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Orissa High Court · body

2016 DIGILAW 68 (ORI)

Sree Venkateswara Enterprises v. Union of India

2016-01-22

S.C.PARIJA

body2016
ORDER Per S.C. PARIJA, J. 22.01.2016 1. Heard Shri Asok Mohanty, learned Senior Counsel for the petitioner and Shri N.K. Barik, learned counsel for the Railway-opposite party nos. 3 and 4. 2.This writ petition has been filed praying for a direction to the Railway authorities to cancel the Bid Notice dated 30.5.2014, issued by East Coast Railway, Bhubaneswar, inviting bids on single stage two packet system from food and catering service providers for “Provision of Catering Services at Major Static Unit Name [AVM] at Bhubaneswar [A1 category] and Cuttack [A category] Stations of Khurda Road Division “. Accordingly, a prayer has been made to direct the Railway authorities to float a fresh tender for the said contract work and till finalization of such tender, the petitioner firm be permitted to run the AVM stalls at Cuttack and Bhubaneswar railway stations. 3.The brief facts of the case as detailed in the writ petition is that pursuant to tender floated by the Chief Regional Manager, East Coast Railway, Bhubaneswar, for operating automatic vending machines on license basis, M/s. Pepsi Foods Pvt. Ltd., having its office at Gurgaon, in the State of Haryana, participated in the said tender and was granted the license to operate the automatic vending machines (‘AVM’ for short) on license basis in different railway stations, including the railway stations in the State of Orissa. For operation of such AVM, the Railway authorities allotted vacant place at the concerned railway stations for establishment of Kiosks, in which the AVM machines were to be installed and operated. For the said arrangement, Indian Railway Catering & Tourism Corporation Ltd., (“IRCTC” for short) entered into an Agreement with M/s. Pepsi Foods Pvt. Ltd., for management of AVM Dispensing Kioska for sale of hot and cold beverages at the railway stations. The present petitioner, who is involved in the business of catering of hot and cold beverages, entered into a Franchisee Agreement with M/s. Pepsi Foods Pvt. Ltd. for managing the AVM Dispensing Kiosks for sale of hot and cold beverages at different railway stations since January 2009, which was approved by the IRCTC. The present petitioner, who is involved in the business of catering of hot and cold beverages, entered into a Franchisee Agreement with M/s. Pepsi Foods Pvt. Ltd. for managing the AVM Dispensing Kiosks for sale of hot and cold beverages at different railway stations since January 2009, which was approved by the IRCTC. 4.In the year 2010, the Ministry of Railways formulated a new Catering Policy-2010 and pursuant to such policy, a Tripartite Agreement was entered into between the East Coast Railway, IRCTC and M/s. Pepsi Foods Pvt. Ltd., under which the management of AVM Dispensing Kiosks at the Bhubaneswar and Cuttack railway stations were taken over by East Coast Railway. The said Tripartite Agreement provided that the existing license i.e. M/s. Pepsi Foods Pvt. Ltd. would continue to operate the AVM Dispensing Kiosks at the platforms in Bhubaneswar and Cuttack railway stations till 18.7.2014, i.e. for the tenure of license awarded by the IRCTC, unless terminated earlier. 5. It is the case of the petitioner firm that even after expiry of the license period, the Railway authorities allowed extension to the petitioner to continue operation of the AVM stalls at Bhubaneswar and Cuttack railway stations for a further period of three months, by increasing 10% of the existing license fees. 6.While the matter stood thus, the Sr. Divisional Commercial Manager, East Coast Railway, issued Bid notice dated 30.05.2014, inviting sealed bid on single stage two packet system from food and catering service providers for “Provision of Catering Services at Major Static Unit Name (AVM) at Bhubaneswar (A1 category) and Cuttack (A category) Stations of Khurda Road Division”, as detailed in the said notice. As the petitioner firm did not fulfill the eligibility criteria prescribed under the Bid Document, he did not submit its bid, however, subsequently the petitioner firm came to learn that after submission of bids, some of the conditions in the Bid Document have been relaxed, as a result of which, the petitioner firm has been deprived of submitting its bid. Pursuant to the floating of the tender and finalization of the same in favour of the successful bidders, the Railway authorities have directed the respective Station Managers of Bhubaneswar and Cuttack railway stations to hand over the possession of the AVM stalls to the new licensees. Pursuant to the floating of the tender and finalization of the same in favour of the successful bidders, the Railway authorities have directed the respective Station Managers of Bhubaneswar and Cuttack railway stations to hand over the possession of the AVM stalls to the new licensees. 7.The case of the petitioner is that though the tender has been floated by the Railway authorities for coin operated AVMs or “Stand Alone Automatic Vending Machine”, the petitioner has come to learn that the successful bidders, who have been awarded with the licenses to operate AVM stalls, have not procured and installed any such machines and are going to operate the AVM kiosks manually, as is being operated by the petitioner firm at present. In this regard, it is submitted that the operation of the Stand Alone Self Dispensing Units does not involve any manual interface and all the operations are through coin operated dispenser. No such machine has been installed either in Bhubaneswar or Cuttack railway stations or in any other railway stations in India till date and that in the garb of “Stand Alone Automatic Vending Machine”, the new licensees are being allowed to operate the AVM kiosks manually, as before, in violation of the terms and conditions detailed in the Bid Document. 8. Learned counsel for the petitioner submits that the aforesaid action of the Railway authorities is tainted with mala fide and is arbitrary and unreasonable, which has denied equal opportunities to the petitioner firm to participate in the bid. In this regard, learned counsel for the petitioner has relied upon a decision of the apex Court in Ramana Dayaram Shetty v. The International Airport Authority of India and others, AIR 1979 SC 1628 . 9.Learned counsel for the Railway with reference to the counter affidavit submits that the AVM stalls at Cuttack and Bhubaneswar railway stations were awarded to M/s. Pepsi Food Pvt. Ltd. for a period of five years. The said stalls were handed over to the East Coast Railway by IRCTC, w.e.f. 02.6.2011, as per the instructions of the Railway Board. After expiry of the existing contract period, extensions were granted to the parties upto 31.12.2014, for the purpose of finalizing tenders received in response to the Bid Notice dated 30.5.2014. In terms of Para 11.2 of the Catering Policy-2010 formulated by the Railway Board, no renewal is permissible in any of the AVM contracts. After expiry of the existing contract period, extensions were granted to the parties upto 31.12.2014, for the purpose of finalizing tenders received in response to the Bid Notice dated 30.5.2014. In terms of Para 11.2 of the Catering Policy-2010 formulated by the Railway Board, no renewal is permissible in any of the AVM contracts. Para 14.1.1 of the Catering Policy-2010 provides for allotment of all major catering units at A1, A & B category of railway stations shall be done through open competitive tow packet tendering system, duly following the procedures prescribed by the Railway Board. 10.Learned counsel for the Railway submits that though the petitioner firm purchased the tender document, it did not participate in the tender process. The eligibility criteria prescribed in the Bid Document has been fixed by the Railway Board with the object to engage an experience and financially sound firm/agency to manage the unit successfully to the satisfaction of the traveling public. 11. Learned counsel for the Railway submits that as the present petitioner has not participated in the tender ;process, he has no locus standi to challenge the Bid Notice dated 30.5.2014, issued by the East Coast Railway or the terms and conditions prescribed therein. It is further submitted that as the successful bidders have not been made parties to the writ petition, no relief can be granted to the petitioner firm and the writ petition suffers from non-joinder of necessary parties. 12. Learned counsel for the Railway further submits that the mere apprehension of the petitioner firm that the successful bidders will not be able to set-up the coin operated “Stand Alone Automatic Vending Machine’, as has been prescribed in the BID Document, cannot be a ground to interfere in the matter and cancel the impugned Tender. 13. It is submitted that the petitioner firm is continuing to occupy and operate the AVM stalls at Cuttack and Bhubaneswar railway stations on the basis of the interim order of this Court dated 07.01.2015. Therefore, the Railway authorities have not been able to handover possession of the said AVM stalls to the successful bidders till date, causing huge financial loss to the Railway. 14.Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. 14.Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders to award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seeks damages in a civil Court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade Courts to interfere by exercising power of judicial review, should be resisted. Such interference, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a Court would interfere in a tender or contractual matters in exercise of its power of judicial review, only if the process adopted or decision taken by the authority is found to be mala fide or arbitrary or irrational, which affects public interest. (See- Jagdish Mandal v. State of Orissa and others, (2007) 14 SCC 517). 15. In the present case, admittedly the petitioner firm has not participated in the tender. No material has been placed before us to show that any of the prescribed condition is unfair, unreasonable and arbitrary, which is alleged to have been relaxed subsequently. The petitioner firm having filed the writ petition after finalization of the tender in favour of the successful bidders, as has been admitted in para-7 of the writ petition, without impleading them as parties, the writ petition suffers from inherent legal infirmity of non-joinder of necessary parties. The petitioner firm having filed the writ petition after finalization of the tender in favour of the successful bidders, as has been admitted in para-7 of the writ petition, without impleading them as parties, the writ petition suffers from inherent legal infirmity of non-joinder of necessary parties. Moreover, on mere apprehension of the petitioner that the successful bidders may not install the coin operated AVM units as specified in the Bid Document cannot be a ground to interfere in the matter in exercise of extra ordinary writ jurisdiction. 16.However, it is made clear that the Railway authorities shall ensure that the successful bidders install the requisite AVM units specified in the Bid Document and operate the same in accordance with the terms and conditions prescribed therein. 17. The writ petition and the Misc. Case are accordingly dismissed with the aforesaid observations. 18. All the interim orders stand vacated. Issue urgent certified copy as per rules. Petition dismissed.