Sri. Rajib Lochan Das vs Indian Oil Corporation Limited & Others

SRI. RAJIB LOCHAN DAS ... PETITIONER VERSUS INDIAN OIL CORPORATION LIMITED & OTHERS

... RESPONDENT

For the Petitioner : Mr. Sakti Nath Mukherjee Mr. Saptangshu Basu Mr. Ayan Banerjee Ms. Debasree Dhamali

For the respondent no.5 : Mr. M.S. Yadav

For the respondent no.6 : Mr. Milan Bhattacharyya Mr. Dilip Kr. Chatterjee Ms. Mrinmoy Bhattacharyya

Heard on : 11.12.2017, 31.01.2018 and 14.02.2018.

Judgment on : 30th April, 2018.

ARINDAM SINHA, J.

Pursuant to notice by advertisement, published in newspapers on 21st January,

2014 inviting applications under Rajib Gandhi Gramin LPG Vitrak (RGGLV) Scheme,

petitioner had applied for award of LPG dealership under Other Backward Classes (OBC)

category for Singhee area in district Birbhum. As per the said notice, inter alia, an

applicant had to have available the sum specified as closing balance on the last date of

submission of applications notified by the advertisement or corrigendum (if any), which would be verified during field verification. By advertisement published on 23rd February,

2014 there was a corrigendum made to the said notice extending last date for submission

of applications to 24th March, 2014 from originally notified date 24th February, 2014.

The Oil Company informed petitioner he had qualified for draw. Petitioner was then

asked to send proof of having maintained a sum of Rs.4,00,000/-, being the sum

specified, in the account mentioned by him in his application till the last date of

submission of applications as per corrigendum, i.e. till 24th March, 2014. After first draw

he was informed that there would be re-draw consequent to cancellation of candidature of

selected applicant (first draw) during field verification of credentials. Re-draw would be

amongst remaining eligible candidates. Ultimately by letter dated 9th February, 2015

petitioner was informed that due to some administrative reasons the re-draw was kept in

abeyance.

Mr. Sakti Nath Mukherjee, learned senior advocate appeared on behalf of

petitioner. He submitted, petitioner had inquired in the matter and applied under the

Right to Information Act, 2005 for copies of applications submitted in response to the said

notice. His client came to learn that a Letter of Intent (LoI) dated 27th April, 2016 had been

issued to private respondent. Private respondent is the applicant who was selected in first

draw but whose candidature was cancelled during field verification of credentials.

According to him the candidature was correctly cancelled since the application of said

respondent did not meet the essential eligibility condition. There are several reasons why

the application was liable to be rejected. It was correctly rejected on the eligibility

condition not met as the said respondent failed to demonstrate in field verification of

credentials that she had available the sum specified as closing balance, on the last date of

submission of applications as in the corrigendum to the said notice, i.e. on 24th March,

2014.

He submitted, it would appear from letter dated 31st December, 2014 of the Oil

Company that it had received communication dated 5th December, 2014 from Hon'ble

Member of Parliament (Lok Sabha) regarding rejection of private respondent's application

on the ground of available balance not having been maintained. Under Secretary of

Government of India, Ministry of Petroleum and Natural Gas wrote letter dated 13th July,

2015 to the Oil Company requiring it to issue necessary clarifications in the particular

case of private respondent on the premise that a candidate who had requisite fund on the

last date of application as originally advertised and had submitted her application before

the said date, her application should not be rejected. Mr. Mukherjee submitted, private

respondent had submitted her application beyond originally notified last date. In any

event the requirement was to maintain as available balance the said sum on the last date

of submission of applications originally notified or per corrigendum, if any. Corrigendum

having been issued with regard to the last date, as extended till 24th March, 2014, all

applicants, to maintain their candidature, had to have available requisite balance as on

24th March, 2014. Any change of that position by reason of interference by Hon'ble

Member of Parliament or Government functionary would amount to change in rule of the

game after the game had started, which is illegal. For this submission he relied on a

decision of Supreme Court in the case of Monarch Infrastructure (P) Ltd. Vs.

Commissioner Olhasnagar Municipal Corporation reported in (2000) 5 SCC 287, in

particular to paragraph 12 therein. He relied on another judgement of the said Court in

the case of Bahadursinh Lakhubhai Gohil Vs. Jagdishbhai M. Kamalia and others

reported in (2004) 2 SCC 65, in paragraph 26 of which it was declared as follows:-

"It is also well settled that if any decision is taken by a statutory authority at the behest or on the suggestion of a person who has no statutory role to play, the same would be ultra vires. (Commr. Of Police v.Gordhandas Bhanji [AIR 1952 SC 16])."

He submitted further, the otherwise ineligibility of private respondent as an

applicant has also been demonstrated in the writ petition with supporting disclosures. He

had not argued otherwise ineligibility of candidature of private respondent since the question of eligibility regarding the aforesaid rule is a prior question to be decided. The Oil

Company in its affidavit did not deal with the other complaints and materials disclosed by

petitioner in that regard. He sought interference.

Mr. Yadav, learned advocate appeared on behalf of the Oil Company and submitted

on instructions that the application of private respondent was made on 28th February,

2014, i.e. in the period extended by corrigendum to the said notice. He produced the

original application to demonstrate the same to Court. On direction made, inspection of

the original application was allowed to both petitioner and private respondent.

Mr. Bhattacharyya, learned senior advocate appeared on behalf of private

respondent. He submitted, by the said letter dated 13th July, 2015 Government policy was

made known to, inter alia, the Oil Company. As such Bahadursinh Lakhubhai Gohil

(supra) had no application to the facts and circumstances of this case. Informing policy

decision to the Oil Companies regarding selection of successful tenderer cannot be said to

be a suggestion made by a person who has no role to play in the matter.

Petitioner should not be heard on his allegation that private respondent was

ineligible on failing to have the credential in respect of maintaining requisite available

balance. Referring in particular to paragraph 8 of the petition he submitted, on vague

allegation of petitioner possessing all required qualifications for getting distributorship of

LPG under the scheme, this Court should not came to his aid. Petitioner had not averred

specifically that he himself maintained balance of Rs. 4,00,000/- till the last date of

submission of applications as extended. For this he relied on two cases decided by

Supreme Court. Firstly, Punjab Financial Corporation and another vs. Garg Steel and

another, reported in (2010) 15 SCC 546 (2), paragraph 7 and secondly, Union of India

vs. R.Bhusal reported in (2006) 6 SCC 36, paragraphs 7 to 9.

Next submission was that the said term in the Notice Inviting Tender (NIT) was a

collateral term and it was up to the Oil Company to decide application thereof in its

wisdom. He relied on judgements of Supreme Court in the cases of Ramana vs. I. A.

Authority of India reported in AIR 1979 SC 1628 and Kanhaiya Lal Agrawal vs. Union

of India and others reported in (2002) 6 SCC 315, in paragraph 6 of which the following

was said:

"6. It is settled law that when an essential condition of tender is not complied with, it is open to the person inviting tender to reject the same. Whether a condition is essential or collateral could be ascertained by reference to the consequence of non- compliance thereto. If non-fulfilment of the requirement results in rejection of the tender, then it would be an essential part of the tender otherwise it is only a collateral term. This legal position has been well explained in G.J.Fernandez v. State of Karnataka."

In this connection he cited G.J.Fernandez vs. State of Karnataka & others reported in

(1990) 2 SCC 488 and IRCTC vs. Doshion Veolia Water Solutions (P) Ltd. and others

reported in (2010) 13 SCC 364.

Mr. Bhattarcharyya also relied on another decision of Supreme Court in Michigan

Rubber (India) Limited vs. State of Karnataka and others reported in (2012) 8 SCC

216, to paragraph 24 therein which is reproduced below:

"24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made in so arbitrary and irrational that the court and say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"? and

(ii) Whether the public interest is affected?

If answers to the above questions are in the negative, then there should be no interference under Article 226."

He submitted, decision of the Oil Company to issue LoI upon his client was made in a

contractual matter. The decision made by the authority was not mala fide or intended to

favour his client. The decision could not be said to be arbitrary or irrational. It could not

also be said that the decision was against public interest. Hence, there should be no

interference.

In reply Mr. Mukherjee also relied on Ramana (supra), on paragraphs 9 to 12 with

special emphasis on the extract in paragraph 10, which is reproduced below:-

"10.....This rule was enunciated by Mr. Justice Frankfurter in Vitarelli v. Section

(1959) 359 US 535: 3 L Ed 2d 1012 where the learned Judge said:

"An executive agency must be rigorously held to the standards by which it professes

its action to be judged. .... Accordingly, if dismissal from employment is based on a defined

procedure, even though generous beyond the requirements that bind such agency, that

procedure must be scrupulously observed. ....This judicially evolved rule of administrative

law is now firmly established and, if I may add, rightly so. He that takes the procedural

sword shall perish with the sword."."

The facts are that the controversy between parties relate to a term in the NIT.

Private respondent had filed connected application being CAN 7880 of 2016 in which was

disclosed letter dated 20th November, 2014 of the Oil Company to her. The said term in

the tender would appear from text of the said letter which is reproduced below:-

"We regret to inform you that upon field verification of the information submitted by you in your application mentioned above, the following variance was observed:

1. As declared in application Form, Balance as on last date of submission of application (24.03.2014) in Baroda bank (A/c. No. 39930100004209) in the name of candidate, Smt. Tandra Das was Rs. 4,00,000/- (rupees four lacs only) and as per verification by FVC Committee balance as on closing date of receipt of application (as per Corrigendum) is Rs. 20,000.00 as on 24.03.14.

Please refer to the 'Note' given under clause 10 of the application form which says:

Quote "Note: The amount declared above in each case must be available as closing balance on the last date for submission of application as specified in the advertisement or corrigendum (if any) and the same will be verified during Field Verification." Unquote"

The other relevant fact is that private respondent submitted her application as received by

the Oil Company on 28th February, 2014 i.e. in the period extended by corrigendum to the

said notice.

The above facts by themselves eliminate, from the controversy between parties, the

issue arisen by intervention of Hon'ble Member of Parliament (Lok Sabha) through Under

Secretary of Government of India, Ministry of Petroleum and Natural Gas by letter dated

13th July, 2015. The said letter was disclosed by the Oil Company and its text is

reproduced below:-

"It has been observed by Hon'ble MOS (I/C), PNG that the candidatures of the successful candidates have been rejected on account of lack of requisite fund in the bank account on the extended date of submission of application. One such case of Smt. Tandra Das for RGGLV in Dist. Birbhum, West Bengal has come to the notice of Hon'ble Minister wherein the applicant had the requisite fund on the last date of submission of application as was originally advertised. However, by way of corrigendum, the last date of submission of application was extended by one more month. Probably the applicant did not have any knowledge about the notice of the received last date of submission. The candidature of Smt. Das was rejected on the ground of non-availability of requisite funds on the last date of application as extended by the corrigendum, though the candidate had requisite funds on the last date as originally mentioned in the advertisement.

2. Hon'ble Minister feels that stand taken by OMCs is erroneous and not in public interest. In this case, there are two dates and both the dates need to be considered as originally advertised and as extended by the corrigendum. Eligibility should be considered with reference to both the dates. Therefore, if a candidate has requisite fund on the last date of application, as originally advertised and has submitted his/her application before the said date, his/her application should not be rejected. The act of rejecting such application by the OMCs is strictly not within the purview of natural justice. Similar provisions already exist in respect of selection of RO dealerships. Hence, extending similar benefits to be LPG distributorships guidelines should not be an issue.

3. Hon'ble Minister has desired to issue necessary clarifications in the particular case.

4. An action taken report may be sent to this Ministry at the earliest so that the case may be submitted for the perusal of Hon'ble MOS (I/C), PNG."

The facts of the case are at variance with what was noticed by the Hon'ble Minister. What

was felt by the Hon'ble Minster as conveyed by the Under Secretary is of no consequence

whatsoever. The Oil Company in its affidavit stated at paragraph 3t. as follows:-

"3t. That upon receipt of the said letter dated 13.07.2015, the Area Manager (LPG Sales), Durgapur Area Office was nominated by Deputy General Manager of the respondent company to conduct further field verification of the respondent no.6.

Pursuant thereto, a report has been submitted by the Field Verification Committee recommending that the respondent no.6 has fulfilled all the eligibility criteria. Accordingly, a letter of intent dated 27.04.2016 has been issued in favour of the respondent no. 6."

The issuance of LoI in favour of the private respondent acting upon receipt of the said

letter dated 13th July, 2015 was clearly wrong.

Contention of Mr. Bhattarcharyya that petitioner should not be heard since he

himself had vaguely alleged of possessing all required qualifications for getting

distributorship of LPG under the scheme without specifically averring that he had

maintained balance of Rs. 4,00,000/- till the last date of submission of applications as

extended, cannot be accepted. It appears, from letters written by the Oil Company to, inter

alia, petitioner and private respondent, procedure adopted by the Oil Company was to

require applicants to furnish proof of having maintained requisite available balance as on

24th March, 2014. Verification of such credential in respect of private respondent being

the successful candidate was undertaken after first draw. It is obvious that there was no

verification made of compliance by petitioner with this condition. It is also obvious that if

there would have been second draw the successful candidate's credential in this regard

would then have been verified by the Oil Company on field verification of credentials.

In Punjab Financial Corporation and another (supra) Supreme Court

emphasised that in cases where writ of Mandamus is sought, High Courts should be very

particular in finding out from the averments of the writ petition whether there exists

proper pleadings. In R.Bhusal (supra) Supreme Court found the High Court's

consideration of the writ petition and conclusion arrived at were beyond pleadings.

Petitioner here has sought Mandamus to cancel candidature of private respondent

including LoI issued to her and for consideration of case of petitioner as next eligible

candidate. Averments of petitioner in the writ petition caused disclosures in affidavits filed

by the Oil Company and private respondent, from all of which the facts could and have

been ascertained. There thus can be no doubt that pleadings in the writ petition are

proper for the purpose of notice of case and reliefs sought. In the circumstances Punjab

Financial Corporation and another (supra) and R.Bhusal (supra) do not come to the aid

of private respondent.

Whether a condition is essential or collateral can be ascertained by reference to the

consequence of non-compliance thereto. If non-fulfilment of the requirement results in

rejection of the tender then it would be an essential part of the tender, otherwise it is only

a collateral term. The above was declared by Supreme Court in Kanhaiya Lal Agrawal

(supra) drawing from the explanation in G.J.Fernandez (supra). The facts reveal that the

Oil Company itself rejected the tender of private respondent for non-fulfilment of the said

term. The Oil Company had set the term and attached the consequence of non-fulfilment

of it. As such there is no hesitation in finding that the said term was an essential

condition of tender. The Oil Company thereafter having issued the LoI on receipt of the

said letter dated 13th July, 2015 can well be said to have made a decision intended to

favour private respondent since, admittedly, the said respondent did not fulfil the said

term being an essential term of eligibility. The Oil Company being a public authority had

put a condition of eligibility to be fulfilled by every person submitting a tender. If in case of

any person this condition was not satisfied, his tender was ineligible for being considered.

The Oil Company being a public authority was bound to give effect to the condition of

eligibility set up by it and was not entitled to depart from it without rational justification. In Ramana (supra) V.Punnan Thomas vs. State of Kerala reported in AIR 1969 Ker 81

(FB) was referred to where it was said, inter alia, that -

"The Government, is not and should not be as free as an individual in selecting the receipts for its largess..."

Furthermore, when the facts in this case show that LoI had been issued to private

respondent who did not fulfil the eligibility condition, such an act of a public authority

affects public interest.

For the reasons aforesaid LoI dated 27th April, 2016 is quashed and the Oil

Company directed to proceed with holding re-draw as informed to petitioner by letter

dated 20th January, 2015. The re-draw must be held within a period of four weeks from

the date of communication of this judgment.

The writ petition is allowed as above.

(ARINDAM SINHA, J.)

Later 30.04.2018

Though this writ petition was listed for judgment on 22nd March, 2018 but it is

being delivered today as the parties are represented. Mr. Bhattacharyya, learned senior

advocate appearing on behalf of private respondent prays for stay of operation of this

judgment for two weeks. The prayer is considered and refused. The file containing

original application is returned to Mr. Yadav.

(ARINDAM SINHA, J.)