dated this the 26 day of april 2013 -...
TRANSCRIPT
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 26TH DAY OF APRIL 2013
BEFORE
THE HON’BLE MR.JUSTICE S. ABDUL NAZEER
WRIT PETITION NO.1813/2013
C/W W.P.NOS.1814/2013, 1815/2013, 2000-2001/2013
& W.P.NO.5074/2013 (GM-TEN)
W.P.NO.1813/2013
Between:
Sri Chennakeshava Transport,Reptd. By its Proprietor,Sri Ranga Swamy,S/o Ramesh Shetty,Aged about 39 years,No.69, 2nd Main Road, Bharathi LayOut,Bangalore – 560 029. …. Petitioner.
(By Sri K.N.Subba Reddy & Vivek S. Reddy, Advs.)
2
And:
1 The Indian Oil Corporation Limited,(A Company Registered under theCompanies Act, 1956, with itsRegd. Office at G-9, Ali Yawan Jung Marga,Bandra (E), Mumbai – 400 051,and its Karnataka State Officeat Indian Oil Bhavan, No.29,P.Kalinga Rao Road, (Mission Road),Bangalore – 560 027, Reptd. By its DGM-Operations,Shri Anbalagan.
2 M/s Rajarajeswari Service Station,IOC Dealer Sy.No.34/1,Reptd. By its Proprietor,Sri Govindraj, Kulemepalya,Visweshwarapura,Nelamangala Main Road,Bangalore District 562 123.
3 M/s Anjanadri Enterprises,Reptd. By its Proprietor,Sri Prasanna, No.113/1 To 7,7th Cross, 5th Main, Chamrajpet,Bangalore – 560 018.
4 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor,Sri Prakash, Old Madras Road,Indiranagar, Bangalore – 560 038.
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5 M/s Varadaraja Service Station,Reptd. By its Proprietor,Sri Mahesh, No.596, Dr.Rajkumr Road, Rajajinagar,Bangalore – 560 010.
6 M/s Sri Banashankari Oils,Reptd. By its Proprietor,Smt.N.Susheela, Hongirana,No.248/5, 53rd C Cross,17th D Main, 3rd Y Block,Rajajinagar, Bangalore – 10.
7 M/s Abhiman Service Station,Reptd. By its Proprietor,Sri Prashanth, Indian Oil Dealers,B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor,Sri Nagabushan, 100 Feet,Industrial Estate Road,Peenya, Bangalore – 58.
9 M/s Swathi Enterprises,Reptd. By its Proprietor,8th Mile Stone, Tumkur Road,Nagasandra Post,Bangalore – 73.
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10 M/s Sri Sharada Enterprises,Reptd. By its Proprietor,Sri Jayaram, No.106/7, 10th K.M.,N.H.7,. Bellary Road,Amruthahalli, Bangalore – 560 092.
11 M/s Triveni Service Station,Reptd. By its Proprietor,Smt. Savithri, No.39,Hesarghatta Main Road,Bagalgunte, Bangalore – 73.
12 T.N.Shashikanth,S/o G.Narasimha Shetty,Aged about 47 years,M/s Sharavani Service Station,N.H.206, Rajatadripura,K.B.Cross, Tiptur – 572 114,Tumkur Dist.
13 K.R.Narayanaswamy,S/o A.Rangappa,Aged about 58 years,M/s Sri Vanamala Service Station,Hulikunte Road, Koratagere 572 129,Tumkur District.
14 Nandeesha,S/o late Honnanna,Aged about 54 years,M/s Sri Honnaganga Petroleum,Mysore Road, Chelur – 572 117,Gubbi Taluk, Tumkur Dist.
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15 B.P.Aswathanarayana Gowda,major, M/s Kondur Enterprises,Indian Oil Dealer, Railway Station,Thondebhavi – 561 213,Gouribidanur Taluk,Chickballapur Dist.
16 H.V.Govindaraja Shetty,S/o Venkatachalapathy Shetty,Aged about 56 years,M/s SLR Agencies,J.C.Circle, Sira Road,Huliyur – 572 118, Tumkur Dist.
17 Smt. K.Shamalamma,major, M/s Raghu Agencies,IOC Dealer, Kuvempu Road,Pavagada – 561 202.
18 M/s Banashankari Service Station,Reptd. By its Partner, Sri Mallesh Gowda,S/o Sri Balaiah, Aged about 57 years,IOC Dealer, No.27/1,Kadirenahalli Cross, Gowdanapalya,Subramanyapura Main Road,Bangalore – 560 070. …. Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan & Sri S.V.Angadi, Advs. For R1 R2 to R11 served Sri S.V.Krishnaswamy, Adv. For R12 to R17 Sri S. Visweswaraiah, Adv. For R18)
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W.P.NO.1814/2013
Between:
Sri Maruthi Transport,Reptd. By its Proprietor,Sri C.Ramesh S/o Channappa,Aged about 48 years, Door No.113, 5th Cross,Mahalaxmi Nagar,Manjunathanagar, Nagasandra Post, Bangalore – 560 073. …. Petitioner.
(By Sri K.N.Subba Reddy & Sri Vivek S. Reddy, Advs.)
And:
1 The Indian Oil Corporation Limited,(A Company Registered under theCompanies Act, 1956, with itsRegd. Office at G-9, Ali Yawan Jung Marga,Bandra (E), Mumbai – 400 051,and its Karnataka State Officeat Indian Oil Bhavan, No.29,P.Kalinga Rao Road, (Mission Road),Bangalore – 560 027, Reptd. By its DGM-Operations,Shri Anbalagan.
2 M/s Rajarajeswari Service Station,IOC Dealer Sy.No.34/1,Reptd. By its Proprietor,Sri Govindraj, Kulemepalya,Visweshwarapura,Nelamangala Main Road,Bangalore District 562 123.
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3 M/s Anjanadri Enterprises,Reptd. By its Proprietor,Sri Prasanna, No.113/1 To 7,7th Cross, 5th Main, Chamrajpet,Bangalore – 560 018.
4 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor,Sri Prakash, Old Madras Road,Indiranagar, Bangalore – 560 038.
5 M/s Varadaraja Service Station,Reptd. By its Proprietor,Sri Mahesh, No.596, Dr.Rajkumr Road, Rajajinagar, Bangalore – 560 010.
6 M/s Sri Banashankari Oils,Reptd. By its Proprietor,Smt.N.Susheela, Hongirana,No.248/5, 53rd C Cross,17th D Main, 3rd Y Block,Rajajinagar, Bangalore – 10.
7 M/s Abhiman Service Station,Reptd. By its Proprietor,Sri Prashanth, Indian Oil Dealers,B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor,Sri Nagabushan, 100 Feet,Industrial Estate Road,Peenya, Bangalore – 58.
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9 M/s Swathi Enterprises,Reptd. By its Proprietor,8th Mile Stone, Tumkur Road,Nagasandra Post,Bangalore – 73.
10 M/s Sri Sharada Enterprises,Reptd. By its Proprietor,Sri Jayaram, No.106/7, 10th K.M.,N.H.7,. Bellary Road,Amruthahalli,Bangalore – 560 092.
11 M/s Triveni Service Station,Reptd. By its Proprietor,Smt. Savithri, No.39,Hesarghatta Main Road,Bagalgunte, Bangalore – 73.
12 T.N.Shashikanth,S/o G.Narasimha Shetty,Aged about 47 years,M/s Sharavani Service Station,N.H.206, Rajatadripura,K.B.Cross, Tiptur – 572 114,Tumkur Dist.
13 K.R.Narayanaswamy,S/o A.Rangappa,Aged about 58 years,M/s Sri Vanamala Service Station,Hulikunte Road, Koratagere 572 129,Tumkur District.
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14 Nandeesha,S/o late Honnanna,Aged about 54 years,M/s Sri Honnaganga Petroleum,Mysore Road, Chelur – 572 117,Gubbi Taluk, Tumkur Dist.
15 B.P.Aswathanarayana Gowda,major, M/s Kondur Enterprises,Indian Oil Dealer, Railway Station,Thondebhavi – 561 213,Gouribidanur Taluk, Chickballapur Dist.
16 H.V.Govindaraja Shetty,S/o Venkatachalapathy Shetty,Aged about 56 years, M/s SLR Agencies, J.C.Circle, Sira Road, Huliyur – 572 118, Tumkur Dist.
17 Smt. K.Shamalamma,major, M/s Raghu Agencies, IOC Dealer, Kuvempu Road, Pavagada – 561 202.
18 M/s Banashankari Service Station,Reptd. By its Partner, Sri Mallesh Gowda,S/o Sri Balaiah, Aged about 57 years,IOC Dealer, No.27/1, Kadirenahalli Cross,Gowdanapalya, Subramanyapura Main Road,Bangalore – 560 070. …. Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan & Sri S.V.Angadi, Advs. For R1 R2 to R11 served Sri S.V.Krishnaswamy, Adv. For R12 to R17 Sri S. Visweswaraiah, Adv. For R18)
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W.P.NO.1815/2013
Between:
Rajagopal Transport,Reptd. By its Proprietor,Sri Raja Gopal S/o Cheena Krishnan,Aged about 54 years,No.840, 8th Main, Yamuna Nadi Road,Bangalore – 560 050. …. Petitioner.
(By Sri K.N.Subba Reddy & Sri Vivek S. Reddy, Advs.)
And:
1 The Indian Oil Corporation Limited,(A Company Registered under theCompanies Act, 1956, with itsRegd. Office at G-9, Ali Yawan Jung Marga,Bandra (E), Mumbai – 400 051,and its Karnataka State Officeat Indian Oil Bhavan, No.29,P.Kalinga Rao Road, (Mission Road),Bangalore – 560 027, Reptd. By its DGM-Operations,Shri Anbalagan.
2 M/s Rajarajeswari Service Station,IOC Dealer Sy.No.34/1,Reptd. By its Proprietor,Sri Govindraj, Kulemepalya,Visweshwarapura, Nelamangala Main Road,Bangalore District 562 123.
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3 M/s Anjanadri Enterprises,Reptd. By its Proprietor,Sri Prasanna, No.113/1 To 7,7th Cross, 5th Main, Chamrajpet,Bangalore – 560 018.
4 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor,Sri Prakash, Old Madras Road,Indiranagar, Bangalore – 560 038.
5 M/s Varadaraja Service Station,Reptd. By its Proprietor,Sri Mahesh, No.596, Dr.Rajkumr Road, Rajajinagar,Bangalore – 560 010.
6 M/s Sri Banashankari Oils,Reptd. By its Proprietor,Smt.N.Susheela, Hongirana,No.248/5, 53rd C Cross,17th D Main, 3rd Y Block,Rajajinagar, Bangalore – 10.
7 M/s Abhiman Service Station,Reptd. By its Proprietor,Sri Prashanth, Indian Oil Dealers,B.H.Road, Tiptur =- 572 201.
8 M/s Sree Venkateshwara Service Station,Reptd. By its Proprietor, Sri Nagabushan, 100 Feet,Industrial Estate Road, Peenya, Bangalore – 58.
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9 M/s Swathi Enterprises,Reptd. By its Proprietor,8th Mile Stone, Tumkur Road,Nagasandra Post,Bangalore – 73.
10 M/s Sri Sharada Enterprises,Reptd. By its Proprietor,Sri Jayaram, No.106/7, 10th K.M.,N.H.7,. Bellary Road,Amruthahalli,Bangalore – 560 092.
11 M/s Triveni Service Station,Reptd. By its Proprietor,Smt. Savithri, No.39,Hesarghatta Main Road,Bagalgunte, Bangalore – 73.
12 T.N.Shashikanth,S/o G.Narasimha Shetty,Aged about 47 years,M/s Sharavani Service Station,N.H.206, Rajatadripura,K.B.Cross, Tiptur – 572 114,Tumkur Dist.
13 K.R.Narayanaswamy,S/o A.Rangappa,Aged about 58 years,M/s Sri Vanamala Service Station,Hulikunte Road, Koratagere 572 129,Tumkur District.
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14 Nandeesha, S/o late Honnanna,Aged about 54 years, M/s Sri Honnaganga Petroleum,Mysore Road, Chelur – 572 117,Gubbi Taluk, Tumkur Dist.
15 B.P.Aswathanarayana Gowda,major, M/s Kondur Enterprises,Indian Oil Dealer, Railway Station,Thondebhavi – 561 213,Gouribidanur Taluk, Chickballapur Dist.
16 H.V.Govindaraja Shetty,S/o Venkatachalapathy Shetty,Aged about 56 years, M/s SLR Agencies,J.C.Circle, Sira Road,Huliyur – 572 118, Tumkur Dist.
17 Smt. K.Shamalamma, major,M/s Raghu Agencies, IOC Dealer, Kuvempu Road, Pavagada – 561 202.
18 M/s Banashankari Service Station,Reptd. By its Partner, Sri Mallesh Gowda,S/o Sri Balaiah, Aged about 57 years,IOC Dealer, No.27/1, Kadirenahalli Cross,Gowdanapalya, Subramanyapura Main Road,Bangalore – 560 070. …. Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan & Sri S.V.Angadi, Advs. For R1 R2 to R11 served Sri S.V.Krishnaswamy, Adv. For R12 to R17 Sri S. Visweswaraiah, Adv. For R18)
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W.P.NOS.2000-2001/2013
Between:
1 M/s N.Shankarachary Transport,Reptd. By its Proprietor N. Shankarachary,No.13, 21st Main Road, BSK 2nd Stage,Near BDA Complex, Bangalore – 70.
2 M/s K.K.Manje Gowda Transport,Reptd. By its Proprietor K.K.Manje Gowda,No.214, Lakshmaiah Building,Kattamnallur, Virgonagar Post,Bangalore – 560049. …. Petitioners.
(By Sri B.K. Sampath Kumar, Adv.)
And:
1 Indian Oil Corporation Limited,Karnataka State Office,Indianoil Bhawan,29, P.Kalingarao Road (mission Road),Bangalore – 560 027.
2 Mr.V.Velu Murgan, major.
3 Mrs. Mallarkodi,W/o Mr.V.Velu Murgan, major.
R2 and R3 are r/a No.199,Ramgopal Layout, Subbannapalya,Banaswadi, Bangalore – 33.
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4 M/s Anjanadri Enterprises,No.113/1 to 7, 7th Cross, 5th Main,Chamrajpet, Bangalore – 18.
5 M/s Sree Venkateshwara Service Station,1, Old Madrs Road, Indiranagar,Bangalore – 38.
6 M/s Vardaraja Service Station,No.596, Dr.Rajkumar Road,Rajajinagar, Bangalore – 10.
7 M/s Abhiman Service Station,Indian Oil Dealers, B.H.Road,Tiptur- 572 201.
8 M/s Triveni Service Station,No.39, Hesaraghatta Main Road,Bagalgunte, Bangalore – 73.
9 M/s Swathi Enterprises,8th Mile Stone, Tumkur Road,Nagasandra Post,Bangalore – 73.
10 M/s Sri Sharadah Enterprises,No.106/7, 10th KM, NH-7,Bellary Road, Amruthally,Bangalore – 92.
16
11 M/s Rajarajeshwari Service Station,IOC Dealer, Sy.No.34/1,Kulumepalya Viswesharapura,Nelamangala Main Road,Bangalore Dist. 562 123.
12 M/s Sri Banashankari Oils,Srimati N. Susheelaa, Hongirana,No.248/5, 53rd Cross, 17th D Main,3rd Y Block, Rajajinagar, Bangalore – 10.
13 M/s Sre Venkateshwara Service Station,100 Feet Industrial Estate Road,Peenya, Bangalore – 58.
14 M/s M.K.Prakash Transports,C/o M/s Subadra Transport,Near Big Bazar, Kolar – 563 101.
15 M/s A.Kavitha Transport,No.27, K.R.Puram, Cocks Town Extension,Vijanahalli, Bangalore – 5.
16 M/s Pragathishwara Nanda Transport,No.29, Mariamma Temple Street,16th Cross, Jayabharathnagar,Bangalore – 33. …. Respondents.
(By Sri Ashok Haranahalli, Sr. Adv. For Sri A.K.Lakshmanan & Sri S.V.Angadi, Advs. For R1 Sri Krishna S. Dixit, Adv. For R2, R3, R15 and R16 R6 to R14 served Notice to R4 & R5 served through hand summons)
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W.P.NO.5074/2013
Between:
B.S.Indu Shekar Singh,S/o late B.S.Bagwan Singh,Aged about 50 years,Prop: Bagwan Sri Balaji Fuels,No.4, Yammerahally, Sira,Tumkur District – 572 137. …. Petitioner.
(By Sri S.V.Krishna Swamy, Adv.)
And:
Indian Oil Corporation,By General Manager (Operations),Indian Oil Bhavan,No.29, P. Kalingarao Road,(Mission Road), Bangalore – 27. …. Respondent.
(By Sri A.K. Lakshmanan, Adv.)
---
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W.P.No.1813/2013 is filed under Articles 226 & 227 of the Constitution of India, praying to quash the letter of indent dated 23.11.2012 as illegal and discriminatory, etc.
W.P.No.1814/2013 is filed under Articles 226 & 227 of the Constitution of India, praying to quash the letter of indent dated 23.11.2012 as illegal and discriminatory, etc.
W.P.No.1815/2013 is filed under Articles 226 & 227 of the Constitution of India, praying to quash the letter of indent dated 23.11.2012 as illegal and discriminatory, etc.
W.P.Nos.2000-2001/2013 is filed under Articles 226 & 227 of the Constitution of India, praying to direct the first respondent to issue work order vide tender dated 14.8.2012, etc.
W.P.No.5074/2013 is filed under Articles 226 & 227 of the Constitution of India, praying to direct the respondent to consider and grant the licence required for transportation of petroleum products from the terminal at Devanagondi to his bunk at Sira, etc.
These Writ Petitions coming on for Further Orders this day, the Court passed the following:
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ORDER
In W.P.Nos.1813/2013, 1814/2013 and 1815/2013, the
petitioners have sought for quashing the Letter of Indent at
Annexures 'C1' to 'C10' dated 23.11.2012 issued by the first
respondent in favour of the private respondents and for a
mandamus directing the first respondent not to issue work orders
and for certain other reliefs.
2. In W.P.Nos.2000-2001/2013, petitioners have sought for a
writ of mandamus directing the first respondent to issue the work
order vide tender notification at Annexure 'A' dated 14.8.2012 to
the petitioners as they have quoted the lowest price and for certain
other reliefs.
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3. In W.P.No.5074/2013, the petitioner has sought for a
direction to the respondent to consider and grant the licence
required for transportation of petroleum products from the terminal
at Devanagondi to his bunk at Sira and to the consortium members.
4. The pleadings in W.P.Nos.1813/2013, 1814/2013,
1815/2013 and 2000-2001/2013 are more or less similar. These
petitions have been filed by the unsuccessful bidders for the
transportation of bulk petroleum products. The first respondent
published tender for bulk transportation of petroleum products to
various locations in Karnataka. The notice inviting tender was
issued on 14.8.2012 from the Karnataka State. The offers were
sought from interested parties and the same was opened on
24.9.2012. The first respondent has completed the process of
issuance of letter of indent (LOI) on 23.11.2012.
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5. The contention of the petitioners is that they are the
owners of certain number of trucks and are presently carrying on
contract of supplying tank trucks to the first respondent. It is their
case that the tender documents contain two parts, viz.,
technical/commercial bid and price bid. In the price bid, rate
schedule for road transportation of bulk petroleum products
estimated rates were given at page No.71 of the tender document at
Annexure 'A'. The technical bids were opened by the first
respondent and petitioners were declared as eligible in the
technical bid along with other eligible bidders.
6. Respondent No.1 has also furnished the schedule date for
opening up of the price bids and the place/venue of the opening of
the price bid. As per the tender notification, evaluation of tenderers
shall be decided on minimum financial outgo to the IOCL by
considering the rates quoted in both the items and expected
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volumes of the business. The bidders are categorised as L1, L2, L3
etc., as per Clause B(4) of the evaluation of tenderers, which is the
criteria for deciding as the lowest bidder in the said tender
procedure. Petitioners were present on the day fixed for opening
the price bid of the aforesaid tender and price bids were announced.
The petitioners came to know that their price was lowest along with
some other participants. Sri Velumurugan was also a successful
bidder in technical bid and when his price bid was opened, he was
ranked as L2. As against this, the petitioners were ranked as L1. It
is further submitted that a complaint has been filed against
Velumurugan for stealing of diesel. Velumurugan and
Smt.Malarkodi are husband and wife. The police have mentioned
that there was a route diversion taken by the tanker to enable the
tanker to steal diesel. Despite the above facts, tenders have been
granted in favour of Velumurugan and his wife.
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7. The petitioners in W.P.Nos.2000-2001/2013 have raised
similar contentions. It is contended that despite the first respondent
knowing that a case against respondent No.2 for stealing of the
diesel is registered against him, it has approved the tender without
any regard to his past conduct. The petitioners have an
unblemished record and are in the business for close to 30 years.
The first respondent is trying to monopolise the transport industry
by favouring few tenderers, who do not deserve the tender and are
trying to throw out the petitioners from the business. The second
respondent-V.Velumurugan and his wife Smt.Malarkodi has been
awarded the tender without any rhyme or reason.
8. In W.P.No.5074/2013, the petitioner contends that
recommendation has been made to award the tender in his favour.
However, the licence has not been issued for carrying bulk
supplies.
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9. The first respondent has filed objections in
W.P.Nos.1813/2013, 1814/2013, 1815/2013 and 2000-2001/2013
contending that the terms and conditions of the public tender
covered under tender No.KASO/OPS/POL/2012-15/Bangalore
Terminal/01 dated 14.8.2012 read with corrigendum dated
15.8.2012 are the All India policy of Indian Oil Corporation, which
got evolved over a period of years and other stake holders for the
purpose of ensuring uninterrupted and smooth supplies of essential
petroleum products to the general public with a view to avoid
malpractices and quantity and quality issues. The terms and
conditions of the public tender revised and effective from
27.7.2012 is applicable for the POL tenders to be floated by the
POL locations of Indian Oil Corporation Limited on all India basis.
The public tender was floated on 14.8.2012 and the offers were
sought from interested parties and the same was opened on
24.9.2012. Thereafter, respondent No.1 has completed the process
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of issuance of Letter of Indent strictly following the tender
conditions on 23.11.2012 and the activities of physical verification
of tank trucks and relevant documents were taken up for another
period during which time respondent No.1 has not received any
representations or objections.
10. It is further contended that the petitioners without any
objections have accepted the tender conditions in full and
submitted their tender documents for consideration. Objection is
raised only on their tenders not found to be successful as per tender
conditions at much a later stage. The contract is not for supplying
tank trucks as mentioned in the petition but for transportation of
petroleum products. The tender applicants have submitted the
tenders in line with the public tender conditions. They have
accepted all the terms and conditions of the public tender, which
were made available in the public domain, without any objections.
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The petitioners have participated in the tender process. Now after
becoming unsuccessful, they cannot challenge the terms and
conditions of the tender.
11. The categorization of L1, L2, L3, etc., have been
established in line with the tender conditions. Further evaluation
and issuance of Letter of Indent has been undertaken in line with
clauses B6 to B9 of the public tender document. Letter of Indent
has been issued to successful tenderers after evaluation of the
tenders in line with the terms and conditions of the public tender by
strictly evaluating all successful tenders as per the ranking
procedures enunciated in the tender conditions and after approvals
from competent authority in line with the policy of the Corporation
Letter of Indents were not issued to the petitioners in line with the
terms and conditions of the tender as they have participated in the
tender under General Transporter category and have quoted L2
27
rates in their price bids.
12. Letter of Indents have been issued in the first instance
only for the tenderers under the category of
dealers/consortium/direct customers only for their own use and
who have subsequently accepted the L1 rates finalised for the
tender. These conditions were also deliberated and explained to the
prospective tenderes during the pre-bid meeting conducted at
Devanagunthi Terminal on 7.9.2012, much before the last date of
submission of the tender, which was on 24.9.2012. The petitioners
were also present during this pre-bid meeting where the terms of
tender were clarified. Similar terms and conditions were also
adopted for the previous tender finalised during October, 2009 for
Bangalore Terminal during which the petitioners were some of the
successful tenderers and they were awarded contract at that time.
Letter of Indents have been issued to other than L1 bidders only for
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own use requirement by tenderers who have participated under the
category of dealers/consortium/direct customers only and not for
general transportation even though such tenders were received
from IOC dealers, which is again strictly in line with the tender
conditions as the entire POL transportation contract is finalised for
ensuring the over all interest of IOC dealers and customers to
receive correct quality and quantity of products without giving
room for any kind of malpractice for which the self-transportation
for own requirement was found to be ideal.
13. It is pointed out that no discrimination has been resorted
to during the evaluation of the tender. No unfair and inequitable
treatment was given to any of the tenderers and all have been
treated equally in accordance with the terms and conditions of the
tender and Letter of Indents have been issued in accordance with
the public tender conditions.
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14. I have heard Sri Vivek S. Reddy, Sri B.K.Sampath
Kumar and Sri S.V.Krishnaswamy, learned Counsel for the
petitioners and Sri Ashok Haranahalli, learned Senior Advocate for
Sri S.V.Angadi, Sri S. Visweswaraiah and Sri Krishna S. Dixit,
learned Counsel for the respondents.
15. Sri Vivek S. Reddy, learned Counsel appearing for the
petitioners in some of the petitions submits that in the evaluation of
the technical bid, the petitioners have been qualified. However, in
the next stage of evaluation under Clause B(9), the tenderers were
not qualified because of the number of tank trucks owned by them.
Clause B(9) of the tender is itself arbitrary. Relying on the decision
of the Apex Court in MEERUT DEVELOPMENT AUTHORITY
VS. ASSOCIATION OF MANAGEMENT STUDIES AND
30
ANOTHER – (2009) 6 SCC 171, he submits that though the terms
of the invitation tender cannot be open to judicial scrutiny because
the invitation to tender is in the realm of contract, a limited judicial
review may be available in cases where it is established that the
terms of the invitation to tender were so tailor-made to suit the
convenience of any particular person with a view to eliminate all
others from participating in the bidding process.
16. It is further argued that policy of the Government from
the point of view of public interest is to prohibit concentration of
economic power and to control monopolies so that the ownership
and control of the material resources of the community are so
distributed as best to subserve the common good and to ensure that
while promoting industrial growth there is reduction in social and
economic justice. In this connection, he has relied on the decision
of the Apex Court in UNION OF INDIA AND OTHERS VS.
HINDUSTAN DEVELOPMENT CORPORATION AND
31
OTHERS – (1993) 3 SCC 499. It is further contended that though
the Madras High Court has upheld the terms of the tender
notification, this question has not been considered by the said
Court. It is argued that discrimination based on person having more
number of trucks is unconstitutional. He has also relied on the
decision of the Apex Court in NATURAL RESOURCES
ALLOCATION, IN RE, SPECIAL REFERENCE NO.1 OF 2012
– (2012) 10 SCC 1 and has drawn my attention to different
paragraphs in this judgment.
17. It is further argued that Velumurugan had a complaint
filed against him for stealing of diesel. The first respondent despite
knowing that the said respondent had a complaint filed against him
has awarded the tender in his favour. Velumurugan and
Smt.Malarkodi are husband and wife.
32
18. Sri B.K.Sampath Kumar, learned Counsel submits that
FIR has been registered against respondent No.2. Despite the same,
he has been awarded the contract, which is not permissible in law.
In this connection, he has taken me through various clauses in the
tender document.
19. The contention of Sri Krishnaswamy, learned Counsel
for the petitioner in W.P.No.5074/2013 is that though there is a
recommendation to award the tender, allotment letter has not been
issued so far.
20. On the other hand, Sri Ashok Haranahalli, learned Senior
Counsel appearing for respondent No.1 submits that the petitioners
having submitted the bid cannot now challenge different clauses in
the tender. It is further submitted that if the applicants are
blacklisted then only they are barred from applying for the tender.
33
The procedure has been prescribed in the tender document for
blacklisting. Merely because FIR has been registered against some
of the respondents, will not bar them from participating in the
tender.
21. It is further argued that none of the conditions of the
tender are in violation of the fundamental rights of Part III of the
Constitution of India. The ranking procedures dealt by clause No.9
of Part B of tender evaluation in case for particular ranking, the
tank trucks offered are more than the requirement, then tenderers in
that particular ranking will be further ranked based on the orders of
priority. It is further argued that granting contract to tenderers
having highest number of 18/20/24 KLs are given preference in
case of tie in evaluation in the previous stage. This again to take
commitment of major and big operators who have invested more in
the high capacity tank trucks as compared to those who have
34
invested less in small capacity tank trucks ('TTs' for short) to say 12
KL capacity TTs. The granting of contract to tenderers, who
possess more trucks is to ensure commitment of tenderers in their
business to avoid malpractice as punishment for any malpractice
will be highly prohibitive and the same will also grossly improve
safety and administrative effectiveness as a promising business
proposition to the first respondent as all TTs of all L1 tenderers
cannot be accepted as the requirement for viable operation is 265
TTs as against 440 TTs offered by eligible L1 tenderers.
22. I have carefully considered the arguments of the learned
Counsel made at the Bar and perused the materials placed on
record.
23. It is settled that the Courts can scrutinise the award of
contract by the Government or its agencies in exercise of its powers
35
of judicial review to prevent arbitrariness or favouritism. However,
there are inherent limitations in the exercise of power of judicial
review in such matters. The Apex Court in TATA CELLULAR VS.
UNION OF INDIA – (1994) 6 SCC 651 has laid down the
principles with regard to the power of judicial review by the
Courts. They are as under:
“The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The Court does not sit as a Court of appeal but
merely reviews the manner in which the decision
was made.
(3) The Court does not have the expertise to correct
the administrative decision. If a review of the
administration decision is permitted, it will be
36
substituting its own decision,without the necessary
expertise which itself may be fallible.
(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 all administrative sphere or quasi-
administrative sphere. However, the decision must
not only be tested by the application of
Wednesbury principles of reasonableness
(including its other facts pointed out above) but
must be free from arbitrariness not affected by bias
37
or actuated by malafides.
(6) Quashing decisions may impose heavy
administrative burden on the administration and
lead to increased and unbudgeted expenditure.”
24. In DIRECTORATE OF EDUCATION VS. EDUCOMP
DATAMATICS LTD. - AIR 2004 SC 1962, the Apex Court has
held that the terms of invitation to tender are not open to judicial
scrutiny the same being in the realm of contract. The Government
must have free hand in setting the terms of the tender. It must have
reasonable play in its joints as a necessary concomitant for an
administrative body in an administrative sphere. The Courts would
interfere with the administrative policy decision only if it is
arbitrary, discriminatory, malafide or actuated by bias. The Courts
cannot strike down the terms of tender prescribed by the
Government because it feels that some other terms in the tender
38
would have been fair, wiser or logical.
25. In GLOBAL ENERGY LTD. AND ANOTHER VS.
ADANI EXPORTS LTD. AND OTHERS – (2005) 4 SCC 435, the
Court has reiterated the principles as under:
“10. The principle is, therefore, well settled that the
terms of the invitation to tender are not open to
judicial scrutiny and the Courts cannot whittle down
the terms of the tender as they are in the realm of
contract unless they are wholly arbitrary,
discriminatory or actuated by malice. This being the
position of law, settled by a catena of decisions of
this Court, it is rather surprising that the learned
Single Judge passed an interim direction on the very
first day of admission hearing of the writ petition
and allowed the appellants to deposit the earnest
money by furnishing a Bank guarantee or a Bankers'
cheque till three days after the actual date of
39
opening of the tender. The order of the learned
Single Judge being wholly illegal, was, therefore,
rightly set aside by the Division Bench.”
26. In ASSOCIATION OF REGISTRATION PLATES VS.
UNION OF INDIA AND OTHERS – 2004 AIR SCW 7074, the
Apex Court was considering the terms and condition of notices
inviting tenders for supply of high security registration plates to
motor vehicles. A contention was raised that the tender conditions
are discriminatory being aimed at excluding indigenous
manufacturers from the tender process. The Court held that the
State as an implementing authority has to ensure that scheme of
high security plates is effectively implemented. Keeping in view
the enormous work involved in switching over to new plates within
two years for existing vehicles of such large numbers in each
State, resort to 'trial and error' method would prove hazardous. Its
concern to get the right and most competent person cannot be
40
questioned. It has to eliminate manufacturers who have developed
recently just to enter into the new field. The insistence of the State
of search for an experienced manufacturer with sound financial and
technical capacity cannot be misunderstood. The terms and
conditions are so formulated to enable the State to adjudge the
capability of a particular tenderer who can provide a fail-safe and
sustainable delivery capacity. Only such tenderer has to be selected
who can take responsibility for marketing, servicing and providing
continuously the specified plates for vehicles in large number.
Capacity and capability are two most relevant criteria for framing
suitable conditions of any notices inviting tenders. The impugned
clauses by which it is stipulated that the tenderer individually or as
a member of joint venture must have an experience in the field of
registration plates in atleast three countries, a common minimum
net worth of Rs.40 crores and either joint venture partner having a
minimum annual turnover of atleast Rs.50 crores and a minimum
of 15% turnover of registration plates business have been, as stated,
41
incorporated as essential conditions to ensure that the manufacturer
selected would be technically and financially competent to fulfil
the contractual obligations, which looking to the magnitude of the
job requires huge investment qualitatively and quantitatively. The
Court has repelled the argument that the terms of notice inviting
tenders deliberately exclude domestic manufacturers and new
entrepreneurs in the field.
27. In M/S MICHIGAN RUBBER (INDIA) LIMITED VS.
STATE OF KARNATAKA AND OTHERS – (2012) 8 SCC 216,
the Apex Court has held that judicial review is not permissible with
regard to the Government contract in the absence of any malafides
or arbitrariness in the process of evaluation of bids and
determination of the eligibility of bidders.
28. A limited judicial review may be available in cases
42
where it is established that the terms of the invitation to tender
were so tailor-made to suit the convenience of any particular person
with a view to eliminate all others from participating in the bidding
process. In MEERUT DEVELOPMENT AUTHORITY''s case
(supra), the Apex Court has held as under:
“A tender is an offer. It is something which
invites and is communicated to notify acceptance. It
must be unconditional; must be in the proper form,
the person by whom tender is made must be able to
and willing to perform his obligations. The terms of
the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the
realm of contract. However, a limited judicial
review may be available in cases where it is
established that the terms of the invitation to tender
were so tailor-made to suit the convenience of any
particular person with a view to eliminate all others
from participating in the bidding process.”
43
29. This view has been reiterated by the Apex Court in
NATURAL RESOURCES ALLOCATION's case (supra).
30. It is also to be noticed here that the invitation to tender
impugned herein was a subject matter of challenge before the
Madras High Court in W.P.Nos.32166 to 32171/2012 (between SRI
NAVAJEVAN TRANSPORTS AND OTHERS VS. THE INDIAN
OIL CORPORATION LIMITED AND OTHERS). A learned
Single Judge of the said Court has dismissed the writ petitions on
1.3.2013. In the said case, even clause B(9) was also under
challenge. The contention has been negatived by holding as under:
“In so far as the petitioners, who have filed the writ
petitions praying for a writ of declaration are
concerned, I am of the view that they have no locus
standi to file these writ petitions now and they are
estopped from questioning the tender conditions as
arbitrary, not followed properly, etc., that too, after
44
participation in the tender process and failing to get
the contract. The petitioners after having read and
understood the tender conditions and signed and
sealed each page of the tender document challenge
the same after participation and failing to get the
contract. Further, the preferential treatment has a
meaning to ensure uninterrupted supply in the
public interest. RO Dealers/Direct Customers and
the petitioners are not equals and therefore, there is
no question of offending Article 14 of the
Constitution of India. RO Dealers/Direct Customers
are already under the control of the first respondent
Corporation and the same is not the case of the
petitioners who are just transporters. Therefore, it is
reasonable classification and the question of
discriminatory treatment does not arise.”
31. Therefore, the writ petitions challenging the various
clauses in the tender document have to fail on the ground that they
have participated in the tender process.
45
32. Be that as it may. I am of the view that condition B(9) is
not violative of the fundamental rights of Part III of the
Constitution of India. The ranking procedures dealt by Clause No.9
of Part B of tender evaluation in case of particular ranking, the tank
trucks offered are more than the requirement, then the tenderers in
that particular ranking will be further ranked based on the orders of
priority as elaborated therein. The Dealers/Direct Customers are
given preference over others as they are the total beneficiary of
tender to receive uninterrupted quality and quantity supplies in time
so as to supply to the customers and face competition in the
markets. They are the permanent feature of business
relations,unless any malpractice is committed by them. Hence,
utilizing their tank trucks and encouraging them in transportation is
highly essential to protect the supply of essential petroleum product
supplies from vagaries of en-route malpractices in quantity and
quality.
46
33. Maximum number of owned TTs offered is given with
next preference in the tender to promote transporters having more
number of owned TTs instead of depending on the TTs of the other
owners on attachment basis as the control over these TTs will be
more difficult and challenging and they are also not the direct
beneficiary. It involves the commitment of transporters as they own
more number of Tank Trucks in the contract. Maximum number of
TTs offered by the tenderer is given next preference in case of tie in
above evaluation to involve more commitment and for utilizing
their business acumen and commitment in the business as it was the
practical experience of the company that the tenders with less
number of TTs were indulging in malpractice and even if any
action is taken they are not much affected as affected by big
operators due to which the services of big operators are found to be
good. There is no merit in the contentions of the petitioners that
this clause is against public interest and has the effect of
concentrating economic power on some persons. Materials on
47
record would disclose that the contract has been awarded in favour
of several bidders, who satisfy the eligibility criteria. I do not find
any arbitrariness in the aforesaid clauses.
34. Coming to the other contention that since FIR has been
filed against Velumurugan, he should not have been granted any
contract and that his wife has also been granted the contract is
without any merit. It is needless to say that both of them had the
eligibility to apply for the grant of contract. The wife of
Velumurugan has been granted contract under the quota reserved
for Scheduled Caste and Scheduled Tribe. Velumurugan has been
ranked on the basis of the maximum number of owned TTs. It is
not the case of the petitioners that Velumurugan has been
blacklisted. The tender document provides procedure for the
blacklisting of the contractors. Mere filing of FIR does not amount
to blacklisting under the tender document. Therefore, the
48
contention of the petitioners that Velumurugan should not have
been granted the contract is hereby rejected.
35. In the light of the above discussions, I pass the
following:
ORDER
(i) W.P.Nos.1813/2013, 1814/2013, 1815/2013 and 2000-
2001/2013 are dismissed.
(ii) The Indian Oil Corporation is directed to consider the
case of the petitioner in W.P.No.5074/2013 for grant of licence in
accordance with law. This writ petition is disposed of accordingly.
36. In view of the disposal of the writ petitions as above,
I.A.Nos.3/2013, 4/2013 and 6/2013 in W.P.Nos.1813/2013,
1814/2013 and 1815/2013 and I.A.No.2/2013 in W.P.Nos.2000-
49
2001/2013 do not survive for consideration. They are accordingly
dismissed. No costs.
Sd/- JUDGE.
BMM/-