Telangana High Court
M/S. E To E Transportation ... vs Union Of India on 25 November, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 21716 OF 2025
O R D E R:
Petitioner, a company registered under the
Companies Act, 2013 and classified as an MSME under
Registration ID UDYAM-KR-03-0046748, is engaged in major
railway infrastructure works and executed various projects for
Indian Railways including Respondent's zone. It is contended
that disqualification of its bid for Tender No. CSGC 365399
dated 07 February 2025 for works under South Central Railway,
is impermissible under the tender terms and conditions, and
that disqualification was issued through a non-speaking order
on the IREPS portal stating only "not fulfilled eligibility criteria"
without any opportunity of being heard. Petitioner alleges mala
fides and bias in view of past acceptance of identical documents
by the same Respondent even after providing clarifications on
the technical bid.
1.1. It is asserted that on 04.12.2024, Petitioner
Company converted from Private Limited to Public Limited and
its name changed as E To E Transportation Infrastructure
Limited, registered with the Ministry of Corporate Affairs vide
Corporate Identity Number U45201KA2010PLC052810. On
20.12.2024, Petitioner issued a formal communication titled
"TO WHOMSOEVER IT MAY CONCERN" informing all the
concerned about the change in name and legal status, clarifying
that daily operations, agreements, obligations, contracts,
certifications, empanelment's and commitments remain
unaffected, consistent with Section 18(3) of the Companies Act,
2013 which protects continuity of legal identity irrespective of
such conversion.
1.2. On 07.02.2025, February 2025, Respondent No. 3
issued an Open Tender with Two Packet System under Tender
No. CSGC 365399 for "Outdoor Signalling Works at KZJ Yard in
Connection with the 3rd Line works in KZJ-BPQ Section. It is
stated that Tender Document carried value Rs. 216,165,980.73
and earnest money Rs. 1,230,800.00 with offer validity 120 days
and bidding schedule from 01.04.2025 to 15.04.2025 at 15:00
hrs. Corrigendum No. 1 dated 01.03.2025 changed the closing
date to 31.03.2025 at 15:00 and bidding start to 17.03.2025.
Corrigendum No. 2 dated 14.03.2025 further revised the closing
date to 15.04.2025 at 15:00 and bidding start to 01 April 2025.
It is stated that Corrigendum No. 3 dated 31.03.2025 revised
EMD from Rs. 1,259,100.00 to Rs. 1,230,800.00 and advertised
value from Rs. 221,819,282.53 to Rs. 216,165,980.73. It is
stated that on 08.04.2025, HDFC Bank issued EMD Bank
Guarantee BG No. 009GT02250980012 for Rs. 12,30,800.00
corresponding to revised EMD.
1.3. Petitioner states that on 15.04.2025, Petitioner
submitted its comprehensive Techno-Commercial Bid for Tender
No. CSGC 365399, marking "Complied" under all technical
eligibility criteria and uploading multiple work completion
certificates, LOAs, BOQs, company details and the Company
status change intimation. All the requisite documents were duly
submitted and the complete checklist fulfilled. On 15.04.2025,
Respondent No. 3 issued another Tender No. CSGC 365400 for
"Comprehensive Signalling and Telecommunication Works for
Provision of Automatic Block Signalling System in Asifabad
Road-Rechni Road and Hasanparthi Road-Nekonda Sections.
On the same day, another Tender No. CSGC 365401 was issued
for "Comprehensive Signalling and Telecommunication Works
for Provision of Automatic Block Signalling System in
Errupalem-Khammam Section".
1.4. It is stated, on 17.07.2025 at 17:29 IST, Petitioner
received e mail from IREPS stating its Techno-Commercial Bid
had been declared "technically unsuitable" for "Not fulfilled
eligibility criteria" with no further detail or opportunity of
hearing. On 17.07.2025, Petitioner immediately submitted a
Clarification Letter protesting the rejection as arbitrary and
asserting full compliance with all the technical, financial and
bid capacity criteria, and highlighting past acceptance of similar
credentials by Indian Railways including an ongoing 58 Crore
contract with Respondent, and requesting re-evaluation and
specific reasons. It is stated, Petitioner reliably learnt that
disqualification was primarily due to change of company name
from E TO E Transportation Infrastructure Private Limited to E
To E Transportation Infrastructure Limited despite advance
disclosure.
2. Sri Mohammed Omer Farooq, learned counsel for
petitioner submits that Respondents acted arbitrarily because
identical documents submitted in Tender Nos. CSG C 36 5 401
and C SG C 36 5 400 were not rejected on such grounds,
including the aspect of the company's name change.
He submits further that arbitrary disqualification has a severe
cascading effect on its ongoing contracts and pending tender
evaluations, specifically Tender No. C_SG_C_36_5_401 and
Tender No. C_SG_C_36_5_400 of South Central Railway,
affecting business prospects, financial stability, and employee
livelihoods. Despite a proven track record, including an ongoing
258 Crore project with Respondent's own zone, exclusion lacks
justification and it is violative of Article 19(1)(g), and it adversely
impacts their MSME status.
2.1. According to learned counsel, Petitioner was not
given any opportunity to respond to the alleged eligibility
shortfall; rejection was via a cryptic, non-speaking order on the
IREPS portal stating only "Not fulfilled eligibility criteria. He
alleges violation of Article 14, stating that Respondent's action is
arbitrary, discriminatory and inconsistent with how similar
credentials have been accepted by multiple railway zones,
including an ongoing Rs.58 Crore contract with Respondent's
own office.
2.2. Learned counsel emphasizes that Respondent
South Central Railway, being an instrumentality of the State
under Article 12, must follow transparency, fairness, non-
discrimination and accountability in procurement, and that a
vague rejection without any specific justification violates these
constitutional standards and undermines the integrity of the
tender process.
2.3. In support of his contentions, on the aspect of
recording reasons, learned counsel relied on the judgments of
the Hon'ble Supreme Court in State of Punjab v. Bandeep
Singh 1, K.K. Alliance Pvt. Ltd. v. Union of India (W.P.No.
15464 of 2018) of Madras High Court, JBMD Enterprises v.
Sr. Dy. CGDA AN 2, Kalu Ram Ahuja v. DDA 3. Contending
that bid cannot be rejected if not complied with ancillary
conditions of tender document or for minor defects, he relied on
the judgments in Poddar Steel Corpn. V. Ganesh Engineering
Works 4, KPC Projects Ltd. v. East Coast Railway (W.P.No.
17150 of 2024) of Andhra Pradesh High Court, IVRCL
Infrastructures & Projects Ltd. v. National Highways
Authority of India 5, MDC Pharmaceuticals Ltd. v. Union of
India 6. According to learned counsel, respondent's conduct in
(2016) 1 SCC 724
2024 SCC On line Del 4281
(2008) 10 SCC 696
(1991) 3 SCC 273
2011 SCC On Line Del 1246
2022 SCC On Line Del 488
not seeking clarification amounts to violation of rights to fair
opportunity (see Texmaco Rail & Engineering Ltd. v. Union
of India 7). Learned counsel emphasizes that following the rule
of audi alteram partem is a requirement of law. In this
connection, reliance is placed on Siemens Engg. & Mfg. Co. of
India Ltd. v. Union of India8 and Banshidhar Construction
Pvt. Ltd. v. Bharat Coking Coal Limited 9.
3. In the counter-affidavit filed on behalf of South
Central Railway, it is stated, Petitioner was disqualified from
Tender No. C-SG-C-36-5-399 dated 07.02.2025 strictly as per
tender conditions because the bid was submitted in the name of
M/s E to E Transportation Infrastructure Private Limited,
though this entity had already ceased to exist after its statutory
conversion into a Public Limited Company on 04.12.2024, as
per the Ministry of Corporate Affairs. The disqualification was
supported by a Legal Opinion dated 24.06.2025 issued by the
Law Branch, Office of the Chief Administrative Officer
(Construction), South Central Railway, confirming that Private
Limited Company ceased to exist from the date of conversion.
2023 SCC On Line Cal 1908
(1976) 2 SCC 981
Manu/SC/1087/2024
Hence, the submitted bid documents did not match the
Petitioner's current legal status.
3.1. It is stated, no fundamental right of petitioner was
infringed. According to this respondent, participation in a public
tender does not give a vested right to be awarded the contract,
particularly when essential eligibility criteria are not met. Article
14 cannot be invoked by a bidder whose bid is submitted in the
name of a non-existent entity, unlike other eligible bidders.
Article 19(1)(g) is subject to reasonable restrictions, including
compliance with tender norms. This Respondent acted based on
objective legal grounds and the Legal Opinion dated 24.06.2025
clearly stating that the Private Limited Company ceased to exist
from 04.12.2024. Submission of a bid under a defunct entity
makes the bid void ab initio. The system-generated reason "not
fulfilled eligibility criteria" on IREPS is due to system format but
the internal legal scrutiny was detailed. No natural justice
violation arises because tender evaluation is a technical process
and no show-cause notice is required. Past work awards or
MSME status does not confer any vested right. Petitioner's
claims of arbitrariness and constitutional violations are denied.
3.2. It is asserted that this Writ Petition is not
maintainable because Petitioner's disqualification arose from
non-fulfilment of essential eligibility criteria; they cannot seek a
writ to force consideration of an invalid bid as they failed to
update the bid or demonstrate continuity between the old entity
and the Public Limited Company. This respondent states that
legal existence of the bidding entity is a basic requirement and
not a hyper-technical issue. They are obligated to ensure that
eligible and legally-existing entities participate. The Law
Branch's opinion dated 24.06.2025 confirms cessation of Private
Limited Company. The Respondent followed the tender
conditions and acted without mala fides. The disqualification
occurred solely because Petitioner failed to align bid documents
with its updated corporate structure.
3.3. Petitioner admitted that it converted from a Private
Limited to a Public Limited Company on 04.12.2024 under CIN:
U45201KA2010PLC052810. Such conversion results in
cessation of the Private Limited entity and creation of a new
Public Limited Company. Yet, the bid, POA, MoA & AoA, and
Board Resolution were all submitted in the name of non-
existent Private Limited Company. As per GCC and tender
conditions, valid corporate documents of the existing legal entity
must be submitted. No documents establishing continuity or
authorization from the Public Limited Company were provided.
This fundamental defect renders the bid void ab initio and
ineligible for evaluation. The disqualification was therefore,
valid.
3.4. It is further asserted, Petitioner's reliance on its
20.12.2024 "To Whomsoever It May Concern" letter and Section
18(3) of the Companies Act, 2013 is misplaced. Section 18(3)
does not exempt a bidder from complying with mandatory
tender documentation requirements. The defect arises because
the bid and foundational documents were filed in the name of a
legally non-existent Private Limited entity. The declaration does
not substitute for legally valid POA, MoA, AoA, and Board
Resolution of the Public Limited Company. No authorisation
from the Public Limited entity was furnished. Hence, Section
18(3) cannot cure the defect, and the bid was rightly rejected.
Further, Petitioner's claim of complete compliance is denied.
Although work certificates, LOAs, BOQs. and a "status change
intimation" were submitted, these did not cure the fundamental
defect: all mandatory legal documents (POA, MoA&AoA, Board
Resolution) were in the name of the Private Limited Company
that ceased to exist on 04.12.2024. As confirmed by ROC and
Legal Opinion dated 24.06.2025, the Private Limited entity was
no longer in existence. The bid therefore, did not satisfy
eligibility criteria and was non-responsive.
3.5. Respondent contends that tender evaluation is a
uniform, system-driven process. There is no requirement to
provide further individual explanations. Rejection is valid and
transparent. Earlier tenders cited by Petitioner are irrelevant
because, in those, the Private Limited entity legal-existed. Here,
the bid is filed by a non-existent entity, which is an incurable
legal defect and cannot be remedied by clarification. Natural
justice does not require show-cause notices in such technical
evaluation. The Respondent acted in accordance with tender
conditions and based on the Legal Opinion dated 24.06.2025.
The request for reconsideration is untenable. Petitioner's e mail
dated 18.07.2025 could not cure the deficiency. As post-tender
changes to cure a defective bid are prohibited, Petitioner was
not entitled to further verification. It is clarified that Letter of
Acceptance was already issued on 25.07.2025 to L1 bidder
M/s Vineela Enterprises, Hyderabad, and work has commenced,
making the Petitioner's allegations factually incorrect.
3.6. It is stated, Petitioner was neither treated unequally
nor arbitrarily and Article 14 is not attracted. All the bidders
were evaluated using the same criteria. Petitioner's reference to
other tenders (CSGC 36 5 400 and 401) is irrelevant, as those
are separate proceedings. The Respondent as an instrumentality
of the State, followed the tender terms and legal opinion. It is
agreed, public tenders must ensure transparency and best
value, but this requires strict adherence to eligibility conditions.
Allowing bidders without valid documentation reflecting their
legal status would undermine the process. The Petitioner's non-
compliant bid was rejected to maintain fairness and
consistency, serving public interest. Fundamental rights do not
override mandatory procurement compliance. Petitioner
misrepresented its legal status by submitting the bid under the
old Private Limited name despite conversion to a Public Limited
Company. This constitutes a material breach under Annexure-V
of the GCC, amounting to false representation. Consequences
include rejection, forfeiture, termination, and up to two years'
banning. The Respondents reserve the right to initiate penal
action. Hence, it is sought that Writ Petition be dismissed.
4. Heard Sri B. Jithender, learned Standing Counsel
for Central Government.
5. Upon consideration of the pleadings and material
placed on record, it is to be observed, the core issue pertains to
Petitioner's disqualification from Tender No. CSGC 365399
dated 07.02.2025, communicated on 17.07.2025, which
Petitioner contends is arbitrary, non-speaking and violative of
the constitutional guarantees under Articles 14 and 19(1)(g).
6. The case of petitioner is that they have uploaded all
the relevant documents for technical eligibility as requested in
General Conditions of Contract. Respondents themselves have
accepted similar technical credentials and documents in the
past and in other bids and they are aware of the change in
name and status of petitioner before and even at the time of
filing the bid and were possession of the necessary documents
too.
7. It is to be seen, at one time, the IREPL Portal stated
that petitioner's technical bid is disqualified for 'not fulfilling
eligibility criteria' 'technically unsuitable' which is not the case
as respondent's own admission and now, in the counter,
respondent raises a new ground alleging that the bid submitted
by petitioner is legally defective as it is submitted in the name of
a non-existent entity. This clearly shows the inconsistency of
respondents. Further, there is no provision in the tender
documents which prescribes that a change of name or status of
bidder constitutes an essential condition in the bidding process,
hence, rejection of bid of petitioner based on ancillary
conditions is against the settled position of law (see Poddar
Steel Corporation v. Ganesh Engineering Works 10 and A2Z
Maintenance and Engineering Services Ltd. v. Maharashtra
State Electricity Distribution Company Ltd. 11).
8. Further, it is also a settled position that in any bid
evaluation process, the main question to be examined is
whether the bid of the company is substantially responsive to
the requirement of the bidding documents? i.e. whether it is the
one, which conforms to all the terms, conditions and
specifications of the bidding document without material
deviation or reservation. A material deviation is also defined, to
mean one which affects in any substantial way the scope,
(1991) 3 SCC 273
2010 SCC On line Bom 1059
quality or performance of the works, limits in any substantial
way, inconsistent with the bidding documents, the employer's
rights or the bidder's obligations under the contract or whose
rectification would affect unfairly the competitive position of
other bidders presenting substantially responsive bids.
However, in the present case, it is the respondents who have
accepted similar technical credentials and documents of
petitioner and they are aware of the change in name and status
of petitioner. Petitioner contends that the legal status change
and related documents were duly disclosed. Whether the
Petitioner complied or not is a matter requiring proper
reconsideration, and outright rejection without evaluation
results in denial of fair competition. Judicial scrutiny is
warranted to ensure that the tender process remains fair to all
participants. Public procurement must adhere to the principles
of fairness, non-arbitrariness, and transparency. If the
disqualification is allowed to stand without examination, it may
undermine confidence in the tendering process.
Given that tendering processes must promote competition,
equal participation, and maximisation of public interest, an
order of disqualification that is not supported by detailed
reasoning affects the integrity of the procurement process.
9. Learned Standing Counsel for Central Government
Sri Jithender relies on the judgments in TATA Motors Limited
v. Brihan Mumbai Electric Supply and Transport
Undertaking (BEST) 12 and Silppi Constructions Contractors
v. Union of India 13 to contend that courts should exercise a lot
of restraint while exercising their powers of judicial review in
contractual or commercial matters. In TATA Motors Limited's
case the Hon'ble Supreme Court held under:
" 55. Ordinarily, a writ court should refrain itself from
imposing its decision over the decision of the employer as to whether or
not to accept the bid of a tenderer unless something very gross or
palpable is pointed out. The court ordinarily should not interfere in
matters relating to tender or contract. To set at naught the entire tender
process at the stage when the contract is well underway, would not be in
public interest. Initiating a fresh tender process at this stage may
consume lot of time and also loss to the public exchequer to the tune of
crores of rupees. The financial burden/implications on the public
exchequer that the State may have to meet with if the Court directs
issue of a fresh tender notice, should be one of the guiding factors that
the Court should keep in mind. This is evident from a three-Judge
Bench decision of this Court in Assn. of Registration Plates v. Union of
India [Assn. of Registration Plates v. Union of India, (2005) 1 SCC 679] .
(2023) 19 SCC 1
(2020) 16 SCC 489
56. The law relating to award of contract by the State and
public sector corporations was reviewed in Air India Ltd. v. Cochin
International Airport Ltd. [Air India Ltd. v. Cochin International Airport
Ltd., (2000) 2 SCC 617] and it was held that the award of a contract,
whether by a private party or by a State, is essentially a commercial
transaction. It can choose its own method to arrive at a decision and it
is free to grant any relaxation for bona fide reasons, if the tender
conditions permit such a relaxation. It was further held that the State,
its corporations, instrumentalities and agencies have the public duty to
be fair to all concerned. Even when some defect is found in the decision-
making process, the court must exercise its discretionary powers under
Article 226 with great caution and should exercise it only in furtherance
of public interest and not merely on the making out of a legal point. The
court should always keep the larger public interest in mind in order to
decide whether its intervention is called for or not. Only when it comes
to a conclusion that overwhelming public interest requires interference,
the court should interfere."
10. He also relies on Silppi Constructions
Contractors' case (supra), wherein the Hon'ble Supreme Court
held as under:
" 25. That brings us to the most contentious issue as to
whether the learned Single Judge of the High Court was right in holding
that the appellate orders were bad since they were without reasons. We
must remember that we are dealing with purely administrative
decisions. These are in the realm of contract. While rejecting the tender
the person or authority inviting the tenders is not required to give
reasons even if it be a State within the meaning of Article 12 of the
Constitution. These decisions are neither judicial nor quasi-judicial. If
reasons are to be given at every stage, then the commercial activities of
the State would come to a grinding halt. The State must be given
sufficient leeway in this regard. Respondents 1 and 2 were entitled to
give reasons in the counter to the writ petition which they have done.
11. While holding, as extracted above, the Hon'ble Apex
Court in the very same judgments had also categorically held
that 'a writ court is empowered to intervene where the decision-
making process of a public authority is shown to be
unreasonable, non-transparent, or contrary to natural justice,
especially in matters of public procurement which must adhere to
the highest standards of fairness'. It is to be understood from
the above that even in contractual matters, a writ is
maintainable where the challenge is not to terms of the contract
but to the arbitrary exercise of power by a State authority. It
gains importance, in the present case, that rejection of
Petitioner's techno-commercial bid was conveyed merely
through IREPS portal and e mail without disclosing any
reasons. A non-speaking rejection order affects Petitioner's
rights and fails the test of fairness and transparency required in
tender evaluation. The prime contention of petitioner is that
disqualification was based on an alleged mismatch in
documents relating to change in legal status. When such
discrepancy relates to verifiable corporate records, the
Tendering Authority ought to have afforded a minimal
opportunity for clarification, which was not done. The absence
of such an opportunity renders the action procedurally
unreasonable. Learned counsel for petitioner relied on the
judgments stated supra; of all the judgments, Siemens Engg.
& Mfg. Co. of India Ltd.'s case and Banshidhar
Construction Pvt. Ltd.'s case deal with the rule of audi
alteram partem. In Siemens Engineering and Mfg. Co.'s case,
it has been settled that where an authority makes an order in
exercise of a quasi-judicial function, it must record its reasons
in support of the order it makes. Every quasi-judicial order
must be supported by reasons. The rule requiring reasons to be
given in support of an order is, like the principle of audi alteram
partem, a basic principle of natural justice which must inform
every quasi-judicial process and this rule must be observed in
its proper spirit and mere pretence of compliance with it would
not satisfy the requirement of law.
12. In Banshidhar Construction Pvt. Ltd.'s case, the
Hon'ble Supreme Court observed that the government bodies /
instrumentalities are expected to act in absolutely fair,
reasonable and transparent manner, particularly in the award
of contracts for Mega projects. Any element of arbitrariness or
discrimination may lead to hampering of the entire project
which would not be in the public interest. In view of the above
settled legal position, this Court is of the view that respondent
railways have not followed the rule of audi alteram partem.
13. For the aforesaid reasons, this Court finds sufficient
reason to entertain the Writ Petition. The Writ Petition is
therefore, allowed, setting aside the disqualification of
petitioner's techno-commercial bid in respect of Tender No.
CSGC 365399 dated 07.02.2025. Respondents are directed to
permit petitioner to participate in the tender by evaluating and
reconsidering their bid on merits. No costs.
14. Consequently, Miscellaneous Applications, if any
shall stand closed.
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NAGESH BHEEMAPAKA, J
25th November 2025
ksld
