Jagannathan and Sekar, A Registered Firm and Others v. Indian Oil Corporation Ltd.
1998-11-26
body1998
DigiLaw.ai
Judgment :- The Order of the Court was as follows : The respondent herein, the Indian Oil Corporation, floated a tender for transportation of the L.P.G. cyclinders. In that tender notice, the respondent put two conditions. They are : "(1) (V)" B "Clause 16-IOC LPG Distributors followed by IOC Resellers will be given priority for awarding of work. (ii) (VII) "E" Clause 8-IOC Distributors and IOC Resellers are exempted from payment of EMD. They should seek exemption in their letter head." The petitioners, who are the transport contractors, have challenged these two conditions on the ground that a discriminatory stand is taken by the Indian Oil Corporation which is the "State" in favour of its distributors and the resellers and this amounts to individious hostile discrimination against the general contractors as such. The petitioner would contend that this does not give a fair chance of competition for the petitioners as against the distributors and resellers. The petitioners further point out that the task of transportation of the Gas cylinders would be effectively and equally competently managed by the transporters also and, therefore, the Corporation the respondent herein, could not have tilted its scales in favour of the distributors and re-sellers. It is further pointed out that by exempting the payment of Earnest Money Deposit, the discrimination has crept in and it is complete injustice to the transporters-petitioners. 2. In their counter, the respondent-Corporation denies this. It is pointed out by the respondent that for the purposes of this contract, the retailers and distributors would form a class by themselves because they are the persons who are already dealing with the Company. The distributors and resellers having been in business with the respondent-Corporation and they already having their deposits with the respondents, it is pleaded by the respondent that the respondent was perfectly justified in not demanding the Earnest Money Deposits from them. They further pointed out that it is to ensure a better consumer service that the priority is to be given to the retailers and resellers because they are dealing with the commodity in question i.e., L.P.G. Cylinders.
They further pointed out that it is to ensure a better consumer service that the priority is to be given to the retailers and resellers because they are dealing with the commodity in question i.e., L.P.G. Cylinders. It is pointed out that they would be in a better position to know as to the stock position and as to the requirements and the movement of L.P.G. Cylinders to the various points; in that, the Corporation points out that there is nothing wrong if the priority is given to the resellers and the retailers. According to the petitioners, there is a clear cut clause carved out and the object of the agreement being the proper and efficient transportation of the L.P.G. Cylinders for consumers, the differentiation has a direct nexus with the object of the agreement. 3. In the first place, this is a matter regarding the tenders, in which normally this Court does not interfere particularly in its jurisdiction under Article 226 of the Constitution of India, unless there is something extremely unreasonable with the tender condition. Wednesbury's test of reasonableness has already been adopted by the Supreme Court in its celebrated judgment reported in (Tata Cellular v. Union of India) where the Supreme Court has explained reasonableness of tender conditions according to that test. In the light of present facts, it cannot be said that a preference given by the Corporation in favour of its retailers and resellers is grossly unreasonable in any manner. In fact, the concerned retailers and resellers have already their agreements regarding the retailing service of the distribution with the Corporation and as such they are the persons who would always be available to the resident for being controlled. The transport of the L.P.G. Cylinders has a direct nexus with the consumer services. In order to better the consumer services, if the Corporation requires the persons whose working style was already known and on whom they have a direct control, though in different ways, there is nothing unreasonable about it. Similarly, nothing can be said about the condition of the waiver and the Earnest Money Deposit. In fact, via agreements executed by the retailers and the distributors with the Corporation, the Corporation would always be having substantial deposits of the retailers and the distributors. Therefore, the exemption granted to them can be well understood.
Similarly, nothing can be said about the condition of the waiver and the Earnest Money Deposit. In fact, via agreements executed by the retailers and the distributors with the Corporation, the Corporation would always be having substantial deposits of the retailers and the distributors. Therefore, the exemption granted to them can be well understood. In view of this, the writ petition has no merits and must be dismissed and it is dismissed. Under the circumstances, there will be no order as to costs. W.M.P. Nos. 17509, 20237 and 20238 of 1998 are closed. Petition dismissed.