K.K.NARAYANAN Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners, who are authorised dealers cum transporters of LPG cylinders, doing their business in northern districts of Kerala, are aggrieved by certain conditions fixed in the tender notification Ext.P1, in deviation from those fixed in the tenders notified on previous occasions.

(2.) As per Ext.P1 notification dated 30.10.2020, the 2nd respondent-the Hindustan Petroleum Corporation Ltd (HPCL), invited e-tenders under two bid system for award of LPG Cylinder contract for Ex-HPCL Mangalore LPG Bottling Plant by road for a period of 5 years with effect from 01.02.2021 to 31.01.2026. The tender due date and time was notified as 23.11.2020 at 14.30 and unpriced bid open date and time was notified as 23.11.2020 and 15.00. The work involved road transportation of packed LPG Gas Cylinders from the LPG plant at Managalore to HP Gas distributors/locations/customers within the State and outside the State through trucks. The petitioners state that LPG cylinders are distributed from Mangalore Plant of the HPCL to the districts of Dakshina Kannada, Uttara Kannada, Uduppi, Coorg, Hassan, Davangere, Shivamogga, Chikmagalur, Dharwad, Haveri, Belgaum and Karvar in Karnataka State and Kasaragod, Kannur and part of Kozhikode in Kerala State. It is stated that till Ext.P1 notification was issued, the tenderers from Kerala and those from Karnataka were being treated differently, taking note of various factors including requirement of national permit, distance from the plant, the expenditure etc. for transportation to the districts in Kerala; but in Ext.P1 notification they are treated as equals in a single unit. It is stated that in Ext.P2 notification issued by the 2nd respondent on 23.11.2015, inviting tenders for the ongoing 5 year period ending on 31.01.2021, the tenderers for transportation of LPG to the districts in Kerala and to the districts in Karnataka were classified separately taking note of the requirement of interstate/national permit, the expenditure towards toll charges @ Rs.280/- to the National Highway Authority, etc. It is stated that in Ext.P2 notification, there was sector wise price band; whereas in Ext.P1 there is a single sector with a single price band. In Ext.P2, separate rate was fixed depending upon the number of kilometers transported like: from 101 km to 150 km, from 151 km to 300 km and beyond 300 kms; on account of the revised terms in Ext.P1, tenderers from the Kerala State would be losers compared to those from Karnataka State where they do not require any interstate permit for transporting the cylinders to a number of districts in the State. It is stated that in Ext.P2 notification higher kilometer charges were given for lesser kilometer classification and lesser charges were given for higher kilometer classification. On the other hand, the classification based on kilometers is stopped in Ext.P1 and there is a single sector. Therefore, the petitioners point out that the transporters from Kasaragod district are further discriminated from others including those from Kannur and Kozhikode districts because of this. It is pointed out that the loading and unloading charges as well as salary of transporting crew would be the same irrespective of the distance/kilometer transported. Therefore, according to them, persons like the petitioners, who are distributors as well as transporters within 100 km to 300 km, are discriminated as against those having more round trip kilometers. It is stated that the decision taken by the HPCL dropping the sector wise rate system is unreasonable and arbitrary. It is further stated that the respondents are adopting issuance of a loyalty card by virtue of clause 14 of Ext.P1 tender and thereby they insist every transporter to fuel their vehicles only from their petroleum outlets which is in violation of their right to choose the fuel dealers and hence violative of Articles 14 and 21 of the Constitution of India. The further grievance is against the provision for imposition of penalty in case transportation crew resort to strike. According to the petitioners, right to form a trade union is a fundamental right of the employees and for the reason that the employees resort to strike, the transporters cannot be found fault with without any adjudicative process. Therefore, it is stated that clause 7.2.2.1 of Ext.P1 notification is bad in law. It is stated that on coming to know about the modified price bands, the 1st petitioner had as per Ext.P3 e-mail raised the grievance of the transporters. It is stated that though the respondents had as per Ext.P4 informed that their grievance would be considered, there was no such consideration before Ext.P1 notification was issued. The petitioners are therefore challenging the tender notification on the ground that by abolition of intelligible classification between the Kerala and Karnataka dealers, which was being adopted by the 2nd respondent even in the previous tender notification Ext.P2, the respondent Corporation has treated unequals as equals in violation of the fundamental right of the petitioners under Article 14 of the Constitution of India; the said classification is arbitrary and unreasonable.

(3.) The 2nd respondent has filed a counter affidavit refuting the contentions raised by the petitioners and objecting to the maintainability of the Writ Petition as against the provisions in a commercial contract. It is stated that the petitioners did not resort to the grievance redressal mechanism available under clause 37 of the general conditions of contract. According to them, there cannot be any interference as against the conditions fixed in a tender notification and it is not for the participants like the petitioners to dictate the terms of tender in order to incorporate conditions to suit their convenience; but it is for the tendering authority which is the master of the tender, to determine the conditions of tender in accordance with its needs and requirements. It is also stated that the petitioners do not have any fundamental right to do business with the 2nd respondent and there is no allegation of malafides. It is also stated that in case the petitioners are not satisfied with the terms of the tender, they would be free not to participate in the same. It is stated that the participants are given a price band for quoting for tenders; the distributors at different locations would be free to quote for the tender in this price band. It is stated that competitive bidding is a decision taken by the 2 nd respondent to have operations which are more economical for it. It is stated that the present toll charges, national/interstate permit charges, truck related costs, loading unloading charges, driver charges etc. are taken into consideration for the estimation of furnished rates as published in the tender to arrive at the combined rate for transportation within the State as well as Interstate transportation using a scientific model developed by the 2nd respondent. It is stated that the differential amount on account of any revision of existing toll charges/taxes or introduction of taxes/toll subsequent to the closing date of the tender would be re-imbursed. The participants are free to quote rates for each category as per clause 6(i) of the Special Terms and Conditions of Ext.R1(a). It is stated that the Mangalore Bottling Plant faced several logistic issues, based on sector wise classification in the previous tender, as the trucks in one State could not be used in other States hampering the operational flexibility at plants resulting in backlog of distribution of LPG cylinders to distributors which affected the customers. In the present tender notice, the sectors are combined with a view to achieve logistic convenience and improve operational efficiency of the bottling plants which would improve the supply of LPG cylinders to customers. It is stated that the HP Gas distributors participating as dealer cum transporters would continue to cater to only their own requirement of cylinders for their respective distributorship as per existing contract terms in the respective States where they are operating unless they participate with more number of trucks and submit their tenders as transporters. According to the respondents, there is no requirement of multiple distance sectors and merging of sectors is done by the Corporation with due diligence. Regarding the loyalty card it is stated that the tender notice is issued for transportation of packed cylinders of the 2nd respondent to the distributors of the 2nd respondent. As fuel retailing is also one of the major parts of the 2nd respondent's domain, tenders are floated to improve its over all profitability/market share in the business. It is stated that similar conditions were available in the previous tenders also. According to the respondents, participation in the tender is not mandatory for any of the existing transporters or distributors cum transporters. The public liability insurance cater to various needs like damages/injuries caused due to leakage of cylinders, resultant explosion etc. which are attributable to LPG being carried in the trucks, legal liability arising due to loss or damage caused to a third party or property by the motor vehicle, legal liability for actual and physical loss of or damage to consignment, loss of consignment in transit etc. It is stated that penalty has been imposed for strike by transportation crew in order to maintain discipline in LPG transportation since LPG is an essential commodity and its transportation is an essential service because general public will be put to serious prejudice on account of untimely strikes. Its transportation is essential and therefore strike by persons who engaged in it is prohibited by law.