Delhi High Court
Oriental Foundry Pvt Ltd. vs Union Of India And Ors. on 7 February, 2018
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 07.02.2018
+ W.P.(C) 76/2018 & CM APPL. 338-339/2018
ORIENTAL FOUNDRY PVT LTD. ..... Petitioner
Through: Mr. Manoj K Singh with
Ms. Tanuka De, Advocate
versus
UNION OF INDIA AND ORS. ..... Respondents
Through: Mr. Deepak Jain, Sr. Panel
Counsel, Ministry of Railways with
Ms. Prabhleen Kaur, Mr. Tanpreet Singh and
Ms. Parul Jagota, Advocates
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A. K. CHAWLA
S. RAVINDRA BHAT, J.(ORAL)
*
1. The petitioner's grievance is that it had applied for/furnished
its bid pursuant to a tender floated by the respondent-Railways
(hereinafter referred to as 'Railways'), inviting bids for the
manufacture of Railway wagons. The notice inviting tender (NIT)
has started operation of the procurement to be sourced on
'developmental orders'. These lots were 500 wagons, two out of
500 wagons - totalling 1000.
2. The petitioner claims that its facility was inspected by the
Research Designs and Standard Organisation (RDSO) and that in
accordance with its guidelines, it had applied for audit of its
facility, that request was pending. The petitioner's bid under the
'developmental orders' category was opened along with the orders
dated 6.9.2017. However, they complain that nothing was heard
thereafter. It was never heard from the respondent-Railways. In
the meanwhile, on 17.11.2017 to 30.11.2017, the RDSO sent a
team for inspection of the petitioner's facility and ultimately, in
respect of the tender in question and on 14.12.2017 issued a
detailed report in this regard.
3. It complains that the subsequent information is based on
arbitrary directions of the tender condition. Subsequently, it is
stated that the petitioners were never formerly informed about the
rejection of the bid.
4. The Railways in its counter affidavit states that the
petitioner's bid - as well as that of 5,000 tenderers who had
claimed bid for 5-6 other tenderers bids for 'development orders'
were rejected for on account of non-fulfilment with essential
legibility character.
5. It is contended that the petitioners undoubtedly had a
registration with the RDSO G-105 (2011). However, their audit
had not been completed on the date the bid was made.
6. It is submitted that in these circumstances, the bid could not
have been accepted. It was urged that the same interpretation was
adopted in the case of other developmental bidders for the
development orders.
7. Learned counsel for the petitioner urges that the rejection of
the bid in the present case is arbitrary. He places reliance on
Clause 10.0 and eligibility in respect of powers for development
orders, (later portion of Clause 1), the relevant conditions are as
follows :-
"Tenderers who have registered for G-105 (2011)
approval with RDSO and whose first Audit has been
completed successfully shall be eligible for developmental
orders. In this regard, assessment of Railways shall be final.
The quantity of a developmental order on an eligible wagon
builder would normally be around 500 wagons subject to
their rates being lower than that of L-1 tenderer eligible for
regular order.
The total cumulative quantity against all
developmental orders in two procurement cycles on any
wagon builder would be restricted to maximum 1,000
wagons. However, such tenderers will not be considered for
wagon allocation formula till they attain the status of a
regular source."
8. It is argued that in the case of regular orders, a valid G-105
Certificate issued by the RDSO should be provided.
9. However, the bidder provided a letter from RDSO stating
that the concerned is entitled for revalidation of certification. It is
urged that the conditions with respect to bidders for
'developmental orders' was received for interpretation.
10. In other words, counsel urges that the requirement of
possessing an audit approval has to be seen at the time of the award
of the contract rather than at the time of bidding in case of those
who opted for 'development orders' too like in the case of G-105
certificate for regular orders.
11. Counsel for the Railway however, contested this position
and states that the tender classifies bidders into two Clauses i.e.
regular bidders and those proposing to supply under the
'development orders'. The eligible conditions are clearly defined;
in the case of those wishing under the development orders
category, the requirement of possessing an audit, the RDSO audit
report is essential.
12. The requirement in the case of regular bidders for regular
orders is entirely different.
13. If the conditions with respect to regular orders (condition (i)
of Clause 1 is contrasted with the condition with respect to
'development orders' (i) in respect of development orders), it is
clear that the registration for G-105 approval with RDSO is
essential for the latter category. The second condition i.e. the
bidder should have opted a certificate and whose audit has been
completed successfully shall be eligible for 'development orders',
is categorical.
14. In the case of those applying for tender/contract under the
regular category, a separate treatment is mandated and in that even
an expired certificate of G-105 (2011) is deemed sufficient as long
as an application for validation or audit is made.
15. The rationale for these distinctions is apparent; it is that the
those supplying under the regular order category are known and it
is a matter which falls within the 'tried and tested category'. In the
case of those applying under the development orders category,
however, the nature of the facility might be known but the audit of
all its machinery is not yet undertaken.
16. In these circumstances, the interpretation given by the
Railways cannot be characterised as unreasonable giving the
extremely circumscribed parameters under Article 226 of the
Constitution.
For these reasons, the petition has to fail. Accordingly, the
same is dismissed.
S. RAVINDRA BHAT, J
A. K. CHAWLA, J
FEBRUARY 07, 2018/P
