Partly allowed

Supreme Agencies, through Sole Prop. Subhash Ramchandra Sonawane and Ors. v. the Union of India, through Secretary, Ministry of Petroleum and Natural Gas and Ors.

Bombay HC29 Oct 2014WP/2073/2014

Case brief

AI extract

What is this about?

Petitioners challenged the arbitrary allocation of kerosene quota and eligibility criteria for LPG distributorships. The Court held that quota allocation is a policy decision and upheld the exclusion of partnership firms/companies, finding no malafide or arbitrariness in the guidelines.

What did the court decide?

Petitioners allowed to make a representation to the State Government on quota allocation; other prayers rejected.

Supreme Agencies, through Sole Prop. Subhash… — Service and Employment | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO.2073 OF 2014

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Supreme Agencies and others versus

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The Union of India and others

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...Petitioners.

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..Respondents.

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Mr. G.S. Godbole i/b Mr. Sumit S. Kothari for the Petitioners. Mr. A.S. Rao with Mr. Rajeev Chavan for Respondent No.1. Mr. V.P. Malvankar, AGP 'B' panel counsel for Respondent No.2. Mr. Minoo D. Siodia with Mr. Siddharth Shenoy i/b Rustamji & Ginwala for Respondent No.4.

CORAM : A.S. OKA &

A.S. GADKARI, JJ.

29^th October 2014.

P.C. :

The submissions of the learned counsel for the parties have been heard yesterday.

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The Petitioners are claiming to be kerosene dealers at different locations appointed by the Third to Fifth Respondents which are the petroleum companies. The Petitioners claim that initially they had entered into a contract or dealership for distribution of kerosene with the petroleum / oil companies. Subsequently the Government of Maharashtra took over the task of both distribution and allocation of kerosene quota in

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various districts. The challenge in this Petition under Article 226 of the Constitution of India is two fold. The first challenge is to the pattern of distribution of quota of kerosene adopted by the State Government. It is contended that the allocation of kerosene quota by the State Government to Pune District is unjust and arbitrary. It is contended that the quota which was originally allocated has been reduced. The second challenge in this Petition is to a part of guidelines issued by the petroleum / oil companies for selection of regular LPG distributors. Clause 6.2.3 deals with specific eligibility criteria for existing SKO dealers. Learned counsel for the Petitioners has confined the challenge to sub-clause (b) and part of subclause (d) of clause 6.2.3 of the said guidelines. The relevant sub-clauses (b) and (d) read thus :

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“b. SKO Dealers operating as a Partnership Firm or Society or Company are not eligible to apply.

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c. In case of allotment, the SKO dealer will have to surrender their SKO dealership prior to issuance of letter of appointment for LPG Distributorship.

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d. Age & Educational Qualification :

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Age: Maximum upper age limit – 60 years.”

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A relief is sought of the withdrawal of the relevant sub-clauses out of Clause 6.2.3 which are quoted above. Another prayer sought in this Petition is prayer clause (b) for enjoining the First and Second Respondents (Union of India and the State of Maharashtra) to reserve without any unreasonable conditions about 50% of the new LPG (domestic and

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commercial) distributorship coming up in future, for the existing kerosene dealers with a view to give an alternate business opportunity which would be a part of rehabilitation measure.

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The submission of learned counsel appearing for the Petitioners is that about the arbitrary allocation of kerosene quota, the Petitioners have made representations from time to time both to Union of India and to the State Government. He submitted that notwithstanding the said representations, the illegality has not been cured. His second submission is that the condition of eligibility fixed by the Third to Fifth Respondents in terms of sub-clause (b) of clause 6.2.3 of guidelines which provides that the SKO dealers operating as a partnership firm or a society or a company are not eligible to apply is illegal. His contention is that going by the eligibility criteria fixed under the guidelines, other non-individual applicants including the companies are entitled to apply for dealership. His submission is that there was no rational basis for excluding the kerosene dealers (SKO dealers) operating as a partnership firm, as a society or a company from the eligibility criteria for grant of regular LPG distributorship. He urges that the whole object is to exclude large number of SKO dealers who have already suffered because of the withdrawal of an adequate quota by the State Government. He urges that only in case of SKO dealers that the upper age limit of 60 years has been fixed. He submitted that a partnership firm of SKO dealers formed by individuals who are below 60 years are excluded by virtue of clause (b) and individual SKO dealers who are above the age of 60 years have been excluded. He

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urged that there was no rational basis for fixing the upper age limit for individual SKO dealers. As far as prayer clause (b) is concerned, learned counsel fairly stated that it may not be possible for him to press this prayer in view of the settled legal position.

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We have carefully considered the submissions. As far as the grievance regarding release of quota of kerosene by the State Government to kerosene dealers in Pune District is concerned, it is a matter of policy decision for the State Government. Therefore, it is for the Petitioners or their association to make a comprehensive representation to the State Government incorporating all grievances regarding the allocation of quota.

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The Third to Fifth Respondent companies issued advertisements for inviting applications for grant of contract of LPG dealership / distributorship. The guidelines for selection contain the eligibility criteria. Therefore, the scope of interference in writ jurisdiction with the eligibility criteria fixed by the Third to Fifth Respondent companies will be governed by the well settled rules regarding the scope of interference with the eligibility criteria in tender notices. There are several decisions of the Apex Court laying down the scope of interference with the eligibility criteria fixed in a tender. One of the recent judgments is in case of Michigan Rubber (India) Ltd. v. State of Karnataka¹ . The Apex Court held that scope of interference by a writ Court is very restricted. The Apex Court held that no person can claim a fundamental right to carry on

1 (2012) 8 SCC 216.

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business with Government. It was held that a greater latitude is to be conceded to State authorities in matters of formulating conditions of tenders and awarding contracts. It was held that interference by a writ Court is warranted only when the action of tendering authority is malafide and is a misuse of statutory powers. The Apex Court observed that Court would not interfere because it feels that some other terms in the tender would have been fairer, wiser or more logical. This was observed in the context of the fact that the qualification for the tenderers have to be laid down to ensure that a contractor has capacity and resources to successfully execute the work.

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As far as the guidelines for selection published by the Third to Fifth Respondents are concerned, different categories of Applicants are entitled to apply. Clause 6.1 lays down common eligibility criteria for all categories applying as individual. We must note here that clause 6.1 provides that the upper age limit for all individual applicants except individual applicants in the category of SKO shall be 45 years. However, in case of locations reserved under GP category, the upper age limit is prescribed as 60 years. Therefore, in case of all categories except GP, FF and SKO categories, the upper age limit in case of individual applicants is fixed as 45 years and only in case of SKO category and GP category, the upper age limit is fixed as 60 years. Therefore, it is obvious that the upper age limit fixed in case of individual SKO applicants, by no stretch of imagination, can be held to be arbitrary or irrational. Apart from category of individual applicants, there are various categories of eligible applicants for whom separate criteria is

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laid down. There is separate criteria laid down for government and public sector units known as GP. There is separate eligibility criteria laid down for the candidates belonging to Scheduled Caste, Scheduled Tribe and other backward classes. Clause 7.1 deals with eligibility criteria for registered co-operative societies / consumer societies applying for categories other than open category. Separate eligibility criteria is prescribed for non-individual applicants which is found in Clause 7.2.

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The separate eligibility criteria has been prescribed for different kinds of applicants. As a matter of policy, it is provided that SKO dealers operating as a partnership or a society or a company are not eligible to apply. Even in case of registered co-operative societies, all registered cooperative societies are not entitled to apply. Same is the case of every non-individual applicants such as organised bodies, societies, companies etc. Therefore, in our view, clause (b) cannot be said to be incorporated by misusing the statutory powers. By no stretch of imagination it can be held to be malafide. Therefore, the contention raised by learned counsel appearing for the Petitioner as regards both the sub-clauses which are applicable to SKO dealers viz. sub-clauses (b) and (d) of clause 6.2.3 cannot be accepted. Therefore, there is no merit in prayer clauses (b), ( c), (c-1) and (c-2).

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As far as prayer clause (a) is concerned, we permit the Petitioners or their association to make a representation to appropriate authority of the State Government. If such a representation is made, the appropriate

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authority of the State Government shall dispose of the same in accordance with law as expeditiously as possible.

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Subject to the above directions, the Petition is rejected.

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(A.S. Oka, J.)