ASIATIC LABOUR CORPORATION Vs. UNION OF INDIA

JUDGEMENT

(1.) This group of writ petitions which are brought under Article 226 of the Constitution relate to certain goods handling contracts given by the western Railway Administration in respect of the Sabarmati BG-MG Group 63, Bharat- pur BG-MG Group 37 and the Hapa Transhipment point. The petitioners of these petitions claim to have experience and expertise in carrying out goods handling work for the Railway Administration. Their grievance is that as the contracts in respect of the aforesaid three transhipment points were given or extended without inviting open tenders, they were prevented from competing which they were entitled to as citizens of India and. therefore, the Railway Administration had acted in violation of their constitutional rights. They, therefore, pray that the contracts executed in respect of the aforesaid transhipment points should be quashed and the railway administration should be directed to grant fresh contracts in accordance with the normal open tender system.

(2.) The contract in respect of the Sabarmati transhipment point is given to M/s. Universal Goods Handling Company. The contract in respect of the Bharatpur Transhipment point is execut ed in favour of M/s. Chirag & Company. Though the contracts for these two points are separate, composite petitions Nos. 171, 2161, 2162 and 3572 all of 1981 have been filed bv different petitioners, albeit on identical grounds, challenging the grant of contracts to the aforesaid two parties. Similarly two petitions Nos. .1786 and 2394 of 1981 have been filed challenging the grant of Hapa Transhipment contract to M/s. Lotus Handling Company. The facts leading to these petitions, briefly stated, are as under:- Re : Sabarmati BG-MG Group 63 Contract. In the year 1975 the Western Railway invited tenders for goods handling contract in respect of the Sabarmati Transhipment point. Tenders were received from several contractors but the contract was ultimately given to Messrs Universal Goods Handling Company. The said contract was for a period of three years but after the said period expired, the Western Railway, instead of inviting fresh tenders, extended the period of the contract by another three years i. e. up to 15th Mar 1981, plus 121 per cent above the fixed schedule of rates. Before the extended period of the contract expired, the contractor wrote a letter dated 6th Sept. 1980 to the Chief Commercial Superintendent, Western Railway. Bombay, stating that because of the constant rise in prices and the increase in expenditure for recruitment and maintenance of labour, it was not possible for him to complete the contract at the existing rates. The contractor, therefore. requested that either the rates should be increased reasonably or the letter should be treated as three months' notice under Clause I (i) of paragraph 2 of the contract. On receipt of this letter the Railway Administration was required to decide whether to negotiate with the contractor for the increase in rates or to treat the contract as terminated on the expiry of the notice period. The Chief Commercial Superintendent recommended to the General Manager as under, vide his Note dated 17th Sept. 1980, Annexure II to his affidavit in-reply in Special Civil Application No. 171 of 1981 --

(3.) The petitioners contend that if the Railway Administration had followed the normal open tender system, they as well as others were prepared to offer far lower rates than those allowed to the present contractor, which would have resulted in a substantial savins to the public exchequer. According to the petitioners the officers of the Railway Administration were for some oblique reason out to favour the contractor of their choice and the entire exercise of appointing a Negotiation Committee and seeking the prior sanction of the Board was nothing but window dressing. That is why, contend the petitioners, the timely warning given by Shri Amar-singh Rathwa, Member of Parliament, to the Railway Minister fell on deaf ears. They, therefore, contend that by refusing to invite offers at per the normal practice the Railway Administration deprived the petitioners of their legal and constitutional right to enter into a fair competition to secure the contract in question. They, therefore, prav that the mala fide action of the Railway Administration reserves to be set at nought so that their favoured contractor does not unjustly enrich himself at the cost of the public excheouer. The Bharatpur BG-MG Route Wo. 37 contract.