TMI Blog2001 (9) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the governors manufactured by General Electric Co., the Railways were approaching the local manufacturers. On 9.12.1991, it is stated that a tender was floated by the Controller of Stores, Diesel Locomotive Works, Varanasi, for supply of certain items of spare parts for use in GE governors. It is stated that only the writ petitioner responded to the tender but its tender was not considered nor was it rejected till 23.10.1992 on which date the writ petitioner received a letter from the Director, Mechanical Engineering (Tr.), Diesel Locomotive Works, Varanasi, wherein it was informed that the Railway Board had reviewed the policy of purchase of GE- EDC governor spares in the context of sophistication, complexity and high degree of precision associated with governors. Consequently, its tender was not acceptable to the Railways. Challenging this decision of the Railways both in regard to the policy purported to have been adopted by the Board as also the rejection of its tender, the writ petitioner moved the High Court seeking a writ in the nature of mandamus commanding the respondents in the writ petition to finalise the offer of the writ petitioner regarding the tender an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition, the question involved requires consideration by this Court. It is to be noted that this Court while granting 'leave' on 12.8.1994 observed : Since this is a matter which can be decided on the present set of paper books, no printing is necessary. The matter is otherwise urgent and requires settling so that the Railways should know how to deal with the matter of the kind. This may be listed in the month of November, 1994 subject to the pleasure of my Lord the Chief Justice. Liberty to mention, if necessary. As things would have it, though the matter was listed for hearing starting from 24.1.1995, for various reasons mentioned in the concerned orders the matter was not taken up for hearing until the same reached the stage of hearing this day before us. Therefore, we have considered it appropriate to decide these appeals on their merits. Mr. P.P. Malhotra and Mr. T.L.V. Iyer, learned senior counsel appearing for the appellants in these appeals, strenuously contended that the respondent was a small-time supplier of spare parts and did not have the necessary expertise and infrastructure for the manufacture of required sophisticated spare parts, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petitioner was not in a position to manufacture the governors as per the requirement of the Railways for want of necessary infrastructure. Based on these grounds the appellant contends that it is safer to place orders for the spare parts of the governors with an original manufacturer of governors, and since EDC alone has been manufacturing governors which are compatible to the GE governors already in use with the Railways, there was nothing unreasonable or arbitrary in placing orders with the EDC for purchase of spare parts also till such time as some other parties are ready to make similar supplies. Mr. M.D. Adkar, learned counsel appearing for the writ petitioner, seriously challenged the contentions advanced on behalf of the appellants and supported the judgment of the High Court. He contended that the policy put forth by the appellants was only an excuse not to accept the offer made by the writ petitioner for supply of spare parts to the GE governors which it has been supplying to the Railways for the last over 17 years to their satisfaction. He also contended that the policy in question was put forward only for creating a monopoly in favour of the EDC and since EDC is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or manufacturing of complete governors which is fully inter-changeable and matches in performance with the GE type Governor so as to generate competition; (iii) The procurement of GE/EDC Governor spares on proprietary basis from M/s. EDC would be reviewed once alternative factory sources of supply of these Governors become available. This issues with the concurrence of the Finance Directorate. A perusal of the said letter shows that the Board adopted this policy keeping in mind the need to assure reliability and quality performance of the governors and its spare parts in the context of sophistication, complexity and high degree of precision associated with governors. It is in this background that in para (i) the letter states that the spares should be procured on proprietary basis from EDC. This policy proceeds on the hypothesis that there is no other supplier in the country who is competent enough to supply the spares required for the governors used by the Indian Railways without taking into consideration the fact that the writ petitioner has been supplying these spare parts for the last over 17 years to various Divisions of the Indian Railways which fact has been establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he GE governors for the last over 17 years to the various Divisions of the Railways. A perusal of the letter dated 23.10.1992 does not show that the Board was either aware of the existence of the writ petitioner or its capacity or otherwise to supply the spare parts required by the Railways for replacement in the governors used by it, an ignorance which is fatal to its policy decision. Any decision be it a simple administrative decision or a policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution. It is next contended that EDC is admittedly manufacturing complete governors by itself and the same being compatible to the GE-governors in use with the Railways, EDC should be considered as the supplier of spares for the original equipment. Therefore, it is always safer to buy spare-parts from an original equipment manufacturer than from a manufacturer of only a spare-part. This argument would have been an acceptable argument if EDC was manufacturing GE-governors itself. It is an admitted case that EDC manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h can be exercised on the existence of certain conditions which in the opinion of the Railways are not in the interest of the Railways to accept the offer. No such ground has been taken when the writ petitioner's tender was rejected. Therefore, we agree with the High Court that it is not open to the Railways to rely upon this clause in the Guidelines to reject any or every offer that may be made by the writ petitioner while responding to a tender that may be called for supply of spare parts by the Railways. Mr. Iyer, learned senior counsel appearing for the EDC, drew our attention to a judgment of this Court in Sterling Computers Ltd. etc. v. M/s. M N Publications Ltd. Ors. (1993 1 SCC 445) which has held : Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the courts, such decisions are upheld on the principle laid down by Justice Holmes, that courts while judgin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
