IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FIRST DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE SRI JUSTICE P.S.NARAYANA Writ Petition No. 25882 of 2007 Between: S.A. Rahaman S/o S.M. Subhan, r/o Plot No. 134, Vanasthali Hills, Vanasthalipuram, Hyderabad-17. ... PETITIONER AND 1. The Union of India, rep by its Chairman, Railway Board and Ex Officio Principal Secretary, Ministry of Railway, Rail Nlayam, Secunderabad. 2. The General Manager, South Central Railway Rail Nilayam Secunderabad. 3. The Principal Chief Engineer, South Central Railway, Rail Nilayam, Secunderabad. 4. The Divisional Railway Manager, O/o DRM Office, Opp: Rail Nilayam Secunderabad Division, Secunderabad. ...RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the affidavit filed in support of the writ petition, the High Court may be pleased to issue an order, more particularly one in the nature of writ of Mandamus or any appropriate Writ to set a side T. No. 740/South/SC(1) proposed development of Ballast Depot at PPY(1) and supplying stacking of 50mm Guage Machine crushed ballast and loading into Railway wagons/ Hoppers by mechanical means (Quantity 15000 cum) as per the Railway Specifications at Railway Depot at PPY(1) i.e, Papatpally in Kazipt – Bazawada Section and declare that tender notice No.740/South/SC(1) as illegal, arbitrary unjust and consequently direct the respondent authorities to restrain the respondent Nos.3-4 from taking further action in terms of tender notice T.No.740/South/SC(1) and to pass such other orders. Counsel for the Petitioner. : Mr. JOGRAM TEJAVAT Counsel for the Respondents. : Mrs. C. V. VINITHA REDDY The Court made the following: ORDER: - Heard Sri Jogram Tejawat, learned counsel representing the writ petitioner and Sri C.V. Rajeeva Reddy, learned standing counsel for Railways, representing the respondents. 2. This Court ordered Notice Before Admission on 07-12-2007 and made an order that any finalization of the tenders would be subject to the further orders, which would be made in the writ petition. The said order is being extended from time to time. 3. Sri Jogram Tejawat, learned counsel representing the writ petitioner had taken this Court through the contents of the affidavit filed in support of the writ petition and also pointed out to the specific stand taken in the counter affidavit, would maintain that the writ petitioner had applied even in his individual capacity and in the light of the same, the tender of the writ petitioner is also to be considered. 4. Sri C.V. Rajeeva Reddy, learned standing counsel representing the respondents, had taken this Court through the relevant portions of the counter affidavit and also pointed out that though under normal circumstances in contractual matters of this nature the writ Court does not interfere, in the light of the specific stand taken in the counter affidavit that in the event of the petitioner making an individual application, the same needs to be considered by the concerned tender committee in accordance with law. 5. Heard the learned counsel and perused the material available on record. 6. The writ petition is filed for a writ of mandamus to set a side the tender notice in T. No. 740/South/SC(1) proposed development of Ballast Depot at PPY(1) and supplying stacking of 50mm Guage Machine crushed ballast and loading into Railway wagons/Hoppers by mechanical means (Quantity 15000 cum) as per the Railway Specifications at Railway Depot at PPY(1) i.e, Papatpally in Kazipt – Bazawada Section and declare that the tender notice No.740/South/SC(1) as illegal, arbitrary and unjust and consequently direct the respondent authorities to restrain the respondent Nos.3-4 from taking further action in terms of tender notice in T.No.740/South/SC(1) and pass such other orders. 7. It is averred that the petitioner is one of the partner in M/s. J.R.S. Stone Metal Industries since its installation till date and has enough experience and is also a diploma holder in Machinery. Solely dependent on the urban contract work, the petitioner is having good knowledge in railway work. The petitioner is having sufficient experience in the field of ballast work and respondents have appreciated the work done by him in several works and as such they have issued certificates to that effect. Further, it is stated that the petitioner had good experience as a partner of J.R.S Stone Metal Industries and also as an individual contractor. The respondent authorities awarded work to the petitioner in Hyderabad Division in the same ballast work and his work was very much appreciated by the respondents. Therefore, it is stated that the petitioner is having full experience in respect of the work mentioned in the present tender. It is stated that whenever respondents called for similar work they do not have imposed the condition, but the respondents are now imposing Tender Rule, which is against the Railway Board Rules and contrary to its persons tender and whatever rule of policy formulated by the respondents in the Indian Railway Rules, the same should be uniformly applicable to all the zones in the country and respondent authorities are not competent to deviate any rules from the apex authority Rule i.e. Railway Board Rules and Regulations. It is stipulated in other tender notices that partnership deed is eligible if entered into and registered at least three years prior to the date of tender notice. If the experience certificate enclosed or submitted in the same name and style, their credentials shall be considered fully i.e. to the extent of work executed by them. The tenderer shall clearly specify whether the tender is submitted on his own or on behalf of the partnership concern. If the tender is submitted on behalf of partnership concern, the tenderer should submit a certified copy of partnership deed and authorization to sign the tender document on behalf of the partnership firm and if these documents are not enclosed along with tender documents the tender will be treated as having been submitted by individual signing the tender documents. 8. It is also averred that the respondent authorities now cannot change the rules for the tenderers for the proposed name of work at S.C. Division, KZJ, BZA Section (i) proposed development of Ballast Dept at PPX i.e. Papatpally (II) supplying stacking of 50 mm Gauge Machine crushed Ballast and loading into Railway Wagons/Happens by Mechanical Means (Qty. 15000 cum). Now the respondent authorities are not allowing the individual eligible tenderer, who has good experience in the field and respondent stipulated the new rule stating that the partnership firm is eligible if entered into and registered prior to Tender Notice. Tenderer should enclose/submit experience certificate in the same name and style as the tenders and their credentials shall be considered to the extent of the work executed by the partnership firm in the same name and style. Experience of individual, consortium agreement, Joint Ventures and MOU’s will not be considered for this tender. This rule ruins the young and unemployed graduates and is discriminatory to Articles 16 and 21 of the Constitution of India. It is the duty of the State to provide employment opportunity to the youth of this country, but respondent authorities are cutting the opportunity of the young graduates in this country. It is stated that the petitioner had enough experience in J.R. Stone Metal Industries as a partner. Further, a contractor, who has not carried out any work so far on this railway, should furnish particulars regarding (1) his position as an independent contractor (2) his capacity to undertake and carryout works satisfactorily as vouched for by a responsible official or firm (3) his present experience on work to that of a contractor, in proof of which original certificates or testimonials may be called for and then genuineness verified if need be by reference to the signatures therefor (4) his knowledge from actual period of investigation of the resources of zone or zones in which he offers to work (5) his ability i.e financial position knows all the above names norms of Railway Board and respondent is trying to debar the petitioner by inserting new conditions, which are not authorized by the apex level authorities i.e. Railway Board. It is also stated that the same Board is also allowing the individuals who have better experience to participate in the tenders, but present impugned order of the respondent authorities is against the principles of natural justice. As per the notice, the last date for submission of the proposed tender schedule is 07-12-2007. The petitioner had down loaded the tender schedule. As per page number, serial number and conditions, the petitioner became ineligible to participate and submission of the above tender and more over the proceedings bearing No.W.148/P(Pilot) Dt.20-02-2007 is contrary to law, discriminatory and arbitrary in nature. The petitioner is fully eligible and as per the various appreciation letters, he petitioner fulfilled all the norms of the respondent authorities. It is further stated that the D P M (Worked schedule) letters of appreciation to the petitioner dated 06-01-2006, 28-10-2007, 30-04-2007, 24-09-2007, 05-07-2007 and 04-10-2007 show that the petitioner is eligible for the present tender also. 9. It is also averred that the petitioner is a Diploma Holder in Mechanical Engineering and fully experienced in J.R.S Metal Industries as one of the partner. Having experience in the above work, the petitioner has done so many similar works at State Government and at South Central Railway. The South Central Railway by its T.No.740/South/SC/ invited tenders for the supply and stacking of 50mm Gauge Machine crushed Ballast and loading into Railway Wagons/Hoppers by Mechanical Means (Quantities of 15000 Cum). It is stated that the closing date for submission of the above tender was fixed as 07-12-2007. As per the eligibility criteria, the tenderer should have credential of same work. All the new rules and conditions are inserted only to accommodate some other firms, which are contrary to law. 10. In the counter affidavit filed on behalf of the respondents 1 to 4 it is stated that for the work “proposed development of ballast depot at Papatpally and supplying and stacking of 50mm gauge machine crushed ballast and loading into railway wagons by mechanical means” an open tender was invited vide tender Notice No.CW.148/WV/BRIDGES/CO- ORD/WEST/NORTH/ CENTRAL/SOUTH/683-762/07/OT, dated 28-10- 2007 along with various other works of this division (totalling 80 works) and the above work is appearing against Sl.No.58 and the tender has been numbered as DRM/W/ SC/740/South/07. The tender was published in various news papers viz., Hindi Milap, Andhra Prabha, Vaartha, Deccan Chronicle, Hindu, Andhra Jyothi, Indian Express on 03-11-2007 vide PUB No.1288/07 through the Railway Chief Public Relations Officer. In addition to the above, tender notices were exhibited in the notice board of the offices of the Assistant Divisional Engineers of the division. As per the extant instructions, the tender notice along with special conditions and the entire tender booklet was uploaded on web site on the Central Govt. portal specifically provided for this purpose so that prospective tenderers can down load the tender booklet and submit their offer. Thus, Railway ensures that wide publicity is given to the tenders invited and the publication in print and electronic media is made one month prior to the date of opening of tender. 11. It is also stated that for all the works costing more than Rs.10 lakhs each, the Railway Board has prescribed certain eligibility criteria, which was published in tender notices and the same was put on web site along with the tender documents well in advance, so that prospective tenders can obtain necessary certificates/documents to be submitted along with their tender. The minimum technical eligibility criteria for works costing more than Rs.10 lakhs is laid down in Railway Boards letter No.94/CE-1/CT/4, dated 22-10-2001. This eligibility criteria has to be followed by all the railways and the same is followed in all cases. The eligibility criteria as specified by Railway Board and as indicated in this Railways tender notices is as under- - a Revenue/Banker” Solvency certificate (1) For works costing less than Rs.1.00 crores Not required ( i i ) For works costing more than Rs.1.00 crore 40% of advertised tender value of work b Should have completed in the last three financial years (i.e. current year and three financial years) A t least one similar single work for a minimum value of 35% of the advertised tender value. Similar nature of works physically completed within the qualifying period ie. the last 3 financial years and current financial year shall only be considered in evaluating the eligibility criteria. The total value of similar nature of works completed during the qualifying period and not the payments received within the qualifying period alone, shall be considered. In case the final bill of similar nature of work has not been passed, paid amount including statutory deduction shall be considered. If final measurements have not been recorded or if final measurements have been recorded and work have been completed with negative variation. However, if final measurements have been recorded and work has been completed with positive variation but variation has not been sanctioned, original contract value of work shall be considered for judging eligibility. C T h e contractual amount received during the last three financial years and in the current financial year. Should be a minimum of 150% of advertised tender value. Documentary evidence duly attested from employer/ client, audited balance sheet duly certified by a Chartered Accountant to be produced along with the offer. D L i s t of works on hand indicating name of work, contract value, bill amount paid so far, due date of completion etc., to be furnished by contractor. Annexure “D” and this certificate to be signed by the contractor. Tenderer should submit a NIL certificate if there are no works on hand. 12. While formulating further guidelines on partnership, consortium agreements, joint ventures & MOUs, Principal Chief Engineer of South Central Railway vide his letter No.W.148 P (pilot) dt.20-02-2007 has issued instructions that “Partnership firm is eligible if entered into and registered prior to tender notice. Tenderer should enclose/submit experience certificate in the same name and style as tenderer and their credentials shall be considered i.e. to the extent of work executed by the partnership firm in the same name and style“. Further, as directed by Railway Board vide their letter No.94/CE-1/CT/4, dated 23-11-2006 the Principal Chief Engineer of South Central Railway has issued instructions to all the divisions vide Lr.No.W.148/P, dated 11-12-2006 specifying the works, considered to be similar in nature towards technical eligibility criteria for works completed during the qualifying period prescribed. For the work under consideration, similar nature of work specified is “supply of machine crushed ballast”. This instruction also has been published in the tender notice for the guidance of the tenderers. 13. It is also stated that the petitioner had applied pursuant to the tender in question in his individual capacity and as such the present writ petition is liable to be dismissed for want of cause of action. In fact, the petitioner at the time of submitting his tender did not raise any such objection and while the tenders are under process for the reason best known to him, has filed the present writ petition. It is also stated that the guidelines for inviting tenders, finalization of the same and contract management are being issued by Railway Board as applicable to all the Railways and further policy formulations, clarifications etc., are being issued by the Zonal Railway which are to be followed by the authorities who are inviting and finalizing tenders. The present tender mentioned by the petitioner abides by all the extant instructions on the subject. As per the extant instructions on partnership firms “Partnership firm is eligible if entered into and registered prior to tender notice. Tenderer should enclose/ submit experience certificate in the same name and style as tenderer and their credentials shall be considered i.e. to the extent of work executed by the partnership firm in the same name and style”. It is stated that the said instruction is published through tender notices and form a part of the tender document. 14. It is also stated that the clause under question is being implemented from March 2007 and the same is reflected in all the contracts. In any event, it is settled law that the State can fix its own terms of invitation to tender and the same will not be opened to judicial scrutiny. As the respondent could make out from the affidavit filed by the petitioner, the petitioner is seeking to challenge one of the conditions of the tender on the ground that the said condition ruins the chances of young and unemployed graduates and that it is the duty of the State to provide opportunity to the youth of the country. It is further stated that it is for the respondents to formulate the guidelines to choose the contractor to meet the requirements of the work to be done and it is preposterous and vexatious to contend that the respondents are denying opportunity to the unemployed youth. The further allegation that respondents 2 to 4 are acting contrary to the instructions issued by the first respondent is also strictly denied and the petitioner is put to strict proof of the same. The respondents 2 to 4 have issued the notification in question, which is in conformity with the guidelines prescribed by the first respondent. The further allegation that due to the terms and conditions mentioned in the tender notice the petitioner becomes ineligible is also denied and as already stated above, the petitioner is very much eligible to participate in the present tender process in his individual capacity if he satisfies the condition prescribed for eligibility as in the tender notice. 15. It is also stated that the tender mentioned supra was opened on 07-12-2007 and is under the consideration of the tender committee. Ballast is an essential component on track to ensure safe running of trains and the proposed ballast depot at Papatpalli station will cater the ballast requirement of the section and as such, the tender is required to be finalized and contract awarded early. 16. Learned standing counsel for the respondents placed reliance on AIR INDIA v. COCHIN INTERNATIONAL AIRPORT LTD.[1] and on M. RAVINDER REDDY v. UNION OF INDIA AND ANOTHER[2]. 17. Specific stand has been taken that the further allegation that due to the terms and conditions mentioned in the tender notice, the petitioner becomes ineligible is also denied and as already stated above, the petitioner is very much eligible to participate in the present tender process in his individual capacity if he satisfies the condition prescribed for eligibility as in the tender notice. 18. Though normally the writ Court would not interfere in matters of this nature, in the light of the stand taken in paragraph 3 of the counter affidavit specified supra, let the respondents consider the case of the petitioner also in his individual capacity, if he satisfies the conditions prescribed for eligibility as in the tender notice along with others. 19. With the above direction, the writ petition is disposed of. No order as to costs. _____________________ JUSTICE P.S.NARAYANA Dt.21-02-2008 Note: Issue C.C. in one week. B/o GLV ASSISTANT REGISTRAR // TRUE COPY // SECTION OFFICER Copy to: 1. The Chairman, Railway Board and Ex Officio Principal Secretary, Union of India, Ministry of Railway, Rail Nlayam, Secunderabad. 2. The General Manager, South Central Railway Rail Nilayam, Secunderabad. 3. The Principal Chief Engineer, South Central Railway, Rail Nilayam, Secunderabad. 4. The Divisional Railway Manager, O/o DRM Office, Opp: Rail Nilayam, Secunderabad Division, Secunderabad. 5. 2CCs to 6. 2CD copies Form-NIC-OGS/WP{TRT} [1] AIR 2000 SC 801 [2] 2008(1) ALD 685