@JUDGMENTTAG-ORDER
K.K. Sasidharan, J.@mdashThe petitioner challenges the tender notification issued by the Public Sector Oil Corporations for awarding the contract of transportation of Liquefied Petroleum Gas and more particularly Clauses 5.2.3.4, 5.2.3.5, 5.2.3.6 and 5.2.3.7 of Industry Bulk LPG Transport Discipline guidelines in Annexure - III of the Tender dated 23 April, 2008.
THE FACTS:
2. The petitioner is an association of LPG Transport Operators and they have filed this writ petition in the interest of the members of their association. The members of the association are owners of tank trucks which are manufactured solely for the purpose of transporting Liquefied Petroleum Gas. The members were granted the privilege to transport Liquefied Petroleum Gas on the basis of the tender floated by the respective Oil Companies. While so, the oil companies have issued the impugned tender notification, which contains a penalty clause in the event of accidents involving the tankers. According to the petitioner, the provisions regarding imposition of penalty has no rational basis. Accidents would take place due to unforeseen circumstances, such as act of god or mechanical failure. The operators cannot be punished on account of such unforeseen happenings which are beyond their control. They would further contend that the Highways are in a very bad shape especially in the State of Karnataka and as such, the possibility of more accidents cannot be ruled out. Therefore they seek to quash the penalty clause as found in the impugned tender notification.
COUNTER:
3. The fourth respondent has filed a counter on behalf of respondents 2 to 4. According to them, the penalty clause was inserted in the tender notification in larger public interest. It was made with a view to curb the accidents and protect the environment, human lives, properties and it was not their intention to harm the business interests of the tenderers. The impugned provisions were made after thorough deliberation at the higher level and the representatives of the transporters were also taken into confidence and as such, no exception could be made to the new provision regarding penalty clause. The new provision also seeks to protect security in the work place, inasmuch as the LPG plant or LPG source where there will be LPG storage and operations, are all very sensitive operations having very high risk of hazards due to the nature of product handled. Therefore an element of discipline should be maintained in the work place, which was also a reason for incorporating the penalty clause. According to the fourth respondent, similar conditions were incorporated in the tender notification in respect of other regions also and the operators have taken part in the tender accepting those conditions. In short, the fourth respondent justified the penalty clause as one made in public interest.
SUBMISSIONS:
4. Learned Senior Counsel for the petitioner would contend that though there are multiple penalty provisions in the tender notification, the petitioner is aggrieved by clauses 5.2.3.4, 5.2.3.5, 5.2.3.6 and 5.2.3.7 which relates to polluting environment due to product spillage from tilting or leaky vehicles on road in case of accident/unsafe driving; in case of accident involving injury or damages to facilities at the work place or accident involving injury during transportation on the road; for fatal accident at work place as well as on the road. According to the Learned Senior Counsel, accidents are bound to happen on account of various reasons. The petitioner is not against taking action against the drivers of the erring vehicles. However the license of the transporters should not be cancelled by imposing penalty on account of reasons, which are beyond their control. Learned Senior Counsel would further submit that as per their request, this Court directed respondents 2 to 4 to take instructions from the oil companies as to whether suitable guidelines could be incorporated for the purpose of ascertaining as to whether individual transporters are responsible for the accident, before taking appropriate action. In pursuance of the said direction, respondents 2 to 4 submitted a clarificatory note wherein they have indicated the steps which would be taken in case the accident involving LPG carrier is reported. According to the Learned Senior Counsel, the petitioner is satisfied with the guidelines but however, their interest would be better protected in case respondents 2 to 4 takes steps to include the officer of the Insurance Company or the nominees of the Highways department as members of the committee.
5. Learned Senior Counsel for respondents 2 to 4 justified the penalty clause incorporated in the tender notification. According to the Learned Senior Counsel, the penalty is not automatic. Whenever an accident is reported, the matter would be considered by Senior Officers of the Corporation and action would be taken only after giving a reasonable opportunity to the contractors. Learned Senior Counsel would further submit that operating instruction for implementation of the Transport Discipline Guidelines now made by the Oil Companies would reveal that the interest of the operators are also protected and penalty will not be a matter of course in the event of accident.
DISCUSSION:
6. The writ petition is at the instance of LPG Transport Owners Association. The issue is as to whether the Oil Companies were justified in incorporating the clause in the tender condition. It is the case of the petitioner that no such condition was incorporated in the earlier tender and the conditions are incorporated in the impugned tender notification for the first time.
7. The notification issued by respondents 2 to 4 are in the nature of invitation to submit the offer. The Oil Companies are well within their powers to incorporate appropriate terms and conditions in the tender document as a condition to be satisfied for awarding the contract. It is for the parties, who proposes to participate in the tender to decide as to whether they should submit their offer in pursuance of such notification. The association has no say in such matters. The tender notification does not permit the association to submit the bid. Therefore the association has no locus standi to challenge the tender terms.
8. The impugned provisions of the tender notification reads thus:
5.2.3.4 - For polluting environment due to product spillage from tilting or leaky vehicles on road, in case of accident/unsafe driving
(a) First instance: The TT shall be suspended for one month.
(b) Second instance: The TT shall be blacklisted on industry basis.
5.2.3.5 In case of accident involving injury or damages to facilities at the work place or accident involving injury during transportation on the road
(a) First instance: The TT shall be suspended for one month.
(b) Second instance: The TT shall be suspended for three months.
(c) Third instance: The TT shall be blacklisted on industry basis.
In case of damages to the facilities at the work place, the cost of the damages shall be recovered from the carrier.
5.2.3.6 - For fatal accident at work place
The TT shall be blacklisted on industry basis.
5.2.3.7 - For fatal accident on the road
(a) First incident: The TT shall be suspended for six months.
(b) Second: The TT shall be blacklisted on industry basis.
9. The impugned conditions pertains to safety aspect. LPG Tankers are engaged for transportation of hazardous commodity and any safety lapse would result in serious consequences to the public as well as to the property. Therefore it was only the larger public interest which weighed with the Corporation to take a decision to incorporate penalty clause and the same is evident from the counter affidavit filed on behalf of the Oil Companies. It is a fact that accidents involving LPG tankers were on the higher side in recent times. In a very recent accident involving an LPG tanker at Kollam in Kerala four people were killed and fifteen were injured and the loss in the said accident was estimated at Rs. 1.15 crores. It has come out that the driver was all alone in the cabin and not even an attendant was there to help him, in spite of the fact that the LPG tanker was carrying 18 tonnes of LPG transporting from Indian Oil Corporation''s Indane refilling plant at Karunagapally. The details furnished by the Learned Senior Counsel for respondents 2 to 4 shows similar accidents involving LPG tankers. Therefore public interest was taken care of by the oil companies, while settling the tender terms, which resulted in incorporating new terms regarding penalty, so that the contractors and drivers would be very careful in future.
10. The matter is purely in the realm of contract. It is for the truck owners to take part in the contract or to abstain from submitting tenders. In case the terms and conditions are not favourable to them nobody compels them to take part in such contracts. It is a business for them. Respondents 2 to 4 are Public Sector oil companies and they are bound to protect the interest of the public. Therefore the impugned provisions were all incorporated in public interest keeping in view, the safety of the general public as well as the work place.
11. The Oil Companies have framed Operating Instructions for Implementation of Transport Discipline Guidelines which reads thus:
a. No penalty shall be imposed in case it is found during the investigation by a local Committee of minimum two Officers that the TT crew/Transporter was not at fault. But, if any FIR has been filed by the local authorities indicting the TT crew or the transporter, the Transporter will challenge the FIR to prove the innocence of the TT crew and further action (if any) will be taken, based on the outcome of the case.
b. For minor offences (where suspension of truck/crew is upto one week), the action shall be initiated after proper investigation by a local Committee of two officers.
c. For minor offences (suspension of more than a week/blacklisting), the action shall be initiated after proper investigation by a local Committee of two Officers in consultation with Region/State Office/Zone.
d. Since it has been pointed out by the transporters during various meetings with them that even though their drivers are not at fault majority of time, but due to driving heavy vehicles generally the Police blame the drivers (in FIR) as given to following examples:
Abruptly any other vehicle/person/animal coming in the way.
Tank truck is hit by other vehicle from behind or from sides while other vehicle is overtaking the tank truck.
In above cases, of during investigation it is observed by the Committee, that the accident has taken place not because of the fault of tank truck driver, and tank truck was on their proper track/path (can be ascertained by meeting the witnesses), Committee can recommend for no penal action in such cases, even though any adverse remark is existing in the FIR, subject to the concerned transporter cahllenging the FIR showing his/crew''s innocence.
e. If it is revealed from the FIR that TT was driven in drunken condition or Driver was not having requisite driving license, then action will be taken in line with Transport Discipline Guidelines for non possession of valid Driving License, unless the driver/transporter produces the valid (valid as on the date of the incident) driving license.
f. In case, the driver himself expires during the road accident (due to other than Malpractice cases), then no action will be taken as the concerned driver will not be available to defend his case. In this case also in case there is FIR which puts the blame on the transporter, the transporter is required to challenge the FIR and final action will be taken based on the final court order.
g. The maximum period of blacklisting in case of road accident cases will be up to the expiry of contract period.
12. The operating instructions extracted above takes care of the situation and it protects the interest of the Truck Operators also. The oil companies have made it clear that action would be taken only after proper investigation by the local committee of minimum two officers in consultation with the Region/State Office/Zonal Office. Therefore the interest of the operators are well protected by the oil companies by issuing operating instructions for implementation of the transport discipline. In any case, no interference is called for in the tender conditions, more particularly, when such conditions were incorporated in public interest.
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10. The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice.
CONCLUSION:
14. Therefore I am of the view that the petitioner has not made out a case for quashing the penalty clause. Accordingly the writ petition is dismissed. Consequently the connected MPs are also dismissed. No costs.
