M/s. R.K. Trading Company vs Union of India and Others

G.S. Sandhawalia, J.

The present writ petition has been filed for issuance of a writ in the nature of certiorari for quashing the selection of respondent No. 4 as wholesale dealership of fertilisers under the General Category and the letter of appointment dated 25.10.2012 which had been issued to him for Madlauda, District Panipat. Further direction is prayed that the official respondents should undertake the exercise of selection of dealership based upon transparent and duly specified criteria in line with the fertiliser policy of Government of India. The pleaded case of the petitioner is that respondent No. 2, National Fertiliser Limited (for short, ''NFL'') is an incorporated Government company and the largest Central Public Sector Enterprise in fertiliser sector with a turnover of over Rs. 7,300/- crores and an overall annual installed capacity of 32.31 lakh tones of urea. The company has five urea plants located at Nangal & Bathinda in Punjab, Panipat in Haryana and Vijaipur I & II Plants in Madhya Pradesh and is involved in the production and distribution of fertilisers to the farmers across the country and it is a State within the meaning of Article 12 of the Constitution of India and is amenable to the writ jurisdiction of this Court. An advertisement was issued on 23.06.2012 proposing to appoint wholesale dealers and the last date of the application was 09.07.2012. As per the copy of the advertisement, terms and conditions and the State and district wise vacancy position for appointment of wholesale dealers was enclosed. For the State of Haryana, at serial No. 40, there was a vacancy for District Panipat. There was no selection criteria specified in the advertisement or in any other document circulated/published by the respondents and there was no transparent manner of adherence to requirements laid down for the appointment of the wholesale dealers. The petitioner having its establishment in Tehsil Bapoli, District Panipat and being fully eligible, made an application within the time specified in the advertisement for the appointment of dealer and was issued an interview letter dated 23.08.2012 for appearing in the office of the official respondents on 06.09.2012. The petitioner produced all the relevant documents in original as well as photocopies of the same as required by the official respondents. The petitioner, at the time of interview, realised that the approach of the officials of the respondents was very casual and they did not put any question to the petitioner and the exercise was a mere formality since they wanted to appoint the dealers which they had chosen in advance for District Panipat consisting of Panipat, Smalkha, Israna and Bapoli and there was already a dealer at three places but there was no dealer at Bapoli. At Sub-Tehsil Madlauda, there were three dealers, namely, M/s. Sunrise Trading Company, M/s. Jain Oil Company and M/s. Sudesh Kumar Dalbir Singh but the official respondents No. 2 & 3 appointed respondent No. 4 as dealer at Madlauda whereas they should have appointed a dealer from Bapoli. Only seven parties had made applications for their appointment whereas three of them were from Panipat, two from Madlauda and one from Bapoli whereas one was out of District, i.e., from District Karnal. Petitioner had been issued a letter of authorisation entitling the petitioner to carry on the business of trading in fertiliser which was valid from 24.05.2012 to 23.05.2015, i.e., for a period of 3 years and he had experience in selling fertilizer and was fully eligible to operate the dealership but his merit had been ignored. The issue had been raised through the District Grievances Committee, Panipat who had issued a letter dated 10.12.2011 to the Area Manager, NFL Panipat that an effort had been made to appoint a dealer at Madlauda whereas there was no necessity since there were already three dealers there. The official respondents had transferred two of its officers to Madhya Pradesh who had processed the aforesaid complaint of the District Grievances Committee which shows the mala fide of NFL authorities. Accordingly, reference was made that fertiliser was a subsidised commodity and there should be equitable distribution of the same to the farmers and it should be made available at all places to achieve optimum production and strengthen the socio-economic structure of the nation. 3. In the written statement filed by respondents No. 2 & 3, it was pleaded that the selection of the dealers was made purely in accordance with the policy and the criteria framed by the answering respondents. 112 vacancies were advertised out of which 92 vacancies were filled throughout the country on the basis of the criteria framed. All the dealers who were selected to be appointed as wholesale dealers on recommendation of duly constituted committees had been duly approved by the competent authority and the appointment letters had been issued. There were four Tehsils in District Panipat, namely, Panipat, Smalkha, Israna and Bapoli. Tehsil Bapoli did not have any dealer. However, as per the criteria framed, the eligible applicants were to be considered for the sale of fertilisers and other factors like inputs in the marketing skills and their marketing and financial strengths etc. had to be seen. The petitioner had no experience regarding the fertiliser and agriculture inputs and it was only a commission agent as per the application form of the petitioner. In the trading account as on 31.03.2011, it was shown that turnover was only to the extent of Rs. 24.25 lacs and Rs. 3.60 lacs as on 31.03.2012 as a commission agent. On the other hand, respondent No. 4, who had been appointed as wholesale dealer, had turnover of Rs. 8.55 lacs in fertiliser and Rs. 211.75 lacs in agriculture inputs. The financial strengths as well as the marketing skills of respondent No. 4 was much better than the petitioner and it was unanimous choice of the selection committee. A criteria for selection was circulated vide letter dated 29.08.2012. The petitioner had applied for being appointed as dealer and its application was found complete. The appointment of the dealer was governed by the marketing trend, demand of the material and location where sale of the product is more. The sale of fertilizers and agriculture inputs in Madlauda was more and three dealers already existed there, one of them was not working at all and the other two, being related to each other, had formed a group and the replying respondents wanted to have one more dealer in that area in order to improve the sale of agriculture inputs especially along with the fertilisers. There was no policy that the dealers were to be appointed at block level nor blocks had been made the main distribution points. The action of the respondents was fully transparent and in fair manner. The communication (Annexure P-5) was written by a member of the District Grievances Committee, Panipat in his personal capacity and not by the District Grievances Committee, Panipat. The Area Manager had nothing to do with the appointment of a dealer and the selection was as per law. The officers who were transferred had been promoted and sent to Madhya Pradesh. Respondent No. 4 had been appointed as wholesale dealer after following due procedure. The decision of appointment of dealers was on the basis of demand and supply.

In the replication filed, it has been pleaded that there was no data for the selection of dealers for the particular location. The petitioner had been duly considered in the rank No. 2 in the selection and as per the Fertiliser Policy, the same had been amended subsequently by the respondent-NFL. Interview was a mere eyewash and the criteria adopted was illegal and liable to be quashed. There was no data available with the official-respondents to show that there was lesser demand from the area to which the petitioner belonged and the farmers of the Bapoli area used to purchase the fertilisers by travelling to far off locations.

An affidavit of Sh. Sohan Lal, Chief Manager, N.F.L. had been filed wherein it was pleaded that the petitioner was a new entrant in the business of fertilisers and agriculture inputs. The Committee who had interviewed the candidates was specified. It was contended that no data was required to be prepared. The State Level Committees were constituted by the State Officers who were well aware of the requirements of the area of the State and the company is working in a commercial field and the supply of fertiliser was to be made as per the requirement of the market and in the area where there was requirement. The company may not prefer to appoint a dealer at the place where there is minimal requirement.

Counsel for the petitioner vehemently argued that the criteria dated 29.08.2012 (Annexure R-1) should have been floated before the advertisement so that the petitioner could meet the requirements of the policy. Accordingly, it was contended that the subsequent fixing of the criteria and circular was bad. There were already three dealers at Madlauda and one had not been working at all and the petitioner, being an applicant at Bhapoli should be appointed as dealer for proper distribution. Reference was also made to the complaint (Annexure P-5) to show that there were grievances regarding the functioning of the dealers at Madlauda.

Counsel for the respondents, on the other hand, submitted that the decision of the Company was a commercial decision and they had to see the viability of the area and where there were sales. The case of the petitioner had been duly considered and it was listed at rank No. 2 and according to the view of the Committee, respondent No. 2 had appointed respondent No. 4 being more experienced and thus, was duly appointed as a wholesale dealer.

Records had also been produced for perusal of this Court. After examining the records and the submissions made by the counsel for the parties, we are of the opinion that no relief can be granted to the petitioner. The petitioner had applied in pursuance of the advertisement and submitted its application along with its experience certificate. Similarly, respondent No. 4 had also submitted its application along with the relevant documents. The Committee consisting of the Senior Manager Marketing and Deputy Manager Marketing along with Manager (F & A) accepted 333 dealers applications up to 09.07.2012 and came to the conclusion that 298 applications were received where the earnest money had been deposited. 35 applications had been received without the earnest money, accordingly, the said 35 applications were not considered. Three applications were received with earnest money but the vacancies were not advertised and were not to be considered and thus, documents of 295 applicants were taken into consideration. Another 58 applications were received after the due date and out of these, 28 applications were received after the due date against the advertised vacancies and accordingly, interviews were to be held for 295 applicants. The Committee was to consist of four persons out of which, there was to be a representative from the zonal office, one from the Central office, one from the State office and one from the financial and accounts representative. As per the decision of the Director, Marketing, for District Panipat, the petitioner-company and respondent No. 4 were recommended on the basis of the interview held on 06.09.2012. It is the case of the petitioner itself that as many as 7 applicants were there out of which three were from Panipat and two were from Madlauda whereas one was from Bapoli and one from Karnal which was out of District. The Committee, on the basis of the interview and the record produced before it, recommended the petitioner and respondent No. 4. The experience certificate of respondent No. 4 shows that the proprietor of the firm has the educational qualification of B.Com. and was already selling fertiliser under the brand name of Shri Ram Fertiliser and had sold 495 metric tonnes of urea and 45 metric tonnes of DAP and 300 metric tonnes of urea and 99.9 for DAP. His turnover from the year 2008-2009 till 2010-2011 was Rs. 10,48,738/-, Rs. 1,38,14,338/- and Rs. 2,20,31,376/- respectively. Thus, it is apparent that the Committee had recommended respondent No. 4 at number one because of the experience in the fertiliser business and the fact that it was already selling fertiliser whereas in the case of the petitioner, it had no experience in the sale of fertiliser and neither was a dealer for any other company. This Court would not interfere with the subjective satisfaction of the Committee unless it is shown to be arbitrary, discriminatory, actuated with mala fides or in any manner, fails to follow any procedure as laid down by law. The merits of the decision is not to be examined but only the decision making process is to be seen. The fact that it is a commercial contract, though in a restricted commodity, would not mean that a dealer is to be appointed at a place where the company does not consider it necessary. The criteria which was circulated on 29.10.2012 is a communication from the General Manager to the Zonal Manager and is inter departmental communication.

Counsel for the petitioner had relied upon Madan Mohan Sharma and Another Vs. State of Rajasthan and Others, to contend that the change in criteria was not permissible after the advertisement was issued. The said judgment pertains to the appointment procedure of Grade-III Teachers and the advertisement was issued on the basis of the circular which was in force and the subsequent advertisement, as per the statutory rules which was amended. The said judgment would have no applicability in the facts of the present case as there are no statutory rules having the force of law. Thus, in the present case, an inter-departmental communication which had been issued cannot be faulted, as contended by the counsel for the petitioner. Merely because there are 3 dealers at Madlauda would not mean that another dealer could not be appointed. Rather, according to the petitioner-company, one of them is not working and the other two are related to each other and had formed a group. In such circumstances, the appointment of another dealer cannot be held to be an arbitrary act and the petitioner had a mere right of consideration which has been duly done by the interview Committee and there was no indefeasible right of the petitioner to be appointed. In the absence of any allegation of mala fides against any particular official, no fault can be found in the action of the official respondents in awarding the tender in favour of respondent No. 4. Accordingly, in such circumstances, no ground for interference by the writ Court in exercise of its discretion under Articles 226/227 of the Constitution of India has been made out. Writ petition is, accordingly, dismissed. Records of the case be handed back to counsel for the respondents against proper receipt.