S. Varadhappa Gounder and Others vs State of Tamil Nadu and Others

A.R. Lakshmanan, J.—W.P. No. 20370 of 1993 has been filed by 40 persons, who are commonly and collectively aggrieved by the act of the Respondent who have suddenly refused to give work order in the light of the contract entered into between them and the Indian Oil Corporation Limited (hereinafter referred to as IOC), Bharat Petroleum Corporation Limited (hereinafter referred to as BPC) and Hindustan Petroleum Corporation Limited (hereinafter referred to as BPC) and Hindustan Petroleum Corporation Limited (hereinafter referred to as BPC). The writ petition has been filed for a mandamus directing Respondents 3 to 6 therein to supply the bulk petroleum products and. bitumen ex MRL, as the case may be, to all the approved contractors equally on equal terms upto the end of the contract period i.e., 31.1.1994 for transportation of the same to thee place mentioned in the work orders and direct Respondents 1,2 and 6 therein to accept the same.

W.P. No. 20371 of 1993 has been filed by 28 persons, who are also similarly placed like the Petitioners in W.P. No. 20370 of 1993 has been filed by 28 persons, who are also similarly placed like the Petitioners in W.P. No. 20370 of 1993. The prayer is also the same as in W.P. No. 20370 of 1993.

W.P. No. 21589 of 1993 has been filed by the Tamil Nadu Bitumen Tanker Lorry Owners Association represented by its President, which is a registered society under the Societies Registration Act. They also pray that the Respondents be directed to issue work orders based on the indents placed by Respondents 4 to 6 therein in favour of the members of the Petitioner association for transporting bitumen.

W.P. No. 1208 of 1994 has been filed by one R. Imayavaramban for a mandamus forbearing Respondents 1 to 6 therein from issuing any work order and/or delivery of the bulk bitumen to Respondents 7 to 13 without issuing any work order and/or delivery of bulk bituman to the Petitioner till the end of contract i.e., 31.10.1994.

All the Respondents have filed counter affidavits contesting the claim of the Petitioners in the respective writ petitions.

Since all the writ petitions raise a common question and since all the Petitioners are commonly and collectively aggrieved by the act of the respective Respondents therein, by consent of all parties, all the writ petitions were taken up together and arguments heard.

Facts in brief of the respective Petitioners for the disposal of all these writ petitions can be stated as follows:

W.P. No. 20370 of 1993: The said writ petition was filed by forty persons who are commonly and collectively aggrieved by the act of the Respondents. They have entered into a contract with Respondents 3 to 5 for transportation of bulk petroleum products, bituman ex MRL Madras depending upon the nature of contract with the Respondents. Some of the Petitioners have contract with IOC, while some of them have contract with BPC. The contract has been awarded to each and every Petitioner for the period from 1.2.1992 to 31.10.1994. In view of the contractual agreement entered into between the Petitioners and the respective Corporations, the Respondents 3 to 5 are duty bound to give work orders to all the Petitioners till the date of expiry of the contractual period. The Petitioners have invested a huge sum of money for the purpose of the abovesaid contract and they have also borrowed money for hire purchase or from the nationalised bank or from pritate parties to purchase the truck/trucks for the transportation. Respondents 3 to 5 being the Government of India Enterprises are expected to act fairly, reasonably and justifiably and they cannot pick and choose the contractors without notifying the proposal for contract to the members of the public and inviting them to be the contractors on fair terms. The Government of Tamil Nadu, the first Respondent herein has passed an order in G.O. Ms. No. 1473, dated 18.10.1993 approving the proposal of the Chief Engineer (Highways and Rural Works) in his letter dated 13.3.1993 and 15.9.1993 to permit the Divisional Engineers to convey bituman through approved transport contractors of the Oil companies without notifying tenders at the terms and conditions concluded by Oil industry along with the payment of price variation formula adopted by IOC for the period upto 30.9.1994. The grievance of the Petitioners is that the work orders are being issued to a very few individuals as per the directions of the Government of Tamil Nadu and that the Respondents 3 to 5 are refusing to allot works to the Petitioners and allow them to take the products and transport the same to the place mentioned in the work order. The letter dated 20.10.1993 from the fifth Respondent to the Chief Engineer, Highways and Rural Works, Chepauk, Madras would clearly indicate the mind of the Respondents 3 to 5, who have already decided to award contract in favour of a very few individuals mentioned by the Respondents 1 and 2. The Respondents cannot choose a very few approved Contractors among hundreds of approved Contractors. The Respondents being the public bodies cannot enter into any secret transaction. The choice of a few Contractors among the hundreds of approved Contractors is neither supported by any reason nor by any known norms of law. It was under these circumstances, the Petitioners have filed this writ petition for the relief stated supra.

W.P. No. 20371 of 1993: This writ petition has been filed about 28 approved Contractors, who are similarly placed as that of the Petitioners in the other writ petitions. Originally, the said writ petition was filed for impleading Respondents 7 to 13 who are the present Contractors and who were impleaded as Respondents 7 to 13 in the said writ petitions per the other dated 11.3.1994 made in W.M.P. NO. 3341 of 1994. Since the facts in this writ petition are similar to that of the other writ petitions, they are not adverted to in detail in this petition.

W.P. No. 21589 of 1993: This writ petition has been filed by Tamil Nadu Bitumen Tanker Lorry Onwers Association, represented by its President- S. Kandaswamy. This writ petition has been filed against some Oil Corporations and also against the Chief. Engineer, Office of the Chief Engineer and Rural Works and also the Highways and the Contractors in whose favour the contractors have now been awarded by the Respondents 4 to 6; Facts in this writ petition are also similar to that of the other writ petition. It is stated in the affidavit filed in support of this writ petition that as years rolled by, there was a very heavy increase in the intake by the Tamil Nadu State Government for Bulk bitumen and as such the number of transport operators considerably increased in the volume of vehicles for the transportation of bulk bitumen and as on date there are about 450 transport vehicles with a capacity of about nine tonnes each specially built only for transporting bulk bitumen which were pressed into service by the Respondents 1 to 3 for nearly a decade and that it is relevant to point that the entire transportation of bulk bitumen was done by the members of the Petitioners'' Association only to the Tamil Nadu State Government outlets and in the system of deliveries, there was no change at all. It is further stated in the affidavit that for each and every year the Respondents 1 to 3 were calling for the tenders and all the members of the, Petitioners'' Association will submit their respective tenders and the entire tenders were organised only by the first and second Respondents, that the third Respondent was giving work orders at the same rate fixed by the first and second Respondents, and that the usual procedure adopted till date by the first and second Respondents before conferring the tender was to negotiate the tender rates given by the various transport operators of the Petitioner''s Association and after negotiations fixed the rates in the ratio per ton per K.M. and the rate so fixed will be lesser than the official tender rates submitted by each and every one of the members of the Petitioner''s Association with the first and second Respondents. The members of the Petitioner''s Association were informed on 20.10.1993 by the Respondents 1 to 3 that the Tamil Nadu State Government authorities through the 4th and 6th Respondents asked the second Respondent to include seven groups of concerns who were not in trade for over a decade and these seven concerns were conferred contracts by the second Respondent at the same rate at which the members of the Petitioner''s Association rates were fixed after regular tenders and negotiations. Since the Respondents 1 to 3 are not honouring the contracts which is still in force till the end of October, 1994 by not conferring work orders to the members of the Petitioner''s Association, the second Respondent has sent a list of seven members to the Government of Tamil Nadu alleging that they are the approved contractors of Respondents 1 to 8. Respondents 7 to 13 whose names have been sent by the second Respondent to Respondents 4 to 6 as approved Contractors for transporting Bitumen are not approved Transport Contractors at all. They own only about 7 lorries compared to the 450 vehicles owned by the members of the Petitioner''s Association. Further, the Petitioner''s Association was plying 450 vehicles found the clock to cope with transportation. According to the Petitioner, public functionaries should be duty conscious rather than power charged. Its actions and decisions which touch the common man has to be tested on the touch stone of fairness and justness. In the present case, Respondents 7 to 13 have been shown arbitrarily as the approved Contractors, when in fact they are not. It is not known on what basis those Respondents 7 to 13 who never functioned as the transport carriers of Respondents 1 to 3 from 1980 onwards have been chosen as the approved Contractors for transporting bitumen. With these allegations, the Petitioner has come up before this Court for the issuance of a writ of mandamus, directing the Respondents 1 to 3 to issue work orders based on the indents placed by the Respondents 4 to 6 in favour of the members of the Petitioner''s Association for transporting bitumen from Respondents 1 to 3 to the consignees.

W.P. No. 1208 of 1994: The said writ petition has again been filed by another individual approved Contractor against the Respondents 1 to 13 who are parties to the other writ petitions, for the relief stated supra. The Petitioner is the Managing Partner of the partnership firm run under the name and style of ''Priya Transports'' at Tiruchirapalli. their main business is to transport goods for Government Departments and most of our transport of the goods to be moved from the Respondents 1 to 3. The lorry body for the purpose of transporting the said goods known as ''bulk bituman'' and the body for moving the said goods, has to be built in such a way to be fit and apt for transporting the said goods ''bulk bituman'' The lorry with the said specific body, the total cost of a lorry comes to approximately Rs. 5.25 lakhs. The Respondents 1 to 3 called for tenders from all the Transport Contractors like the present Petitioner for the purpose of transporting the goods ''bulk bituman'', as the said goods with the special tank so built for the movement of the said goods. In response to the abovesaid tender, the Petitioner has submitted his tender for his two lorries bearing Registration No. TAK 1969 and TN 45-B 2494, which are specially built to suit the transport of the said goods. A contract in favour of the Petitioner has also been awarded from 16.11.1992 to 31.10.1994. The Petitioner has also paid the due deposits Rs. 30,000/- for the due performance of the Transport contract for the said period for which the contract has been awarded to the Petitioner. The Petitioner has also referred to the order made by the first Respondent in G.O. Ms. No. 1473 dated 10.10.1993, approving the proposal of the Chief Engineer (Highways and Rural Works) in his letters dated 10.8.1993 and 15.9.1993 to permit the Divisional Engineers to convey the said goods through approved transport contractors of the Oil Corporations without notifying tenders at the terms and conditions concluded by the Oil industry along with the payment of price variation formula adopted by IOC for the period upto 31.10.1994. The Petitioner is given to understand that the Respondents 7 to 13 but for one all others are benami name lenders and are all owned by one person and it is being managed by an individual who is possessing very high political influence and with the help of the said influence, played a confident trick through the Respondents 4 to 6 whereby indirectly threatened the Respondents 1 to 3 that if the transport of the bituman in bulk is not done by the Contractors suggested/recommended by them, the purchase of bituman in bulk will not be done with the Respondents 1 to 3 at Madras and they the Respondents 4 to 6 may made their own arrangements to procure the same from elsewhere. The directions given by the Respondents 4 to 6 to their subordinates is illegal, unlawful and contrary to the principles of natural justice and in breach of contract with the Petitioner by the first Respondent. It is stated that the act of the Respondents bristles with arbitrariness which is the outcome of unguided and unfettered powers being violative of Articles 14 to 16 of the Constitution of India and without even hearing the Petitioner, the Respondents have started issuing work orders only to the Respondents 1 to 3. As a result the Petitioner and those who are similarly placed like the Petitioner and those who are similarly placed like the Petitioner are subjected to irreparable loss and hardship. Respondents 7 to 13 are the approved Contractors.

All the Respondents have filed separate counter affidavits. The Chief Engineer (Highways and Rural Works) has filed a separate counter affidavit in Writ Petition Nos. 20370 and 20371 of 1993 and in Writ Petition Nos. 21589 of 1993 and 1208 of 1994 respectively. According to the Chief Engineer (Highways and Rural Works), Madras the department is in possession of 4l Tanker Trucks and the transport charges are used to be billed and collected from the Department by the Oil Companies alongwith the cost of bitumen through Director General, Supplies and Disposals, Government of India. The Director General, Supplies and Disposal levy an inspection charge at 1 per cent including the transport cost. Both IOC and HPC Limited are maintaining a list of Transport Contractors. The contracts that have been entered into between the Petitioner and the Oil Corporations does not guarantee any minimum mileage for each tank truck per month nor do they guarantee the minimum number of tank trucks that will be utilised per month and no liability whatsoever shall be attached to the Corporation on account thereof. The Contractors shall not use the said tank trucks for any purpose other than for carrying out this agreement. The contract subsisting with the Petitioners and the Oil Companies only a running rate contract to be operated upon as and when the trucks are requisitioned by the Oil Companies. The Government is not a party to the contract concluded by oil companies with the Petitioners and the Petitioners cannot seek any relief in so far as the transactions of the Government with oil companies are concerned. The Chief Engineer (Highways and Rural Works) addressed the three oil companies by his letter dated 25.10.1993 requesting them to furnish the list of transport Contractors for bulk bitumen. The IOC by its letter dated 25.10.1993 furnished a list of nine Contractors among the large number of Contractors in the list. The HPC by letters dated 2.11.1993 and 3.11.1993 furnished a list of 57 transporters. The BPC furnished a list of 101 Operators. Several names of transporters are also finding place commonly in all the lists. There is no binding contract entered into by the Oil companies as to the minimum mileage during the duration of the agreement. The Government of Tamil Nadu is not a party to the contract and any proceedings sought to be initiated based on such a contract will not bind the Government of Tamil Nadu. If the Petitioners have got any grievance or dispute arising out of the contract concluded by them with oil companies, then the only remedy available to them is to refer the disputes for arbitration.

A separate counter affidavit has been filed by the Regional Manager of HPC in Writ Petition No. 20370 of 1993 and a common counter affidavit by the Regional Manager of HPC in Writ Petition Nos. 21589.of 1993 and 1208 of 1994 has also been filed. According, to them, they are not duty bound to give the loads to the Petitioner alone. There are several other Contractors for transportation of bulk bitumen with whom the Respondents have signed agreements. Even as per (sic)ment, the HPC is at liberty to appoint one or more additional Contractors either to run concurrently with the contracts or separately as per clause IV of the agreement. There is no guarantee for any minimum mileage for each truck or the minimum number of the Contractors that will be utilised. The loads are given depending upon the orders available and on rotation basis. The BPC has not cancelled the contractors with the concerned Petitioner or. Petitioners. It is the State of Tamil Nadu by its G.O. Ms. No. J473, dated 18.10.1993 wanted the bulk bitumen to be supplied by the respective oil companies on Ex. M-1 basis, wherein the respective oil companies have no volition, choice or say with regard to selecting or otherwise of the transport Contractors. Hence the allegation that the Respondent Corporation is selecting, choosing and fixing the Contractors without notifying the same is untenable, unsustainable and not maintainable. It is also submitted that at the request of the Chief Engineer, Highways and Rural Works, Madras HPC vide its letter dated 2.11.1993 furnished the names of some of the transport Contractors and the list so furnished by HPC was not exhaustive and it was categorically and specifically mentioned in the letter addressed to the Chief Engineer that a more number of approved transport Contractors would be furnished if they require the same. In fact by another letter dated 3.11.1993 addressed to the Chief Engineer an exhaustive list of transport Contractors have been duly furnished. It is incorrect to cast any aspersions and level any allegation against HPC, which has no role to play in selecting or choosing transporters for transporation of the said bulk bitumen on Ex. M1 basis. It is the concerned purchaser, who selects the name in all cases, where the product is sold on Ex. Ml basis.

A common counter affidavit by the Deputy General Manager of BPC has also been filed in Writ Petition Nos. 20370 of 1993 and in Writ Petition No. 1208 of 1994 raising similar contentions as that of the other oil Corporations. Respondents 7 and 8 have filed their separate counter affidavits in Writ Petition No. 1208 of 1994. According to Respondents 7 and 8 Writ Petition No. 1208 of 1994 is not maintainable either in law or on facts as being wholly misconceived and the subject matter of (W.P. No. 1208 of 1994) relating to the transporation of bitumen is not a statutory contract and therefore no writ petition is maintainable. Further, according to Respondents 7 and 8 the grievance of Petitioner is non issuance of work order which is solely based on the terms of the contract between the Petitioner and the oil corporations. NO writ petition is entertainable for breach of contract which can be compensated by means of damages and such remedy is available only in civil law. Hence the invocation of extraordinary jurisdiction of this Court for the breach of contract us unsustainable in law.

With regard to the other allegations made by the Petitioner that the action of the Respondents 4 to 6 and the work order issued in favour of Respondents 7 to 13, are not in accordance with law it is stated by Respondents 7 and 8 in their respective counter affidavits that there is no privity of contract between the writ Petitioner and the oil companies and that the writ Petitioner has absolutely no locus standi to question the action of the Respondents 4 to 6 and that they are at liberty to chose their own method of transportation through independent approved Contractors, as per the guidelines set out in G.O. Ms. No. 1473 dated 18.10.1993. According to Respondents 7 and 8 the writ Petitioner is only a contractor under IOC and they have already entered into separate agreements and transporting the bitumen from 4.11.1993 and hence there are no merits in Writ Petition No. 1208 of 1994 and the same is liable to be dismissed.

I have carefully considered the arguments of Mr. K. Alagiriswami, Mr. R. Thiagarajan, Mr. S. Ramasubramaniam, Mr. R. Krishnamurthi, learned Senior Counsel, Mr. M. Vellaiswami, Addl. Govt. Pleader, Mr. S.R. Sundaram and Mr. A. llango, Learned Counsel for the respective parlies.

Mr. K. Alagiriswami, learned Senior Counsel reiterated the contentions raised in the affidavits filed in support of the writ petitions. He is supported by Mr. R. Thiagrajan, learned Senior Counsel. The gist of the argument of Mr. K. Alagiriswami is, that the contracts have been awarded to the Petitioners, which is due to expire by 31.10.1994, and when the contract is still in force, in view of the contractual agreement entered into between the Petitioners and the Oil Corporations, the Oil Corporations are duty bound to give work orders to the Petitioners till the date of expiry of the contract period. He would submit that G.O. Ms. No. 1473, Public Works (HQ. l) Department dated 18.10.1993 has been issued by the Government at the request made by the Chief Engineer, Highways and Rural Works, Madras, and at the instance and collusion with the Oil Corporations.

Mr. R. Thiagarajan contended that when the contract is alive, the Oil Corporations cannot arbitrarily nominate Respondents 7 to 13 as approved contractors and make them available to the Slate of Tamil Nadu for transporting bitumen for the State Government. This act, on the part of the Oil Corporations is thoroughly unfair, unjust and arbitrary besides being mala fide and out of improper and corrupt motive to promote the interests of Respondents 7 to 13. Mr. K. Alagiriswami contended that the action of the State Government is contrary to the well established and well settled principles of State action being just, fair and reasonable. All these years viz., from 1980 onwards, the Oil Corporations invited tenders for transporting bitumen from oil companies to the destination of the consignees and having granted contract to the members of the Petitioner- association, cannot all of a sudden arbitrarily deviate from the said contract without any proper and valid reason. However, it is pointed out, that the choice of Respondents 7 to 13 as approved contractors, is totally unfair, wholly unjust and unreasonable besides violating the principles of natural justice. Ac-cording to the learned Senior Counsel Mr. R. Thiagarajan, public functionaries should be duty conscious rather than power charged and its actions and decisions, which touch the common man, have to be tested on the touch stone of fairness and justness. In the instant case, according to the learned Senior Counsel, Respondents 7 to 13 have been shown arbitrarily as the approved contractors when in fact, they are not. It is also not known on what basis Respondents 7 to 13, who never functioned as the transport carriers for the Oil Corporations from 1980 onwards, have been chosen as the approved contractors for transporting bitumen.

Mr. S. Ramasubramaniam and Mr. S.R. Sundaram have reiterated their stand taken in their counter-affidavits and submitted that the OU Corporations have submitted and furnished the names of some of the transport contractors at the request of the Chief Engineer, Highways and Rural Works by letter dated 12.11.1993. It is admitted in paragraph 18 of the counter affidavit filed in W.P. No. 20370 of 1993 that the list furnished by them is not exhaustive and it was categorically and specifically mentioned in the letter addressed to the Chief Engineer, that more number of approved transport contractors would be furnished if the Department require the same. In fact, by letter dated 3.11.1993, addressed by HPC to the Chief Engineer, Highways and Rural Works, Madras, an exhaustive list of transport contractors has been duly furnished. They have also reiterated that the oil Corporations have no role to play in selecting or choosing transporters for transportation of bulk bitumen on ex MI basis. Again, it is reiterated that the Oil Corporation are in no way connected or concerned with the nomination of the transport contractors when bulk bitumen is supplied on ex MI basis. It is entirely the sole and absolute discretion and right of the purchasers viz., the Chief Engineer, Highways, and Rural Works, Madras, through his designated officials like Divisional Engineers of various divisions under Tamil Nadu, to purchase bulk bitumen from any one of the oil companies and also to nominate any one of the transport contractors to convey, carry and deliverybulk bitumen when the supply is on Ex. M.1 basis. It is also denied that the Oil Corporations have chosen a very few contractors. The Learned Counsel appearing for the Oil Corporations would submit that the liability and responsibility of the Corporations ceases once a Sale is made and completed. The responsibility of the Oil Corporations ceases as soon as the product is moved out of their premises and acknowledgment given by the purchasers or their representatives, and that the purchaser is at liberty to take the goods at his own free will and volition. The purchaser is also at liberty to take it by any and every mode of transport through any transport of transporters of his choice.

Assuming for the sake of argument that the Respondents-Oil Corporations have no role play either in nominating, selecting, choosing or fixing the transport contractors for the State of Tamil Nadu as alleged, I fail to understand as to why and how the Oil Corporations have submitted only a Very few names. The letter sent by IOC dated Nil to the Chief Engineer, Highways and Rural Works, must be referred to in this context. It is seen from the said letter that pursuant to the letter of the Chief Engineer dated 25.10.1993, the IOC has sent a list of few transport contractors to the Chief Engineer, even though the IOC has a large number of approved contractors operating in the oil industry. In the last paragraph of the said letter it is stated that if the Chief Engineer requires further approved transporters, the IOC may be addressed in order to give a further list of the contractors.

Two things are very clean from the above letter of IOC. There are about 400 and odd contractors are operating for the three Oil Corporations for transporting bitumen from one place to the other including the supplies made by the Oil Corporations to the State of Tamil Nadu. This system was in vogue for a quite large time There is no dispute that all the contractors have entered into agreements with the respective Oil Corporations and their names have been included in the list of approved transport contractors. It is also not in dispute contractors with the respective Oil Corporations still subsists and is due to expire only by 31.10.1994. It is further seen from the above referred letter of IOC that they have a large number of approved transport contractors operating in the oil industry. However, IOC has furnished only a few transport contractors. I fail to understand as to why a few names alone have been picked by IOC and submitted those few names alone to the Chief Engineer. In my opinion, it raises a suspicion in the minds of this Court as to, why a few selected names alone have been furnished ignoring the persons who are already in the list of approval contractors and are functioning as transport operators for the three Oil Corporations for their customers including the State of Tamil Nadu, who is one of their customers.

It is asserted by Mr. R. Thiagarajan, learned Senior Counsel, that Respondents 7 to 13, whose names have been sent by HPC to Respondents 4 to 6 as approved contractors for transporting bitumen, are not approved contractors at all. The Learned Counsel for the three Oil Corporations are not in a position to deny this statement of fact. The list of approved contractors furnished to this Court only show other names as approved contractors and not the names of Respondents 7 to 13. It appears that the seven names (Respondents 7 to 13) have been approved by the Oil Corporations only in order to send their names alone to the State of Tamil Nadu. It is not known whether the procedure adopted by IOC in selecting the approved contractors is right or not.

At the time of hearing, an additional affidavit was filed in W.P. No. 1208 of 1994 stating that Respondents 7 to 13, though named differently, are owned by one and the same person and that while filing the writ affidavit, the Petitioner was not aware of the full and correct particulars. He has given the particulars in regard to the relationship between Respondents 7 and 13 in his additional affidavit.

It is seen from G.O. Ms. No. 1473, Public Works (HQ. 1) Department, dated 18.10.1993, that the Government have approved the Chief Engineer''s proposal to permit the Divisional Engineers to convey bitumen through approved transport contractors of the Oil Companies without inviting tenders on the terms and conditions concluded by oil industries along with the payment of price variation formula adopted by IOC for the period upto 30.9.1994. What prompted the Chief Engineer to submit the proposal to the Government to permit the Divisional Engineers to convey bitumen through approval transport contractors of the Oil companies without inviting tenders, is unknown Admittedly, all the approved contractors, who have been selected by the oil companies, are not before the Government for its selection. As metnioned earlier, though the approved contractors numbering about 400 and odd are available in the list of approved contractors with the oil companies, only a few names have been recommended to the Government of Tamil Nadu to employ them to convey bitumen. The proposal made by the Chief Enginer, Highways and Rural Works, to entrust the work to the approved contractors of the oil companies without inviting tenders, to some extent, is unerstandable if the Government have directd them to usbmit the complete list of approved transport contractors so as to give work to all the contractors by turn. Instead, only a few names have been furnished by IOC for the reason best known to them and also to the Highways ad Rural Works Department.

The stand taken by the Chief Engineer, Highways and Rural Works, in his counter affidavit is, only to avoid the payment of inspection charge at 1% to the Director General, Supplies and Disposals and since the Departmnt is in possession of 41 tanker trucks, the quantities required over and above that can be transported by the departmental tankers used to be delivered by the oil companies through their transport contractors. It is not disputed that by a joint tender, a common rate for transport charges is settled and operated upon by the three Oil Corporations. It is also staled that the Government is not a party to the contract concluded by oil companie with the Petitioners and that the Petitioners cannot seek a relief in so far as the transactions of the Government with oil companies are concerned.

Though it is stated that there are several instances of mal-practices like shortage of quantity, pilferage during transit and non-receipt of stocks at the destinations, etc., not a single instance has been pointed out against the approved contractors who have been operating for the State of Tamil Nadu through the three Oil Corporations all these years. Nothing prevents the Government of Tamil Nadu from accepting the entire list of approved transport contractors and allowing all of them to transport bitumen by turn, which alone will serve the public interst. Instread, the Highways and Rural Works Department has adopted a dubious process of obtaining a few names from the Oil Corporations and entrusting them with the work of transport of bitumen through those persons any. The reason appears to be obvious. When the contract work has been done by more than 400 and odd aproved transport contractors, I am unable to understand the stand taken by the Government as to how they thought it fit to enter into a contract with a few persons only. The conclusion of contract by all the Divisional Engineers with Respondents 7 to 13 initially upto 30.9.1994 cannot be a ground for requisitioning the services of those seven persons alone when more than 400 and odd approved transport contractors are available on hand.

It is also Stted that the seven contractors did not take part in the tender and their names were not found in the list of approved contractors when all the other contractors were selected. It is stated that though Respondents 7 to 13 are named differently, they are owned by one and the same person viz., Raj Ganesh, son of Raju Udayar, No. 10, C.S.I. Shopping Complex (now in Sakthi Complex), Kamarajanar Road, Attur, Salem District. The said Raj Ganesh is the owner of the 7th Respondent/Sakthi Transport. The owner allegedly for the 8th Respondent/Sree Sakthi Transports is one M. Rajamanickam, who is the nephew of the said Raj Ganesh. The 9th Respondent/Athur Gas Service Transport is owned by Raj Ganesh. The 10th Respondent/Seven Hills Corporation is also owned by a close relative of Raj Ganesh, the Petitioner could not exactly specify the relationship. The 11th Respondent/Prabhuraj Roadlines is stated to run in the name of the minor son of Raj Ganesh. The 12th Respondent/Sree Raghavendra Roadlines is owned by Raj Ganesh''s brother-in-law. The 13th Respondent/ Chinnamma Bulk Carriers is run in the name of Raj Ganesh''s mother by brother-in-law of Raj Ganesh. The Petitioner in W.P. No. l208 of 1994 filed an additional affidavit to the said effect and stated that the above facts are placed in the affidavit on the basis of the information gathered through reliable source. No affidavit by way of reply has been filed by the contesting Respondents.

Mr. R. Krishnamoorthi, learned Senior Counsel appearing for the contesting Respondents 7 and 8 would submit that Respondents 7 to 13 are the approved contractors and that the Petitioners cannot prevent their names being taken as approved contractors and entrust the work of transport of bitumen to1 them, He further contended that the subject matter of the writ petition relates to the transport of bitumen, which is not a statutory contract, and therefore, no Writ petition is maintainable. Further more, the grievane of the Petitioners is non-issuance of work order, which is solely based on the terms of the contract between the Petitioners and the Oil Corporations/Respondents 1 to 3. The learned Senior Counsel further states that no writ petition is entertainable for breach of contract, which can be compensated by means of damages and that such remedy is available in civil law. Hence, the invocation of extraordinary jurisdiction of this Court for breach of contract is unsust ainable in law. Concluding his argument, the learned Senior Counsel would submit that the Petitioner is a contractor under the Oil Corporations/Respondents 1 to 3 and therefore no Writ Petitioner has got lis against Respondents 4 to 13. Therefore, the substractum of the writ petition is wholly baseles as being totally misconceived and as such, the writ petition is liable to be dismised. It is further stated that Respondents 7 to 13 had already entered into agreement and transporting bitumen from 4.11.1993 and if the right of these Respondents is interfered with at this stage, great prejudice and monetary loss would be caused to them.

I am unable to accept the contention of the learned Senior Counsel Mr. R. Krishnamoor-thi. It is well settled by a catena of decisions of the Supreme Court that the discretin of the Government has been held to be not unlimited, in that, the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will. The Supreme Court in the decision reported in Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, has observed as follows:

It is unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or deial of some privilege...

Therefore, where the Government is dealin-with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licenor granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of larges including award of jobs, contracts, etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particualr case or cases, the action of the Government would be iable to be struck down, unless it can be departure was not arbitrary, but was based on some valid principle which in itself was nonirrational, unreasonable or discriminatory Where a corporation is an instrumentality or agency of Government it would be subject to some constitutional or public law limitations as Government. The rule inhibiting arbitrary action by Government must apply equally where such corporation is dealing with the public and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will. Its action must be in conformity with some principles which meets the test of reason and relevance. It is well established that Article 14 requires that State action must not be arbitrary and must be based on some rational and relevant principle which is non-discriminatory. It must not be guided by extraneous or irrelevant considerations. The State cannot act arbitrarily in entering into relationship, contractual or othrewise, with a third party. Its action must conform to some standard or norm which is rational and non- discriminatory.

In the decision reported in Kumari Shrilekha Vidyarthi and Others Vs. State of U.P. and Others, , the Supreme Court has held as follows:

Unlike the private parties, the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. It acterize all its actions, in whatever field, and not the nature of function, contractual Or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and resonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fallls within the domain of contractual obligations would not relieve the State of its obligation to company with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of their being any other right or obligation in addition thereto. An additinal contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitratiness at the hands of the State in any of its actions....

Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, the ultimte impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters....

Every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 and basic to the rule of law, the system which governs us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. Arbitrariness is anathema to State action in every sphere and wherever the vice percolates, the Court would not be impeded by technicalities to trace it and strike it down. This is the surest way to ensure the majesty of rule of law guranteed by the Constitution of India.

In the decision reported in Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries, the Supreme Court has observed as follows:

In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is ''fairplay in action''. Due observance of this obligation as part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non- arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.

Thus, as pointed out by the Apex Court, the Government in this case have not taken due care and caution in awarding the contract only to a few individuals, totally ignoring the lawful claims of hundreds of approved transport contractors, who are already occupying the field. The Government have, therefore, acted arbitrarily at is sweet will arid like a private individual and that the action of the Government is not in conformity with the standard or norm which is prescribed by the Supreme Court in several of its decisions. The Government have not exercised its discretion carefully but recklessly. Though the Supreme Court has held that the Government cannot give or withhold largess in is arbitrary discretion or its sweet will, the same thing has been done in the instant case. The action of the State is not at all in conformity with the principles of law, which meets the test of reason and relevance. It is not shown by the Government that the departure was not arbitrary. In my opinion, the non-inclusion or non-award of the contract to all the other approved transport contractors on the foils of the three Oil Corporations but only to a selected few is itself unreasonable arbitrary and discriminatory. Further, in my opinion, it should have been guided by extraneous considerations ignoring the lawful claims of hundreds of approved contractors. Therefore, I have no hesitation in allowing all the writ petitions.

For the fore-going reasons, all the writ petitions are allowed and the Government is directed to allot the work of transport of bitumen to all the approved transport contractors till the expiry of their contract with the Oil Corporations viz., upto 31.10.1994. The Oil Corporations are directed to forthwith forward the list of approved transport contractors on their rolls to the State to enable the State Government to allot work of transport of bitumen to all the transport operators in turns. There will, however, be no order as to costs.