Leotech Process, Rep. By Its Proprietor Sri v. Srinivasa Reddy VS Union Of India, Rep. By The General Manager, South Central Railway
2025-12-15
NAGESH BHEEMAPAKA
body2025
DigiLaw.ai
ORDER : NAGESH BHEEMAPAKA, J. 1. This Writ Petition is filed aggrieved by the action of Respondents 3, 4 and 5 in qualifying the 6th Respondent in respect of Tender dated 15.05.2025, which, according to Petitioner, is contrary to Annexure-XIX and XX and the instructions at page 138 of the Tender Notice. Petitioner, therefore, seeks to declare the said action as illegal, arbitrary and contrary to the tender conditions, and consequently to set aside the qualification of the 6 th Respondent in the above tender process. 2. Petitioner states that the 6th Respondent did not comply with the said requirements, having failed to disclose crucial information that directly affects determination of its eligibility, therefore ought to have been disqualified at the threshold. It is stated, on 15.05.2025, the 5 th Respondent issued e-tender calling for bids for a comprehensive, large-scale turnkey BOOT (Build, Own, Operate and Transfer) project involving the establishment of a 20 TPD mechanized laundry at Secunderabad. The scope of the project included washing, cleaning, drying, pressing, packaging and supply of linen for AC coaches of trains maintained at Secunderabad as well as transportation of soiled linen to the laundry and delivery of washed and packaged linen to designated locations. The contract was to be executed over a period of ten years, with an estimated total value exceeding Rs. 434 crores and an annual value of approximately Rs. 43.47 crores. The tender was designed as a two-packet system, requiring bidders to submit eligibility documents in the first packet and price bids in the second. Only those bidders, who were found compliant with the eligibility requirements in the first packet were to be declared qualified on the GeM portal and proceeded to financial evaluation. 2.1. Petitioner states further, 21.06.2025 was the last date prescribed for submission of bids. Upon examination of the eligibility documents, the Tender Committee declared Petitioner and the 6 th Respondent as qualified on 26.07.2025. Thereafter, on 30.07.2025, financial bids were opened, and the 6th Respondent was declared L1, while Petitioner declared L2. It is also stated, the tender contained detailed instructions outlining the list of documents required for consideration of eligibility. These included various mandatory declarations which were required to accompany the bid without exception. The instructions unequivocally stipulated that failure to upload any mandatory document would result in outright rejection of the bid.
It is also stated, the tender contained detailed instructions outlining the list of documents required for consideration of eligibility. These included various mandatory declarations which were required to accompany the bid without exception. The instructions unequivocally stipulated that failure to upload any mandatory document would result in outright rejection of the bid. Among these mandatory declarations were Annexure XIX, which required the bidder to affirm the truthfulness of all statements made in the bid, and Annexure XX, which required the bidder to declare whether it had ever been debarred from participating in tenders by Railways, PSU or State Government. Petitioner asserts that compliance with these declarations was essential determining the eligibility of bidders, and any deficiency rendered the bid liable rejection. 2.2. Petitioner contends that the 6 th Respondent failed to comply with these requirements. According to Petitioner, the 6 th Respondent did not disclose that its contract with Northern Railway had been terminated and that it had been debarred from participating in tenders floated by that Railway. Such undisclosed information was crucial for assessing the eligibility of the 6 th Respondent and that suppression of such material facts amounts to a clear violation of mandatory tender conditions. On 21.06.2024, Northern Railway terminated the contract awarded to the 6 th Respondent under a GeM procurement and simultaneously, debarred them from participating in any future tenders issued by Northern Railway. Despite this, the 6 th Respondent failed to declare the said termination and debarment in the mandatory declaration. This omission amounts to false declaration, attracting immediate disqualification as per the tender conditions. 2.3. Petitioner also states that on 17.08.2024, Guntakal Division of South Central Railway disqualified the 6 th Respondent in respect of another tender on the ground that its contract had been terminated and that it had been debarred by Northern Railway. According to Petitioner, this demonstrates that other division of the Railways have recognized the termination and debarment as a disqualifying factor, whereas Respondents have ignored the same in the present tender process. This inconsistency further highlights the arbitrary and irregular approach adopted by Respondents in qualifying the 6th Respondent 2.4. Petitioner states that in view of the serious discrepancies and violations observed, he submitted a representation dated 01.08.2025 to the 1 st Respondent, requesting verification of tender proceedings and pointing out the 6th Respondent's non-compliance with tender conditions.
This inconsistency further highlights the arbitrary and irregular approach adopted by Respondents in qualifying the 6th Respondent 2.4. Petitioner states that in view of the serious discrepancies and violations observed, he submitted a representation dated 01.08.2025 to the 1 st Respondent, requesting verification of tender proceedings and pointing out the 6th Respondent's non-compliance with tender conditions. Despite such representation, official respondents failed to take corrective action or to re-evaluate the qualification of the 6 th Respondent. It is contended, the 6 th Respondent has not complied with the fundamental eligibility requirements of the tender and that its qualification is contrary to the explicit terms of the tender conditions. Petitioner therefore, states that the decision to qualify the 6 th Respondent is patently illegal, arbitrary, unreasonable and unsustainable in law, and that such action deserves to be set aside by this Court. 3. Respondents 1 to 5 stated in their counter that Writ Petition is devoid of merit and is liable to be dismissed. According to them, the affidavit filed in support of Writ Petition does not disclose any valid, tenable or substantial ground that would justify the extraordinary and discretionary jurisdiction of this Court being invoked. It is the categorical stand of Respondents that Petitioner has not approached this Court with clean hands and has suppressed material facts and circumstances, thereby disentitling him to any relief. 3.1. Respondents 1 to 5 have carefully examined the averments contained in the Writ affidavit and state that tender process impugned by Petitioner was conducted strictly in accordance with law, with full adherence to the terms and conditions specified in the tender document and the relevant Government and Railway guidelines governing such procurement. It is stated, technical bids were subjected to a comprehensive evaluation by a duly-constituted Tender Committee comprising competent officers and domain experts. This Committee objectively assessed all bids, including those submitted by Petitioner and the 6th Respondent, strictly based on the documents uploaded on Government e-Marketplace (GeM) portal. Upon such scrutiny, they contend that both the Petitioner and the 6 th Respondent were found to satisfy all eligibility criteria and technical requirements. Respondents specifically deny any breach or violation of Conditions 4, 6 or 7 of Annexure XIX or Annexure XX of the Tender Document, as alleged by Petitioner. 3.2.
Upon such scrutiny, they contend that both the Petitioner and the 6 th Respondent were found to satisfy all eligibility criteria and technical requirements. Respondents specifically deny any breach or violation of Conditions 4, 6 or 7 of Annexure XIX or Annexure XX of the Tender Document, as alleged by Petitioner. 3.2. It is the further stand of Respondents that evaluation process was undertaken in an objective, transparent and fair manner, strictly consistent with General Conditions of Contract for Services issued by the Indian Railways. It is stated, the conditions referred to by Petitioner, including those relating to declarations and mandatory disclosures, were clearly stipulated in the tender document and were binding alike on all participating bidders. The required declarations, including Annexure XX, formed an integral part of the eligibility evaluation framework, and all the bidders, including the 6 th Respondent, furnished the mandatory documents. Respondents categorically deny Petitioner's allegation that the 6 th Respondent suppressed material facts relating to termination or debarment. They state that both the bidders, including Petitioner, were found technically-qualified and that the 6th Respondent emerged as L1 solely on the basis of financial bid evaluation. With respect to Petitioner's allegation concerning termination and debarment by Northern Railway, Respondents state that the said issue was discovered only after the L2 bidder lodged a complaint, following which the matter was duly verified. It was then ascertained that the 6th Respondent had been subjected to debarment by the Northern Railway; however, the Hon'ble Delhi High Court, by order dated 28.06.2024, had stayed the operation of the impugned debarment letter, insofar as it pertained to disqualification of the 6th Respondent for future bids. The Respondents rely upon the said stay order and contend that in view of the subsisting stay, the 6th Respondent cannot be considered disqualified. 3.3. Respondents further state that after securing the stay order, the 6 th Respondent had been awarded more than thirty work orders by various Railway Zones across the country. They point out that Petitioner themselves had participated in some of those tenders but did not raise any objection to the 6 th Respondent's participation therein. Thereby they contend that the present Writ Petition has been selectively filed and is motivated by personal considerations rather than legitimate grievances. 3.4.
They point out that Petitioner themselves had participated in some of those tenders but did not raise any objection to the 6 th Respondent's participation therein. Thereby they contend that the present Writ Petition has been selectively filed and is motivated by personal considerations rather than legitimate grievances. 3.4. These Respondents state that representation dated 01.08.2025 submitted by Petitioner is under consideration of the competent authority, however, they assert that mere pendency of such representation does not operate as a bar to the issuance of Letter of Acceptance (LOA), which forms part of the procedural culmination of a concluded tender evaluation. Petitioner's apprehensions regarding possible prejudice are, according to Respondents, wholly unfounded and do not constitute sufficient grounds to stall the tender process or interfere with administrative decision-making. 3.5. Respondents 1 to 5 further clarify that though a different Division of South Central Railway disqualified the 6 th Respondent in a separate tender process, such disqualification was based on combination of factors, namely (1) non-disclosure of debarment, (2) failure to meet liquidity criteria, and (3) machinery-related shortcomings. They contend that such disqualification has no bearing on the present case, where all bids were evaluated independently and where the Tender Committee found no ground for disqualifying the 6th Respondent. It is asserted, the evaluation undertaken herein fully conformed with the tender conditions and was neither arbitrary nor irregular. It is specifically stated, the bid of the 6 th Respondent was compliant and responsive in all respects, accompanied by the requisite declaration under Annexure XX as mandated by Clause 2.8(iii) of the tender conditions. The decision taken by the Tender Committee is not tainted by mala fides or undue influence, and that the Committee has exercised its discretion within the ambit of the tender rules and applicable guidelines. Judicial interference with such administrative processes, it is contended, is neither warranted nor appropriate. 3.6. Finally, Respondents state that Writ Petition is speculative and constitutes an unwarranted attempt to interfere with a reasoned administrative process, thereby causing avoidable delays in execution of a critical public utility project. They therefore, pray that Writ Petition be dismissed with exemplary costs so as to prevent unwarranted disruption of the tender process and to serve the interests of justice. 4. Petitioner filed reply specifically disputing Respondents' contention that Writ Petition discloses no valid or substantial grounds for interference by this Court.
They therefore, pray that Writ Petition be dismissed with exemplary costs so as to prevent unwarranted disruption of the tender process and to serve the interests of justice. 4. Petitioner filed reply specifically disputing Respondents' contention that Writ Petition discloses no valid or substantial grounds for interference by this Court. The gravamen of Writ Petition rests upon the 6th Respondent's failure to disclose termination of its contract by Northern Railway, which the 6 th Respondent was mandatorily required to disclose under sub-clause (iii) of Condition 2.8 of the tender conditions. Petitioner contends that this non-disclosure amounts to deliberate suppression of material and disqualifying fact, existence of which would automatically render the 6th Respondent ineligible for technical evaluation. According to Petitioner, Respondents have consciously and conveniently circumvented an essential and mandatory condition of the tender, thereby vitiating the entire evaluation process. 4.1. Petitioner clarifies that they do not dispute technical qualifications or experience of the 6th Respondent per se. Their challenge is confined solely to the legality and propriety of Respondents' decision to consider the 6 th Respondent's bid despite its failure to disclose a termination that directly attracts disqualification clause. Petitioner specifically denies the assertion made in paragraph 7 of the counter affidavit, wherein Respondents claim that bid of the 6 th Respondent was evaluated in an objective, transparent, and lawful manner. It is stated, Respondents themselves admitted that the factum of termination and debarment of the 6th Respondent by Northern Railway came to their knowledge only after such information was brought to their attention by L2 bidder, subsequent to the identification of L1 bidder. This admission, according to Petitioner, conclusively establishes that the 6th Respondent suppressed information which it was mandatorily obliged to disclose through Annexure XX and declarations required under Condition 2.8(iii). Such suppression, Petitioner states, is fatal to the 6 th Respondent's eligibility and ought to have resulted in immediate disqualification. 4.2. Petitioner denies Respondents' contention that stay of debarment by the Hon'ble Delhi High Court justified consideration of the 6 th Respondent's financial bid. It is pointed out, the stay order dated 28.06.2024 only stayed the operation of debarment, and did not stay or set aside termination of contract by Northern Railways. Termination, according to Petitioner, remains valid, subsisting and unchallenged, therefore, continues to have legal consequences, including disqualification under the tender conditions.
It is pointed out, the stay order dated 28.06.2024 only stayed the operation of debarment, and did not stay or set aside termination of contract by Northern Railways. Termination, according to Petitioner, remains valid, subsisting and unchallenged, therefore, continues to have legal consequences, including disqualification under the tender conditions. Consequently, reliance on the stay order is wholly misplaced and does not cure the suppression committed by the 6th Respondent. 4.3. Petitioner further disputes reliance of Respondents on the assertion that more than thirty works have been awarded to the 6 th Respondent subsequent to the stay order. Such subsequent awards cannot legitimize suppression of material facts in the present tender, nor do they have any bearing on interpretation or applicability of Condition 2.8 of the current tender document. It is stated, they are unaware whether those tenders contained a condition analogous to Condition 2.8 and even otherwise, multiple violations in other tenders cannot justify a violation in the present case. Two or more wrongs cannot render an illegal act lawful. 4.4. Petitioner candidly admits that they participated in some of the tenders in which the 6 th Respondent was awarded work orders; however, it is clarified that at the relevant time, they were not aware of the Northern Railway termination. They came to know of the said termination only recently, and therefore no adverse inference can be drawn from their earlier participation. Petitioner specifically denies the contention of Respondents that submission of Annexure XX by the 6 th Respondent remains valid by virtue of the stay order. It is reiterated that on the date of submission of tender, termination order was very much in force and had attained finality, as it was not challenged by the 6 th Respondent. Therefore, the declaration furnished in Annexure XX is incorrect, misleading and in violation of the tender conditions. 4.5. Petitioner states, Respondents' reference to separate decision of Guntakal Division of South Central Railway, wherein the 6 th Respondent was disqualified for multiple reasons including termination by Northern Railway, only highlights the inconsistency and arbitrariness in the present evaluation. According to Petitioner, Guntakal Division correctly considered termination as a ground for disqualification, whereas Respondents ignored the same material fact without justification. This inconsistent approach, Petitioner states, clearly demonstrates that the evaluation committee in the present case failed to adhere to the mandatory requirements of the tender. 4.6.
According to Petitioner, Guntakal Division correctly considered termination as a ground for disqualification, whereas Respondents ignored the same material fact without justification. This inconsistent approach, Petitioner states, clearly demonstrates that the evaluation committee in the present case failed to adhere to the mandatory requirements of the tender. 4.6. It is the specific and categorical case of Petitioner that the 6 th Respondent suppressed termination of Northern Railway contract, which squarely attracts Condition 2.8(ii) of the tender conditions and mandates disqualification. Respondents have circumvented mandatory conditions with impunity, thereby rendering the entire evaluation process illegal, arbitrary, and void. In view of the above submissions, it is stated, the claim of Respondents that the Tender Committee evaluated the bid of the 6 th Respondent strictly in accordance with the tender conditions is wholly incorrect and unsustainable. 5. Heard Sri Prasad Rao Vemulapalli, learned counel for petitioner, Sri B. Narasimha Sharma, learned Assistant Solicitor General and Sri V.T. Kalyan, learned Standing Counsel for Central Government and Sri B. Chandrasen Reddy, learned Senior Counsel on behalf of Sri B. Vamshidhar Reddy, learned counsel for Respondent No.6. 6. Having heard learned counsel on either side and having considered the pleadings and the documents brought on record, the core issue arising for adjudication in the present Writ Petition pertains to the decision of Respondents 3, 4 and 5 to treat the 6 th Respondent as technically-qualified in the tender process initiated pursuant to Tender Notice dated 15.05.2025. Petitioner contends that such qualification was accorded in complete disregard of the mandatory conditions governing the tender, with particular reference to Conditions 4, 6 and 7 of Annexure XIX as well as the declaration envisaged under Annexure XX. It is the specific assertion of Petitioner that non- compliance with these essential requirements goes to the root of the eligibility scrutiny and materially affects the legitimacy of the technical evaluation undertaken by the Respondent authorities. 7. The principal grievance advanced by Petitioner is that the 6 th Respondent did not disclose the fact that its contract with Northern Railway had been terminated on 21.06.2024 and that, consequent thereto, it had been debarred from participating in future tender processes. According to Petitioner, this was precisely the nature of material information that Annexure XX obligated every bidder to disclose, and omission of such a fact amounted to suppression of a vital circumstance having a direct bearing on bidder's eligibility.
According to Petitioner, this was precisely the nature of material information that Annexure XX obligated every bidder to disclose, and omission of such a fact amounted to suppression of a vital circumstance having a direct bearing on bidder's eligibility. Petitioner asserts that this failure to disclose a disqualifying event, by itself, renders the bid of the 6 th Respondent non-responsive and liable to be rejected at the threshold. 8. Respondent - Railways, on the other hand, contend that technical evaluation was undertaken strictly in conformity with the tender conditions and the governing procedural guidelines. They assert that the 6th Respondent furnished all the requisite declarations, both the Petitioner and the 6 th Respondent were initially found technically-qualified and that the information pertaining to termination of contract and the consequential debarment came to their knowledge only at a subsequent stage. Respondents further place reliance on an interim order passed by the Hon'ble Delhi High Court, whereby operation of debarment order has been stayed, and they submit that this development has a bearing on consideration of the 6 th Respondent's eligibility. 9. This Court is not convinced with the explanation advanced by Respondents. The tender conditions unequivocally mandated every bidder to make a truthful and complete disclosure regarding debarment by the Railways or by any other Government authority. This requirement was not intended to be a mere procedural formality; rather, it constituted an essential safeguard designed to uphold transparency, fairness, and integrity in the tender evaluation process. It is an admitted position that the 6 th Respondent's contract had been terminated by Northern Railway and that such termination had neither been stayed nor set aside as on the date of submission of bids. The interim order of the Hon'ble Delhi High Court pertains only to debarment aspect and does not suspend or negate the subsisting termination. Consequently, the obligation of the 6 th Respondent to disclose termination remained operative and binding in its entirety. 10. Suppression of material information of this nature, which has a direct and substantial bearing on a bidder's eligibility, cannot be treated as inconsequential. The legal regime governing tenders requires that evaluation be confined strictly to the conditions stipulated in the tender document, and adherence to such conditions is fundamental to maintaining the credibility and fairness of the process.
10. Suppression of material information of this nature, which has a direct and substantial bearing on a bidder's eligibility, cannot be treated as inconsequential. The legal regime governing tenders requires that evaluation be confined strictly to the conditions stipulated in the tender document, and adherence to such conditions is fundamental to maintaining the credibility and fairness of the process. A bidder, who withholds information, which is material and expressly required to be truthfully disclosed, cannot seek to retain the advantage of continued participation in the tender. Such an omission strikes at the core of the eligibility assessment and is not capable of being retrospectively cured by referring to subsequent work orders purportedly issued by other authorities or by relying on the fact that other Railway Zones may have permitted the 6 th Respondent to participate following the stay of debarment order. 11. Respondents' submission that Petitioner had participated in earlier tender processes in which the 6th Respondent was also a bidder is of no legal relevance to the present controversy. Every tender process is required to be evaluated independently, strictly in accordance with the terms and conditions set out in the respective tender document, and the validity of the decision challenged herein must be determined solely with reference to the conditions governing this particular tender. 12. It is further noteworthy that another Division of the South Central Railway, namely Guntakal Division, disqualified the 6 th Respondent in a separate tender process on the very ground of the Northern Railway termination. This circumstance demonstrates that other competent authorities have treated termination as a disqualifying factor. The approach adopted by Respondents in the present case, therefore, appears inconsistent with the treatment accorded to the same issue by other divisions and lends support to Petitioner's contention that evaluation undertaken herein did not properly account for the mandatory tender conditions. 13. In view of the foregoing discussion, this Court is of the considered opinion that the decision of Respondents 3, 4 and 5 to treat the 6 th Respondent as technically-qualified constitutes violation of the mandatory requirements of the tender. Where eligibility criteria are expressly and unequivocally prescribed in the tender document, neither bidders nor evaluating authorities are vested with discretion to overlook, dilute or circumvent them.
Where eligibility criteria are expressly and unequivocally prescribed in the tender document, neither bidders nor evaluating authorities are vested with discretion to overlook, dilute or circumvent them. Once it is shown that a bidder has failed to meet such requirements by suppressing material facts that were required to be disclosed, decision to qualify that bidder cannot be legally-sustained. Accordingly, this Court concludes that qualification of the 6 th Respondent is arbitrary, contrary to the governing tender conditions and vitiated by non- disclosure of essential information. The impugned action, therefore, fails to withstand judicial scrutiny and is liable to be set aside. 14. For the foregoing reasons and in view of the findings recorded hereinabove, this Court holds that the action of Respondents 3, 4 and 5 in qualifying the 6th Respondent in Tender dated 15.05.2025 is contrary to the mandatory tender conditions and cannot be sustained. Non-disclosure by the 6 th Respondent of termination of its Northern Railway contract constitutes a material suppression that vitiates the entire evaluation process. 15. Accordingly, the Writ Petition is allowed. The qualification of the 6 th Respondent in the aforesaid tender process is hereby set aside. Respondents 1 to 5 shall take further steps strictly in accordance with the tender conditions and law. No costs. 16. Consequently, Miscellaneous Applications, if any shall stand closed.