IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 18TH APRIL 2008 / 29TH CHAITHRA 1930 WP(C).No. 36014 of 2007(K) --------------------------------------- PETITIONER: ------------------- T.SREEKUMAR, BHARATH PUBLICITY, ANAND BHAVAN, KURUMANDALAM, PARAVOOR, KOLLAM. BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA). RESPONDENTS: ------------------------ 1. THE UNION OF INDIA, REPRESENTED BY GENERAL MANAGER, SOUTHERN RAILWAY, MADRAS. 2. DIVISIONAL RAILWAY MANAGER, (COMMERCIAL), SOUTHERN RAILWAY, TRIVANDRUM. BY ADV. SRI. N.B. SUNIL NATH, SC, RAILWAYS. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/02/2008, THE COURT ON 18/04/2008 DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ------------------------------------ W.P.(C) 36014 of 2007 ------------------------------------- Dated: APRIL 18, 2008 JUDGMENT The prayer in this writ petition is to quash Ext.P5 and to direct the 2nd respondent to issue fresh notification inviting separate tenders for different modes of advertisements at different railway stations under the Trivandrum Railway Division. 2. Petitioner submits that he is engaged in the business of erecting advertisement hoardings and in other allied activities. According to the petitioner, till 20.10.2000, the Railways had the practice of inviting tenders for different types of advertisements for each railway station. Petitioner submits that in response to the tender invited by the Railways on 20.10.2000, petitioner had submitted his tender and was awarded the sole right of display of advertisement hoardings at Ernakulam South Railway Station and Ext.P1 is the order that was issued. However, dispensing with the tender system, the Railways started negotiating with persons who have made applications for allotment of spaces, on the basis of WP(C) 36014/07 Page numbers “first come first serve” basis. This led to favouritism and corruption and the petitioner had lodged complaints against the system followed by the Railways. 3. It is stated that by Ext.P2 tender notice, issued on 21.7.2007, the 2nd respondent invited tenders for different modes of advertisements for all the railway stations coming under the Trivandrum division extending from Melapalayam to Vallathol Nagar, covering 105 railway stations. It is stated that Ext.P2 was published knowing fully well that no person will come forward and quote for the advertisement as it would not be practicable to do so. According to the petitioner it will be advantageous for the Railways if the advertisements are bifurcated and separate bids are invited for individual railway stations. Petitioner challenged Ext.P2 before this court in WP(C) 25977/2007 and in the meanwhile, Ext.P4 letter was issued by the respondents informing him that Ext.P2 tender notice was issued based on the Railway Board's Directive so that the Railways may achieve the target fixed by the Board. 4. While the writ petition filed by the petitioner as above was pending, Ext.P5 advertisement was published by the respondents WP(C) 36014/07 Page numbers inviting tenders for all types of advertisements in Ernakulam Junction and Kottayam railway stations. According to the petitioner, the conditions specified in EXt.P5 were incorporated with the mala fide motive of ensuring that there will not be any successful tenderer so that the respondents can continue the earlier system of allotting advertisements on negotiated basis to their favoured clients. The petitioner submitted Ext.P6 representation objecting to Ext.P5 and as the respondents were proceeding with the tender notification, the writ petition was filed. 5. Petitioner is referring to Ext.P7 tender notification issued by the Palakkad Division of the Railways where different types of advertisements are segregated and separate tenders were invited for different advertisements. Petitioner also submits that Ext.P5, in which all types of advertisements are included, is not practical for the reason that different contractors have been granted contracts for different types of advertisements, and the contract periods be expiring on different dates. Therefore, according to the petitioner, even if Ext.P5 results in a contract with a prospective customer of the Railways, it will not be possible for the Railways to handover the WP(C) 36014/07 Page numbers sites until the existing arrangements expire. 6. It is on the above allegations the writ petition is filed praying for quashing Ext.P5 tender notification issued by the Railways and for directing the authorities to issue fresh notification inviting separate tenders for different modes of advertisements at different stations. 7. The respondents have filed a counter affidavit. According to the respondents the manner in which the tenders are to be awarded for displaying advertisements in the Railway Stations is a matter fully within the discretion and commercial wisdom of the Railway administration. They would submit that it is for them to adopt the ways and means to maximise their earnings under commercial publicity. It is stated that the Railway Headquarters, as also the Ministry of Railways periodically review their policies and that in the Trivandrum Railway Division, licenses to display advertisements are let out by following a combination of spot sanction of applications with sketch received from interested parties, canvassing of major customers, tender system where a notified area in Railway premises is handed over to a bona fide WP(C) 36014/07 Page numbers contractor or by canvassing advertisements from various clients against payment of commission at rates notified by the Railway Board. 8. It is stated that the Railways have already fixed the tariff charges payable on “per square feet basis” and that these rates are notified and therefore even in the absence of any advertisement, when space is allotted on application, there is no negotiation involved. On this basis, it is contended that the allegation that the system followed by the Railways would lead to widespread corruption is wholly baseless. It is stated that even when the system where space was allotted on the basis of applications was in vague, the earnings of the Railways have only increased substantially. 9. Referring to Ext.P1 it is stated that while the petitioner had offered a licence fee of Rs.3.25 lakhs only for display of hoarding in Ernakulam Junction Railway Station, what is proposed under Ext.P5 is a minimum earning of Rs.45 lakhs per annum. It is also stated that the scheme for the entire division advertisement contract was envisaged to achieve quick realisation of bulk earnings since under the contract system, the contractor will pay licence fee in lumpsum WP(C) 36014/07 Page numbers advance. It is stated that in terms of the aforesaid policy, tenders were invited by all Divisions of the Indian Railways including Trivandrum Division and that the scheme was fruitful in the select divisions in Northern Railway, Western Railway etc. However, it is stated that no offers were received in response to Ext.P2 in so far as the Trivandrum Division is concerned. 10. Dealing with the contention of the petitioner about Ext.P5 tender notification, it is stated the same was issued upon analysis of the marketing potential of Ernakulam Junction and Kottayam Railway Stations. It is stated that in response to Ext.P5 in respect of Kottayam Railway Station, two offers were received and the highest offer received was Rs.13.36 lakhs as against Rs.88000/- that was realised by the Railways under the earlier tender system. It is also stated that in so far as the Ernakulam Junction is concerned, tenders were invited for display of all types of advertisements against a reserve price of Rs.45 lakhs and that in response one offer was received and the same was under scrutiny. As regards the contention of the petitioner that it will not be practical for the Railways to handover the sites until the expiry of the period of the WP(C) 36014/07 Page numbers present contracts, the respondents would submit that according to their system, as and when the contractors complete their tenure, the sites thereof shall be handed over to the contractor. 11. From the pleadings what emerges is that the petitioner is objecting to Ext.P5 tender notification published by the Railways inviting tenders for all types of advertisements in so far as Kottayam and Ernakulam Junction Railway stations are concerned. According to the petitioner, the various advertisements should be segregated and individual tenders should be invited for each of those advertisements. The justification offered by the petitioner is that in response to Ext.P5, there is no likelihood of any offer being made and that if separate tenders are invited, that will only increase the revenue of the Railways. Petitioner is also pointing out the possibility of favouritism and corruption in the method adopted by the Railways. 12. First of all, apart from making various assertions, petitioner has not succeeded in establishing any one of his contentions. Whether individual tenders should be invited or a single consolidated tender should be invited for all the items of WP(C) 36014/07 Page numbers advertisements either for the whole division or for each railway station is essentially a policy matter for the Railways to decide. If, on appreciation of relevant factors, the Railways have decided to go in for a single tender for all types of advertisements for all the stations in the Division, in the absence of any mala fides or arbitrariness in such a decision, the said policy decision cannot be interfered by this court exercising the powers under Article 226 of the Constitution of India, even if any other mode is considered to be a better one, in the opinion of the court. 13. The allegation of the petitioner that there is no likelihood of any response to Ext.P5 tender notice is also factually incorrect. The further assertion that the Railways will be getting better revenue if separate tenders are invited is also incorrect. For Ernakulam Railway Station itself, as against Rs.3.25 lakhs, the reserve price fixed is Rs.45 lakhs. Similar is the case in so far as the Kottayam Railway Station is concerned. Therefore, Ext.P5 has only led to increase in revenue and not decrease as assumed by the petitioner. 14. As I have already found, the question as to whether separate tender should be invited or a single tender is to be invited WP(C) 36014/07 Page numbers either for the entire division or for each station is a matter of policy which is to be decided by the Railways on commercial considerations. The Railways having decided to go in for a single tender for Kottayam and Ernakulam Railway Stations and as the petitioner has not succeeded in making out any mala fides or arbitrariness in the decision taken by the authorities, this writ petition is only to be dismissed and I do so. ANTONY DOMINIC, JUDGE mt/-