The terms of the invitation to tender are not open to judicial scrutiny unless they are wholly arbitrary, discriminatory, or actuated by malice. The court emphasized the commercial nature of contract awards and the limited scope of judicial review in such matters.

The petitioner has filed the above writ petition to issue a writ of declaration, declaring that the pre-qualification criteria as specified in Condition Nos. I, II(3), II(5) of the Notice Inviting Tender dated 14.10.2016, issued by the respondent Corporation, as arbitrary, unreasonable, irrational and null and void.

2. The brief case of the petitioner is as follows:-

(i) According to the petitioner, they are doing Oil Tanker transporting business for the past several years and they are the existing contractor of the respondent Oil Corporation. The Petitioner Transport was awarded contract by the respondent corporation for the period of two years with effect from 10.01.2014 and extendable for one more year at the sole discretion of respondent corporation. On 14.10.2016, the respondent corporation issued Notice Inviting Tender, thereby invites e-tenders under two bid system from tank trunk owners for award of the contracts for road transportation of bulk petroleum products with effect from 16.12.2016 or from the date to be decided at the discretion of the company for the period of three years with option for extension upto two more years at the discretion of the company.

(ii) The respondent company prescribed the following conditions in its notice inviting tender dated 14.10.2016:-

I. Earnest Money Deposit (EMD) of Rs.10,00,000/- (Rupees ten lakhs only) shall be paid online only except MSME having valid registration certificate as MSME rendering transport services.

II. Eligibility criteria

3. Maximum three transporters/vendors/ Logistic Company shall be issued work order without any details of tank truck numbers. Single work order will be given for all locations (Chennai based locations, Coimbatore, Tuticorin and Narimanam terminals) together. This is a combined tender for all four locations of Tamil Nadu State Office together. Tenderer has to quote for all the locations. Narimanam Terminal will be transporting LSHS, hence, suitable Fit Tank Trucks for transportation of LSHS are to be provided by the bidders. In addition to the above FO Transportation Fit Trucks are to be provided in other three locations.

5. Product shall be released to the transporter against security deposit. The amount of security deposit with IOCL shall always be more than the value for the product released to the transporter. The security deposit can be increased or decreased by transporter depending upon work load. However, minimum security deposit of Rs.50,00,000/- (Rupees fifty lakhs only) will always be maintained by the transporter with IOCL. To illustrate the release of supplies against security E.g. in case security deposit with IOCL is Rs.10 crores for a particular transporter, at no point of time, value of the product in transit for that transporter should exceed Rs.10 crores as per HO approved note dated 29.01.2016.

(iii) According to the petitioner, the respondent company introduced the above said three conditions for the first time in the above said Notice Inviting Tender dated 14.10.2016. Further, according to the petitioner, the said conditions are discriminatory under Article 14 of the Constitution of India being aimed at excluding small transporters like the petitioner from the tender process and creating monopoly in favour of selected bidders to complete exclusion of all others in the field.

(iv) According to the petitioner, the respondent company fixed the Earnest Money Deposit of Rs.5,000/- (Rupees five thousand only) per trunk in the existing contract and previous contracts. Now, suddenly, the respondent company increased the Earnest Money Deposit amount from Rs.5,000/- per trunk to Rs.10,00,000/- per bid. Similarly, the respondent company fixed a sum of Rs.8,00,000/- (Rupees eight lakhs only) as a security deposit in the previous contracts and now it has been increased to Rs.50,00,000/-. In these circumstances, challenging the said conditions the petitioner has filed the above writ petition.

3. The brief case of the respondent is as follo