Indian Oil Corporation Ltd v. Arti Devi Dangi & Another

Indian Oil Corporation Ltd v. Arti Devi Dangi & Another

(Supreme Court Of India)

Civil Appeal No. 8672 & 8673 Of 2015 (Special Leave Petition (Civil) No. 22012 & 31525 Of 2014) & Civil Appeal No. 8673 Of 2015 (Special Leave Petition (Civil) No. 31525 Of 2014 | 14-10-2015

1. Leave granted.

2. The sole question in the two appeals under consideration is whether the insistence by the appellant - Indian Oil Corporation Limited on adherence to the Indian Roads Congress (I.R.C.) Guidelines requiring maintenance of specific distance between the proposed retail outlet and the median of the road was correct in view of the fact that in the advertisement and the brochure there was no specific reference to the said guidelines and no specific mention was made that the same would have to be complied with by a tenderer. The respondents - writ petitioners in both the appeals have been held to be disqualified on the ground that they do not satisfy the requirement in question (i.e. distance) under the aforesaid guidelines.

3. To answer the question arising, it will be necessary to note herein the relevant part of the advertisement issued dealing with the above question.

"(a) For establishment of Kendra, the compulsory measurement of the plot should be 35 meters x 35 meters (apart from the P.W.D land) the proposed plot of land for KVK should not be on the National highway/State Highway and should fulfill all Rules and sub-rules of P.W.D. and local legal necessities."


4. The materials on record would go to show that the I.R.C. Guidelines have been adopted by the State P.W.D. of Madhya Pradesh. In view of the aforesaid fact, it is urged on behalf of the appellant that the respondents ought to have verified all such requirements that the rules and sub-rules of P.W.D. stipulate including the requirements spelt out under the I.R.C. Guidelines.

5. On behalf of the respondents - writ petitioners it is urged that there being no specific reference to the guidelines in question the requirement of compliance therewith was not an essential condition of the tender. It is also urged that the rules and sub-rules of P.W.D. referred to in the extract of the advertisement as above would naturally mean statutory rules and the I.R.C. Guidelines do not partake the character of statutory rules.

6. From the proceedings of the selection which shows the manner in which the cases of the respondents - writ petitioners were considered, which proceedings are on the record of the case, it is clear and evident that even at the very initial stage of consideration of the cases of the respondents, it is the requirements spelt out under the I.R.C. Guidelines that were taken into account to hold that the respondents do not fulfill the eligibility criteria prescribed by the tender conditions. The respondent - writ petitioner Arti Devi Dangi was found not to have satisfied the particular eligibility criteria as the land offered by her was situated at a distance of 26 meters away from the intersection on the road whereas in the case of Mohan Singh Parmar the distance was found to be about 600 meters. The I.R.C. Guidelines stipulated that in urban areas where the station is to be located along the State/National Highways the distance should be 1000 meters and in case of rural areas the distance should be 300 meters.

7. Though an argument has been sought to be made on behalf of the respondent - Mohan Singh Parmar that the location of the station for which he had tendered is in an urban area and a certificate in support of the said claim has been relied upon, we do not find the aforesaid stand to be substantiated by the certificate [issued by the Municipal Council, Pankhedi (Kalapipal) District Shajapur] which has been placed on record of the present appeal inasmuch as the same only indicates that the volume of traffic on the road (about 300 vehicles).

8. If the clauses in the advertisement required a tenderer to fulfill all requirements under the rules and sub-rules of P.W.D. and if what was suggested/recommended by the I.R.C. has been adopted by the State P.W.D. and the said norms are in the interest of public safety and would facilitate smooth movement of traffic, it will be difficult to hold that the rules and sub-rules of P.W.D. contemplated in the advertisement do not embrace the I.R.C. Guidelines either because there was no specific mention thereof in the tender documents or the same do not have a statutory flavour. We, therefore, hold that the fulfillment of the requirements spelt out by the I.R.C. Guidelines relevant to the present cases to be a mandatory requirement of the tender conditions. Coupled with the above what we find is that the action of the appellant Corporation cannot be said to be either arbitrary or unreasonable inasmuch as a uniform standard has been applied to all the applicants and in the present two appeals in question no candidate has been found to be eligible upon application of the said uniform standard i.e. the I.R.C. Norms. The action of the appellant corporation, therefore, not being in any manner arbitrary or unreasonable the power of judicial review vested in the High Court ought to have been exercised with due circumspection.

9. A perusal of the orders of the High Court indicates that the only basis on which the decision of the appellant Corporation has been faulted with is that the I.R.C. Guidelines are not mandatory. We fail to see how such a view can be sustained keeping in mind the provisions of the advertisement quoted above; the purport and object of the said norms; the uniform application of the same to all the tenderers by the appellant Corporation and above all the requirements of public interest.

10. In view of the above conclusion reached it is not necessary for us to consider the arguments advanced on the question of permissibility of deviations from the tender conditions on the touchstone of public interest or the issue of understanding the requirement of the I.R.C. Guidelines as implied terms of the tender document.

11. For the aforesaid reasons, the orders of the learned single judge as well as the Division Bench of the High Court cannot be sustained. We, therefore, set aside the same and allow the appeals.

Advocate List
Bench
  • HON'BLE MR. JUSTICE RANJAN GOGOI
  • HON'BLE MR. JUSTICE N.V. RAMANA
Eq Citations
  • 2015 (12) SCALE 6
  • (2016) 15 SCC 480
  • LQ/SC/2015/1417
Head Note

A. Contract Act, 1872 - S. 74 and 75 — Tender conditions — Deviation from, on ground of public interest — IRC Guidelines requiring maintenance of specific distance between proposed retail outlet and median of road — Requirement of compliance therewith, held, is a mandatory requirement of tender conditions — Action of appellant corporation, not being in any manner arbitrary or unreasonable, power of judicial review vested in High Court ought to have been exercised with due circumspection — High Court erred in faulting decision of appellant corporation on ground that IRC Guidelines were not mandatory — Public Notary Act, 1952 — Ss. 10 and 11 — Public interest (Paras 8 and 11) B. Administrative Law/Administrative Tribunals Act, 1985 — S. 11 — Permissibility of deviations from tender conditions on touchstone of public interest or understanding the requirement of IRC Guidelines as implied terms of tender document — Not required to be considered (Para 10) C. Contract Act, 1872 — S. 74 and 75 — Tender conditions — Requirement of compliance with IRC Guidelines, held, is a mandatory requirement of tender conditions (Para 8)