MANUFACTURERS OF PETROLEUM SPECIALTIES ASSOCIATION AND OTHERS Vs. UTTAR HARYANA BIJLI VITRAN NIGAM LIMITED AND ANOTHER

JUDGEMENT

(1.) The petitioners through the present writ petition filed under Articles 226/227 of the Constitution of India pray for quashing the impugned notice and the tender documents dated 5.10.2015, Annexures P.1 and P.2 respectively.

(2.) A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. Petitioner No.1 is a company licenced and registered under Sec. 8 of the Companies Act, 2013 (in short, "the Act") on June 13, 2014. Thereafter, it was incorporated under the provisions of the Act as a company limited by guarantee on July 24, 2014. Its main object is to promote and protect trade, commerce and industries in India and in particular trade, commerce and industries connected with petroleum specialty and lubricant products and/or specialty oils. Petitioner Nos. 2 to 5 are pioneers in the manufacture of petroleum specialty products, lubricant products and specialty oils including insulating oil in drums for transformers and switch-gears. They have been supplying Transformer oil (TO)/Insulating oil to customers in more than 75 countries including customers in the domestic Indian market such as various electricity boards, PGCIL, BHEL, ABB, Alstom, Siemens, Transformer Rectifiers etc. They have also been supplying the TO/insulating oil to several government undertakings all over India. Respondent No.1 is a government of Haryana undertaking which undertakes the power distribution and retail supply business in the northern parts of Haryana. It is registered under the Act and commenced its operations in July 1999 on inheriting the distribution business of the erstwhile Haryana State Electricity Board. It has issued 27,59,193 connections in various categories in the area under its jurisdiction. The petitioners are aggrieved by the condition in the notice inviting tender dated 5.10.2016, Annexure P.1 and the tender documents, Annexure P.2 which excludes all private sector companies from participating in the tender process. The said notice and the tender documents contain an oppressive clause "procurement of following material directly from PSUs only". According to the petitioners, respondent No.1 and the erstwhile HSEB used to buy TO/Insulating oil from the private players including the members of petitioner No.1 but for the past few years, orders were being directly placed on public sector undertakings without advertising the procurement openly. Previously, the private sector companies did participate in the tender process and were also successful suppliers to respondent No.1/HSEB. In fact, in 2012, respondent No.1 had floated a tender for supply of TO/Insulating oil when there was no restriction on participation by private players. In the said tender, petitioner No.2 quoted the lowest rates and was awarded the tender. Petitioner No.2 fulfilled the supply to respondent No.1 without any complaint whatsoever about quality. The petitioners assert that insertion of the impugned condition in the notice inviting tender and the tender documents is contrary to the mandate of the guidelines for determination of tariff by bidding process for procurement of power by distribution licenses issued by the Ministry of Power on 19.1.2005 and published in the Gazette of India. The underlying objectives and the principle of the competitive bidding guidelines is essentially promotion of competitive bidding, reduction of cost of procurement, price of electricity and benefit for consumers. Aggrieved by the impugned condition in the impugned notice and the tender documents, the petitioners are before this Court through the instant writ petition.

(3.) In the written statement filed on behalf of respondent Nos. 1 and 2, it has been inter alia stated that on the basis of the executive policy decision of the government with the purpose to cut short the procurement of time and to meet the regular requirement of transformer oil directly from the PSUs, the respondents floated the present tender restricting to PSUs only. The respondents followed the procedure for procurement of transformer oil directly from PSUs since 2013 and the petitioners never challenged the decision in the past and only for first time they have challenged the notice and the tender through association as petitioner No.1 who has no locus standi. With regard to the rate quoted by the petitioners in the year 2012, the chart Annexure P.2A with the petition shows that there is no substantial difference of price on account of quoting the lowest rates. Moreover, as regards the rates quoted by the petitioners, it is dependent upon the international market price of the crude oil. As per clause 7 of the terms and conditions of the bidders, the rates quoted shall be variable as per IEEMA price. On these premises, prayer for dismissal of the petition has been made.