart from the fact that if the dealer opts for demand beyond his requirement, then he is to fulfill the requirement of Clause 11(a). Then, coming to the condition no. B.10, it was contended, that earlier there was a guarantee that the contractor would get business, while this time there is no guarantee, rather the entire exercise is calculated to benefit the dealers. Even after scrutiny of the tenders a ranking is to be prepared, and out of that ranking even within same ranking further preference has been prescribed, clearly stipulating that the persons who have ranked lower in that particular ranking, may not get any allocation, and in this, the first priority is to be given to tank trucks offered by Retail Outlet Dealer/ Customers, the second preference is to be given to the persons who had offered maximum number of 12 KL Truck Tankers offered by the tenderer, and in case 12 KL TTs offered being equal, preference will be given to the tenderer having offered more number of 12 KL owned Truck Tankers, and so on, which is clearly discriminatory. To this, it is submitted, by the learned counsel for the respondent, that this is altogether wrong to contend, that there is no guarantee of business. Of course, so far dealers are concerned, they form a different class, and the two classes cannot be compared, apart from the fact that the 10 dealer are to take supply for himself or for the consortium. It is contended that unlike the transporters the retail outlet dealers are having a regular business dealing with the respondent, being selling their products. Then, various other aspects have been highlighted like in case of dealers goods are to be delivered at the depot against cash payment, and thereafter the risk is of the dealer. While in the case of transporter, the transporter acts as an agent of the respondent, and in the event of accident or malpractice, the risk lies with the respondent, and such other various factors have been highlighted. In this very sequence, the learned counsel for the appellant had also contended that in case of the dealers, consortium can be constituted, in which event the transporter is to stand deprived of his business with respect to those points. This was contested by the respondent by contending, that it is only in eventualities covered by para 11(a) and (e), that the consortium can be formed, and in para-(e) it has been specifically stipulated that where retail outlet dealers 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. Thus, it cannot be said that forming of consortium adversely affect the contractors much less does it bring about any discrimination. In our view, firstly there is no pleading in the writ petition seeking to challenge this preference, nor any argument was advanced before the learned single judge 11 in this regard, and thus a wholly new plea has been raised for the first time before us, which cannot, and need not be entertained. That apart, a proper reading of clause 11 does clearly show, that it is in case where the dealer owns truck, and finds utilisation of that truck to be not enough to make use of the truck viable, considering his own requirement, then consortium can be formed with other dealers who are not having tank trucks, in that event the stringent condition enumerated in clause 11(d) are applicable including that the truck so offered shall be utilized only for supply to the retail outlet dealer, and can form consortium with other retail outlet dealers under the agreement, and this consortium can not be changed during the entire contract period, and so on. Rather it appears that this stipulation is calculated to maintain chain of supply of the product. So far as the condition of preference is concerned, as contained in para B.10, in our view, no discrimination is made out, inasmuch as it is only in the event of more truck tankers being offered, then the requirement, then this condition is attracted. Obviously, if the supply of tanker is more than the demand, then some rational is required to be laid down to avoid clash on the spot, and for that purpose these guidelines have been laid down. It cannot be said to be tentamounting to practicing any discrimination requiring the stipulation to be struck down under Article 226 jurisdiction. It is contended that the tender is calculated to create hurdle in the free trade. It would suffice to 12 observe, that the free trade does not mean, that the respondents cannot take policy decision in their commercial matters keeping in view their best commercial interests. Whatever stipulations are contained in the tender notice, they are uniformly applicable to all, i.e. each category of persons for which they are intended to apply, and if that process has certain rigors for persons not fulfilling requisite parameters of number of vehicles etc., it cannot be said that it creates any hurdle in the free trade. Strong reliance was placed by the learned counsel on the judgment of Hon’ble the Supreme Court, in Reliance Energy Limited Vs. Maharashtra State Road Development Corp., reported in 2007 AIR SCW-6416, specially para-22. Hon'ble Supreme Court in that case discussed the parameters of Article 14, 19 and 21, and after referring to Constitutional Bench judgment in I.R. Coelho Vs. State of Tamil Nadu reported in (2007) 2 SCC-1, it was held, that 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 which doctrine was invoked in the case in hand, it was held that, that doctrine is, however, subject to public interest, and in the world of globalization, competition is an important factor to be kept in mind. The doctrine of “level playing field” has been considered to provide space within which equally placed competitors are allowed to bid, so as to sub-serve the larger public interest. It was found, that today India has dismantled licence-raj, and 13 thus it was held, that the 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, and that, in the matter of implementation of aforesaid doctrine “level playing field” should be kept in mind. It would suffice to say, that there is no dispute about the legal proposition propounded by the Hon'ble Supreme Court, but then, the question is as to how that principle is applicable in favour of the appellant in the present case. That was a case where after opening tenders, in the matter of assessment of bids, the process was not found to be properly followed, therefore, interference was made by the Hon'ble Supreme Court, by laying down above principles. In the case in hand these principles are not at all attracted, at the stage of inviting tenders. Then, yet another judgment of Hon’ble the Supreme Court, in State of Rajasthan Vs. Basant Nahata, reported in 2005 AIR SCW-4456 was also relied upon to show the parameters of public policy, which in our view is not at all relevant to the present case. Learned counsel for the respondent on the other hand, apart from highlighting conduct of the petitioner- appellants, also submitted, that the identical tender notice has been challenged before Madras High Court, and Punjab & Haryana High Court. The Division Benches thereof had clearly upheld those tender notices, which judgments 14 have been rightly relied upon by the learned Single Judge. Then, regarding the permissible scope of interference, reliance was placed on a judgment of the Hon'ble Supreme Court, in Directorate of Education & Ors. Vs. Educomp Datamatics Ltd., reported in (2004) 4 SCC-10, specially para-9. In this judgment the Hon'ble Supreme Court has recapitulated the principles propounded in the case of Tata Cellular Vs. Union of India, reported in (1994) 6 SCC-651, wherein the principle no. 4 and 5 were propounded as under:- “(4) 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. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by malafides” Then, in para-10 the earlier judgment of the Hon'ble Supreme Court, in Air India Ltd. Vs. Cochin International Air Port, reported in (2000) 2 SCC-617, was also referred to, and followed, wherein it was clearly ruled, that 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. Of course, the Court can examine the decision making process, and interfere, if it is found vitiated by malafides, unreasonableness and arbitrariness. 15 We may at once observe that despite long drawn repeated arguments, no case for malafide could be made out by the learned counsel for the appellant, and we do not find these conditions to be either unreasonable or arbitrary. Thus, in our view, these two judgments, which again have been relied upon by the learned Single Judge, also cover the case against the appellant. Regarding the fixation of rates, learned counsel for the respondent relied upon another judgment of the Hon'ble Supreme Court, in Rayalaseema Paper Mills Ltd. Vs. Govt. Of A.P., reported in (2003) 1 SCC-341. Apart from this judgment when we have found, that the price fixation has been done by the respondent, after undertaking a proper study, and for appropriate reasons, it cannot be interfered with. That apart even otherwise we do not find any ground to interfere in the fixation of price. Fixation of minimum price will rather benefit tenderer. Thus, agreeing with the reasons given by the learned Single Judge, whole hog, and for some of the above additional reasons, we do not find any force in the appeals. The same are, therefore, dismissed summarily. Interim stay obviously stands vacated. ( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J. /Sushil/