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2013 DIGILAW 1000 (BOM)

Swapnil Ramesh Kaulgud v. Hindustan Petroleum Corporation Ltd.

2013-05-10

ANOOP V.MOHTA, MOHIT S.SHAH

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Judgment :- Anoop V. Mohta, J. Heard finally by consent of parties. 2. The Petitioner's application for grant of retail outlet dealership at Bedag MDR-44, rejected by respondent No.1, a Government of India Enterprise -Hindustan Petroleum Corporation Limited (HPCL) which decision was confirmed by the Grievance Redressal Committee/Authority by order dated 29 May 2012 and lastly by letter dated 2 July 2012. Therefore, present petition under Article 226 of the Constitution of India. 3. Both the respondents have filed their affidavits to oppose the petition. 4. The petitioner submitted an application for grant of dealership along with respondents 2 and 3, pursuant to a public advertisement read with the terms and conditions specified in the guidelines/policy issued by respondent No.1 which provides various tests and formalities for evaluation and allotment of marks. The guidelines provides for parameters; identification of location, mode of selection of dealers, eligibility and disqualifications criteria, multiple dealership norms, prescribed form, documents to be filed and various test and formalities for evaluation and allotment of marks. The types of retail outlet dealership and the basic requisite facilities which retail outlets should provide are also described, apart from procedure of interviews, norms for evaluating the candidates. 5. After scrutiny, inspection and interviews, respondent No.1 prepared a provisional merit list, based upon the marks obtained by the respective parties/candidates. Respondent No.2 got 95.20 marks and was shown at serial no.1. The petitioner got 91.85 marks and respondent No.3 got 93.40 marks. The provisional merit list provides for names of candidates, capability to provide infrastructure and facility, capability to arrange finance, educational qualification, capability to generate business, experience, business ability and acumen, future plans for growth, personality and lastly total marks secured and rank so provided. It is clear that respondent No.1 being the State, had to follow the basic requirement of due advertisement and after evaluating the merit as per the terms and conditions, granted the dealership, subject to completion of requirements like inspection of documents and the field investigation. 6. In the present case, the petitioner has challenged the action of respondent No.1 of awarding of zero marks on the sub-head of Tie up of sales volumes with prospective customers, clause of forms for evaluating the candidates. The other respondents were awarded five marks each for this. The petitioner's representation was also rejected by the impugned orders as referred above. 7. The other respondents were awarded five marks each for this. The petitioner's representation was also rejected by the impugned orders as referred above. 7. The learned counsel has basically raised this issue only and relied upon judgment dated 20 February 2008 passed by the Division Bench of Madhya Pradesh High Court, Bench at Indore, in W.A. No.2/2007 (Smt. Shobha Jaiswal vs. Hindustan Petroleum Corporation Ltd.). That was a case for allotment of retail outlet dealership, based upon the same guidelines for selection of retail outlet dealers. The Division Bench of Madhya Pradesh, after considering the grievance revolving around the marking under the caption “Tied up volume” has observed in paragraphs 9 and 12 as under:- “9. Learned counsel have not disputed that the eligibility/suitability of a candidate seeking Retail Outlet is just for the purpose of ensuring his capability to generate business, called a “tied up volume”. It is also not disputed for the purposes of adjudging the suitability, “tied up volume” is considered on the basis of the affidavits of the persons in the vicinity of the proposed Retail Outlet and on that basis the committee arrives at the conclusion about the capacity of the particular candidate to generate business, in addition to the suitability adjudged on the anvil of the other criteria. From the criteria, it is clear that capability to generate business and of sales potential is assessed on the applicant's ability to tap the sales potential for both MS and HSD through interview and production of documents including affidavits from prospective customers in support of the claim. 12. We may add that the affidavits filed from the residents of the area do not bind the residents to purchase quantity of the fuel from the proposed outlet and, therefore, apart from being a mere promise, no credence can be given to such affidavits which do not bind the persons who have sworn them. This apart, the affidavit produced by the candidates would enure to the credit of all candidates as they show that there is assured sale. Therefore, the selection has been made on the criteria which cannot be sustained.” 8. By allowing the petition partly, the direction was issued against respondent No.1 for fresh interview, but subject to the other selection criteria except not to give weightage to the affidavits filed by the candidates. Therefore, the selection has been made on the criteria which cannot be sustained.” 8. By allowing the petition partly, the direction was issued against respondent No.1 for fresh interview, but subject to the other selection criteria except not to give weightage to the affidavits filed by the candidates. It is also observed that the documents filed in support of the claim for capability to generate business should be taken into consideration. It is relevant to note that till the date of impugned orders, the special leave petitions filed by respondent No.1 against the above decision were pending; the status-quo order was passed. 9. By order dated 10 October, 2012 the Supreme Court disposed of those Special Leave Petitions without deciding the above issue by observing as under: “[ …... ] Accordingly, the special leave petitions are disposed of without going into the merits of these petitions, with a direction that respondent No.2 shall continue to operate the said outlet subject to her complying with the terms and conditions of allotment of the outlet. Needless to add that if there is an occasion for the first respondent to apply for allotment of a retail outlet, her application shall be considered sympathetically in accordance with the allotment Rules/Regulations.” 10. The learned counsel appearing for the petitioner, therefore, contended that in view of the above Division Bench judgment and as there was no interference by the Supreme Court, the view so taken binds and will have an effect throughout the territory of India. The reliance was placed on KusumIngots & Alloys Ltd. v. Union of India and another (2004) 6 SCC 254 ) for that proposition. This judgment of Supreme Court in KusumIngots (supra) is distinguishable on facts and circumstances itself. The constitutional validity was challenged under Article 226 of the Constitution of India. The order, therefore, so passed though in given facts and circumstances would have effect throughout the territory of India, but it is always subject to the applicability of the Act. We are not concerned with such constitutionality of any provision. 11. There was no challenge raised, at any point of time, by the petitioner to the terms and conditions of respondent No.1. We are not concerned with such constitutionality of any provision. 11. There was no challenge raised, at any point of time, by the petitioner to the terms and conditions of respondent No.1. On the contrary, the petitioner, knew that it was integrated part of evaluation of merit and the eligibility for any person to apply for such dealership; participated in the proceedings, as per the prescribed procedure and the practice so approved and followed by respondent No.1 since long. Let us, therefore, consider whether the grounds urged by the petitioner are so strong and the action of the respondent-authority so arbitrary that we should brush aside the submission of the respondent-authority invoking the principle of estoppel. 12. The law with regard to the power of Court under Articles 14 and 226 of the Constitution of India in respect of grant of Government contracts is quite settled. The basic principles are re-iterated in RaunaqInternational Limited vs. I.V.R. Construction Limited ( 1999(1) SCC 492 : AIR 1999 SC 393 ) by the Supreme Court in the following words: “After examining a number of authorities, the court concluded (at pp. 687-88 as follows: (The modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. 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 or quasi administrative sphere. However, the decision can be tested by the application of the “Wednesbury principle” of reasonableness and the decision should be free from arbitrariness, not affected by bias or actuated by mala fides. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” (emphasis supplied) 13. The Supreme Court has also observed in Monarch Infrastructure Private Limited v. Commissioner, Ulhasnagar Municipal Corporation ( AIR 2000 SC 2272 : 2000 (5) SCC 287 ) as under: “ [ ….. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” (emphasis supplied) 13. The Supreme Court has also observed in Monarch Infrastructure Private Limited v. Commissioner, Ulhasnagar Municipal Corporation ( AIR 2000 SC 2272 : 2000 (5) SCC 287 ) as under: “ [ ….. ] We may sum up the legal position thus: (i) The Government is free to enter into any contract with citizens but the court may interfere where it acts arbitrarily or contrary to public interest; (ii) The Government cannot arbitrarily choose any person it likes for entering into such a relationship or to discriminate between persons similarly situate; (iii) It is open to the Government to reject even the highest bid at a tender where such rejection is not arbitrary or unreasonable or such rejection is in public interest for valid and good reasons.” 14. It is relevant to note in the present case that the Grievance Redressal Committee of respondent No.1 by the impugned orders, after considering the rival contentions and the affidavits filed by the parties, dealt with them on merits and justified their action of giving particular marks as recorded above and also provided detail finding why zero marks awarded for Tied up volume to the petitioner. It noted the order and pendency of special leave petitions and in view of stay order not to be given effect to the Division Bench decision, at the relevant time. The same was confirmed by order dated 2 July 2012 by observing further that “the petitioner failed to establish the case that resulted into rejection of the complaint/various objections so raised by the petitioner on 5 January 2012”. The concerned authorities of respondent No.1, after hearing both the parties and considering the rival contentions, including the material placed on the record, had arrived at a particular conclusion and prepared the statement of merit and accordingly declared respondent No.3 at serial no.1. 15. Respondent No.1, as recorded in the affidavit, rejected the case and grievance of the petitioner, as pursuant to the clause of capability to generate business sub-head of “Tiedup volume” failed to comply with the eligibility criteria of furnishing proper and required documents, the concerned authority therefore awarded zero marks. 15. Respondent No.1, as recorded in the affidavit, rejected the case and grievance of the petitioner, as pursuant to the clause of capability to generate business sub-head of “Tiedup volume” failed to comply with the eligibility criteria of furnishing proper and required documents, the concerned authority therefore awarded zero marks. We are inclined to observe here that the terms and conditions so provided unless are declared invalid and/or non binding, respondent No.1's decision cannot be stated to be arbitrary, illegal and/or bad in law. No case is made out by the petitioner to interfere with the selection by respondent No.2, based upon the relevant data and the objective assessment. 16. There is no case made out of any arbitrariness and/or non-application of mind and/or malafide against respondent No.1. The Grievance Redressal Committee's decision, based upon the material available on record and the reason so provided, in no way can be stated to be arbitrary and/or unreasonable. We are inclined to observe that it is well within the frame work of the published guidelines and/or terms and conditions. The dissection of any item of prescribed norms of evaluation would affect whole prescribed assessment of merit of all. The acceptance of petitioner's case means re-scrutiny and granting marks only to the petitioner as an assessing authority for the first time in the writ petition. The Court cannot re-consider or re-evaluate all the items again for awarding the contract or for setting aside the orders as prayed. The sole ground so raised by the petitioner specifically with regard to “zero marks awarded for Tiedup volume”, even otherwise cannot be the reason to interfere with the action taken by respondent No.1, within the frame work of their declared guidelines. 17. The Division Bench judgment of Madhya Pradesh High Court, though not interfered with by the Supreme Court, now cannot be of any assistance to the petitioner as while disposing of those special leave petitions, clearly permitted respondent No.1 to proceed with the matter in accordance with the allotment rules and regulations. The disposal of special leave petitions itself cannot be stated to confirm the observation made by the Division Bench basically, in the present facts and circumstances, where the Grievance Redressal Committee, after considering the merits of the matter, by taking noting of the position of the relevant time, rejected the objections so raised by the petitioner. The disposal of special leave petitions itself cannot be stated to confirm the observation made by the Division Bench basically, in the present facts and circumstances, where the Grievance Redressal Committee, after considering the merits of the matter, by taking noting of the position of the relevant time, rejected the objections so raised by the petitioner. Even otherwise, the observation made by the Division Bench itself cannot be the sole reason to interfere with the decisions given by the Grievance Redressal Committee on all counts. We are further inclined to observe that in view of the settled position in law as quoted above and as the writ Court does not sit as the Court of appeal and as it does not have the expertise to correct the administrative decisions and/or substitute its own decisions and as respondent No.1 has acted within the frame work of declared policy, and the terms of tender/guidelines, being in the realm of contract, cannot be open to judicial scrutiny. 18. Therefore, taking overall view of the matter, no case is made out by the petitioner to interfere with the impugned decisions/orders. 19. Resultantly, the petition is dismissed. There shall be no order as to costs.