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 2 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 3 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".4
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 5 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- 6 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 1 (2016) 1 SCC 724 2 2024 SCC On line Del 4281 3 (2008) 10 SCC 696 4 (1991) 3 SCC 273 5 2011 SCC On Line Del 1246 6 2022 SCC On Line Del 488 7 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. 7 2023 SCC On Line Cal 1908 8 (1976) 2 SCC 981 9 Manu/SC/1087/2024 8 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. 9 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 10 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 11 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 12 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' 13 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 14 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, 10 (1991) 3 SCC 273 11 2010 SCC On line Bom 1059 15 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 16 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] . 12 (2023) 19 SCC 1 13 (2020) 16 SCC 489 17
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 18 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 19 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 20 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