Two writ petitions challenging the allocation of tanker lorries and the consequent Letter of Intent (LOI) issued by Bharat Petroleum Corporation Limited during a public tender. The High Court upheld the company's actions, dismissing the petitions for lack of arbitrariness, illegality, or malafide intention.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
MONDAY, THE 05TH DAY OF AUGUST 2019 / 14TH SRAVANA, 1941
WP(C).No.4120 OF 2019(L)
PETITIONER/S:
ST.ALPHONSA TRANSPORT, REPRESENTED BY ITS PARTNER, BIJU M.K., AGED 44 YEARS, S/O. KUNJIPAILAN, MADAPPALLY HOUSE, PALAYAMPARAMBU P.O., THRISSUR DISTRICT.
BY ADV. SRI.V.M.KRISHNAKUMAR
RESPONDENT/S:
1 CHIEF TRANSPORT MANAGER(RETAIL)SOUTH, BHARATH PETROLEUM CORPORATION LIMITED, RANGANADHAN GARDENS, 11TH MAIN ROAD, CHENNAI 600 040.
2 BHARATH PETROLEUM CORPORATION LIMITED, (IRIMBANAM INSTALLATION) IRIMBANAM, ERNAKULAM DIST. PIN 682 309, REP. BY SENIOR MANAGER (OM & S).
3 A.M. DAVID, ANAMTHURUTHIL HOUSE, CHITRAPUZHA, IRUMPANAM P.O., THRIPUNITHURA, ERNAKULAM DIST. PIN - 682 309.
5 S.R ENTEERPRISES, SHALOM BHAWAN, V.R PURAM P.O., CHALAKUDY, THRISSUR, PIN - 680 722 REPRESENTED BY MANAGING PARTNER - RAJU.
6 WHITE STAR TRANSPORT, REP. BY MANAGING PARTNER, JESMIN GEORGE, NH ROAD, KORATTY, THRISSUR DISTRICT, PIN 680 308.
W.P.(C) Nos.4120 & 4216 of 2019
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BY ADVS. R1 & R2 - SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.PAULOSE C. ABRAHAM SRI.KURYAN THOMAS R3 - SRI.P.SATHISAN SMT.ROHINI S KUMAR R5 - SRI.JOHN JOSEPH(ROY) SRI.C.G.ANTU R6 - SRI.G.SREEKUMAR (CHELUR)
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05.08.2019, ALONG WITH WP(C).4216/2019(B), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) Nos.4120 & 4216 of 2019
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
MONDAY, THE 05TH DAY OF AUGUST 2019 / 14TH SRAVANA, 1941
WP(C).No.4216 OF 2019(B)
PETITIONER/S:
VADAKKAN ROADWAYS, VADAKKAN HOUSE, GRANDWAY ROAD, CHALAKUDY - 680307, THRISSUR DISTRICT, REPRESENTED BY ITS MANAGING PARTNER, STALU SEBASTIAN.
BY ADVS. SRI.KALEESWARAM RAJ SRI.VARUN C.VIJAY KUM.A.ARUNA KUM.THULASI K. RAJ SMT.RIYA RAYMOL IYPE
RESPONDENT/S:
2 CHAIRMAN AND MANAGING DIRECTOR, BHARAT PETROLEUM CORPORATION LTD., SOUTHERN REGION-1, RANGANATHAN GARDEN OF 11TH MAIN ROAD, ANNA NAGAR WEST, CHENNAI-600 040.
W.P.(C) Nos.4120 & 4216 of 2019
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6 RAKSHIT HOSPITAL, 153 ARCOT ROAD, VALASARAVAKKAM, CHENNAI-600087, REPRESENTED BY MANAGING PARTNER.
7 WHITE STAR TRANSPORT, N.H.ROAD, KORATTY, THRISSUR - 680 308, REPRESENTED BY MANAGING PARTNER.
8 S.R. ENTERPRISES, 'SHALOM BHAVANA', B.R. PURAM P.O., CHALAKKUDY, THRISSUR-680722, REPRESENTED BY ITS MANAGING PARTNER.
BY ADVS.
R1 TO R4 - SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM
R5 - SRI.P.SATHISAN R7 - SRI.G.SREEKUMAR (CHELUR) R8 - SRI.JOHN JOSEPH(ROY)
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05.08.2019, ALONG WITH WP(C).4120/2019(L), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) Nos.4120 & 4216 of 2019
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C.R.
JUDGMENT
The captioned writ petitions are materially
connected in respect of the tender awarded by the Bharat Petroleum Corporation Limited (BPCL) for transportation of bulk petroleum products vis-a-vis allocation of vehicles. Therefore, I heard them
together and propose to deliver this common judgment.
partnership firm engaged in transportation business. Pursuant to invitation of tenders by the BPCL,
petitioner participated and placed a total number of 13 tanker lorries of 12 Kl, according to the petitioner, which are later model than many other tanker lorries placed by other tenderers. As per Clause H of Ext.P1
tender notification, the successful bidder will be required, before undertaking the contract, to sign an agreement within 15 days from the date of issue of Letter Of Intent (LOI). It is also stipulated that the
tenderers should physically place tanker lorries at the
location within 30 days of issuance of work
order/Letter Of Intent, and the tanker lorries shall be inducted after physical verification including the
W.P.(C) Nos.4120 & 4216 of 2019 6
engine, chassis numbers etc. It is also submitted
that, as per Clause H.1, the company is vested with powers to reject the induction of such tanker lorries in case of failure of tenderer to comply with the stipulations contained under Ext.P1 tender
notification.
tanker lorries provided by the petitioner, petitioner was awarded work order for 9 tanker lorries. The 3rd respondent was allotted with 5 tanker lorries of 12 Kl capacity along with the petitioner. Likewise, the 4th respondent was allotted with 5 tanker lorries of 18 Kl, the 5th respondent was allotted with two tanker lorries of 18 Kl capacity, and the 6th respondent was allotted with 11 tanker lorries of 12 and 18 Kl capacity. According to the petitioner, in violation of Clause 22 of Ext.P1, to sign the agreement within 15 days of
issuance of work order by placing the tanker lorries within 30 days of receipt of work order, the 3rd and 4th respondents had not submitted the bank guarantee or signed the agreement within 15 days of the date of issuance and receipt of the Letter Of Intent/work order. It is also the case of the petitioner that, the said date expired on 18.01.2019. Therefore, in view of
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Clauses 10 and 22 of Ext.P2 Letter Of Intent, the said
persons are not eligible and induction of their tanker lorries on any subsequent date should not be permitted, and it should be rejected.
had only produced one vehicle and another vehicle is of Maharashtra registration, which is not accepted by the 1st respondent, since it is violative of the tender conditions, consequent to the stipulation that the vehicles should be of Kerala registration. It is further submitted that, the 6th respondent though
entered into agreement within 15 days, they placed only 10 vehicles and one vehicle was not placed by them so far. Therefore, according to the petitioner, there should be a direction to respondents 1 and 2 to cancel the Letter Of Intent issued to respondents 3 to 6.
partnership firm registered under the Indian Partnership Act, 1932, and participated in the very same tender proceedings, and the petitioner was issued with Letter Of Intent for 16 vehicles, despite the
offer of 21 vehicles. The sum and substance of the contention advanced by the petitioner therein is that, petitioner is entitled to get the full work order on
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re-allocation, consequent to the failure on the part of respondent Nos.5 to 8 to comply with the conditions of tender notification as well as the Letter Of Intent.
Petroleum Corporation and its officers, refuting the allegations and claims and demands raised by the petitioners. According to the said respondents, the
tender process is complete in all respects, and the tanker lorries have already been inducted and since the petitioners are also running tanker lorries consequent to the Letter Of Intent issued, they cannot be said to be aggrieved in any manner. It is also submitted that, the terms and conditions of all Letter Of Intent/work order are identical as specified in Ext.P2, and on a perusal of Clause 10 of Ext.P2 will show that the Bank Guarantee and the Security Deposit are to be submitted within 15 days of receipt of Letter Of Intent/work orders, and in Clause 22 of Ext.P2, it is mentioned that the tanker lorries shall be physically placed within 30 days of receipt of Letter Of Intent/work order. It is also submitted that, the party respondent viz., A.M. David has received the Letter Of Intent on 02.02.2019 and submitted the Bank Guarantee on 05.02.2019 and signed the agreement. Likewise, M/s.
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Rakshith Hospital has received the Letter Of Intent on 19.01.2019 and submitted the Bank Guarantee within 15 days of receipt of LOI and signed the agreement as per the prescribed condition, and both those tenderers have submitted their tanker lorries for inspection within 30 days of receipt of LOI/Work order.
party respondent was allotted with 2 numbers of tanker lorries and have submitted both tanker lorries for induction. It is also submitted that, there is no bar in participating in tender with outside registered vehicle and the tenderer is required to change the registration once induction is complete. Therefore, M/s. S.R. Enterprises has fulfilled the tender conditions and there is no need of disciplinary action against them. So also, M/s. White Star Transport has submitted 9 tanker lorries for inspection, out of 11 tanker lorries for which LOI was issued. However, as per a communication dated 15.01.2019, the said tenderer expressed its inability to produce one vehicle, viz., vehicle bearing registration No.KL-64C-4284 due to vehicle damage on account of floods and confirmed that another vehicle No.KL-30E-7110 has met with an
accident. Therefore, action has been initiated as per
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Clause 23 of LOI/Work order for non-submission of 2
nos. of tanker lorries. Show cause notice has already
been issued and action is being initiated for nonsubmission of 2 tanker lorries. Later on, the said tenderer have further confirmed that they are not in a position to produce 8 nos. of tanker lorries, and accordingly, suitable action for non-submission was initiated against the said tenderer. Therefore, according to the official respondents, there is no manner of shortcomings on the part of the company for taking action in accordance with the provisions of the tender documents as well as the Letter Of Intent issued to the successful bidders.
petitioners, learned Standing Counsel appearing for the BPCL, and the respective counsel appearing for the party respondents, and perused the pleadings and the documents on record.
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“ 10 . Payment of Security Deposit will be Rs.8,00,000/- per contract for General Category & Rs.50,000/- per contract for SC/ST tenderers to be submitted in the form of Bank Guarantee as per the specified Performa provided in the tender document and should be valid up to 31.07.2024. SD to be submitted within 15 days from the date of receipt of LOI/Work order.
22 . Tank lorries should be positioned and tenderer/s will be required, before undertaking the contract, to sign the Agreement, within 15 days of the date of issue of the LOI/Work Order and should physically place the tank-lorries at the location within 30 days from the receipt of Work Order/LOI. The Tank lorries shall be inducted after physical verification, including verification of Engine & Chassis nos. etc. & compliance as per BPCL standard check list available at the BPCL location. In case of failure, BPCL will have the right to reject the induction of such tank-lorries.
23 . In the event of non-placement of Tank Lorry within 30 days post issue of LOI, the defaulters will be penalized as follows:
a. Full non-placement of Tank lorries - Forfeiture of EMD including putting transport vendor on holiday for five years.
b. Partial non-placement of Tank lorries-
i. Forfeiture of 1 lakh per lorry from SDmaximum up to SD amount.
ii. Withdrawal of LOI and cancellation of contract, if the full complement of the tank lorries allocated (even if one TL) but not placed by the transporter.
c. Withdrawal and non-replacement of TLs (including vehicles withdrawn after attaining maximum age): Forfeiture of 1 lakh per tank lorry from SD-maximum up to SD amount.”
that, the Bank Guarantee is to be submitted within 15
W.P.(C) Nos.4120 & 4216 of 2019
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days from the date of receipt of Letter Of Intent/Work order. As per Clause 22, tanker lorries should be positioned and the successful bidders will be required to sign the agreement within 15 days of the date of 'issue' of Letter Of Intent/Work order, and should
physically place the tanker lorries at the location within 30 days from the date of receipt of the Work Order/LOI, and in case of failure to comply with the stipulations contained thereunder, the company has the
right to reject the induction of such tanker lorries, and impose penalty in accordance with the terms and conditions of Clause 23.
learned counsel for the petitioners is that, the party respondents have failed to sign the agreement within 15 days of date of issue of LOI/Work order, and they have signed the agreement only after the date of receipt of LOI. However, learned Standing Counsel appearing for the Corporation as well as the party respondents have submitted that, all the party respondents have executed the agreement within the time period prescribed under the aforesaid clauses and from the date of receipt of the Letter Of Intent.
W.P.(C) Nos.4120 & 4216 of 2019
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across the Bar. As I have pointed out earlier, learned
counsel for the petitioners have put forth a contention that the tender documents that are specified to be signed under the Letter Of Intent was from the date of issue of Letter Of Intent and not from the date of
receipt of LOI. In my considered opinion, a successful bidder will not come to know about their selection
unless and until the LOI/Work order is communicated and received by them.
W.P.(C) Nos.4120 & 4216 of 2019
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entitled to seek cancellation of the tender.
meaning to the word issue employed thereunder.
Therefore, if the company has not so required, to sign the agreement within 15 days from the date of issue of LOI/work order, the tenderer is not liable to suffer any penal consequences. So much so, the intention behind the tender conditions is to implement and execute the terms and conditions of the tender in a reasonable, fair and appropriate manner and the look out of the company should only be to assign meaning to the words and expression with the intention of translating its requirement rather than clinging on to any expression or usage of an English word, overlooking the true spirit of the terms and conditions. This is exactly what the company has done.
successful bidders viz., White Star Transport having
not complied with the tender conditions, the company
has initiated action, and it is also submitted by
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learned counsel appearing for the said tenderer that
they have surrendered the contract. Moreover, the conditions contained under Ext.P2 shall be read as a whole, in order to gather the meaning for practical purposes. Accordingly, on a conjoint reading of Clauses 10, 22 and 23, it is clear that the successful tenderers are duty bound to carry out the stipulations contained thereunder on receipt of information from the company with respect to their selection. Therefore, on appreciating the factual circumstances put forth by the petitioners, it is clear that, there is no case for the petitioners that the party respondents have not executed the necessary documents and complied with the stipulations contained in the LOI, within the time period prescribed after receipt of LOI.
evaluation of a tender cannot be employed with the same force and strength, after the tender evaluation proceedings are over and the tenderers are identified. The rest of the actions are within the clear precincts of the company, and it is for the company to decide the course of action to suit its requirements and to regulate the business, and the petitioners have no business to interfere with the same, unless and until
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their LOI/Work order is interfered with, in any manner.
Which thus also means, even if the LOI/work order of the party respondents are terminated, it would not benefit the petitioners, since the company may have to go for fresh tender in order to attain transparency. To put it otherwise, no manner of prejudice is caused to the petitioners so as to have any cause of action to file these writ petitions, since I am of the firm opinion that the company has adhered to the tender norms, and the procedural formalities as per the Letter of Intent.
arbitrariness, illegality or malafides , justifying interference of this Court under Article 226 of the Constitution of India.
The writ petitions fail, and accordingly they are dismissed.
SHAJI P.CHALY
JUDGE
St/08.08.2019
W.P.(C) Nos.4120 & 4216 of 2019
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APPENDIX OF WP(C) 4120/2019
PETITIONER'S/S EXHIBITS:
| EXHIBIT P1 | TRUE COPY OF THE RELEVANT PAGE OF THE TENDER NOTIFICATION ISSUED BY BHARAT PETROLEUM CORPORATION LIMITED. |
|---|---|
| EXHIBIT P2 | TRUE COPY OF WORK ORDER DATED 03-01-2019 ISSUED BY THE BHARAT PETROLEUM CORPORATION. |
| EXHIBIT P3 | TRUE COPY OF THE INTERIM ORDER IN WP(C) NO. 9338/2018 DATED 27-03-2018. |
| EXHIBIT P4 | TRUE COPY OF THE ORDER SR.DGM. TPT.4 DATED 16-04-2015. |
| RESPONDENTS' EXHIBITS: |
|
| EXHIBIT R3(A) | TRUE COPY OF THE EMAIL DATED 22.01.2019 SENT BY 1ST RESPONDENT TO THIS RESPONDENT. |
| EXHIBIT R3(B) | TRUE COPY OF COURIER RECEIPT DATED 22.01.2019 SENT TO THIS RESPONDENT. |
| EXHIBIT R3(C) | TRUE COPY OF HARD COPY OF LOI WITH DATE OF RECEIPT DATED 02.02.2019. |
//TRUE COPY//
P.S. TO JUDGE
St/-
W.P.(C) Nos.4120 & 4216 of 2019
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APPENDIX OF WP(C) 4216/2019
PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE REGISTRATION OF THE FIRM DATED 10/02/2017 ISSUED BY THE REGISTRAR OF FIRMS IN THE NAME OF 'VADAKKAN ROADWAYS'.
EXHIBIT P2 TRUE COPY OF THE RELEVANT PAGES OF TENDER FORM DATED 24/04/2018.
EXHIBIT P3 TRUE COPY OF THE WORK ORDER DATED 03/01/2019 ISSUED TO THE PETITIONER.
RESPONDENT'S/S EXHIBITS:
EXHIBIT R5(A) TRUE COPY OF THE E-MAIL DATED 22/01/2019 SENT BY 1ST RESPONDENT TO THIS RESPONDENT.
EXHIBIT R5(B) TRUE COPY OF COURIER RECEIPT DATED 22/01/2019 SENT TO THIS RESPONDENT.
EXHIBIT R5(C) TRUE HARD COPY OF LOI WITH DATE OF RECEIPT DATED 02/02/2019.
//TRUE COPY//
P.S. TO JUDGE
St/-
3 issues framed by the court
Whether the writ court can interfere with the tender evaluation proceedings and actions taken by Bharat Petroleum Corporation Limited after the tender period has concluded.
Whether the delay by successful bidders in signing the agreement from the date of "issue" versus "receipt" of the Letter of Intent constitutes arbitrariness or illegality.
Whether the non-compliance by some tenderers justifies reallocating contracts to the appellant or cancelling the Letter of Intent issued to others.
ST. ALPHONSA TRANSPORT
DAHAKKAN ROADWAYS
BHARATH PETROLEUM CORPORATION LIMITED
A.M. DAVID
RAKSHITH HOSPITAL
WHITE STAR TRANSPORT
SHAJI P. CHALY
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
