'Reservation In PSU Contracts For SC/ST Contractors Does Not Violate Article 14': Bombay High Court Upholds BPCL Tender Conditions

The Bombay High Court has upheld the validity of Bharat Petroleum Corporation Ltd.'s (BPCL) tender conditions that provide for reservations and concessions to Scheduled Caste (SC) and Scheduled Tribe (ST) bidders in petroleum transport contracts, holding that affirmative action need not be restricted to public employment alone.A division bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne dismissed a writ petition filed by M/s. Patil Roadlines and other transporters, challenging the August 9, 2024, tender issued by BPCL for road transportation of Bulk POL (Petroleum, Oil, Lubricants) products.The petitioners, who are existing contractors, objected to concessions and reservations provided in the tender. They also challenged the underlying 1994 Government of India guidelines that directed oil PSUs to reserve quotas for SC/ST operators.The petitioners contended that the provisions made by Respondent No.1-BPCL for reservation in the matter of allotment of contract to SC/ST bidders are constitutionally invalid and violate the fundamental rights of the Petitioners. They argued that the reservations can be made only in public employment under provisions of Articles 15 and 16 of the Constitution.Rejecting the petition, the Court clarified that Article 46 of the Constitution empowers the State to promote the economic interests of weaker sections, including SC/ST, and that this can extend beyond public employment. It observed:“…the State is under obligation to take care of the economic interest of SC/ST category persons. The State has considered it appropriate not to restrict the social and economic upliftment only in the matter of public employment and to extend the same in smaller contracts floated by the PSUs.”The Court remarked that the scope of interference by constitutional courts in the implementation of the tender process by the tendering authority lies in an extremely narrow compass; it cannot sit in appeal over the wisdom of the tendering authority in prescribing the tender conditions. “While determining challenge to a tender process, the courts are not concerned with the merits of the decision, but need to verify only whether the decision making process is just, fair and transparent,” the court observed.The Court said that far from creating any inequality violating the provisions of Article 14 of the Constitution of India, such measures are towards affirmative action aimed at promoting the economic upliftment of a select class of persons in the society. Such measures do not cause any violence to the equality clause enshrined in the Constitution of India. Case Title: M/s. Patil Roadlines & Ors. v. Bharat Petroleum Corporation Ltd. & Ors. [Writ Petition No. 12106 of 2024]Click Here To Read/Download Order

'Reservation In PSU Contracts For SC/ST Contractors Does Not Violate Article 14': Bombay High Court Upholds BPCL Tender Conditions

Saksham Vaishya

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