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Judgment
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]).â€
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 noncompliance 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.â€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.â€
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.â€.â€
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:
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.
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.
Hon’ble Minister has desired to issue necessary clarifications in the particularcase.
An action taken report may be sent to this Ministry at the earliest so that thecase 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.â€
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.