M/s. Shri Ram Motors vs Indian Oil Corporation Ltd. and Others

Arun Bhansali, J.—The present appeal has been filed by the unsuccessful petitioner, a proprietorship concern, in the writ petition filed before this Court seeking direction to the respondents to place its name in Price Bid of the tender issued by the Indian Oil Corporation Limited (''the Corporation'') for awarding contract of transportation of LPG Cylinders from Indane Bottling Plant, Bikaner. The petitioner also questioned a communication dated 03.04.2012 issued by the respondents informing M/s. Shri Ram Roadlines, Jodhpur, a partnership firm, that it had been placed on the Holiday list and debarred from entering into any contract with the Corporation for a period of one year, effective from the date mentioned in the said communication. The relevant facts, in brief, are that the respondent Corporation issued a notice inviting tender for awarding contract of transportation of Indane LPG Cylinders for the years 2012-14 from Indane Bottling Plant, Bikaner. The petitioner submitted the tender and after verification of documents through credential bid, the price bid was opened on 09.04.2012. However, the petitioner''s name did not figure in the list of successful tenderers, who were invited for negotiations. Assuming that after opening of the price bid, its name had not been included in the list of successful tenderers on account of the fact that the petitioner''s proprietor was partner in the said partnership firm M/s. Shri Ram Roadlines, which had been put on Holiday list; the petitioner-appellant filed the writ petition leading to this appeal questioning its non-inclusion in the tender process. Besides this, the petitioner-appellant also challenged the aforesaid communication dated 03.04.2012 putting the said partnership firm on Holiday list and debarring it from entering into any contract with the Corporation for a period of one year.

A reply to the writ petition was filed on behalf of the respondent Corporation and it was, inter alia, submitted that the proprietor of the petitioner concern Mr. Hariram Bishnoi was having 50% share in the partnership firm M/s. Shri Ram Roadlines, which had been placed on Holiday list and as the proprietor of the petitioner concern was having major share in the said partnership firm, the petitioner was not entitled for consideration of its price bid for the award of contract pursuant to NIT issued. The communication putting the partnership firm M/s. Shri Ram Roadlines, Jodhpur on Holiday list was also justified.

The learned Single Judge, after hearing the parties, though observed that the petitioner, a proprietorship concern, cannot be said to be aggrieved by the order putting M/s. Shri Ram Roadlines on Holiday list, but went on to examine its validity and came to the conclusion that the order dated 03.04.2012 passed by the competent authority of the Corporation, putting the said partnership firm on Holiday list for a period of one year, cannot be faulted with. The learned Single Judge also came to the conclusion that the action of the Corporation in treating the petitioner, a proprietary concern, on Holiday, because of its proprietor being the Managing Partner of the Firm M/s. Shri Ram Roadlines, which has been placed on Holiday list, was in consonance with the Guidelines and did not suffer from any illegality warranting interference by the Court under Article 226 of the Constitution of India. However, in the facts and circumstances of the case, the learned Single Judge left it open for the petitioner to make the representation to the respondent Corporation for removal of the bar and consideration of its tender for award of contract in view of the fact that no financial loss had been caused to the Corporation and there was a shortage of trucks offered by the successful tenderers. Aggrieved, by the order so passed by the learned Single Judge, the writ-petitioner has preferred this intra-court appeal.

Seeking to question the order aforesaid passed by the learned Single Judge, the learned Senior Counsel appearing for the appellant has strenuously argued that the finding arrived at by the learned Single Judge interpreting Clause 1.29.7.4 of Guidelines for Holiday list is against the express provision of the said Guidelines, inasmuch as, though the said Guidelines provide for implication on a proprietary concern being put on Holiday list, it does not provide for similar implication in case of a partnership firm being put on Holiday list and, as such, the judgment impugned deserves to be set aside and the writ petition filed by the appellant deserves acceptance.

The referred Clause 1.29.7.4, relevant for the present case, reads as under:-

The Holiday listing shall be party specific and when the party is put on holiday, all the offices of the party shall be on holiday for all locations of IOCL & for all Services/locations of the party. If the party placed on holiday, is proprietary concern, all the concerns of the same proprietor shall also be considered to be on holiday and if that proprietor is the managing partner of any firm, such firm shall also be considered to be on holiday. The Functional Director may however, if he considers this to be in the interest of the Corporation, remove the bar in respect of any specific service/location.

We have gone through the elaborate discussion made by the learned Single Judge and the findings arrived at on both the issues relating to putting the partnership firm on Holiday list and debarring the petitioner, a partnership concern, on account of bar on the said partnership firm, in which, petitioner''s proprietor was a partner having 50% share and are unable to find any infirmity or impropriety in the findings so arrived at so as to call for interference.

It is well settled principle of law that a firm or partnership is not a legal entity separate and distinct from the partners and a firm is only a compendious description of the individuals who compose the firm [see Munshi Ram and Others Vs. Municipal Committee, Chheharta, Therefore, once the partnership firm, M/s. Shri Ram Roadlines, was put on Holiday list by the order dated 03.04.2012, the petitioner, whose proprietor is admittedly a major partner in the said partnership firm, cannot escape the consequence of the said order; and the respondents cannot be faulted in debarring the petitioner from participation in the tender. The learned Single Judge has dealt with the contentions as regards interpretation of Clause 1.29.7.4 of the guidelines with reference to the facts of the present case in the following:-

Adverting to the clause 1.29.7.4 of the Guidelines, it is pertinent to note that the Holiday listing on the breach of conditions of contract is party specific and when party is put on Holiday, all offices of party shall be on Holiday for all locations of IOCL and for all Services/location of the party. Since, the firm has no legal entity and it is only collective name for its different members, and therefore, when a firm is put to Holiday list, the partners representing the firm also deserves to be considered on Holiday. There is yet another aspect of the matter, in terms of the said clause, if a proprietary concern is placed on Holiday, all the concerns of the same proprietor are considered to be on Holiday and if the proprietor is managing partner of any firm, such firm shall also be considered to be on Holiday and thus, there is no reason as to why the proprietary concern of the managing partner of a firm, which has been placed to Holiday list should also not be considered to be on Holiday. In this view of the matter, in considered opinion of this court, the action of the IOCL in treating the petitioner, a proprietary concern on Holiday inasmuch as, its proprietor who was a managing partner of the firm M/s. Sri Ram Roadlines, which has been placed on Holiday list, appears to be in consonance with the clause 1.29.7.4 of the Guidelines and does not suffer from any illegality so as to warrant interference by this court in exercise of its extra ordinary jurisdiction under Article 226 of the Constitution of India.

(Emphasis supplied)

We find ourselves in total agreement with what has been observed and held by the learned Single Judge. The firm being not a legal entity and only a collective name of its members, when the firm is put on a Holiday list, debarment would, ordinarily, operate on all its partners. Moreover, when the proprietor of the petitioner-firm is shown to be major share-holder and managing partner of the partnership firm that has been put on Holiday list, the petitioner-appellant can only be treated as on Holiday, rather as a necessary consequence.

The learned Single Judge has yet left it open for the petitioner to make representation to the respondent-IOCL for consideration of his tender. The matter being essentially of award of contract, when the respondent-IOCL was not shown acting with any mala fide or on any irrational principle, the order as passed by the learned Single Judge does not call for any interference. In view of the above, the appeal has no substance and the same is, therefore, dismissed in limine.