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12. In the circumstances, the Committee feel that the offer of Messrs Universal Goods Handling Co. Ahmedabad at +390% above the Schedule of Rates which is +121.72% as compared to the rates accepted at +121% above the schedule of rates in the year 1975 and + 84.16% above as compared to the escalated rate of +155.07% above the Schedule of Rates applicable for the period from 6-7-1980 to 15-8-1980, is reasonable. The annual value of the contract estimated is Rs. 45,00,348-41 paise. The Committee, therefore, recommend that the fresh contract be awarded to Messrs Universal Goods Handling Co. Ahmedabad at this rate on a single tender basis with the following conditions existing in their current contract:--

5. In the affidavit-in-reply filed on behalf of the Railway Administration a preliminary contention regarding jurisdiction is raised on the ground that no part of the cause of action in respect of the Bharatpur contract has arisen within the State of Gujarat. The concerned contractor too has raised a similar objection. The contract was given to Messrs Chirag & Company for three years from 1st Feb. 1978 after following the open tender system as their quotations were the lowest. The performance of the said contractor was satisfactory and, therefore, it was considered advisable in public interest not to disturb the arrangement since the contractor was agreeable to continue the work at the same rates. It was thought that if tenders were invited having regard to the rise in labour charges, etc., there was every likelihood of higher rates being quoted. With the shifting of coal transhipment to Agra East Bank from Jan. 1980, Bharatpur became a transhipment point for crane consignments only. Since the performance of the contractor was satisfactory, the General Manager accepted the recommendation of the Negotiation Committee after examining the rising trend in the rates offered in the recent past for similar contracts and on being satisfied that if fresh tenders were invited, the Railway Administration would have to pay higher rates which was not in public interest. It was in these circumstances that the Railway Administration resorted to the single tender system and renewed the contract in question. It is, therefore, denied that the contract was extened for a further period of three years i. e., up to 31st Jan. 1981 with a view to favouring the contractor. On similar lines is the affidavit-in-reply of the contractor.

(i) By invitation to one firm only ('single' tender or 'private' purchase).
(ii) By direct invitation to a limited number of firms ('limited tender') and
(iii) By advertisement ('Open tender').

The State Railway Code for the Stores Department also refers to tre aforesaid three tender methods. Rule 323 lays down that the exceptions made to the general rule that tenders should be called for in all cases, are based only on practical considerations in order to avoid delay and unnecessary work in cases of comparatively small value. Rule 324 refers to the open tender system and states that this system of invitation to tender bv public advertisement in the most open and public manner possible, should be used as a general rule and must be adopted, subject to the exceptions noted in paragraphs 331 and 332 in all cases in which the estimated value of the tenders to be received is Rs. 5,000/-or over, R. 331 refers to powers of 'Agents', (this expression is used because these rules were enacted when the Railways were managed by Companies under the British Rule) in Exceptional Cases. Rule 332 next provides ad tinder :

19. Messrs Chirag & Company were awarded contract for three years i. e. from 1-2-1978 to 31st Jan. 1981 after inviting open tenders. The previous contractors Messrs Western Goods and Transport Corporation were given a contract for three years i. e. from 1-2-1975 to 31-1-1978 at a rate which was higher by 17.73 per cent than the rates quoted by Messrs Chirag & company in 1978. When the period of the contract was about to expire the contractor requested the Railway Administration to extend the contract by holding negotiation. In the meantime, the coal transhipment work was shifted to Agra-East Bank with the result that so far as Bharatpur transhipment point was concerned it was limited to crane consignment. The performance of Messrs Chirag & Company was found to be quite satisfactory and it was thought that if open tenders were invited the Railway may have to pay higher rates. The Railway, therefore, decided to negotiate with the Contractor for which a negotiation committee was appointed. The minutes of the negotiation commit tee show that the fact that the contractors had quoted highly competitive rates in the year 1978 which were lower by 17.73% as compared to the rates allowed to the previous contractor, no reduction was necessary on account of the closure of coal dump at Bharatpur. The Negotiation committee, therefore, recommended that the contract may be extended for a further period of 3 years from 1-2-1981 to 31-1-1984 at the existing rates on a single tender basis for the reasons set out in para 7 of its report. The petitioners have contended that the extension of the contract without any reduction on account of the discontinuance of coal dump at Bharatpur is a clear act of favouritism because under the terms of the contract a fixed mini-mum payment has to he made to the contractor under that head. It was, therefore, submitted by the learned Counsel for the petitioners that the action of the Railway Administration in granting contract at the existing rates without making any reduction on account of the closure of the coal dump resulted in loss to the public exchequer.