THE HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO W.P.No.12227 of 2010 ORDER: This writ petition has been instituted for declaring the action of the respondents 1 to 5 in accepting the bid and awarding the contract in favour of the 6th respondent by their letter dated 25-05-2010, pursuant to the tender notification floated on 05-06-2009, as illegal and to consequently, direct the respondents 1 to 5 to evaluate the tenders strictly in accordance with the eligibility conditions of the tender notification, more particularly, condition Nos.1.3, 1.4 j and 1.8. The 2nd respondent, South Central Railway, has floated a tender notification on 05-06-2009 for supply and stacking of, approximately, 262611 cubic meters of 50mm gauge hard and durable machine crushed stone ballast at Miryalaguda Ballast Depot in Guntur division and loading the same into ED / Hoppers / Traffic ballast wagons by Mechanical / Manual means. The approximate value of the tender was a little more than Rs.16-02 crores. The completion period of the contract was set as 39 months, which included three months period towards mobilization. The last date for receipt of the tenders was set as 10-07-2009 at 11-00 hours, while they were set to be opened at 11-30 hours on the same day. The petitioner is one of the bidders and so was the 6th respondent. It is contended that the 6th respondent did not satisfy the eligibility criteria, but yet, his bid has been processed and ultimately accepted. Clause 1.3 of the tender documents sets out the eligibility criteria. It is required of every bidder to have completed, in the last three financial years, at least, one similar single work for a minimum value of 35% of advertised tender value of work and should have received 150% of the advertised tender value of work as contract amount during the last three financial years. It is further contended that for satisfying that the bidder has executed a similar nature of work, certain documents were required to be submitted in proof thereof along with the tender. The details of such documents have been listed out in Clause 1.4. Clause 1.4(e) also required the bidders to furnish details regarding suspension of business, termination of contract, penalties levied, arbitration, etcetera, to be furnished as per Proforma-V. Clause (j) thereof further specified that works executed for Government or public sector undertakings only will be considered for assessing the turnover. Works executed for private organizations / individuals shall not be considered. It is also contended that as per Clause 1.8, the tenderers are required to submit the test report in respect of sample of ballast, proposed to be supplied, from a laboratory attached to the Civil Engineering Department of any Government recognized Engineering College, and such a test report should not be older than three months before the date of opening of the tender. It is contended that the 6th respondent has failed to furnish in terms of Proforma-V of the bid document, the information relating to suspension of business, termination of contracts, arbitration, etcetera, in respect of each of its partners as the 6th respondent is a joint venture firm. There was material suppression indulged in by the 6th respondent in not disclosing certain crucial information with regard to its joint venture partner as the same is likely to have an adverse impact against it. It is further alleged that the 6th respondent has not executed similar nature of work by supplying ballast to any Government or to any public sector undertaking and that it has also failed to submit the test report of the sample of the ballast, sought to be supplied, from a laboratory attached to any of the Engineering Colleges recognized by the Government, whereas the petitioner has satisfied all the relevant criteria and hence, the present writ petition has been instituted. On behalf of respondents 1 to 5 and 7, the Senior Divisional Engineer (Coordination), Guntur, has filed a detailed counter affidavit in the matter. It is submitted that the 6th respondent has enclosed a certificate to vouch for the fact that he has supplied the ballast to Kutch Railway Company, which is a Government Company and hence, the experience certificate produced by the 6th respondent is valid. Further, the Railway Board (Ministry of Railways) through their letter dated 24-09-2009, have clarified the issue in that regard leaving no scope for any doubt or suspicion for the objection raised by the petitioner to be sustained in that regard. Insofar as the information concerning the joint venture partners in Proforma-V, it is submitted that necessary clarifications have been incorporated in Clause 16.1 of the tender document and hence, the credentials of the partners of the joint venture have been taken into account though the requisite information in terms of Proforma-V is not correctly spelt out. Insofar as the submission of the test report is concerned, the respondent Railways have taken the stand that a similar question has fallen for consideration of this Court in W.P.No.27345 of 2009 and this Court by its Judgment dated 29-12-2009, has held that the certificate issued by the Professor & Head of the Department, Geology, Osmania University, is liable to be taken as a valid certificate and as in-keeping with the similar requirements spelt out in another tender enquiry and hence, the certificate produced by the 6th respondent from the Professor & Head of the Department, Geology, Osmania University, has been accepted and acted upon. It is also pointed out that the petitioner has also produced a similar certificate from the very same Professor & Head of the Department, Geology, Osmania University, with regard to another tender enquiry for supplying ballast to Shankerpally Depot, and hence, the writ petitioner cannot make an issue out of the same. It was further pointed out that there was enormous price difference between the offer made by the writ petitioner @ +24% in juxta- position to the offer of the 6th respondent @ -16%, the difference between the two, working out to Rs.6.41 crores. It was further averred that a Tender Evaluation Committee comprising of experts, has been constituted for making an objective assessment of the offers made by the bidders and the Committee after a fair assessment of the relevant merits in the offers and taking into account and consideration all the relevant criteria and after an in- depth analysis of the merits for accepting the bid of the 6th respondent, made its recommendation that it is not improper for respondents 1 to 5 and 7 to accept the bid of the 6th respondent. Hence, no exception need be drawn in this regard. The 6th respondent has reiterated the same contentions as are canvassed by the official respondents and further added that the Railway Board (Ministry of Railways), after checking up the shareholding pattern of the Kutch Railway Company, has clarified, through their communication dated 24-09-2009, that the said Company is a Government Company in terms of Section 617 of the Companies Act. I have heard Sri Dammalapati Srinivas, learned counsel for the writ petitioner, Sri S.R. Ashok, learned senior Counsel for Sri R.S. Murthy, learned Standing Counsel for respondents 1 to 5 and 7 and Sri D. Prakash Reddy, learned senior Counsel for Sri L. Prabhakar Reddy, learned counsel for the 6th respondent. The learned counsel for the writ petitioner Sri Srinivas, while reiterating the contentions canvassed by the writ petitioner, would submit that the offers made by the bidders pursuant to the tender floated by the respondents, should be evaluated fairly and reasonably and that the same shall not be evaluated by departing from the essential conditions stipulated and any such departure is bound to be viewed not only as an unfair way of dealing with the merits of the matter, but, as an act of conferring favour on one of the bidders. It is, further, contended that when the 6th respondent had withheld the relevant information with regard to one of its joint venture partners, as it is likely to impact his offer adversely, instead of rejecting the bid of the 6th respondent strictly in accordance with the terms and conditions of the tender floated, the 6th respondent has been unduly favoured. The learned counsel has also pointed out that the Ministry of Railways has clarified that the Kutch Railway Company is a Government Company, whereas the tender conditions required the bidders to have executed similar nature of work to a Government or public sector undertaking. The supply of ballast to Kutch Railway Company is not the same as that of supplying to the Government. The information furnished by the Registrar of Companies in this regard, clearly discloses that Kutch Railway Company is a non-governmental Company, and hence, the bid of the 6th respondent ought to have been rejected straightaway. Insofar as the price part of it is concerned, the learned counsel for the writ petitioner submits that irrespective of the offer made by the writ petitioner, the writ petitioner is willing to supply the requisite quantity of ballast material to the respondents at the same price quoted by the 6th respondent, so that the concerns of the respondents 1 to 5 and 7, in that regard, can be addressed. Further, the learned counsel for the writ petitioner would submit that if the price is the only factor that was weighing heavily on the mind of respondents 1 to 5 and 7, they would have done well to call for negotiations, whereat the writ petitioner, who does not suffer the set of disqualifications suffered by the 6th respondent, would have graciously accepted to supply the requisite quantity of ballast material to respondents 1 to 5 and 7 at the same rate quoted by the 6th respondent. Finally, the learned counsel for the writ petitioner would submit that the entire process of consideration of the bid of the 6th respondent, having vitiated the entire process, the tender floated should be cancelled making way for fresh tendering process to take place. Sri S.R. Ashok, learned senior Counsel would submit that all the terms and conditions specified in the tender schedule are not of mandatory nature to be specifically complied with by the bidders. Some of the stipulations and conditions, in the discretion of the Railways, can be waived. But however, the core and essential ingredients of the conditions are liable to be complied with by every one of the bidders and the same are essential and integral to the process of consideration. The learned senior Counsel would, further, point out that in Part-D of the tender schedule, condition No.8 of the conditions of the tender, clearly and unmistakably conveyed to every bidder that if the tenderer gives wrong information or creates wrong circumstances misleading the Railways into acceptance of his tender, the Railways reserve the right to reject such tender at any stage. Thus, the learned senior Counsel would contend that an element of discretion in the matter has been retained in the Ministry of Railways and so long as that discretion has been validly and properly exercised, the same shall not be interfered with by this Court. The learned senior Counsel would further submit that a high-ranking team of technical experts has been constituted for evaluating the tenders and the said Committee has specifically adverted to and dealt with the inaccurate information furnished by the 6th respondent in Proforma-V and it has concluded that the defect in that regard does not come in the way of accepting the bid of the 6th respondent in view of the merit in its offer. Sri D. Prakash Reddy, learned senior Counsel, while adopting the submissions made on behalf of the respondents, would add that every piece of information that is called for in the tender schedule is not an essential one, which will have a bearing upon the assessment of merit of the bidders. Some of the conditions might help the Railways to firm up their conclusions in favour of a bidder. Insofar as the information required to be disclosed as contained in Proforma-V is concerned, the information solicited therein is one such, which might, ultimately, help in tilting the balance in favour of a particular bidder. But however, when the merit of the offer made by a bidder is, otherwise, competitive, as in the instant case, the discretion exercised by the Ministry of Railways to accept the bid of the 6th respondent, cannot be faulted. The learned senior Counsel would submit that the Ministry of Railways is perfectly legitimate and justified in accepting the bid of the 6th respondent, inasmuch as, the Railways will stand to gain by nearly Rs.6.5 crores. The learned senior Counsel would submit that the offer made now by the writ petitioner, to match the price of the 6th respondent, shall not be considered by this Court, inasmuch as, the very sanctity of the tendering process would be lost in such an event. In such a case, every unsuccessful tenderer would resort to litigation first and then seek to match the offer of the lowest tenderer, thus, frustrating the entire process of tendering itself. The essential facts are not in dispute in this case. In view of the same, the questions that fall for consideration can be crystallized as under: (1) whether all the conditions specified in a tender schedule are invariably liable to be considered as essential or some of them could be construed as discretionary ; (2) if some of the terms and conditions of the tender schedule are to be considered as discretionary, whether the respondent Railways has exercised the said discretion properly and correctly; and (3) whether a Government Company can be construed to be a public sector undertaking or not? The essential qualifications or eligibility criteria specified in any tender form are very much integral to the process of tendering itself. There is no discretion involved for the employer to vary or dispense with any time later on such essential and integral conditions and terms of the tender. It is important that there should be a level-playing-field amongst all the players. They should be judged by uniform standards and common criteria. There cannot be any element of variation with regard to these eligibility criteria at a later stage. If, any variation is allowed, it would amount to tilting the balance, unjustly, in favour of one of the bidders. Even while entering into a contract, the State and its instrumentalities cannot have the freedom to choose a tenderer of its choice. They will have to deal with everyone, who responds to a tender enquiry, with the same and equal measure of fairness and consideration. One cannot be isolated or chosen for favourable treatment, while the others can be exposed to harsher treatment. In the instant case, every bidder was required to have executed similar nature of work of, at least, 35% of the value of the tender. The tender document has clarified the ‘similar nature of work’ as, meaning, as supplies affected to Government or public sector undertakings. The expression “Government”, is, at best, capable of being construed as, in the context, Union Government or any of the State Governments. The same is not liable to be construed otherwise. But however, when it comes to the expression “public sector undertaking”, if the same it to be understood in the context of common parlance, means a business house or trading enterprise owned or controlled by the Government carrying on trade or business or rendering professional or technical services. In Webster’s Third New International Dictionary the expression ‘undertaking’ has been assigned the meaning: “The act of one who undertakes or engages in a project of business; the business of an undertaker; a business, work, or project which one engages in or attempts”. In Words and Phrases Legally Defined, 3rd Edn., “undertaking” has been defined thus: “Undertaking” includes any trade, business or profession and, in relation to a public or local authority, includes any of the powers or duties of that authority, and, in relation to any other body of persons, whether corporate or unincorporated, includes any of the activities of that body.” A trade or business carried on by a definite set of individuals can be understood as an undertaking, thereby conveying, abundantly, that it is a business or trading entity carrying on a specified set of activity. Such an undertaking could be a public or private entity, depending upon its composition and strength. A private entity stands in contrast to that of a public entity. An organization, which is overwhelmingly regulated or controlled or extensively supported either administratively or financially by the State or its instrumentalities, could be understood as a public entity as compared to that of private entity comprising of individuals pursuing a trade or calling either for profit or for the love of it. A public undertaking, in comparison, need not indulge in its activities only with a profit motto. For instance, a transport organization, or an energy supplier or water or drainage service provider, can be classified as essentially operating to render quality service to the public at large, to the extent possible, without an eye on profit making. Essentially, they are intended to be hardship mitigaters, if not efficient service providers to render the life and times of the public at large as comfortable as is possible. When the State is required to render manifold obligations towards its citizens, some of which may not be so capable of being rendered without acquiring a degree of professionalism and expertise, the State started devising the method of making available such services through establishment of commercial entities. Such entities carry on the trade or business or calling with an assured element of skill and dexterity coupled with professionalism. If such entities are administratively and financially supported or controlled by the Government, they are called as public sector undertakings. In the instant case, the Railway Board upon checking up the share holding pattern of Kutch Railway Company Limited has opined that it is a Government Company for the purpose of Section 617 of the Companies Act, through their communication dated 24.9.2009. Section 617 of the Companies Act defined the Government Company means any company in which not less than 51% of the paid up share capital is held by the Central Government or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company. Thus, a Government Company is sought to be defined based upon majority share holding of the paid up share capital held by one or the other governments. It is therefore clear that unless 51% of the paid up share capital of the company is owned by one government or the other, no such company can be said to be a Government company. As was already noticed supra, if one government or the other supplies capital or extensively seeks to administratively and otherwise control the affairs of any undertaking, such an undertaking answers the expression `public sector undertaking’. The expression `public sector undertaking’ is deployed for the purpose of contrasting it to private sector. Hence, in my view, Kutch Railway Company answers the expression `public sector undertaking’. Therefore, the works executed by the 6th respondent to Kutch Railway Company can legitimately be taken into account and consideration to qualify and render it eligible for competing along with the writ petitioner. All the conditions stipulated in a tender document need not be construed as essential qualifications. Similarly, the terms and conditions contained in a tender document are not liable to be construed in the same manner or with the same vigor as a provision of law is normally construed. Tender document at best is an invitation for the prospective offerers to enter into a contract. The terms and conditions contained therein are essentially the terms set out by the employer for the purpose of making the prospective offerers understand the rules of the game and the contours of the work/service needed to be provided. So long as fair and reasonable terms are settled and applying uniformly the same to all the bidders and if all the bids were to be considered, then the action of the State/employer passes the test and form part of the obligation to act fairly and reasonably by the State. There is an obvious difference in the matter of entering into contracts by and between private parties and the contracts to which the State is a party. Even in matters of contracts, the State has to act for the public good and to cater to the larger public interests. The State is under an obligation not to act arbitrarily or whimsically. It is correspondingly under obligation to not only act fairly, but also reasonably. This is the fundamental obligation that flows from the adherence to the stipulations contained in Article 14 of our Constitution. But, however, if an element of discretion in the matter of choosing one bid in preference to the other is retained, even in such circumstances, the discretion retained must be exercised within the limits set out supra. No decision can be taken without being guided by rational principles. It is apt in this context to note that the Supreme Court in Jaisinghani S.B. v. Union of India[1] has approvingly quoted what Douglas J has stated in United States v. Wunderlich[2], thus: “law has reached it’s finest moments when it has freed man from the unlimited discretion of some ruler; where discretion is absolute, man has always suffered.” In the same judgment, dictum spelt out by Lord Mansfield in John Wilkes, In Re[3] has been adopted. It is said: “discretion means sound discretion guided by law. It must be governed by rule, not by humour: it must not be arbitrary, vague or fanciful.” In the instant case, the information which is called for to be furnished in Format V of the Tender form can at best help the railways to evaluate properly and correctly the merits of the respective tenders. If the offer of more than one tender is fairly competitive, then perhaps the information called for in Form V will have a role to play in the ultimate choice of the bidder. But, in a case like the present one on hand, where the offer of the 6th respondent is the most competitive one, the failure to submit truthfully and faithfully the information called for in Form V will not have an absolute role to play. Even then, the Tender Committee constituted by the respondents comprising of two technical members and one financial expert have crytically evaluated this failure or default on the part of the 6th respondent after necessary deliberation until the issue has been concluded to accept the bid of the 6th respondent. Therefore, there does not appear to be any arbitrary or whimsical attitude exhibited by the respondents. Then comes the question as to whether the failure of the 6th respondent to supply the certificate from a laboratory attached to the College of Engineering would disentitle the bid of the 6th respondent from being considered or not? It is not in dispute that the 6th respondent has submitted the certificate issued by the Professor of Geology, Osmania University. But, however, it should be stated in all fairness to the learned counsel for the petitioner Sri Dammalapati Srinivas that when his attention was drawn to the fact that when a similar question has fallen for consideration before this court in WP No.27345 of 2009, this court has taken the view that the Geology department of any University would equally be capable of certifying about the analytical report of the ballast material. Hence, this court had come to the conclusion that the report submitted by the Professor of the Geology department of Osmania University is also liable to be construed as the same as certified by a lab attached to a College of Engineering. Sri Srinivas, has not pressed this contention beyond this point. I have perused the judgment rendered by this court in WP No. 27345 of