Bombay High Court
Central Railways Caterers' ... vs Union Of India & 4 Ors on 8 January, 2016
Equivalent citations: AIR 2016 (NOC) 363 (BOM.), 2016 (2) ABR 163, (2016) 2 MAH LJ 769, (2016) 4 BOM CR 748
Author: B. P. Colabawalla
Bench: S.C. Dharmadhikari, B.P. Colabawalla
WP2753.13.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2753 OF 2013
WITH
NOTICE OF MOTION NO.491 OF 2015
Central Railway Caterer's Association
and another ... Petitioners
v/s
Union of India and others ... Respondents
WITH
WRIT PETITION NO.2745 OF 2015
Jitendra Kumar P. Jain and another ... Petitioners
v/s
Union of India and others ... Respondents
WITH
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.653 OF 2014
WITH
WRIT PETITION NO.652 OF 2014
M/s M.B. Agarwal and Co. ... Petitioners
v/s
Union of India and others ... Respondents
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WITH
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3942 OF 2015
M/s S.A. Pai and Co. ... Petitioners
v/s
Union of India and others ... Respondents
Mr Y.S. Jahagirdar, Sr. Counsel i/b M/s Vidhi Partners for
Petitioners in WP No.2753 of 2013.
Mr K. Talukdar i/b M/s M.P. Rege and Co. for Petitioners in WP
No.2745 of 2015.
Mr T.J. Pandian for Respondents in WP Nos.2753 of 2013, 652 of
2014 and 653 of 2014.
Mr Anil Singh, ASG alongwith Mr Suresh Kumar for Respondents
in WP No.2745 of 2013.
Mr K. Talukdar i/b Mr Krishna Baruah for Petitioners in WP
Nos.652 and 653 of 2014.
Mr K. Talukdar i/b Mr Siddharth Wakade for Petitioners in WP
No.3942 of 2015.
CORAM: S.C. DHARMADHIKARI &
B.P. COLABAWALLA JJ.
Reserved On : 9th December, 2015.
Pronounced On : 8th January, 2016.
Judgment: [ Per B. P. Colabawalla J. ] :-
1. Rule. Respondents waive service. By consent of parties,
rule made returnable forthwith and heard finally.
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2. By these Petitions under Articles 226 and 227 of the
Constitution of India, the Petitioners challenge the Railway Catering
Policy 2010 to the limited extent that the classification and
categorization of Railway Stations based on their annual earnings
are per se illegal, arbitrary and unjust and have no nexus with the
actual sales and/or footfalls on the catering units on such Railway
Stations. The Petitioners also challenge the technical criteria,
evaluation and selection process contained in the tender document
dated 9th October, 2013 issued by the Railways for provision of
refreshment rooms.
3. It is the case of the Petitioners that as a result of
classification and categorization of Railway Stations on the basis of
their annual earnings, the members of Petitioner No.1 (in Writ
Petition No.2753 of 2013) who were originally allotted small static
catering units have now become major static units and have
thereby been affected by certain onerous, unjust and arbitrary
evaluation criteria in Section B Chapter III of the tender document
dated 9th October, 2013. It is in these circumstances that the
Petitioners are before us in our writ jurisdiction under Article 226
of the Constitution of India. For the sake of convenience we shall
refer to the facts in Writ Petition No.2753 of 2013.
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4. The brief facts to decide the present controversy are
that Petitioner No.1 is a Public Trust registered under sections 18
and 19 of the Bombay Public Trust Act, 1950 and is an organization
that represents various catering licensees providing Railway
catering services to the Central Railways. Petitioner No.2 is the
secretary of Petitioner No.1. Respondent No.1 is the Union of India
through the Ministry of Railways. Respondent No.2 is the General
Manager, Central Railways and the person in-charge of the entire
Central Railways. Respondent No.3 is the Chief Commercial
Manager, Central Railways and looks into the day-to-day
commercial affairs of the same. Respondent No.4 is the Executive
Director (T & C) who formulates the catering policy, circulars etc.
under instructions from the Railway Board and Respondent No.5 is
Senior Divisional Commercial Manager, Bhusawal Division, Central
Railways who has issued the tender document dated 9th October,
2013 for refreshment rooms. Respondent Nos.2 to 5 are in the
employment, supervision and control of Respondent No.1.
5. The Indian Railways have the largest network of
Railways divided into 17 zones and approximately 8056 Railway
Stations. The Railway's main activity is plying goods and
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passengers and the main source of revenue is passenger ticket
fares, freight and transportation charges etc. Apart from providing
the aforesaid services, the Railways also provide catering services
to its passengers and ensure that good and wholesome food is
supplied to the passengers using its services.
6. From time to time, the Railway Board issued catering
policies to achieve the aforesaid objective. Presently, the Catering
Policy 2010 issued under Commercial Circular dated 21st July 2010
is in force. Between 2005 to 2010 Railway Catering Services were
managed by the Indian Railway Catering and Tourism Corporation
Ltd. (IRCTC). In 2010 Respondent Nos.1 to 4 issued a catering
policy wherein the entire catering work of Mobile and Major units of
the Indian Railways was transferred back to the Railways and all
the 17 zones of the Railways were entrusted with the said work.
7. As far as Writ Petition No.2753 of 2013 is concerned,
the members of Petitioner No.1 are holding refreshment rooms at
Kandwa Railway Station, Manmad Railway Station, Shegaon
Railway Station, Akola Railway Station and Badnera Railway
Station. The aforesaid Railway Stations are 'A' category Stations. It
is the case of the Petitioners that the actual sales of the members of
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Petitioner No.1 vary from Rs.2,500/- to Rs.5,000/- per day. It is
thus the case of the Petitioners that the annual earnings of a
Railway Station have no nexus to the earnings of the catering units
on such Stations or with the actual footfall in that particular
Station.
8. Be that as it may, on 9th October 2013, Respondent No.4
issued a notice inviting tenders containing the standard bid
document for refreshment rooms at Kandwa Railway Station,
Manmad Railway Station, Shegaon Railway Station, Akola Railway
Station and Badnera Railway Station respectively. The said bid
document provided for various technical and financial criteria that
were required to be fulfilled by the prospective bidder. The said bid
document is divided into two parts. Part A is the technical bid and
Part B is the financial bid. According to the Petitioners, the terms
of the technical bid regarding the evaluation criteria / selection
process stipulated by the Respondents is illegal, arbitrary,
discriminatory and unreasonable as it has the effect of virtually
throwing out the members of Petitioner No.1 from the tendering
process as they may not be able to fulfill the evaluation criteria.
9. To elaborate this point further, Mr Jahagirdar, learned
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Senior Counsel appearing on behalf of the Petitioners, submitted
that though under the minimum eligibility criteria, an individual /
proprietor/ partnership firms are permitted to participate, they
cannot fulfill certain criteria such as financial standing, annual
turnover etc. In this regard, Mr Jahagirdar brought to our notice
page 192 of the paper book which sets out the eligibility and
evaluation criteria for the bidders. He laid much stress on clause
3.4.1 which provides that the bidder must have profit or loss plus
accumulated reserves plus share capital of a minimum of
Rs.20,00,000/- during each of the preceding five years. Mr
Jahagirdar submitted that this clause would clearly oust
proprietary concerns, individuals and partnership firms as they
can never have a share capital. Mr Jahagirdar then submitted that
the annual turnover criteria (clause 3.3.1) is to be calculated not
only from the revenue generated from the Railway catering
business but also from other catering businesses undertaken by the
bidder such as at airports, restaurants, franchisee outlets etc. He
submitted that due to this, the bidders who were exclusively
catering for the Railways are put at the huge disadvantage and
instead of showing loyalty to these caterers, they are now sought to
be ousted by bidders who may not have any experience in catering
for the Railway commuting public.
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10. Mr Jahagirdar, by drawing our attention to page 203 of
the paper-book, then submitted that undue consideration /
weightage is given in the tender document to the number of base
kitchens and average number of meals prepared per day by the
prospective bidder. According to Mr Jahagirdar, this weightage is
arbitrary and totally inapplicable to refreshment rooms.
Refreshment rooms consist of a kitchen and a sitting area and
therefore the refreshment room licensees do not require any
separate kitchen. Also, according to Mr Jahagirdar, meals are
prepared based on the average footfall and/or sales and only lunch
and dinner are considered as meals as per the tender document,
whereas refreshment room licensees also serve breakfast and
snacks. It was therefore his submission that even this criteria and
weightage given to the number of base kitchens and the average
number of meals is totally arbitrary and has no nexus to inviting
tenders for refreshment rooms in 'A' category Railway Stations.
11. Mr Jahagirdar next submitted that as per the tender
document, each bidder is required to give himself marks / scores as
set out in the tender document and the highest score obtained by a
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bidder is considered as the base techno-commercial score (HTS).
All other bidders are required to obtain 50% or more of the said HTS
in order to be technically qualified. In other words, the price bids of
those bidders who do not obtain 50% or more of the HTS would not
be opened. Mr Jahagirdar submitted that this criteria is also
wholly arbitrary, onerous and unreasonable and would have the
effect of ousting small caterers who wish to take part in the above
tender. For all the aforesaid reasons, Mr Jahagirdar submitted that
the tender document as well as the tendering process is vitiated and
the same be quashed and set aside by us in our writ jurisdiction
under Article 226 of the Constitution of India.
12. On the other hand, Mr. Anil Singh, the learned
Additional Solicitor General appearing on behalf of the
Respondents, submitted that the scope of judicial review of
Government Policies is extremely restricted. It is impermissible for
the Court to enter upon any exercise of ascertaining the wisdom of
a policy decision of the Government or to examine the same with a
fine toothcomb. He submitted that it is immaterial if a better and
more comprehensive decision could have been taken and it is
equally irrelevant even if it can be demonstrated that the policy
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decision is unwise or is likely to defeat the purpose for which the
decision has been taken. The learned Additional solicitor General
submitted that a policy decision can be interfered with only if it is
demonstrably capricious or completely arbitrary and not informed
by any reason whatsoever. He submitted that by no stretch of the
imagination can the Catering Policy 2010 be termed as arbitrary or
capricious and in any event no such case has been made out in the
Writ Petition.
13. The learned Additional Solicitor General was at pains to
point out that the fundamental challenge in the Writ Petition was to
the limited extent regarding the classification and categorization of
Railway Stations into A-1, A, B, C, D, E and F categories on the basis
of annual passenger earnings of that Railway Station. He
submitted that it is the Petitioners' contention that this policy is per
se illegal, arbitrary and unjust as the annual earnings of the
Railway Station have no nexus with the actual sales and/or footfalls
on the catering unit and as a result of such classification /
categorization, the members of Petitioner No.1 who were originally
allotted small static catering units, have now become major static
units and have been subjected to the tender process. In this regard,
the learned Additional Solicitor General submitted that the aspect
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of classification / categorization of Railway Stations on the basis of
annual passenger earnings has been in existence since the time of
the Catering Policy 2000 as also in the Catering Policy 2005.
Notably, a similar challenge to the classification of Railway Stations
on the basis of its annual passenger earnings inter alia amongst
other aspects of the 2005 Policy, was made before this Court in a
group of Writ Petitions, the first of which was Writ Petition No.569
of 2006 filed by the Indian Railways Caterers' Association. A
Division Bench of this Court by its order dated 12th April, 2006 was
pleased to uphold the classification of Railway Stations on the basis
of annual passenger earnings and negated each of the contentions
of the Petitioners therein. The learned Additional Solicitor General
submitted that the contentions raised in the present Writ Petition
are also similar to the ones raised in Writ Petition No.569 of 2006
and other connected Writ Petitions that were disposed of by this
Court on 12th April, 2006. Even the Special Leave Petition filed
against the order of this Court dated 12th April, 2006 was dismissed
as withdrawn by the Supreme Court vide its order dated 18th
February, 2011. In view of the aforesaid, the learned Additional
Solicitor General submitted that there was no merit in the challenge
to the Catering Policy 2010.
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14. As far as the challenge to certain terms and conditions
of the tender document are concerned, the learned Additional
Solicitor General submitted that the tender conditions cannot be
said to be in any way arbitrary. The tender conditions are
formulated keeping in mind the Catering Policy 2010 and seek to
achieve the objectives under the said policy which is to improve the
quality of service and to ensure the supply of wholesome and
hygienic food to the expectation and satisfaction of the Railway
commuting public. To achieve this very objective, tender conditions
have been imposed to ensure that reputed players and with
adequate experience and financial backing as well as other
infrastructural facilities are persons who participate in the
tendering process. One such condition can be found in clause 3.3.1
(pg 192 of the paperbook) which stipulates that the bidder must
have a minimum turnover of Rs.50.00 lakhs during the preceding
five years. This minimum turnover is to be calculated not only from
the Railway catering business but also from other catering services,
if any, undertaken by the tenderer such as at airports, bus stations,
industrial / institutional kitchens / mess, restaurants, franchisee
outlets etc. The learned Additional Solicitor General submitted that
this particular condition would in fact ensure that persons not only
catering for the Railways but also elsewhere, are given an
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opportunity to take part in the tender process. This would increase
competition and which is always healthy in a democratic set up.
15. As far as clause 3.4.1 is concerned, the learned
Additional Solicitor General submitted that this clause stipulates
that the bidder must have profit or loss plus accumulated reserves
plus share capital of a minimum of Rs.20.00 lakhs during each of
the preceding five years. He submitted that if a bidder is an
individual, he can show profits of a minimum of Rs.20.00 lakhs for
the preceding five years in order for him to fulfill this criteria. This
clause does not in any way mean that an individual or a partnership
firm that cannot have a share capital is ousted from the bidding
process. In other words, a bidder who is an individual / partnership
firm having a minimum profit of Rs.20.00 lakhs for the preceding
five years would certainly qualify as per clause 3.4.1 and could not
be ousted merely because he does not have a share capital. He
submitted that these conditions are being totally misconstrued and
misread by the Petitioners to somehow set up a challenge to the
tender conditions. Equally, the concerns of the Petitioners
regarding the evaluation criteria provided under clause 3.5.1(c)
and clause 3.5.1(d) is totally ill-founded. The learned Additional
Solicitor General submitted that clause 3.5.1(c) inter alia stipulates
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that the highest techno-commercial score (HTS) secured by any
bidder will be the base techno-commercial index. Clause 3.5.1(d)
stipulates that all bids whose techno-commercial score is more than
or equal to 50% of the HTS will be techno-commercially qualified. In
other words, if the highest score secured by any bidder is 60, then
all other bidders, in order to be techno-commercially qualified, have
to score 30 or above. The learned Additional Solicitor General
submitted that there is absolutely nothing arbitrary or
unreasonable about the aforesaid condition. The aforesaid
condition has been imposed in order to ensure that the bidders
whose financial bids would be opened are competent enough to meet
the standards and the increasing level of expectations of the
Railway commuting pubic. Merely because the said condition,
according to the Petitioners, would have the effect of significantly
reducing their chances of success in the tender process, cannot be a
ground to interfere with the tender conditions under Article 226 of
the Constitution of India, was the submission. The learned
Additional Solicitor General submitted that in any event this so
called apprehension of the Petitioners is totally misplaced
inasmuch as in the facts of the present case, the tenderer who has
secured the highest marks is an individual and who exclusively
caters for the Railways. This would clearly demonstrate that all
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these so called apprehensions of the Petitioners have no basis. The
learned Additional Solicitor General submitted that the tender
conditions have been stipulated keeping in mind the overall
Catering Policy 2010 and to ensure that applicants who take part in
the tender process would be able to fulfill the object sought to
achieved thereby. For all the aforesaid reasons, the learned
Additional Solicitor General submitted that there is no merit in the
Writ Petition and the same ought to be dismissed with costs.
16. We have heard learned counsel at length and with their
assistance perused the papers and proceedings in the Writ Petition
along with the Catering Policy 2010 as well as the terms and
conditions of the tender document dated 9th October, 2013. It is
common ground before us that in 1992, the Railways decided to
privatize the existing departmental units regarding
catering/vending and framed the Catering Policy 1992. The main
aim for privatization was to ensure that Railway passengers are
provided with good quality food and professional service. Under the
1992 policy, the applications received were scrutinized by a
Screening Committee keeping in mind the reputation/business
standing of the applicant, the turnover of the applicant's business,
catering experience of the applicant, financial standing of the
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applicant, size of establishment of the staff etc. After the 1992
policy, there were new catering policies that were framed by the
Government in the year 2000, 2005 and 2010. These policies have
undergone changes essentially in line with the increased number of
passengers using the Railways and with a view to provide better
quality of catering services in a more professional manner by more
professionally run units. This is to ensure that the overall service
imparted to the Railway commuters is improved and meets the ever
increasing demand of the Railway commuting public. The terms and
conditions of each of these policies have been modified from time to
time in the wisdom of its framers so as to better cater to the needs
of the ever increasing number of Railway passengers. As far as the
Catering Policy 2010 is concerned, the fundamental challenge is to
the classification and categorization of Railway Stations into
different categories such as A1, A, B, C, D, E and F on the basis of its
annual passenger earnings. It is not in dispute that the aspect of
classification/categorization of a Railway Station on the basis of its
annual passenger earnings had been in existence since the time of
the Catering Policy 2000 and also in the Catering Policy 2005. In
fact, this very aspect of classification/categorization of Railway
Stations in the 2005 policy was subjected to a challenge before this
Court in a group of Writ Petitions, the first of which was Writ
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Petition No.569 of 2006. A Division Bench of this Court, by its
order dated 12th April 2006, upheld the classification /
categorization of Railway Stations on the basis of its annual
passenger earnings as the same was held to have a direct nexus to
the objectives sought to be achieved under the policy. Even though
in the present case, what is challenged is the Catering Policy 2010,
we find from the averments in the Writ Petition that the challenge
to the classification/categorization of Railway Stations is on the
basis of the annual passenger earnings of that Station. This is the
exact same challenge that was repelled by a Division Bench of this
Court, albeit in relation to the Catering Policy 2005. It is to be noted
that even though the order of the Division Bench dated 12th April,
2006 (which upheld the aforesaid classification/categorization)
was subjected to an Appeal before the Supreme Court, the SLP was
dismissed as withdrawn on 18th February, 2011. In this view of the
matter, we do not find any substance in the challenge to the
categorization/classification of Railway Stations on the basis of its
annual passenger earnings as set out in the Catering Policy 2010.
To be fair to Mr Jahagirdar, the main thrust of his argument was
not on challenging the Catering Policy but on the validity and
legality of the technical criteria as well as the evaluation and
selection process contained in the tender document dated 9th
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October, 2013. In fact, the points urged by Mr Jahagirdar were
submitted to us in the form of a note which we have taken on
record.
17. Before we deal with the arguments of Mr Jahagirdar on
the different terms and conditions that he sought to assail before
us, it would be apposite to reiterate some well settled legal
principles. It is now well settled that fixation of a value of the
tender is entirely within the purview of the executive and courts
hardly have any role to play in this process except for striking
down such action of the executive that is arbitrary or unreasonable.
If the Government acts in conformity with certain healthy
standards and norms such as awarding of contracts by inviting
tenders, in those circumstances, interference by the courts is very
limited. In the matter of formulating conditions of a tender
document and awarding a contract, greater latitude is required to
be conceded to the State authorities unless the action of such
authorities is found to be malicious and a misuse of its statutory
powers. Certain pre-conditions or qualifications for tenders have to
be laid down to ensure that the contractor has the capacity and the
resources to successfully execute the work. If the State or its
instrumentalities act reasonably, fairly and in public interest in
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awarding the contract, here again, interference by courts is very
restricted and no person can claim a fundamental right to carry on
business with the Government. The Government and their
undertakings must have a free hand in settling the terms of the
tender and only if it is demonstrably arbitrary, discriminatory,
malafide or actuated by bias, that the Courts would interfere. The
Courts cannot interfere with the terms of the tender prescribed by
the Government because it feels that some other terms in the
tender would have been fairer, wiser or more logical. The Courts
are not experts in this field and the Courts will be well advised not
to substitute its own opinion for that of the experts in the field.
These principles have been very succinctly set out by the Supreme
Court in the case of M/s. Michigan Rubber (India) Ltd V/s State
of Karnataka and Others.1 Paragraphs 23, 24 and 35 of the
aforesaid decision read thus:-
"23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in
action by the State, and non-arbitrariness in essence
and substance is the heartbeat of fair play. These
actions are amenable to the judicial review only to
the extent that the State must act validly for a
discernible reason and not whimsically for any
ulterior purpose. If the State acts within the bounds
of reasonableness, it would be legitimate to take into
consideration the national priorities;
1 (2012) 8 SCC 216
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(b) Fixation of a value of the tender is entirely within the
purview of the executive and the courts hardly have
any role to play in this process except for striking
down such action of the executive as is proved to be
arbitrary or unreasonable. If the Government acts in
conformity with certain healthy standards and norms
such as awarding of contracts by inviting tenders, in
those circumstances, the interference by courts is
very limited;
(c) In the matter of formulating conditions of a tender
document and awarding a contract, greater latitude
is required to be conceded to the State authorities
unless the action of the tendering authority is found
to be malicious and a misuse of its statutory powers,
interference by courts is not warranted;
(d)
ig Certain preconditions or qualifications for tenders
have to be laid down to ensure that the contractor
has the capacity and the resources to successfully
execute the work; and
(e) If the State or its instrumentalities act reasonably,
fairly and in public interest in awarding contract,
here again, interference by court is very restrictive
since no person can claim a fundamental right to
carry on business with the Government.
24. Therefore, a court before interfering in tender or contractual
matters, in exercise of power of judicial review, should pose to
itself the following questions:
(i) Whether the process adopted or decision made by the
authority is mala fide or intended to favour someone;
or whether the process adopted or decision made is
so arbitrary and irrational that the court can say:
"the decision is such that no responsible authority
acting reasonably and in accordance with relevant
law could have reached"? and
(ii) Whether the public interest is affected?
If the answers to the above questions are in the negative, then there
should be no interference under Article 226.
****************
35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of VRD 20 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender.
As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre-qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide."
18. Keeping these principles in mind, we will now deal with the arguments advanced by Mr Jahagirdar in relation to certain terms and conditions of the tender, which according to him, are discriminatory and unreasonable. The first condition that was challenged by Mr Jahagirdar was the annual turn over criteria which stipulates that the bidder must have a minimum annual turnover of Rs.50,00,000/- during each of the preceding five years.
According to Mr Jahagirdar this annual turn over is to be calculated not only from the revenue generated from the Railway VRD 21 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc catering business but also from other catering businesses, if any, undertaken by the bidder such as at airports, restaurants etc. According to Mr Jahagirdar, this would clearly show that persons who were/are exclusively catering for the Railways are put to a huge disadvantage as now other applicants who have other catering businesses and not necessarily having any experience in catering for the Railways, would not only be allowed to bid, but probably outbid the caterers who exclusively cater to the Railways. We fail to see how this ig condition can be termed as arbitrary, discriminatory or unreasonable. In fact, this allows others also to participate in the tender process and promotes competition. If the Railways, in its wisdom, choose to give an opportunity and invite tenders from persons other than those who are exclusively catering for the Railways, we see nothing wrong in it. We did not think that such a decision is any way unreasonable, discriminatory or arbitrary requiring our interference under Article 226 of the Constitution of India. As mentioned earlier, to our mind, such a decision of the Railways would be in larger public interest as not only it would promote competition but would ensure participation of reputed players in the field. We, therefore, find no merit in this objection.
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19. The next objection raised by Mr Jahagirdar was to Clause 3.4.1 which stipulates that the bidder must have profit or loss plus accumulated reserves plus share capital of a minimum of Rs.20,00,000/- during each of the preceding five years. He submitted that even though Clause 3.1 allows even an individual or a partnership firm to be a bidder, Clause 3.4.1 would effectively mean that an individual or a partnership firm would be ousted from the bidding process as admittedly they cannot have any share capital. We find this argument wholly without substance. Clause 3.4.1 is with reference to the financial standing of the bidder.
Financial standing of an individual/partnership firm/company is the cumulative sum of the profit or loss + accumulative reserves + share capital. On a proper reading of Clause 3.4.1, it is clear that an individual/partnership firm would qualify even if the reserves + share capital is "Nil", provided the profit is Rs.20,00,000/- or more.
In fact, after filing of this Writ Petition, the Government of India, Ministry of Railways, by its circular dated 22nd November, 2013 has clarified that in the case of an individual/partnership firm, share capital should mean the proprietor's/partner's capital. This capital account could consist of capital brought by them from outside or capital generated internally by the business i.e. retained profit, which is normally added to the capital account instead of VRD 23 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc keeping it separately under reserves and surplus as in the case of a company/corporate. We, therefore, find that even this objection of the Petitioner is of no substance and stands rejected.
20. The next objection of Mr Jahagirdar was that undue consideration and weightage is given to the number of base kitchens and the average number of meals prepared per day by the bidder. He submitted that a refreshment room, for which the bids are invited, consists of a kitchen and a sitting area and therefore refreshment room licensees do not require a separate kitchen.
Further, only lunch and dinner are considered as meals whereas the refreshment room licensees also serve breakfast and snacks which are not taken into consideration in the bidding process.
Form Tech-4 deals with the details of base kitchens. A bidder, as per the said Form, has to mention the location of the base kitchen with the complete address along with average number of meals prepared per day. We find that this weightage has been given by the Respondents in the bid document to ensure that the person who bids in the tender has adequate number of kitchens so as to ensure that he is able to cope with supplying adequate meals at that particular Station. Applying the principles laid down by the VRD 24 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc Supreme Court in M/s Michigan Rubber (India) Ltd,1 we do not find this condition to be either arbitrary, discriminatory or unreasonable requiring interference in our limited jurisdiction under Article 226 of the Constitution of India. We find that all the terms and conditions including the present one, have been imposed in order to sub-serve larger public interest and to ensure good quality service to the passengers as well as provide hygienic and wholesome food to the Railway commuting public. Merely because a better criteria or a wiser condition could have been imposed by the Railways is no ground for the court to interfere in its writ jurisdiction. These conditions denote that the bidders who wish to cater for the Railways should be professional and competent enough to meet the constantly increasing level of expectations and needs of the Railway commuting public. They can by no stretch of the imagination be termed as unreasonable or arbitrary and/or discriminatory. We, therefore, find no substance even in this objection.
21. The last objection raised by Mr Jahagirdar is that the Petitioners have a serious concern about the evaluation criteria set out in Clause 3.5.1(c) and 3.5.1(d). Clause 3.5 deals with the 1 (2012) 8 SCC 216 VRD 25 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc Selection process and can be found at page 213 of the paper book.
Clause 3.5 reads as under:-
"3.5 Selection Process 3.5.1. The responsive bids shall be evaluated in the following manner:-
a) Scrutiny of bids for minimum Eligibility as per Chapter 3 of Section A. Such bids that meet with the eligibility criteria will be called "eligible bids".
b) The eligible bidders will be evaluated techno-
commercially and awarded Techno-Commercial Score to assess the capability of the bidder(s) on the ig basis of scrutiny of information provided in Annexure
- A/5(Tech Form 1 to Tech Form 3) and the scoring scale at Annexure - A/5.
(c) The highest Techno-Commercial Score (HTS) secured by any of the bids will be the base Techno- commercial index.
(d) All bids whose techno-commercial score is more than or equal to 50% of HTS will be the "techno-
commercially qualified" for consideration of Railway Administration.
(e) Price bids will be opened for "techno-commercially qualified" bids only. The date time and venue of opening of price bid will be intimated only to the "techno-commercially qualified bidders"
.
(f) Highest Priced bid will be selected for award of contract.
(g) In the event of highest price being the same for more than one bid, bid with higher techno-commercial score will be considered for award of contract."
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22. What Clause 3.5.1(c) sets out is that the highest techno-
commercial score (HTS) secured by any bidder will be the base Techno-Commercial Index. Clause 3.5.1(d) stipulates that all bids whose techno-commercial score is more than or equal to 50% of the HTS will be techno-commercially qualified and price bids of only the techno-commercially qualified bids would be opened [clause 3.5.1(e)]. In other words, a bidder who is not techno-commercially qualified would be eliminated and his price bid would not be opened.
It was Mr Jahagirdar's submission that looking to these conditions, individual players would be edged out and would not have a level playing field in the tender process. We are unable to agree with the aforesaid submission. As mentioned earlier by the learned Additional Solicitor General, the highest tecno-commercial score (HTS) was secured by an individual who exclusively catered to the Railways. This fact has not been disputed by the Petitioners. This being the case, we are unable to agree with Mr Jahagirdar that these conditions would edge out an individual who wishes to take part in the tender process. Furthermore, we find that these conditions are aimed to attract reputed players in the field to achieve the objectives of the policy and therefore cannot be said to be unreasonable, discriminatory or arbitrary. These terms and conditions have been imposed after due deliberation and by an VRD 27 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc expert body after taking all factors into consideration and we do not think the same require any interference by us. This is more so in the present case since there are no allegations of malafides or malice on the part of the authorities. This being the case, we find that even this objection is of no substance.
23. Having dealt with the arguments of Mr Jahagirdar, we shall now deal with the judgment of the Supreme Court relied upon by him in the case of Reliance Energy Limited and Another v/s Maharashtra State Road Development Corporation Ltd and Others.2 Mr Jahagirdar placed heavy reliance on paragraph 36 of the aforesaid decision which reads as under:-
"36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of "non- discrimination". However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to "right to life". It includes "opportunity". In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N. [(2007) 2 SCC 1] , Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. "Level playing field" is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of "level playing field". We may clarify that this doctrine is, however, 2 (2007) 8 SCC 1 VRD 28 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of "level playing field" is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. "Globalisation", in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of "globalisation". Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of "level playing field" embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of "equality" should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of "level playing field". According to Lord Goldsmith, commitment to the "rule of law" is the heart of parliamentary democracy. One of the important elements of the "rule of law" is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of "reasonableness", then such an act or decision would be unconstitutional."
24. There is no dispute about the proposition laid down by the Supreme Court in the aforesaid decision but we fail to see how the same applies to the factual matrix before us. We are clearly of the view that the conditions imposed in the tender document and specially those that have been challenged by the Petitioner, do not create a situation whereby there was no level playing field. In fact as mentioned earlier, the bidder securing the highest techno-
commercial score (HTS) was an individual who catered for the Railways. This itself negates the contention of the Petitioners that VRD 29 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc there has been any violation of the doctrine of "level playing field".
We, therefore, find that the reliance placed on the aforesaid decision of the Supreme Court is wholly misplaced.
25. Before parting, we must mention that it is not disputed that from time to time catering polices have been framed by the Government of India. Some of these policies have been challenged which have been repelled by judicial pronouncements. In fact, a Division Bench of the Orissa High Court, by its order dated 24th January 2006, had sought to interfere with the Catering Policy 2005 in respect of reservations. This judgment and order of the Orissa High Court was subjected to an Appeal before the Supreme Court in the case of Indian Railways Catering and Tourism Corporation Limited v/s Indian Railway Major and Minor Caterers Association and Others.3 The Supreme Court set aside the order of the Orissa High Court on the ground that policy decisions of the Government should not be interfered with in a routine manner unless the policy is contrary to the provisions of statutory rules or of the Constitution. In the facts of that case nothing was brought to the notice of the Supreme Court that the Catering Policy 2005 was contrary to the provisions of the 3 (2011) 12 SCC 792 VRD 30 of 31 ::: Uploaded on - 08/01/2016 ::: Downloaded on - 09/01/2016 00:03:56 ::: WP2753.13.doc statutory rules or the Constitution. On this ground alone, the order of the Orissa High Court interfering with the Catering Policy of 2005 was set aside.
26. In view of our discussion in this judgment, we find no merit in these Writ Petitions. Rule is accordingly discharged and the Writ Petitions are dismissed. However, in the facts and circumstances of the case, we leave the parties to bear their own costs.
(B.P. COLABAWALLA J.) (S.C. DHARMADHIKARI J.)
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