Indane LPG Distributors v/s Indian Oil Corporation: Legal Implications of Transparency in LPG Transportation EOI

By Vikram Views: 15872

Factual Matrix:

The petitioners, an association of distributors of Indane LPG cylinders in West Bengal, filed three similar writ petitions regarding the respondents' actions related to the Expression Of Interest for transporting LPG cylinders.
The respondent issued an expression of interest to ascertain the interest of distributors in engaging their own packed trucks for transporting LPG cylinders vertically from the bottling plants to their respective places of business/go down.
This Expression Of Interest did not specify a base rate for transportation, leaving distributors dependent on respondent's discretion when fixing transportation rates through the tender process.
The petitioners particularly contested clause 9, 10, and 11 of the Expression of Interest.
The petitioners argued that the Expression of Interest lacked transparency, failing to outline the factors used to determine the per unit transportation rate, such as labor costs, fuel costs, and geographical considerations.
They alleged that this violated Articles 14, 19(1)(g), and 21 of the Constitution.

Issues:

Whether the failure to disclose a base rate in the Expression Of Interest violates the distributors' rights and is in violation of Articles 14, 19(1)(g), and 21 of the Constitution of India?
Whether the Expression of Interest's clause 9, 10, and 11 are arbitrary and violate Article 14 of the Constitution of India?

Court's Observation:

The court opined that the Expression Of Interest's failure to specify a base rate for transportation and its lack of transparency regarding factors used to determine the per unit rate made it arbitrary and unreasonable.
The court held that the Expression of Interest was in violation of Article 14 of the Constitution of India.
The Court held that the Expression of Interest issued by the respondent was in fact an offer and not an invitation to offer.
The Court concluded that the Expression of Interest was invalid because it required distributors to accept it without specifying any consideration, making it void ab initio.