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2013 (2) TMI 370 - HC - Indian LawsE-auction method for sale of chrome ore and chrome ore concentrates to seven enlisted empanelled buyers - petitioner No.1 claims to be a producer of Friable Chrome Ore and Chrome Concentrate & Respondent No.6/Union of India constituted, designated and nominated respondent No.1/MMTC as the sole canalizing agency under the Export & Import Policy - petitioner no. 1 questined mode and manner in which respondent No.1 seeks to work out its role as a canalizing agency in terms of the export and import policy. - Held that - The petitioner No.1 had a grievance with the earlier policy enlisting seven (7) buyers. It is the petitioners who proposed that global tender would be the answer. Such a course of action was accepted by respondent No.1. Of course, petitioners submits that the proposal for the global tender through e-process was not accompanied with suggestions or a consent on the part of the petitioners qua clauses (a) to (d) of condition (i) but what consider is whether the conditions so imposed can be said to be so arbitrary or illegal that no reasonable person could come to the conclusion of framing such a policy (Wednesbury‟s principle) or that the terms & conditions have been tailor made to suit a particular person/entity Decision Oriented Systematic Analysis (DOSA) . It is true that respondent No.1 holds a dual obligation arising from the role it performs, i.e., the first one arising from the process culminating in the contract with the buyer and the second one when those offers are put to the sellers. In order to safeguard its commercial interests, insofar as the contract with the buyer is concerned, clauses (a) to (d) of condition (i) have been inserted as part of Technical Bid . No doubt clauses (g) & (h) of condition (i) also seek to safeguard the interest of respondent No.1 but then it cannot be said that respondent No.1 is devoid of the authority of creating additional assurances to safeguard its commercial interests as is sought to be done by clauses (a) to (d) of condition (i). There is also force in the contention of respondents 1 to 5 that petitioner No.1 cannot really make a grievance as a seller as it is the buyers who can be aggrieved by the terms & conditions. It cannot be that a proxy battle can be fought by petitioner No.1. Of course interest of petitioner No.1 is to safeguard its economic interest but that cannot be at the cost of compromising the financial interest of respondent No.1 as a canalizing agent who has taken steps to safeguard those interests. Thus respondent No.1 acted within its domain to lay down terms & conditions for safeguarding its interest qua independent contracts with the buyers and sellers separately. No exercise of jurisdiction under Article 226 of the Constitution of India required.
Issues Involved:
1. Legality of the introduction of e-auction and global e-tender system by respondent No.1. 2. Validity of clauses (a) to (d) of condition (i) in the "Technical Bid" of the global e-tender. 3. Locus standi of the petitioners to challenge the terms and conditions of the global e-tender. 4. Allegations of forum shopping and misleading the court by the petitioners. 5. Scope of judicial review in tender and contractual matters. Issue-Wise Detailed Analysis: 1. Legality of the introduction of e-auction and global e-tender system by respondent No.1: The dispute arose from a meeting of Chrome Ore Producers on 10.7.2012, where respondent No.1 introduced an e-auction method for selling chrome ore, which was challenged by the petitioners. The petitioners proposed a global tender system instead. Respondent No.1 later introduced a global e-tender system for export, as communicated on 20.7.2012. The petitioners were aggrieved by the introduction of certain clauses in the "Technical Bid" of the global e-tender, which they claimed impeded competition. 2. Validity of clauses (a) to (d) of condition (i) in the "Technical Bid" of the global e-tender: The petitioners argued that clauses (a) to (d) of condition (i) in the "Technical Bid" impeded competition and were not necessary for securing revenue. They contended that these clauses should not prevent them from exporting their cargo. The court noted that clauses (a) to (d) were introduced to safeguard the commercial interests of respondent No.1 and were within its authority. The court found that these clauses were not arbitrary or illegal and were designed to ensure that the buyers had the capacity and resources to fulfill the contracts. 3. Locus standi of the petitioners to challenge the terms and conditions of the global e-tender: The respondents argued that the petitioners, as sellers, did not have the locus standi to challenge the terms and conditions of the global e-tender, which were meant for buyers. The court agreed, stating that the petitioners could not fight a proxy battle and that the terms and conditions were designed to safeguard the financial interests of respondent No.1 as a canalizing agent. 4. Allegations of forum shopping and misleading the court by the petitioners: The respondents accused the petitioners of forum shopping and misleading the court, given that a similar petition was pending in the Calcutta High Court. The court noted that the petition in Calcutta had become infructuous due to the change in policy and that the present petition was a challenge to the new policy. Therefore, the court did not find merit in the allegations of forum shopping. 5. Scope of judicial review in tender and contractual matters: The court referred to the Supreme Court judgment in Michigan Rubber (India) Ltd. Vs. The State of Karnataka & Ors., emphasizing that judicial review of administrative action is limited to checking for arbitrariness, irrationality, unreasonableness, bias, and mala fides. The court reiterated that it would not interfere with policy decisions unless they were arbitrary, discriminatory, mala fide, or actuated by bias. The court found that respondent No.1's actions were within its domain and aimed at safeguarding its commercial interests. Conclusion: The court concluded that respondent No.1 acted within its authority to lay down terms and conditions for safeguarding its interests in contracts with buyers and sellers. The petitioners' challenge to the global e-tender system and its clauses was dismissed, and the court declined to exercise jurisdiction under Article 226 of the Constitution of India. The writ petition was dismissed, with each party bearing its own costs.
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