JUDGMENT C. Shivappa, J. - The contesting parties are respondents 1 and 2 in all these writ petitions. Though the cases are listed for admission, after notice to the learned Counsel for respondents 1 and 2 and private notice to the respondents, since pleadings are complete between the contesting parties, having regard to the urgency urged by the learned Counsel for the respondents 1 and 2 that traffic has been disrupted and public are put to great inconvenience and that pendency may result in delay in completing the time-bound programme, the matter is taken up for final disposal, with the consent of the learned Counsel appearing on either side. 2. In all these writ petitions, since common question of law and fact arise for consideration, they are taken up together and a common order is passed. 3. The only point for consideration in these petitions is "whether the impugned orders, regarding non-awarding of contracts to the petitioners, suffer from arbitrariness and discrimination and on that count are liable to the quashed ?" 4. To determine the point at issue between the parties, certain essential facts are stated thus : Respondent No. 1 by Tender Notice No. 54/CE/CN/97(A), dated 6-10-1987, invited sealed tenders from the approved list of contractors, for gauge conversion work between Madras Beach to Tiruchirappalli, Inchangadu-Valadi Section. The conversion work included assembling, laying and linking of permanent way Broad Gauge Track by PQRS Manual, including dumping and packing of stone ballast. 5. The petitioner in W.P. No. 1308 of 1998 submitted a tender for the work in Serial No. 1(b). The value of the work at Serial No. 1(b) is approximately Rs. 16.97 lakhs and an Earnest Money of Rs. 20,000/- was required to be deposited alongwith the tender form which costed Rs. 548/-. The petitioner in compliance with all the tender conditions submitted his rates for the work at Serial No. 1(b). Alongwith him, several, other approved contractor also applied for the work at Serial No. 1(b) and the sealed tenders were opened at the Office of respondent No. 2 on 11-11-1997 at 11.30 hrs. The tenders were called for negotiations on 6-1-1998. The negotiation was held by a Committee consisting of respondent No. 2 and other members alongwith the tenderers.
Alongwith him, several, other approved contractor also applied for the work at Serial No. 1(b) and the sealed tenders were opened at the Office of respondent No. 2 on 11-11-1997 at 11.30 hrs. The tenders were called for negotiations on 6-1-1998. The negotiation was held by a Committee consisting of respondent No. 2 and other members alongwith the tenderers. The sealed envelopes were opened and the rates quoted by the six tenderers were read out and the rate quoted by the petitioner was the lowest among other tenderers. However, the tender in respect of the work at Serial No. 1(b) has been awarded to the respondent No. 3 herein, by order dated 27-1-1998. 6. The petitioner in W.P. No. 1309 of 1998, submitted a tender for the work in Serial No. 1(c). The value of the said work is approximately Rs. 30.30 lakhs and an Earnest Money of Rs. 30.30 lakhs and an Earnest Money of Rs. 30,300/- was required to be deposited alongwith the tender form which costed Rs. 658/-. The petitioner had in compliance with all the tender conditions, submitted his rates for the work at Serial No. 1(c). The sealed tenders were opened at the office of respondent No. 2 on 18-12-1997 at 11.30 hrs. and the rate quoted by the petitioner was the lowest among all other approved tenderers. Still, the tender was awarded to respondent No. 3. 7. The petitioner in W.P. No. 1310 of 1998 submitted his tender for the work in Serial No. 1(e) of the Tender Notice No. 54/CE/CN/97(A), dated 8-10-1997. The value of the said work is Rs. 29.53 lakhs and an Earnest Money of Rs. 29,600/- was required to be deposited alongwith the tender from which costed Rs. 658/-. The petitioner in compliance with all the tender conditions submitted his rates for the work at Serial No. 1(e) and the sealed tenders were opened at the Office of respondent No. 2 on 11-1-1997 at 11.30 hrs. Thereafter, the tenderers were called for negotiations on 6-1-1998 before the Committee consisting of respondent No. 2 and two other members. The rate quoted by the petitioner was the lowest among, the rates quoted by all other tenders but still, the work at Serial No. 1(e) was awarded to respondent No. 3 by respondent No. 2. 8.
Thereafter, the tenderers were called for negotiations on 6-1-1998 before the Committee consisting of respondent No. 2 and two other members. The rate quoted by the petitioner was the lowest among, the rates quoted by all other tenders but still, the work at Serial No. 1(e) was awarded to respondent No. 3 by respondent No. 2. 8. All these petitioners have voiced a common grievance that they have been enlisted as approved contractors since 1985 and for execution of works costing from Rs. 20 lakhs to Rs. 50 lakhs under the category of Contractor-I and promptly executed all the works entrusted to them and never given any cause for complaint and non-accepting the lowest tender and resorting to the one higher than the rates quoted by them is violative of principles of natural justice and arbitrary exercise of power and or these grounds, the sought for quashing the order of Respondent No. 2 dated 27-1-1998, awarding the contract in respect of Serial No. 1(b) of the Tender Notice dated 6-10-1997 to Respondent No. 3 in W.P. No. 1308 of 1998 and for quashing the order of Respondent No. 2, dated 27-1-1998, awarding the contract in respect of Serial No. 1(c) of the Tender Notice, dated 28-11-1997 to Respondent No. 3 in W.P. No. 1309 of 1998 and similarly on the same ground for quashing the order of Respondent No. 2 dated 27-1-1998, awarding the contract in respect of Serial No. 1(e) of Tender Notice dated 6-10-1997 to Respondent No. 3 in W.P. No. 1310 of 1998. 9. Respondents 1 and 2 in all these petitions have filed counter affidavits, inter alia contending that the petitions are bad for non-joinder of necessary party viz., the General Manager, Southern, railway. It is also contended that even though tenders are invited from contractors in the approved list, for the work which is the subject matter of the present writ petitions, the decision to award the contract to a particular contractor is left to the discretion of respondents 1 and 2. The Tender Committee consists of the Deputy Chief Engineer Gauge Conversion-II, Tiruchirapalli, Deputy Financial Adviser and Chief Accounts Officer-II, Madras and Deputy Chief Electrical Engineer (O&G), Madras. Respondents 1 and 2 have to give due weight to all the surrounding circumstances and it is not mandatory to award all the contracts to the lowest tenderers.
The Tender Committee consists of the Deputy Chief Engineer Gauge Conversion-II, Tiruchirapalli, Deputy Financial Adviser and Chief Accounts Officer-II, Madras and Deputy Chief Electrical Engineer (O&G), Madras. Respondents 1 and 2 have to give due weight to all the surrounding circumstances and it is not mandatory to award all the contracts to the lowest tenderers. The Tender Committee was of the opinion that the rates received for the special tender were high and recommended for one round of negotiations. The petitioners also attended the negotiations on 6-1-1998, Clause 9 of the Regulations for the tenders and contract, reserves the right to the administration to accept the tenders in whole or in part or reject any tender or all tenders without assigning any reasons. The Committee, having regard to several factors such as, the nature of work involved capacity of the tenderers to complete the work and also their past performance, decided not to grant tender to the petitioners even though the rates quoted by them were the lowest. The Tender Committee also kept in view the fact that the gauge conversion work between Tambaram and Tiruchirapalli, via the chord line is targeted for completion by March, 1998 and being a prestigious and time bound programme, the Committee felt that it would not be safe and prudent to entrust the important linking work to the petitioners who were recently found to be defaulting contractors. The Committee, after due deliberations considered the fact that the petitioners have failed to complete various other works awarded to them and on that count, chose not to award the contracts to the petitioners. Moreover, the petitioners had also not produced any documents to prove and substantiate that they had the capacity, necessary manpower and equipments to execute the linking works in a short period of two months. The Committee, therefore, recommended the second lowest offerors since they satisfied all the requirements. The respondents have also denied the allegation that they have acted arbitrarily and against the principles of natural justice. 10. In support of his contentions, the learned Counsel for the petitioner, Mr. Vibhishanan, relied on a decision in Erusian Equipment and Chemicals Limited v. State of West Bengal ( AIR 1975 SC 266 ), wherein the Apex Court has held that the State has a duty to observe equality and it cannot choose to exclude persons by discrimination.
10. In support of his contentions, the learned Counsel for the petitioner, Mr. Vibhishanan, relied on a decision in Erusian Equipment and Chemicals Limited v. State of West Bengal ( AIR 1975 SC 266 ), wherein the Apex Court has held that the State has a duty to observe equality and it cannot choose to exclude persons by discrimination. He also relied on a decision in Ramana Dayaram Shetty v. International Airport Authority of India ( AIR 1979 SC 1628 ), wherein the Apex Court has observed that the action of the Government cannot be arbitrary at its sweet will and, like a private individual deal with any person it pleases, but it must be in conformity with the standard or norm 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-discriminatory standard or norm and if the Government departs from such 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. In Food Corporation of India v. Kamadhenu Cattle Food Industries ( AIR 1993 SC 1601 ), the Apex Court has held that the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to the affected by the decision .... Though the highest tenderer can claim to right to have his tender accepted, there being a power while inviting tenders to reject all the tenders, yet the power to reject all the tenders, cannot be exercised arbitrarily and must depend for its validity on the existence of cogent reasons for such action. In Tata Cellular v. Union of India ( AIR 1996 SC 11 = 1995(1) Arb. LR 193), the Apex Court has held that the tender of one company selected by Telecommunications Department-Company informed accordingly.
In Tata Cellular v. Union of India ( AIR 1996 SC 11 = 1995(1) Arb. LR 193), the Apex Court has held that the tender of one company selected by Telecommunications Department-Company informed accordingly. Subsequently, its name deleted from list of selected bidders without giving reasons. The Company ought to have been heard prior to omission of its name. 11. In AIR 1975 SC 266 . referred above, a party was black-listed and prevented from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. On considering the fact that a disability is created by the order of black-listing the Apex Court has held that such a person is entitled to be heard before his name is black-listed. The instant case is not a case of black-listing a contractor. Such action is not yet taken. So also, AIR 1996 SC 11 , because, at no time the petitioners were communicated having accepted their tenders. The other cases referred above, viz., AIR 1978 SC 1628 and AIR 1993 SC 1601 would apply only where there is no reasons assigned for rejecting the lowest tender and such rejection is arbitrary. The cases on hand are not such cases. 12. In the Minutes of the Tender Committee Meeting held on 21-1-1998, it is seen thus : ".... It is seen from the above that the lowest offer is from Shri N. Rajendran with a total value of Rs. 17,64,059/-. The technical member stated, that the lowest tenderer Shri N. Rajendran has failed to complete the Korukupet yard work vide Agt. No. 247/CN/97, dated 3-7-1997 and the contract was terminated due to his poor performance vide CE/CN/MS Letter No. W. 148/M/655/CE/III, dated 11-7-1997. The technical member further stated that as the GC work in the chord line is targeted for completion by March 1998 no chances can be taken by entrusting the track linking work to this contractor who had shown poor progress. Moreover, the remaining offers available for the consideration of the TC are equally competitive and therefore, no loss will be caused to the administration by passing over the offer of Sri N. Rajendran. In view of the above reasons, the offer of Shri N. Rajendran is passed over : "The second lowest offer has come from M/s. K. Vangili & Co. for a total value of Rs. 16,45,945/-.
In view of the above reasons, the offer of Shri N. Rajendran is passed over : "The second lowest offer has come from M/s. K. Vangili & Co. for a total value of Rs. 16,45,945/-. Already PQRS track linking work between Ottakovil and Ariyalur Section and yards works in OTK, KLGM and VLDE stations have been awarded to the above agency. As it may not be possible for one agency to concentrate two PQRS track linking work alongwith above mentioned yard works the technical member opined that it would not be prudent and advisable to entrust the above work to M/s. K. Vangli & Co. In view of the reasons stated by the technical member, the Tender Committee decided to pass over the offer of M/s. K. Vangili & Co. as well". The next lowest offer is from one K. P. Sekhar Babu with a total value of Rs. 18,87,961/-, whose rates are discussed and based on several items pertaining to track linking works, worked out the data and accepted the rate keeping the comparison of the previously accepted rate adopted mostly from Salem-Bangalore B.G. Project." 13. So also, in the case of another tender, which is the subject matter of W.P. No. 1309 of 1998 the Minutes of the Tender Committee Meeting held on 15-1-1998, it is seen thus : "The Tender Committee note that he had been awarded by the Construction Organisation with the work of forming of bank for siding work at Korukkupet on 3-3-1997. This contractor had miscrably failed in execution of this work and the work was eventually terminated, vide CE/CN/MS letter dated 11-7-1997 at F. 79. The target for the completion of Tambaram-Tiruchirapalli Gauge Conversion has been fixed by the Railway Board as 31-3-1998. The Tender Committee is of the view that it would not be prudent to entrust this important linking work in the suburb of Chennai City to a contractor who had failed in another work within the city recently. He has not enclosed any document to prove that he has the capability to execute this linking work in a short period of two months. Hence, the Tender Committee recommend that the lowest tender of Shri N. Rajendran may be passed over. Dy.
He has not enclosed any document to prove that he has the capability to execute this linking work in a short period of two months. Hence, the Tender Committee recommend that the lowest tender of Shri N. Rajendran may be passed over. Dy. FA & CAO/I/CN/MS said that since his failure in the above referred contract was known to the administration before floating this limited tender, his name should have been eliminated from the scope of this limited tender. Dy. CE/GC/MS stated that normally approved list of contracts is updated only once in a year and that he would initiate action immediately to remove the name of this contractor from the approved list. Similar "review should be done in case of all failed contractors whose names continue to figure in the approved list .... From the above it is seen that the rates quoted by this tenderer Shri. J. Salauddin are lower than (or) equal to the last accepted rates (or) arrived rates based on rate analysis for items for which no last accepted rate is available. In view of the above the Committee recommend acceptance of the quoted rate for these 30 items. Annexure 'C' consists of only one item i.e. Tamping the sleepers with contractor's off track tampers, which is not covered by the basic schedule of rate of Southern Railway. The lowest tenderer has quoted a rate of Rs. 10/- as against the cash value of Rs. 15/-. The Committee consider this rate quoted by the tenderer as reasonable and recommend the same for acceptance" - in favour of Respondent No. 3 herein. 14. Regarding another tender, which is the subject matter of W.P. No. 1310 of 1998, in the Minutes of the Tender Committee Meeting held on 21-1-1998, it has been stated thus : ".... It is seen from the above that the lowest offer is from Shri M. Jayakumar with a total value of Rs. 28,22,052/-. However, the lowest tenderer Shri M. Jayakumar has been already awarded a work "in Mathur yard linking, the Tender Committee therefore, decided to pass over his offer. The second lowest offer has come from M/s. Sree Marugan and Co. with a total value of Rs. 2,10,095/-. They have quoted a rate of at par for Annexure A, 7% for Annexure B and Rs. 10/- for Annexure C ....
The second lowest offer has come from M/s. Sree Marugan and Co. with a total value of Rs. 2,10,095/-. They have quoted a rate of at par for Annexure A, 7% for Annexure B and Rs. 10/- for Annexure C .... The Annexure 'B' which consists of 17 items pertaining to track linking works. This Annexure involves various works, which contribute to above 90% of the total value of the work. The Rlys. cash value for all these item is based on previously accepted rate or on data worked out. These previously accepted rates were adopted mostly from Salem-Bangalore B.G. Project. For Annexure 'B' the lowest tenderer M/s. Sree Murugan & Co. have quoted a collective percentage of 7%. For TPJ-MSB guage conversion project a uniform track-lining schedule has been adopted and a rate of 10% to at par rate have been already accepted for Tambaram-Vridhachalam Section. In view of this, the rate of 7% quoted by M/s. Sree Murugan & Co. is found to be reasonable and recommended for acceptance" - in favour of Respondent No. 3 herein. From these discussions, it is clear that the respondents have taken into consideration the quality of work to be carried on, the time with which it has to be completed, the past experience, reliability equipments, manpower, financial stability, etc., while awarding the contracts. 15. Violation of Article 14 of the Constitution of India occurs only when the standards applied for selection or rejection is arbitrary and not one intended for maintaining the very object for which the tender is invited. 16. In M/s. Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir ( AIR 1980 SC 1992 ), the Apex Court has held that every activity of the Government has a public element in it and must therefore, be informed with reason and guided by public interest while awarding a contract and that has to be decided on the touchstone of reasonableness.
In the instant case, if this principle is applied, respondents 1 and 2 who are the members of the Committee have taken into consideration several factors as detailed in the Minutes of the Tender Committee Meetings, which indicate that the decisions to award contract in favour of respondent No. 3 in each of the writ petitions, are not arbitrarily rejected, but have assigned the reasonings as to what weighed with the Committee for rejecting the tender in favour of the petitioner. 17. In General Conditions of Contract in Civil Engineering Works, Condition Nos. 60 and 61, deal with termination of contract which given the power to rescind the contract as a whole or in part or parts. The conditions of auctions embodied in Standard Regulations for Tenders and Contracts, at para 9 it reads thus : "The Railway reserves the right of not to invite tenders for any work or works, or to invite open or limited tenders, and when tenders are called, to accept a tender in whole or in part or reject any tender or all tenders without assigning any reasons for any such action." Where the conditions are such that the Government was under no obligation to accept the highest bidder and no right accrued to the bidder merely because he happens to be the highest bidder or the lowest bidder, the acceptance of the bid was entirely within the power of the authority viz., Respondent Nos. 1 and 2 herein. 18. The Committee has power to reject even the lowest rate and there is no criteria that the lowest rate should be accepted. Where the authority has gone into the aspects of efficiency, financial capacity, manpower and past history of the contractors in previous works, it cannot be said that the exclusion of the lowest tender is arbitrary. Arbitrariness implies abuse of discretion including manifest unreasonableness. On time-bound programme, where the "policy" empowers discretionary power to do an act in public interest, Court should be circumspect to read implied limitations to such power as it would restrict within a narrow range the factors to which the Competent Authority is entitled to have regard. The test in such a situation is whether the exercise of discretionary power has been influenced by considerations that cannot be lawfully taken into account, or by disregard of the relevant considerations.
The test in such a situation is whether the exercise of discretionary power has been influenced by considerations that cannot be lawfully taken into account, or by disregard of the relevant considerations. In some situations, strict observance of antecedent requirements may be a relevant consideration to base the discretion. Having regard to the reasons assigned for non-awarding the contract or an available material with reference to antecedents of the contractors cannot be said that respondents 1 and 2 have considered irrelevant matters in arriving at a decision or allowed to be influenced by extraneous matters and it is not the case of the petitioner that respondents 1 and 2 wilfully and partially acted in bad faith or in discrimination motivated by considerations that are incompatible with discharge of public responsibilities. In the absence of such a situation, it is not proper to hold that the non-awarding of the contract suffers from unreasonableness or arbitrariness. Therefore, the question regarding non-awarding of contract to the petitioner is answered in the negative. 19. For the aforestated reasons, the petitioner is not entitled to any relief and all the writ petitions are liable to be dismissed. Accordingly, they are dismissed. The parties to bear their own costs. Consequently, the connected miscellaneous petitions are also dismissed. Petitions dismissed.