1 2025:CGHC:6141-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 5768 of 2024 Lupin Gases Private Limited (A Private Limited Company) Having Its Registered Office At R- 8, Anupam Nagar, Raipur, Chhattisgarh. 492007, And Factory At Plot No. 811/812, Urla Industrial Area, Raipur, Chhattisgarh. Through Its Authorised Signatory B.P. Sahu, General Manager. ... Petitioner versus 1 - Union of India Through The Secretary, Ministry of Railways, Rail Bhawan, New Delhi 2 - Chairman, Railway Board, Ministry of Railways, Rail Bhawan, New Delhi. 3 - South Eastern Central Railway Through Its General Manager, Bilaspur, Chhattisgarh- 495001 4 - The Principal Chief Materials Manager (P.C.M.M.) South Eastern Central Railway, Bilaspur, Chhattisgarh.- 495001 5 - Chief Commercial Manager(1) Stores, South Eastern Central Railway, Bilaspur, Chhattisgarh.- 495001 ... Respondents _________________________________________________________ For Petitioner : Mr. Ashish Shrivastava, Senior Advocate assisted by Mr. Udit Khatri, Advocate For Respondents : Mr. Ramakant Mishra, Deputy Solicitor General with Mr. Niraj Baghel, Advocate _________________________________________________________ Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal , Judge Order on Board Per Ramesh Sinha , Chief Justice 03 . 02 .202 5 1. Heard Mr. Ashish Shrivastava, learned Senior Advocate assisted by Mr. Udit Khatri, learned counsel for the petitioner. Also heard ROHIT KUMAR CHANDRA Digitally signed by ROHIT KUMAR CHANDRA Date: 2025.02.04 18:26:26 +0530 2 Mr. Ramakant Mishra, learned Deputy Solicitor General along with Mr. Niraj Baghel, learned counsel, appearing for the respondents / Railways. 2. The petitioner has filed this writ petition under Article 226 of the Constitution of India, with the following prayer:- “10.1 It is prayed that this Hon'ble Court may kindly be pleased to call for the entire records pertaining to case of the petitioner company from the possession of the respondents, for its kind perusal; 10.2 That, this Hon'ble Court may kindly be pleased to issue an appropriate writ or order quashing and setting aside the impugned fresh e-tender No.08241051A dated 21.10.2024 (Annexure P/1) by declaring the same to be illegal and inoperative in law. 10.3 That, this Hon'ble Court may kindly be pleased to issue an appropriate writ commanding the respondents SECR to consider the petitioner's offer/negotiated rates for procurement of 222731 Cum of Dissolved Acetylene Gas, pursuant to previous Tender No.08241051 dated 05/08/2024 for the SECR. 10.4 Any other relief/reliefs, which this Hon'ble Court may think fit and proper in the facts and circumstances of the case, with cost of the petition, my also please be granted to the petitioner.” 3. Brief facts, necessary for disposal of the present writ petition, are that the Petitioner Company is a Private Limited Company engaged in manufacturing and supply of Oxygen and D/A gases having its factory at Plot No.811/812, Urla Industrial Area, Raipur and the Registered/Administrative Office at, 4, Mandir Path, 3 Choubey Colony, Raipur (Chhattisgarh). The respondent No.1 South Eastern Central Railway (SECR), floated Enquiry under E- tendering bearing No. 08241051 dated 05.08.2024 for supply of Dissolved Acetylene Gas confirming to IS:308/1988 with amendment No.1 (reaffirmed-2005) requirement on 05.08.2024 to the following consignees, i.e., ELS/Bhilai, SECR for 457.00 cum, GSD/Nagpur, SECR for 6083.00 cum, ROH/PPYD/Bhilai, SECR for 68425.00 cum and RWSS/Raipur, SECR for 147766.00 cum for a total of 222731.00 cum, having closing date as 04/09/2024. It is pertinent to mention herein that the said tender is two parts i.e. (i) bulk quantity and (ii) development order. The petitioner Company submitted its E-tender on 03.09.2024. The petitioner Company has successfully cleared the technical bid round and was further considered for the financial bid round. Upon opening of the financial bid on 12.09.2024 the petitioner was found L-1 for bulk quantity and prices quoted by the petitioner Company for each works were disclosed as Rs.278.00 per unit which was exclusive of all other charges i.e., transportation and GST. 4. On opening of the technical and price bid, the Petitioner bid was successfully qualified and declared as L-1 for bulk quantity with the following overall charges as for ELS/Bhilai, SECR for 457.00 cum at Rs. 342.20 per unit, GSD/Nagpur, SECR for 6083.00 cum at Rs. 410.64 per unit, ROH/PPYD/Bhilai, SECR for 68425.00 cum at Rs. 342.20 per unit and RWSS/Raipur, SECR for 147766.00 cum at Rs. 336.30 per unit which was inclusive of 4 transportation and GST charges. 5. Thereafter, the petitioner Company was called for negotiation of rate per unit for the supply of the said Dissolved Acetylene Gas and on 28.09.2024 the petitioner Company quoted its negotiated price as for ELS/Bhilai, SECR for 457.00 cum at Rs. 341.02 per unit, GSD/Nagpur, SECR for 6083.00 cum at Rs. 409.46 per unit, ROH/PPYD/Bhilai, SECR for 68425.00 cum at Rs. 341.02 per unit and RWSS/Raipur, SECR for 147766.00 cum at Rs. 335.12 per unit which was inclusive of transportation and GST charges. 6. Thereafter, the respondent No. 1 SECR vide letter No. STORES/08241051/1030826 dated 14.10.2024 issued a counter offer by reducing the bulk quantity for which the tender was floated as for ELS/Bhilai, SECR for 75.00 cum at Rs. 238.00 + Rs. 7.67 (freight charges) per unit, GSD/Nagpur, SECR for 2182.00 cum at Rs. 238.00 + Rs. 97.00 (freight charges) per unit, ROH/PPYD/Bhilai, SECR for 17136.00 cum at Rs. 238.00 + Rs. 7.67 per unit and RWSS/Raipur, SECR for 41242.00 cum at Rs. 238.00 + Rs. 7.00 per unit which was exclusive of GST charges, i.e., 18.00% GST, which if calculated will boil down to Rs. 245.67 per unit for ELS/Bhilai, SECR, Rs. 335.00 per unit for GSD/Nagpur, SECR, Rs. 245.67 per unit for ROH/PPYD/Bhilai, SECR and Rs. 245.00 per unit for RWSS/Raipur, SECR inclusive of freight and GST prices. 7. As the petitioner Company could not submit its acceptance to much below and less rates as well as reduced quantity, he 5 respondents SECR without any notice, information and opportunity of hearing to the petitioner Company, have issued the impugned fresh e-Tender No. 08241051A dated 21.10.2024 having closing date as 20.11.2024. Hence, the present petition has been filed by the petitioner seeking aforementioned reliefs. 8. Mr. Ashish Shrivastava, learned Senior Advocate for the petitioner Company submitted that action on the part of respondents SECR in inviting impugned fresh e-Tender No.08241051A dated 21.10.2024 for the same item without notice and without giving any opportunity of hearing to L-1 bidders i.e. the petitioner Company, is not only bad, illegal and arbitrary in nature but the same is also in serious violation of professed norms, various guidelines issued and the Circular dated 17/11/2017 issued by the Railway Board, MoR, GoI besides being in serious violation of Article 14, 16 and 19 (1) (g) of the Constitution of India. In support of its contention, he placed reliance upon the judgment passed by the Hon’ble Supreme Court in Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, reported in (1979) 3 SCC 489. He further submitted that upon declaring the petitioner Company as L-1 and subsequently inviting them for negotiation and countering their offer, is a deemed acceptance of the petitioner’s original offer and without further rejecting the original offer, floating another e-tender for the same scope of work is germane to the contractual jurisprudence and illegal on the part of the respondents and it seems that the 6 respondents are in collusion with other bidders. He also submitted that the subsequent e-tender is for a higher quantity than the quantity which was asked in counter offer, which is in serious violations of principles of law, as the scope of work remains the same. 9. On the other hand, Mr. Ramakant learned Deputy Solicitor General appearing for the respondents SECR opposed the aforesaid submission and submitted that after the evaluation of financial bid, Tender Committee has tallied previous work purchase orders for the same item when it was found by the Tender Committee that the quoted price of the petitioner/bidder was Rs. 278 per unit which was about 16% to 18% higher than last purchase order in the year 2023, recommended to negotiate the offer rate with the petitioner. After negotiation, the petitioner/bidder has reduced negligible amount of Rs.1 in basic rate i.e. 0.36% and quoted the basic rate Rs. 277 per unit. Tender Committee again discussed the rates and found the rates are still on higher side, therefore, on 14.10.2024 the respondent authority gave a counter offer to the petitioner for the quantity of 60635 CuM. at basic rate of Rs. 238 per unit, but when the petitioner did not submit any response to the counter offer within the stipulated time, hence, it was deemed that the petitioner Company is not interested for the work order and as such, the tender was finalized new tender was floated, in which the new Company, namely, Shivank Gases Private Limited, Raipur with the same Directors as 7 in the petitioner Company is ready to do the same work at basic rate of Rs. 201 per unit. Thus, it shows the malafide intention of the petitioner Company. Hence, the action of the Tender Committee is in the interest of common good by saving Govt’s money and the petitioner Company is not entitled to get any relief as prayed, therefore, the petition may be dismissed at the threshold. 10. We have heard learned counsel for the parties and perused the impugned order and other documents appended with writ petition. 11. From perusal of the prayers and pleadings made in the writ petition, reply, rejoinder and materials available on record, it transpires that the petitioner Company has participated in the tender in question and upon opening of the financial bid on 12.09.2024 the petitioner Company was found L-1 for bulk quantity and prices quoted by the petitioner Company for each works were disclosed as Rs.278.00 per unit which was exclusive of all other charges i.e., transportation and GST. After declaring the petitioner Company L-1, the Tender Committee has compared his rates with last purchase order in the year 2023 for the same item, which is completely baseless and irrelevant as the prices pertaining to the year 2023 cannot be compared to the present rates as currently the market conditions have changed and prices of raw materials are also affected. Further, it is completely arbitrary, illegal and against the principles of natural justice as despite the fact that petitioner was admittedly declared L1 for bulk 8 category he was forced to accept unconditional counter offer by the respondent SECR, failing which it was presumed that the petitioner was not interested for order, which was in clear violation of Article 14 & 19(1)(g) of the Constitution of India. 12. The Hon’ble Supreme Court in the matter of Ramana Dayaram Shetty (supra) held as under : “12. We agree with the observations of Mathew, J., in V. Punnan Thomas v. State of Kerala, AIR 1969 Kerala 81 that: "The Government is not and should not be as free as an individual in selecting the recepients for its largess. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal". The same point was made by this court in Erusian Equipment and Chemicals Ltd. v. State of West Bengal, [1975] 2 S.C.R. 674 where the question was whether black-listing of a person without giving him an opportunity to be heard was bad ? Ray, C. J., speaking on behalf of himself and his colleagues on the Bench pointed out that black-listing on a person not only affects his reputation which is in Poundian terms an interest both of personality and substance, but also denies him equality in the matter of entering into contract with the Government and it cannot, therefore, be supported without fair hearing. It was argued for the Government that no person has a right to enter into contractual relationship with the Government and the Government, like any other 9 private individual, has the absolute right to enter into contract with any one it pleases. But the Court, speaking through the learned Chief Justice, responded that the Government is not like a private individual who can pick and choose the person with whom it will deal, but the Government is still a Government when it enters into contract or when it is administering largess and it cannot, without adequate reason, exclude any person from dealing with it or take away largess arbitrarily. The learned Chief Justice said that when the Government is trading with the public, "the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be confined and structured by rational, relevant and non- 10 discriminatory standard or norm and if the Government departs from standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. 13. Considering the aforesaid facts and circumstances of the case, particularly the fact that price bid of the petitioner Company has already been opened and it was already declared L-1 and in the light of judgment passed by the Hon’ble Supreme Court in the matter of Ramana Dayaram Shetty (supra), this Court is of the considered opinion that issuance of impugned fresh e-tender No.08241051A dated 21.10.2024, without any notice, information and opportunity of hearing to the petitioner Company, is bad in law and accordingly the same is hereby quashed. The respondents SECR are directed to consider the petitioner's offer/negotiated rates for procurement of 222731 Cum of Dissolved Acetylene Gas, pursuant to previous Tender No.08241051 dated 05/08/2024 for the SECR. 14. The writ petition is allowed to the extent indicated hereinabove. The parties shall bear their own cost. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Chandra