W.P.(C)/8776/2014 of BARODA ROAD TANKERS & ANR. Vs DEPUTY GENERAL MANAGER-LPG NORTH ZONE HINDUSTAN PETROLEUM CORPORATION LTD & ORS.

IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 23.12.2014Pronounced on: 06.01.2015

W.P.(C) 8776/2014, C.M. NOS.20152-20153/2014

BARODA ROAD TANKERS & ANR.

..... Petitioners

versus

DEPUTYGENERALMANAGER-LPGNORTHZONEHINDUSTAN PETROLEUM CORPORATION LTD & ORS.

..... Respondents

+W.P.(C) 8435/2014, C.M. NO.19492/2014

MR. RAJESH MALIK & ANR.versusUNION OF INDIA & ORS.

..... Petitioners

..... Respondents

W.P.(C) 8568/2014, C.M. NOS. 19774/2014 & 20119/2014

M/S. THAKUR BALWAN SINGH

..... Petitioner

versus

UNION OF INDIA & ORS.

..... Respondents

Through:Sh. Yashank Adhyaru, Sr. Advocatewith Sh. Naman Joshi, Advocate, for petitioners inItem No.2.

Sh. Jasmeet Singh, CGSC, for UOI in Item No.2.

Sh. Rajat Navet with Sh. Kushagra Pandit and Sh.Rohan Yadav, Advocates, for IOC/BPCL in ItemNos. 2 to 4.

Sh. A.K. Singh, Sr. Advocate with Sh. RahulShukla, Advocates, for petitioner in Item No.4.

Sh.RikeshSinghandSh.NakulPathania,Advocates with Sh. T.S. Cheema, Sr. Manager,LPG Distribution (NZ), HPCL, for Resp. Nos. 1and 2 in Item No.2; for Resp. No.3 in Item No.3and for Resp. No.3 in Item No.4.

Sh. Sandeep Sethi, Sr. Advocate with Sh. AyushAgrawal and Sh. Shaan Mohan, Advocates, for thepetitioners in Item No.3.

Sh. Sanjeev Narula, CGSC with Sh. Ajay Kalra,Advocate, for UOI in Item No.3.

Sh. Yeeshu Jain and Sh. K.S.M. Vimal Kanth,Advocates, for LAC, for Item No.3.

Ms. Suparna Srivastava, CGSC with Ms. NishthaSikroria, Advocates, for respondents in Item No.4.

CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE VIPIN SANGHI

MR. JUSTICE S. RAVINDRA BHAT

1.These three writ petitions involve adjudication on common issuesarisingfromthesamefacts,i.e.interpretationoftenderno.

LPG/LOGS/TT/ER/2014/A dated 01.09.2014 issued jointly by the threecontesting respondents – hereafter referred to conveniently as “the oilmarketing companies”. The petitioners in W.P.(C) 8776/2014 argue that therejection of their bids on the ground that the mismatch between the primemover capacity and the trailer capacity made the bid non-conforming, isarbitrary. The petitioners in this writ petition are referred to compendiouslyas “the Baroda group”. The petitioners in W.P.(C) 8435/2014 (hereaftercalled “the Malik Group”), on the other hand, assert that the oil marketingcompanies should strictly follow the tender conditions and reject the tankercontracts (TTs) which do not conform to the prescribed specifications. Theyseek consequent directions for quashing of actions taken towards acceptingbids which are not in conformity with the tender specifications, so far. Thewrit petitioners in the third group, i.e. W.P.(C) 8568/2014 (hereafter called“the Balwan Singh group”) seeks directions to the oil marketing companiesto reject the tenders submitted by the bidders quoting LPG tank trucks of 18MT capacity attached with prime movers/trucks of 4018/4019 modelcoupled with two axle trailer. In addition, they seek rejection of bids of twotenderers who applied in the SC/ST quotas with certificates which weremore than year old calculated from the date of the tender advertisement.

2.Through common advertisement, three the respondents, i.e.,(hereafter called "the oil marketing companies" consisting of Indian OilCorporation Ltd ("IOCL"); Bharat Petroleum Corporation Ltd (BPCL) andHindustan Petroleum Corporation Ltd (HPCL) invited electronic bids fortransportation of bulk Liquefied Petroleum Gas ("LPG") by road. The

electronic bids (e-tenders) invited consisted Two-Bid system from bona-fide bidders, willing to quote rates fulfilling advertised conditions, i.e.:

1. Owning at least One Bulk LPG / PROPANE tank truck ("TT") as onclosing date of tender.

2. The age of the tank truck quoted being not more than 15 years as on31.10.2014 from the date of first registration.

3. Tank Truck quoted possessing valid license from Petroleum ExplosivesSafety Organization (PESO) as on closing date of tender.

3.The tender was advertised for Region/Zone wise requirements of theOil Marketing Companies; the interested bidders had to quote rate for theRegion / Zone as well as for each Company of their choice. Bidders had tomeet the minimum qualification criteria, of the tender to participate in theprocess. However, induction of TTs was to be based on evaluation criteria ofthe tender. Furthermore, bidders had to upload particulars of all TTs offered,according to prescribed format - in terms of Annexure-II at the time ofsubmission of the e-tender. The TTs had to lift (pick up) the product fromany or allof the sources of bulk LPG for transportation of bulk LPG by roadin tank trucks, from loading locations as mentioned in the tender ( Price bidand technical bid ) to all bottling Plants/Customers ( Ex- MI / Delivered ) ofthe Oil Marketing Companies as well as for stock transfer of Auto LPG fromsupply sources to Bottling plants during the contract period. The contractswere to be valid for three years with effect from 01.11.2014 and extendablefor two more years at the sole discretion of the Corporation(s) at the sameterms and conditions. The tender provided for yearly escalation of 3.25 %

for the 4th year & 5th year on the non fuel component of the applicable rate(maximum 50% of rate) with formula mentioned in clause No.33 ofContract Agreement. The bidders offering single ready owned truck couldoffer one proposed owned truck and bidders offering more than one readyowned trucks could offer maximum two proposed owned trucks of licensedcapacity of minimum 17 MT and above except for specified sectors.

4.Proprietorships, partnership firms as well as other juristic entitiescould participate and submit bids. Furthermore, reservation was permitted infavour of Scheduled Cast/Scheduled Tribe applicants. The condition withrespect to the specification of TTs, contained in Clause 11 of the GeneralTerms and Conditions, stated that:

"11. SPECIFICATION OF TANK TRUCKS:

The tank trucks offered against this tender should conform to thespecification mentioned in Motor Vehicles Act, as applicablefrom time to time and be equipped to transport bulk LPG andshould conform to the following:

a) (i) Tank Trucks expected to be inducted for movements fromMumbai/ BPCR/HPCR, should not be more than 8 years old ason 31.10.2014.

For this purpose BPCL Western Region will be requiringminimum 50 trucks which are not more than 8 years old as on31.10.2014, HPCL Western Zone will be requiring minimum 274trucks which are not more than 8 years old as on 31.10.2014.The bidders are required to offer trucks accordingly for meetingabove requirement. In case sufficient number of such tank trucksare not received in this tender, Corporation may either requestthe Bidders for replacement of the offered trucks to meet theabove requirement or take suitable measures to meet suchrequirement. IOCL Eastern Region will be requiring minimum16(sixteen) Tank Trucks ( fixed chassis) having capacity upto 14

MTs. HPCL Eastern Region will require minimum 20 tank truckshaving capacity upto 12.5 MTs and 20 tank trucks havingcapacity upto 7.5 MTs. M/s HPCL, Northern Region wouldrequire minimum 116 tank trucks having capacity upto 12 MTs.The bidders are required to offer trucks accordingly for meetingabove requirement. In case sufficient number of such tank trucksare not received in this tender to meet the above requirement,Corporationmaytakesuitablemeasurestomeetsuchrequirement.

(ii) Rules pertaining to the transportation of LPG under SMPVRules and amendments issued from time to time;

(iii) specifications as laid down by OISD and other statutoryauthorities and amendments issued from time to time;

(iv) pressure vessel to be designed and constructed and tested inaccordance with the Indian Standards IS: 2825 and amendmentsissued from time to time;

(v) Central Motor Vehicle (Fifth Amendment) Rules,2005 andamendments issued from time to time;

(vi) Requirement as per Public Liability Insurance Act andamendments issued from time to time;

(vii) Bulk LPG Tank Trucks of category other than tractor-trailercombination manufactured on and after 1st October 2006 shouldbe fitted with Anti Lock Brake System (ABS) .

(viii) Bulk LPG Tank Trucks manufactured on and after 1st dayof October 2007 that are used as tractor-trailer combinationshould be fitted with Anti Lock Brake System (ABS).

(ix) If ABS has been made mandatory by any of the StateGovt.(s), the same to be complied by the bidders irrespective ofthe model.

(x) Three point seat belt to be provided in each of the tank truckirrespective of any model.

(xi) Large rear view mirrors have to be fitted in each tank truckon either sides.

(xii) All trucks offered have to be fitted with Internal Excess FlowCheck Valves (IEFCV) as per PESO guidelines.

(xiii) Visual Manifestation Standards (VMS) : Induction ofTrucks will be done only after ensuring of compliance of VMstandards of respective Oil Companies.

(xiv) The body of tanker carrying dangerous or hazardousgoods shall be painted in white colour with dry leaf brownribbon of 5 centimeters width around in the middle of theexterior and that of the driver's cabin in orange colour ( Rule90(1) of the CMVR, 1989).

(xv) Fixing of retro –high-intensity grade reflective stickers whitetape with 7 cm width in the front of prime mover, yellow colouron both sides in the same width and red colour tape with 7 cmwidth throughout at rear side for better visibility in poor lightcondition.

(xvi) There should not be any mobile re-charging facility in thecabin.

(xvii) Any other applicable Act/Rule or any other amendment orre-enactment thereof as per specific State / Central Authorities, ifany from time to time .

b) No tank truck will be offered under this tender which :

(i) is presently in Contract with any Oil Company (includingPrivate Company) for period beyond the commencement dateof this contract i.e. 01.11.2014

(ii) has been offered in more than one tender or to more than oneCorporation. Such Tank Truck(s) will be rejected and shall notbe considered in any of the tenders."

Contentions of the Baroda group of Petitioners in W.P.(C) 8776/2014

5.The Baroda group petitioners submitted their tenders and offeredthree and two tank trucks respectively. Their tenders enclosed the necessarydocuments, such as the Registration Certificates (RCs) issued by theconcerned Road Transport Officers (RTOs), stating: (i) MLW of 40.2 MTwith two axles; (ii) PESO license for 18 MT with ML not exceeding 40.2MT, and (iii) mounted trucks for 35.2 MT. The Baroda group claims thatthey discovered- from website of the oil marketing companies- on29.11.2014 that their bids were disqualified, due to mismatch of licenses andRTO registrations. This was because one of the oil marketing companies, i.e.HPCL was of the opinion that there was discrepancy between the RC andthe PESO certificate on the one hand and the mounted drawings of thetrucks on the other. The RC and PESO license provided for MLW of 40.2MT and the mounted drawings provided for MLW of 35.2 MT. The Barodagroup petitioners were asked on 02.12.2014 by the HPCL to interact withthem at their offices for clarifications on the issue of disqualification. In this,they had referred to some minutes of meeting of the oil marketingcompanies. The Baroda group petitioners sought for copies of the minutes ofmeeting. The petitioners also by their e-mail sought clarifications as towhether they could furnish any documents for clarifications – stand whichwas not accepted by the oil marketing companies. In these circumstances,the Baroda group state that since the document, i.e. the minutes of themeeting of the oil marketing companies were not furnished, they sought forit under the RTI Act. This application was, however, not accepted.

6.In this background of circumstances, the Baroda group contends thatthere is no requirement of synchrony or uniformity between the mounted

trucks and the TTs as long as the certificates issued by the PESO and thelicenses issued by the RTO are valid and legal. In this connection, it iscontended that no tender condition has been referred to in the report by theHPCL, an oil marketing company, while rejecting the bid. It is argued thatsince the petitioners are in possession of RC and mounted trucks endorsedfor 40.2 MT, the tank trucks are logically suitable for 35.2 MTs. In thisconnection, the Baroda group petitioners also referred to the interpretationadopted by the other companies - IOCL and BPCL where the differencebetween the mounted trucks and the TT capacity (referred to as mismatch bythe HPCL) was overlooked as long as the PESO certificate and the RTOlicenseweresubsisting,providedtheRTOendorsementindicatedacceptance of such TTs. The Baroda group assert that such position hasbeen adopted by the oil marketing companies with respect to allegedmismatch for the first time in seven years during which such vehicles hadbeen consistently accepted and awarded LoI/contracts.7.Sh. Yashank Adhyaru, learned senior counsel argued that there is nobasis for the alleged mismatch, given that the tender conditions merelyreferred to the licensed capacity of minimum MT and above, except forspecified sectors. It is submitted that neither the general terms andconditions of the tender, nor the notice inviting the bidders to respond to thee-tender, nor for that matter do any of the other tender documents and itsseveral annexures, refer to the specifications, alleged to be applicable. It wassubmitted that the alleged mismatch between the prime mover and the traileris of no consequence considering that the prime mover is heavier, i.e. 40.2

MT whereas the trailer load is 35.2 MT. In reality, therefore, the TT couldnot cater to anything more than what 35.2 MT tanker capacity could.

8.Sh. Yashank Adhyaru, learned senior counsel referred to the PESOlicense issued to both the petitioners of the Baroda group as well as theinsurance documents and highlighted that the copy of the licenses of thevehicles which are part of the record fully describe the TTs as follows:

Learned senior counsel also relied upon the RC in the case of five tanktrucks to underline that they are duly endorsed and were valid as on the dateof the submission of the bids.Itwasfurthersubmittedthatallthedocuments were duly verified by the concerned oil marketing companiesand in these circumstances, the rejection based on the interpretation of thetender condition, i.e. that the RCs endorsed for GVW of 40.2 MT andmounted drawings endorsed for GVW 35.2 MTs for the “TTs with 2 axletrailer but MLW as per form IV – PESO certificate is 40.2 MT” was utterlyunwarranted. These were determined as mismatch and were rejected on thebasis of the minutes of meeting dated 11.11.2014. The learned seniorcounsel contended that this criteria was never notified in the advertisement.

Referring to the minutes of the meeting dated 11.11.2014, which was in turnrelied upon by the HPCL (the oil marketing company) in the rejection note,it was submitted that, alternatively, even the narrow interpretation given tothe minutes of the said meeting was also not justified.

9.Sh. Adhyaru, learned senior counsel submitted that since the minutesof meeting of the oil marketing companies was silent and no clarificationissued thereafter, fairness demanded that all the bidders who hadfurnished/submitted their bids - but without the necessary endorsement ofthe RTOs concerned, ought to have been provided an opportunity to obtainthe same and thereafter consider the tenders on the basis of theendorsements made. The relevant extracts of the minutes of the meetingwhich clarified the basis for assessing the bids, provided as follows in regardto the different models of trucks:

10.It is argued on behalf of the Baroda group that the oil marketingcompanies’ imposition of superfluous and subsequently thought-out criteriais colourable exercise of discretion and power. Asserting that so called“mismatch” was never thought-out as disqualifying factor in the tendernotice or the essential conditions spelt out with it, learned senior counselsubmitted that the oil marketing companies could not unilaterally, in theguise of bringing interpretive uniformity, impose new conditions. It wasfurther stressed that whilst the reading of the minutes of meeting dated11.11.2014 itself underlines that there is nothing inherently illegal orunacceptable in regard to the allegedly mismatch between the prime moversand the trailers as long as the PESO certificate and the RTO endorsementwith respect to that condition, i.e. the mismatch is furnished, it was arguedthat, therefore, the insistence on newly created condition amounts tohostilely discriminating those who never had the occasion to secure suchdocuments on the one hand, and favourably treat those who managed tosecure it beforehand and submit it with their tender bids, on the other.Learned counsel also referred to letter issued by the Deputy ChiefController of Explosives (West Circle) dated 28.10.2014 as well as thecertificate issued in respect of the vehicles (i.e. 40200 mover with 35200 kg.capacity trailer 2 axle trailer) by the Automotive Research Association ofIndia (ARAI). It was submitted that in these circumstances, the rejection ofthe Baroda group’s position is both arbitrary and unfair. Counsel lastlyrelied on the decision in M.R. Shah Logistics Pvt. Ltd v Indian OilCorporation Ltd (W.P.(C) 7957/2012 and connected writ petition, decidedby Division Bench of this Court on 26.07.2013) to say that change of thevehicle specifications is not considered an essential deviation, as long as the

license and registration conditions are met with, so as to empower the oilcompany to reject the tender altogether.

Contentions of the Malik Group (W.P.(C) 8435/2014) & the Balwan Singhgroup (W.P.(C) 8568/2014)

11.The Malik and Balwan Singh groups in their petitions as well asthrough the submissions of their senior counsel - M/s. Sandeep Sethi andA.K. Singla submit that the rejection of the Baroda group’s bids was anecessary consequence of the correct interpretation of the tender conditionsand specifications. It was also submitted that to the extent the minutes ofmeeting of 11.11.2014 dilute the tender specifications, they are contrary tolaw. In support of this argument, this second group of petitioners – the Malikand Balwan Singh groups firstly seek to highlight the malpractices wherebythe PESO issued licenses for 600 TTs whereas, in reality, fraction of themare manufacturing the corresponding TTs. It was argued consequently- andmore substantially - that LPG is carried in specifically designed vesselknown as SMPV (Static and Mobile Pressure Vessels) governed by theStatic and Mobile Pressure Vesses (Unfired) Rules, 1981. Such TTs consistof two main body parts – the prime mover and the trailer. Though they aredifferent constituents, they are treated as part of one unit. The gross vehicleweight of TTs, it is contended, is governed by the statutory notificationunder Section 58(1) of the Motor Vehicle Act (hereafter referred to as “theAct”) dated 18.10.1996. It is stressed here that in terms of the notification,where the prime mover is of 3516/3518 chassis model, it can be coupledwith two/double axle trailer. Likewise, where prime mover is 4018/4019chassis model, it can be coupled only with suitable triple/three axle trailer.It is submitted that manufacturers of such TTs, i.e. Tata and Ashok Leyland

first seek approval of the ARAI, certifying that their vehicles comply withthe Motor Vehicle Act and Rules and after such certifications they approachthe concerned RTO for registration of the vehicle.

12.The second group of petitioners alluded to previous writ petition, i.e.W.P.(C) 17451/2005 which was public interest litigation that highlightedthe misuse of the forged or fictitious RCs based upon which PESO licenseswere obtained and sought to be used to obtain Letters of Intent from the oilmarketing companies. It is contended that as consequence of theundertaking recorded by this Court on 08.08.2007 that firm contracts wouldnot be issued and only LoI work permits would be first issued to enable theforwarding of documents requiring verification from the concerned agenciesand only thereafter work orders would be issued, was the practice of issuingLoIs initiated.

13.The provisions of the Motor Vehicle Act, particularly Sections 52 and58 are relied upon by M/s. Sandeep Sethi and A.K. Singla, to say that anychanges not only have to be in conformity with the notified specificationsfor vehicles, to be considered permissible ones- but that every change has tobe endorsed and duly accepted by the concerned RTO in the absence ofwhich, the motor vehicles itself fall within the forbidden category,prohibited from plying on the roads. In this connection, the notificationdated 18.10.1996 issued in respect of the maximum GVW was relied on byboth these petitioners. The said notification reads as follows:

“GOVERNMENT OF INDIAMINISTRY OF ROAD TRANSPORT AND HIGHWAYS

NOTIFICATION

Specification of Maximum Gross Vehicle Weight and theMaximum Safe Axle Weight.

S.O.728(E), dated 18.10.1996.- In exercise of the powersconferred by sub-section(I) of section 58 of the Motor VehiclesAct,1988 (59 of 1988) and in supercession of the notification ofthe Government of India in the Ministry of Surface TransportS.O.No.479(E),datedthe4thJuly,1996,theCentralGovernment hereby specifies that in relation to the transportvehicles (other than motor cabs) of various categories detailed inthe Schedule below the maximum gross vehicle weight and themaximum safe axle weight of each axle of such vehicles shall,having regard to the size, nature and number of tyres andmaximum weight permitted to be carried by the tyres as per rule95 of the Central Motor Vehicles Rules,1989, be-

(i) vehicle manufacturers rating of the gross vehicle weight andaxle weight respectively for each make and model as dulycertified by the testing agencies for compliance of rule 126 of theCentral Motor Vehicles Rules,1989, or

(ii) the maximum gross vehicle weight and the maximum safeaxle weight of each vehicle respectively as specified in theSchedule below for the relevant category,or(iii) the maximum load permitted to be carried by the tyre(s) asspecified in the rule 95 of the Central Motor VehiclesRules,1989, for the size and number of the tyres fitted on the axle(s) of the relevant make and model, whichever is less:

Provided that the maximum gross vehicle weight in respectof all such transport vehicles, including multi-axle vehicles shallnot be more than the sum total of all the maximum safe axleweight put together subject to the restrictions, if any, on themaximum gross vehicle weight given in the said schedule.

14.It was lastly argued that by reason of Section 52 of the Act,alternations which involve change in the structure of the vehicle and theresulting change in its basic feature cannot be effected without approval ofthe Central Government. Any consequential changes such as alteration in theseating capacity – subject to parameters of Chapter V etc. only can beundertaken. It is urged that given the specific phraseology of Section 52, anypermissible alterations which are not specifically mentioned and which iscontrary to terms of notifications under Section 58(1) have to receiveexpress approval. It was, therefore, urged that the minutes of the meeting tothe extent they clarified the acceptance of vehicles that are not authorized toply on the road, is illegal.

-Stand of the Official Respondents the Oil Marketing Companies

15.The position adopted by the oil marketing companies – the BPCL andIOCL - in joint reply filed in the Baroda group writ petition disclose theestimated/undertaken requirement of the number of TTs of the oil marketingcompanies and further relied upon the eligibility criteria prescribed for the

TTs. They also stated that the credential bids were opened on 24.09.2014and the process of price bid evaluation is underway. It is urged that since thetenders are being finalized on common basis for all regions, commonissues cropped-up which needed clarifications. As result, the meeting washeld on 11.11.2014 where it was particularly decided upon the commonapproach to be adopted in the evaluation exercise. It was in thesecircumstances that the relevant clarification No.12 was issued. The oilmarketing companies in their affidavit state that they would be evaluatingTTs offered by the bidders and where the model of the TT is4018/4019/4021, its GVW is recorded in the RC as 40.2 MT and theexplosive license records GVW/MLW as 35.2 MT and not as 40.2 MT, thesame would be rejected unless the RC with respect to the revised GVW asrecorded in the explosive license is endorsed. It is because of this that thisposition was taken since the RC is issued by the RTO and the explosivelicence is issued by PESO and they form the bids’ basic documents onwhich the eligibility of TT is premised. The oil marketing companiesassert that whether the registering authority or the explosive departmentissues written certificate is neither within their domain, nor they arequalified to make such an enquiry.

16.The counter affidavit and reply of the HPCL interestingly in its mostpart supports the arguments of the second group of the petitioners andheavily relies upon the notification dated 18.10.1996. It is submitted that thevariance in specification of TTs from the description mentioned in the RCmakes it incompatible with the tender specifications, which strikes at thevery root of the validity of the RC. The HPCL relies upon clarificationissued by the Additional Transport Commissioner, Maharashtra Circle to the

Chief Controller of Explosives in reply to the latter’s letter dated 28.10.2014which is to the following effect:

“To,Chief Controller of ExplosivesA-Block, 5[th]Floor, CGO Complex,Seminary Hills, Nagpur-440 006

Sub:- Prime Movers with GVW of 40200 kgs.

Ref:1) Complaint of Mr. Vijay Khosala, President Western IndiaBulk LPG Transporters Association dt. 16/10/2014

2)YourofficeLetterNo.PV(M)General/2009dt.28/10/2014.”

Mr. Vijay Khosala, President Western India Bulk LPGTransportersAssociation,videhisletterdt.16.10.2014complained that some operators are using the tractor of 40200kgs. With 2 axle trailer. However, GVW of these vehicles arenoted as 40200 kgs. in the vehicle registration certificates.

As per S.O. no.728E dt. 18.10.1996, the Govt. of India specifiesthe Maximum Gross Vehicle Weight for semi trailers is as below:

However, if the operator who are using the tractor of 40200 kgs.with 2 axle trailers and whose GVW is noted as 40200 kgs. in thevehicle registration certificates are violating the provisions ofMV Act, 1988, such kind of tractors are required to be providedwith 3 axle semi trailer.

You are requested not to certify these tractors whose GVWis noted as 40200 kgs. in the registration certificates and fittedwith 2 axle trailer. You are also requested to send theseoperators back to Registering Authorities for verification ofrecords.

Addl. Transport Commissioner,Maharashtra State, Mumbai”

The HPCL highlights that the tender conditions unequivocally require thatthe vehicle offered at all times should be in conformity with the provisionsof the Motor Vehicles Act.

Analysis & ConclusionsProvisions of the Motor Vehicles Act17.Section 52 of the Motor Vehicles Act, which was cited during thesubmissions, reads as follows[1]:

1 Old Section 52 was substituted by Act 27 of 2000, S.2 (w.e.f. 11-8-2000). Prior to its substitution,Section 52 read as under :-

“52. Alternation in motor vehicle .- (1) No owner of motor vehicle shall so alter the vehicle that theparticulars contained in the certificate of registration are no longer accurate, unless.-(a) he has given notice to the registering authority within whose jurisdiction he has the residence orthe place of business where the vehicle is normally kept, as the case may be of the alteration heproposes to make; and(b) he has obtained the approval of that registering authority to make such alteration :Provided that it shall not be necessary to obtain such approval for making any change in the unladenweight of the motor vehicle consequent on the addition or removal of fittings or accessories, if suchchange does not exceed two per cent. of the weight entered in the certificate of registration :*[Provided further that modification of the engine, or any part thereof, of vehicle forfacilitating itsoperation by different type of fuel or source of energy including battery, compressed natural gas,solar power or any other fuel or source of energy other than liquid petroleum gas shall be treated asan alteration but that shall be subject to such conditions as may be prescribed.]

“52. Alteration in motor vehicle. - (1) No owner of motorvehicle shall so alter the vehicle that the particulars containedin the certificate of registration are at variance with thoseoriginally specified by the manufacturer :

Provided that where the owner of motor vehicle makesmodification of the engine, or any part thereof of vehicle forfacilitating its operation by different type of fuel or source ofenergy including battery, compressed natural gas, solar power,liquid petroleum gas or any other fuel or source of energy, byfitment of conversion kit, such modification shall be carried outsubject to such conditions as may be prescribed:

Provided further that the Central Government may prescribespecifications, conditions for approval, retro fitment and otherrelated matters for such conversion kits;

Provided also that the Central Government may grant exemptionfor alteration of vehicles in manner other than specified above,for any specific purpose.

(2) Notwithstanding anything contained in sub-section (1), aState Government may, by notification in the Official Gazette,authorise, subject to such conditions as may be specified in thenotifications, and permit any person owing not less than tentransport vehicles to alter any vehicle owned by him so as toreplace the engine thereof with engine of the same make andtype, without the approval of registering authority.

(3) Where any alteration has been made in motor vehicle withoutthe approval of registering authority or by reason of replacementof its engine without such approval under sub-section (2), theowner of the vehicle shall, within fourteen days of the making ofthe alteration, report the alteration to the registering authoritywithin whose jurisdiction he resides and shall forward thecertificate of registration to that authority together with theprescribed fee in order that particulars of registration may beentered therein.

(4) registering authority other than the original registeringauthority making any such entry shall communicate the details ofthe entry to the original registering authority.

(5) Subject to the provisions made under sub-section (1), (2), (3)

and (4), no person holding vehicle under hire-purchase

agreement shall make any alteration to the vehicle except withthe written consent of the registered owner.Explanation. - For the purpose of this section, “alteration”means change in the structure of vehicle which results inchange in its basic feature.]

18.Section 58 reads as follows:

“58. Special provisions in regard to transport vehicles. – (1) The

Central Government may, having regard to the number, natureand size of the tyres attached to the wheels of transport vehicle(other than motorcab), and its make and model and otherrelevant considerations, by notification in the Official Gazette,specify, in relation to each make and model of transportvehicle, the [maximum gross vehicle weight] of such vehicle andthe maximum safe axle weight of each axle of such vehicle.

(2) registering authority, when registering transport vehicle,other than motor cab shall enter in the record of registrationand shall also enter in the certificate of registration of thevehicle the following particulars, namely :-

(a) the unladen weight of the vehicle;

(b) the number, nature and size of the tyres attached to each

wheel;

(c) the gross weight of the vehicle and the registered axle weightspertaining to the several axles thereof; and

(d) if the vehicle is used or adapted to be used for the carriage ofpassengers solely or in addition to goods, the number ofpassengers for whom accommodation is provided, and the ownerof the vehicle shall have the same particulars exhibited in theprescribed manner on the vehicle.

(3) There shall not be entered in the certificate of registration ofany such vehicle any gross vehicle weight or registered axleweight of any of the axles different from that specified in thenotification under sub-section (1) in relation to the make andmodel of such vehicle and to the number, nature and size of thetyres attached to its wheels :

Provided that where it appears to the Central Government thatheavier weights than those specified in the notification under

sub-section (1) may be permitted in particular locality forvehicle of particular type, the Central Government may, byorder in the Official Gazette direct that the provisions of thissub-section shall apply with such modifications as may bespecified in the order.

(5) In order that the gross vehicle weight entered in thecertificate of registration of vehicle may be revised inaccordance with the provisions of sub-section (3), the registeringauthority may require the owner of transport vehicle inaccordance with such procedure as may be prescribed toproduce the certificate of registration within such time as may bespecified by the registering authority.”

The objects and reasons for this provision (Clause 57 of the Bill as itoriginally stood) provided that this was to “specify in relation to each makeand model of transport vehicle the maximum safe laden weight and themaximum safe axle weight of each such vehicle”; and further that “theregistering authorities while registering transport vehicle shall make anote of the unladen weight, and gross vehicle weight and such otherparticulars in the registration certificate of the vehicle and other suchparticulars in the registration certificate…”

19.Section 52 enacts, therefore, general prohibition against the ownersand pliers of motor vehicles- with few well defined exceptions- from

2 Act 27 of 2000, by S.3 omitted Sub section (4) w.e.f. 11-8-2000. Prior to itsomission, sub-Section (4) read as under :-omission, sub-Section (4) read as under :-

“(4) When by reason of any alteration in such vehicle, including analteration in the number, nature or size of its tyres, the gross vehicle weightof the vehicle or the registered axle weight of any of its axles no longeraccords with the provisions of sub-section (3), the provisions of section 52shall apply and the registering authority shall enter in the certificate ofregistration of the vehicle revised registered weights which accord with thesaid sub-section.”alteration in the number, nature or size of its tyres, the gross vehicle weightof the vehicle or the registered axle weight of any of its axles no longeraccords with the provisions of sub-section (3), the provisions of section 52shall apply and the registering authority shall enter in the certificate ofregistration of the vehicle revised registered weights which accord with thesaid sub-section.”

changing or altering the basic character of vehicle. Section 58 (1) dealswith special provisions in respect to transport vehicles. Parliament hereempowered only the Central Government to specify, through notification,“in relation to each make and model of transport vehicle, the [maximumgross vehicle weight] of such vehicle and the maximum safe axle weight ofeach axle of such vehicle…” Section 58 (2) enjoins every registeringauthority to enter certain details, viz (a) the unladen weight of the vehicle;(b) the number, nature and size of the tyres attached to each wheel; (c) thegross weight of the vehicle and the registered axle weights pertaining to theseveral axles thereof; and (d) if the vehicle is used or adapted to be used forthe carriage of passengers solely or in addition to goods, the number ofpassengers for whom accommodation is provided, and the owner of thevehicle shall have the same particulars exhibited in the prescribed manner onthe vehicle. Section 58 (3) importantly directs that no registration certificateof vehicle can reflect “any gross vehicle weight or registered axle weightof any of the axles different from that specified in the notification under sub-section (1) in relation to the make and model of such vehicle and to thenumber, nature and size of the tyres attached to its wheels..” The proviso tothis sub-section authorizes the Central Government to relieve this conditiononly“in particular locality for vehicle of particular type, the CentralGovernment may, by order in the Official Gazette direct that the provisionsof this sub-section shall apply with such modifications as may be specified inthe order.”

20.It is thus apparent that what Parliament intended by enacting Section58 (1) and (3) was to ensure uniformity in regard to the standards whichevery transport vehicle had to conform. Section 58 (1) enabled the

prescription of criteria. This means that only one authority, i.e. the CentralGovernment alone, is empowered to notify what should be “maximum grossvehicle weight of such vehicle and the maximum safe axle weight of eachaxle of such vehicle” in respect of transport vehicles. Section 58 (2) obligesevery registering authority to effectuate the mandate of Section 58 (1) bydescribing the relevant particulars, i.e. unladen weight of the vehicle; thenumber, nature and size of the tyres attached to each wheel; the gross weightof the vehicle and the registered axle weights relating to the several axlesthereof; and whether the vehicle is used or adapted to be used for thecarriage of passengers solely or in addition to goods. Section 58 (3) enactswhat is implicit in Section 58 (1)- that the standards spelt out only and noneother than those, can be adhered to in respect of “the number, nature andsize of the tyres attached to its wheels..” Section 58 (3) proviso carves outan exception to its applicability to the extent the Central Governmentspecifies in relation to particular region.

21.Section 52 talks generally of the kind of alterations which vehiclecan undergo; some can be undertaken without intimation or approval of theregistering authority; in the case of others, however, approval of theregistering authority is required. Section 52 (1) however, specifically statesthat “No owner of motor vehicle shall soalter the vehicle that theparticulars contained in the certificate of registration are at variance withthose originally specified by the manufacturer”. The exceptions which arepermissible in succeeding provisions- Section 52 (1) and its proviso, Section52 (3), relate to alterations which make the vehicle more fuel efficient andenvironmentally friendly, as well as pertain to replacement of engines, etc.Barring these changes, every alteration is impermissible; what is an

alteration is defined in Explanation below Section 52: ““alteration” meansa change in the structure of vehicle which results in change in its basicfeature.”

22.A collective reading of Sections 52 and 58 would lead one toconclude that firstly, alterations, which result in change of basic feature ofthe vehicle are prohibited. Secondly, such changes which result in fuelefficiency, if they conform to specific standards, are permissible: thecondition being that the registering authority has to be notified. Thirdly,Section 58 (1) requires the prescription of standards to be followed by everytransport vehicle, especially with regard to maximum axle weight havingregard to the number of wheels it has. The mandatory nature of thisprovision is emphasized by Section 58 (3) which states that there cannot bevariance (of vehicle) with respect to “the make and model of such vehicleand to the number, nature and size of the tyres attached to its wheels..”

23.The notification spelling out the safe standards for “semi-articulated”transport vehicles of the kind which are in question here, provide, inter alia,

that:

“….the Central Government hereby specifies that in relation tothe transport vehicles (other than motor cabs) of variouscategories detailed in the Schedule below the maximum grossvehicle weight and the maximum safe axle weight of each axle ofsuch vehicles shall, having regard to the size, nature and numberof tyres and maximum weight permitted to be carried by the tyresas per rule 95 of the Central Motor Vehicles Rules,1989, be-

(i) vehicle manufacturers rating of the gross vehicle weight andaxle weight respectively for each make and model as dulycertified by the testing agencies for compliance of rule 126 of theCentral Motor Vehicles Rules,1989, or

(ii) the maximum gross vehicle weight and the maximum safeaxle weight of each vehicle respectively as specified in theSchedule below for the relevant category,or

(iii) the maximum load permitted to be carried by the tyre(s) asspecified in the rule 95 of the Central Motor VehiclesRules,1989, for the size and number of the tyres fitted on the axle(s) of the relevant make and model, whichever is less:

Provided that the maximum gross vehicle weight in respectof all such transport vehicles, including multi-axle vehicles shallnot be more than the sum total of all the maximum safe axleweight put together subject to the restrictions, if any, on themaximum gross vehicle weight given in the said schedule.

SCHEDULETransportMaxMaximum Safe Axle WeightVehicles CategoryGVWTonnes(ii)TwoAxle35.2TractorTandemAxle TrailerTractor:2tyreson6 tonnes on front axlefront axle4tyreson10.2 tonnes on rear axlerear axleTrailer:8tyreson19 tonnes on tandem axletandemaxle(iii)TwoAxle40.2TractorThreeAxleTrailerTractor:2tyreson6 tonnes on front axlefrontaxle

It is thus clear that as matter of law,the safety standard required of eachtransport vehicle which describes itself as semi articulated vehicle,comprised of two constituent parts, i.e. the prime mover and the tractortrailer, is that for 40.2 MT vehicle, two axle front prime mover with 6tonnes on front axle and 10.2 tonnes on rear axle; and 24 tonnes on 3 axlesfor the trailer (12 tyres on those 3 axles) is mandated.

24.In the present case, the IOCL and the BPCL, the two oil marketingcompanies rely on the minutes of meeting dated 11.11.2014 to say that solong as the PESO license and the registration are shown, any change in thevehicle description which varies from the manufacturer’s description can beaccepted, provided the concerned RTO endorses the registration certificate.Their further position is that such endorsement should have been obtainedbefore the date of submission of the application form. Now, as discussed inthis judgment, Section 58 is unrelenting as to the requirement which every

transport vehicle has to conform to, especially as regards maximum weight,number of axles and tyres. These are in no manner relieved in theirapplication – except by statutory notification of equal authority, i.e. by theCentral Government, under proviso to Section 58 (1). However, no suchnotification exists in relation to the class of vehicles which the present caseis concerned with. (Here the court is not expressing any opinion on therequirement of another category of transport vehicles for the eastern region,for which lesser tonnage has been spelt out). Therefore, the petitioners ofthe second group- i.e. the Malik and the Balwan Singh group are correct incontending that the oil marketing companies could not have sought to dilutethe standards spelt out in the 1996 notification. The oil marketing companiesare concededly neither the Central Government nor even the registeringauthority. In this connection, the guidance and advice provided by theAdditional Transport Commissioner, Maharastra to the Chief Commissionerof Explosives on 28[th]October, 2014 is also in line with the conclusions ofthis Court. That letter had pertinently said that:

“.. if the operator who are using the tractor of 40200 kgs. with 2axle trailers and whose GVW is noted as 40200 kgs. in thevehicle registration certificates are violating the provisions ofMV Act, 1988, such kind of tractors are required to be providedwith 3 axle semi trailer.axle trailers and whose GVW is noted as 40200 kgs. in thevehicle registration certificates are violating the provisions ofMV Act, 1988, such kind of tractors are required to be providedwith 3 axle semi trailer.

You are requested not to certify these tractors whose GVWis noted as 40200 kgs. in the registration certificates and fittedwith 2 axle trailer. You are also requested to send theseoperators back to Registering Authorities for verification ofrecords.”with 2 axle trailer. You are also requested to send theseoperators back to Registering Authorities for verification ofrecords.”

25.As to the contention of the Baroda group that the tender conditionsand specifications nowhere spelt out the details in regard to the number of

axles which were to be on different categories of TTs are concerned, theCourt is of the opinion that this argument is fallacious. Firstly, Clause 11 ofthe General terms and conditions governing the tender specified that:

“The tank trucks offered against this tender should conform tothe specification mentioned in Motor Vehicles Act, as applicablefrom time to time and be equipped to transport bulk LPG andshould conform to the following:”

Secondly, arguendo, even in the absence of the above specification, theimperative nature of Section 58 (1) and 58 (3) allow any exceptions, when anotification (read the 1996 notification) stipulates specifications. Thecontentions of the Baroda group regarding arbitrariness and discrimination,therefore, are unpersuasive. There can be no two opinions that tenderconditions bind both the state agency which invites bids for goods andservices, as well as the potential supplier of those goods and services, i.e. thetenderer/bidder. (Ref G.J. Fernandez vs State Of Karnataka & Ors AIR1990 SC 958; State of NCT of Delhi and Another v. Sanjeev alias Bittoo(2005) 5 SCC 181). As to what should be the approach of courts in dealingwith challenges to tender conditions and their applications, under Article226 of the Constitution of India,Jagdish Mandal vs. State of Orissa & Ors,a decision of the Supreme Court (reported as (2007) 14 SCC 517) spelt outthe relevant considerations which weigh in such judicial review:

“22. Judicial review of administrative action is intended toprevent arbitrariness, irrationality, unreasonableness, bias andmala fides. Its purpose is to check whether choice or decision ismade “lawfully” and not to check whether choice or decision is“sound”. When the power of judicial review is invoked inmatters relating to tenders or award of contracts, certain specialfeatures should be borne in mind. contract is commercialtransaction. Evaluating tenders and awarding contracts are

essentially commercial functions. Principles of equity andnatural justice stay at distance. If the decision relating toaward of contract is bona fide and is in public interest, courtswill not, in exercise of power of judicial review, interfere even ifa procedural aberration or error in assessment or prejudice to atenderer, is made out. The power of judicial review will not bepermitted to be invoked to protect private interest at the cost ofpublic interest, or to decide contractual disputes. The tenderer orcontractor with grievance can always seek damages in civilcourt.Attempts by unsuccessful tenderers withimaginarygrievances, wounded pride and business rivalry, to makemountainsoutofmolehillsofsometechnical/proceduralviolation or some prejudice to self, and persuade courts tointerfere by exercising power of judicial review, should beresisted. Such interferences, either interim or final, may hold uppublic works for years, or delay relief and succour to thousandsand millions and may increase the project cost manifold.Therefore, court before interfering in tender or contractualmatters in exercise of power of judicial review, should pose toitself the following questions:

(i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone;

OR Whether the process adopted or decision made is soarbitrary and irrational that the court can say: “the decision issuch that no responsible authority acting reasonably and inaccordance withrelevant law could have reached?”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be nointerference under Article 226.”

The Court again recollects later judgment of the Supreme Court inMichigan Rubber (India) Limited Vs. State of Karnataka & Ors 2012 (8)SCC 216. The court had then re-visited its previous rulings on the nature of

judicial review in respect of contractual matters of the State or its agenciesand concluded as follows:

“23. From the above decisions, the following principles emerge:

(a) the basic requirement of Article14is fairness in action by theState, and non-arbitrariness in essence and substance is theheartbeat of fair play. These actions are amenable to the judicialreview only to the extent that the State must act validly for adiscernible reason and not whimsically for any ulterior purpose.If the State acts within the bounds of reasonableness, it would belegitimate to take into consideration the national priorities;

(b) fixation of value of the tender is entirely within the purviewof the executive and courts hardly have any role to play in thisprocess except for striking down such action of the executive asis proved to be arbitrary or unreasonable. If the Governmentacts in conformity with certain healthy standards and norms suchasawardingofcontractsbyinvitingtenders,inthosecircumstances, the interference by Courts is very limited;

(c) In the matter of formulating conditions of tender documentand awarding contract, greater latitude is required to beconceded to the State authorities unless the action of tenderingauthority is found to be malicious and misuse of its statutorypowers, interference by Courts is not warranted;

(d) Certain preconditions or qualifications for tenders have to belaid down to ensure that the contractor has the capacity and theresources to successfully execute the work; and

(e) If the State or its instrumentalities act reasonably, fairly andin public interest in awarding contract, here again, interferenceby Court is very restrictive since no person can claimfundamental right to carry on business with the Government.

24. Therefore, Court before interfering in tender or contractualmatters, in exercise of power of judicial review, should pose toitself the following questions:

(i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone; or whetherthe process adopted or decision made is so arbitrary andirrational that the court can say: "the decision is such that noresponsible authority acting reasonably and in accordance withrelevant law could have reached"; and (ii) Whether the publicinterest is affected. If the answers to the above questions are innegative, then there should be no interference under Article226.”

The last contention of the Baroda group, based on the decision of theDivision Bench, in Shah Logistics (supra) is unmerited. In that case, thechassis of the vehicle had to be changed; this necessitated its inspection bythe Controller of Explosives, who certified that the changed chassis also metwith the specifications. This post tender development was duly notified tothe oil company, which did not take the position at that time that the changecould not have been effected. The Court held that at the time the bid wasentered, there was no dispute that it complied with all specifications and thatthe subsequent change, duly intimated was not of such consequence as toundermine the essential basis of the bid; the Court then interpreted Clause11 (b) of the Tender documents. Here, that is not the situation; the Barodagroup is stating that the insistence that the offer of the bidder should complywith legal requirements, spelt out in the 1996 notification,is post tendercondition. As explained and held earlier, this is based on an inaccuratereading of the tender conditions.

26.That leaves the court to consider one of the contentions advanced bythe Balwan Singh group with respect to acceptance of tenders of bidders in

the SC/ST categories; the complaint was that in regard to this group,contrary to the tender conditions, which required the certificates to havebeen issued within year from the last date of submission of tenders, the oilmarketing companies were accepting bids with certificates obtained earlier.This, in the opinion of the court cannot be termed as an illegality orirregularity of such magnitude as to be characterized as arbitrary or “sounreasonable that no reasonable man could have taken such decision”. Theobject of ensuring submission of such certificates is to monitor whether theapplicant is indeed falling in such SC/ST category. It cannot be overlookedor even overemphasized that the purpose of providing such reservation is toensure that State largesse is distributed to those deserving it and in theprocess all sections of the society are given it. Here, the SC/ST caste statusare in the nature of certification of their status which does not vary withtime. Therefore the approach of the oil marketing companies is not arbitraryor discriminatory.27.In view of the above conclusions, the writ petitions of the Barodagroup W.P.(C) 8776/2014- fail. The other two writ petitions succeed in partto the extent that the respondent oil marketing companies are herebydirected to ensure that only those TTs which confirm strictly to the legalstandards spelt out in the relevant notification (No. SO 728(E) dated18.10.1996) are processed and awarded Letters of Intent (LoIs), in the tenderprocess and all TTS which do not conform to such technical standards, arenot awarded LoIs. The writ petitions W.P.(C) 8435/2014 and W.P.(C)

8568/2014 are partially allowed only to the extent and in terms of, suchdirections. There shall be no order as to costs.

S. RAVINDRA BHAT(JUDGE)

JANUARY 6, 2015

VIPIN SANGHI(JUDGE)