The High Court · 2025

HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No.23O 84 0F 2025 ]^5.12.202s Between: M/s Leotech Process Rep. by its Proprietor Sri V' Srinivasa Reddy . Petitioner And Union of India, Rep. by the General Manager, South Central Railway & hve others' ORDER: . Respondents This Writ Petition is filed aggrieved by the action of Respondents 3,4 and 5 in qualifying the 6ft Respondent in respect of Tender dated 15'O5'2025' which' according to Petitioner, is contrary to Annexure-XlX 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 qualihcation of the 6th Respondent in the above tender process 2

2. Petitioner states that the 6ft Respor dent did not comply u,ith the said requirements, having faile I to disclose crucial information that directly affects deternr; ration of its eligibitity, tirerefore ought to have been disqr r lified at the threshold. Il Is stated, on 15.O5.2025, the 5tr Respondent issued e-tender calling for bids for a comprehens \ e, Iarge-scale turnkey BOOT (Build, Own, Operate and Tra r sfer) project involving the establishment o[ a 20 TPD mechaniz:d 1aundry at Secunderabad. The scope of the project inch r ed washing, cleaning, drying, pressing, packaging and supply r'linen for AC coaches of trains maintained at Secunderaba I as well as transportation of soiled linen to the laundry a:-r 1 delivery of washed and packaged linen to designated i I :ations. The contract was to be executed over a period of ten r:ars, with an estimated tot-al value exceeding Rs. 434 crores ar C an annual value ol approximatcly Rs. 43.47 crores. Tht. tender was designed as a two packet system, requiring bidde -s to submit eligibility doc:uments in the first packet and priu bids in the second. Only those bidclers, who were found compl ant with the eligibility re quirements in the first packet were r I be declared l J qualihed on the GeM portal and proceeded to hnancial evaiuation. 2 .l . Petitioner states furthe r, 2l .06.2025 was the last date prescribed for submission of bids. Upon examination of the eligibility documents, the Tender Committee declared Petitioner and the 6tr' Respondent as qualifre d on 26.07 -2O2 5 Thereafter, on 30-07.2025, financial bids were opened, and the 6m Respondent was declared L1, while Petitioner declared L2' It is also stated, the tender contained detailed instructions outlining the list ol documents required for consideration o[ eligibility' These inctudcd various mandatory declarations which were required [o accompany the bid without exception The instructions unequivocally stipulated that failure to upload any mandatorl' document would result in outright rejection of the bid. Among these mandatory declarations were Annexure XIX, 'the truthfulness of all which required the bidder to affirm 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 d 4 essential derermining the eligibility of bidd: .s, and any deficiency rendered the bid liable rejection. c) PCtitioner contends that the 6h Resp<;r clent failed to comply u,ith these requrrements. According to pet ir iont:r, the gth Respondent did not discrose that its contract ,," th Northern Railway had becn terminated and that it had t r en debarred from participa ting in tenders floated by that Re ilwav. Such undisclosed inlormation was crucial for assessing rec cligibility of the 6th Responclent and that suppression of. sr ch materiar facts amoun t s to a clear violation of mand:r ory tender conditions. Ott 2).06.2024, Northern Railway terr rrnated the contract arr,,ar-decl to the 6rh Respondent un(L r a GeM procurement and simulhneously, debarred lrem from participating in any future tenders :ssued by Northt,: n Railway Despite this, the 6th Respondent failed to declarr the said termination anrl debarment in the mandatory decla.r lion. This omission amounts to false declaration, attracting mmediate disqualifrcation as per the tender conditions. 2.3. petilioner also states that on lZ.Og.2O24 liuntakai Division of South Central Railu,ay disqualified the 6rh Respondent in respect of another tender on the grourr I that its , L 5 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 terminationanddebarmentaSadisqualifyingfactor,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 6h Respondcnt Petitioner states that in view of the serious 2.4 . discrepancies and violations observed, he submitted a representation dated 01.08-2025 to the l"t Respondent' requesting verihcation of tender proceedings and pointing out the6hRespondent'snon-compliancewithtenderconditions. Despite such representation, ofhcial respondents failed to take corrective action or to re-evaluate the qualification of the 6h Respondent. It is contended, the 6fr Respondent has not complied with the fundamental eligibility requirements of the tender and that its qualihcation is contrary to the explicit terms ofthetenderconditions.Petitionertherefore,statesthat,the decision to qualify the 6d' Respondent is patently illegal' 6 arbitrary, unreasonable and unsustainable in lrw, and that such action deserves to be set aside by this Courr.

3. Respondents i to 5 stated in their coL nter that Writ Petition is devoid of merit and is liable to I ,e dismissed. According to them, the afhdavit filed in support ,r Writ Petition does not disclose any valid, tenable or substantj. I ground that would justifv the extraordinary and discretionan urisdiction of this Court being invoked. It is the categon:al stand of Respondents that Petitioner has not approached r1 is Court with clean hancls and has suppressed materirr facts and circumstances, lhereby disentitling him to any re1i, f.

3.1. Respondents I to 5 have carefulll, , xamined the averments contained in the Writ affidavit and srir e that tender process impugned by Petitioner was condu<:r::1 strictly in accordance with law, with full adherence to tt-: terms and conditions specihed in the tcndcr document an i the relevant Government and Railway guidelines gove -ning such procurement. It is stated, technical bids were s;r Lbjected to a comprehensive evaluation by a duly-consti .r Lted Tender Committee comprising competent officers and drl rain experts. This Committee objectively assessed all bids, ir < luding those 7 submitted by Petitioner and the 66 Respondent' strictly based on the documents uploaded on Government e-Marketplace (GeM) portal. Upon such scrutiny, they contend that both the Petitioner and the 6e Respondent were found to satisfy all eligibility criteria and technical requirements Respondents specilrcally 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. I t is the further stand of Respondents that 3.2. 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 todeclarationsandmandatorydisclosures,wereclearly stipulated in the tender document and were binding alike on all declarations, including participating bidders The required an integral Annexure XX, formed evaluation framework, and all the bidders' Respondent, furnished the mandatory documents' Respondents categorically deny Petitioner's allegation that the 6rh Respondent suppressed materiai facts relating to terminatlon or of the eligibilitY including the 6d \ ') 8 debarment. They state that both the bidd: 's, including Petitioner, rvere found technically-qualified anrl that the 6n Respondent emerged as Ll solely on the basis r,l hnancial bid evaluation. With respect to Petitioner's allegatrc -r concerning termination and debarment by Northern Railu'a1 , Responde nts state that the said issue was discovered only afte ' the L2 bidder todged a complaint, following which the ma t :r was duly verified. It was then ascertained that the 6th Rr: ,po nden t had been subjecl-ed to debarment by the Northem Rail ray; however, the Hon'ble Delhi High Court, by order dated 2t, )6.2024, h,ad stayed the operation of the impugned debarment etter, insofar as it pertained to disqualification of the 6th F! spondent for future bids. The Respondents rely upon the said s ,ay order and contend that in view of the subsisting stay, thc (r t Rcspondent cannot be considered disqualified. i L.

3.3. Respondents further state that afte' securing the stay order, the 6th Respondent had been awarc ( d more than thirty work orders by various Railway Zones acrot; the country. They point out that Petitioner themselves had n rrticipated in some of those tenders but did not raise any objer: ion to the 6h Respondent's participation therein. Thereby ther contend that 9 the present Writ Petition has been selectively filed and 1S motivated by personal considerations rather than legitimate grlevances. These Respondents state that representation dated 3.4. 0 1.08.2025 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 theissuanceoflrtterofAcceptalce(LoA),whichformspartof the procedural culmination of a concluded tender evaluation' Petitioner's apprehensions regarding possible prejudice are' according to Respondents, wholly unfounded and do not constitutesuflrcientgroundstostallthetenderprocessor interfere with administrative decision-making'

3.5. Respondents 1 to 5 further clarify that though a differentDivisionofsouthCentralRailwaydisqualilredthe6h Respondent in a separate tender proceSs' such disqualification wasbasedoncombinalionoffactors,namely(1)non_disclosure of debarment, (2) failure to meet liquidity criteria' and (3) machinery-reiated shortcomings' They contend that such disqualification has no bearing on the present case' where all bids were evaluated independently and where the Tender L 10 Committee found no ground for disqualil5 ing the 6trr Respondent. it is asserted, the evaluation unde -taken herein ful1y conformed with the tender conditions an c was neither arbitrary nor irregular. It is specifically stated, tt.r bid of the 6ft Respondent was compliant and responsive irL all respects, accompanied by the requisite declaration under,4r nexure XX as mandated by Clause 2.8(iii) of the tender c'r rditions- The decision taken by the Tender Committee is not tl nted by maLa fides or undue influence, and that the Committerr has exercised its discretion within the ambit of the tender rules r nd applicable guidelines. Judicial interference with such dministrative processes, it is contended, is neither warranted n,r 'appropriate.

3.6. Fina11y, Respondents state that \l I it Petition is speculative and constitutes an unwarranted atterc :t to interfere u,ith a reasoned administrative process, th,r eby causing avoidable dclays in execution of a critical public rdliq/ project. They therefore, pray that Writ Petition be d i ;missed u.ith exemplary costs so as to prevent unwarranted dis 'uption of the tender process and to serve the interests ofjusticr: 4 . Petitioner filed reply specifica i , disputing Respondents' contention that Writ petition disclo s rs no valid or 11 substantial grounds for interference by this Court' The gravamen of Writ Petition rests upon disclose termination of its failure to RaiiwaY, which the 6h Respondent was the 6th ResPondent's contract bY Northern mandatorilY required to of material and disqualifYing render the 6fr discloseundersub_clause(iii)ofCondition2.Bofthetender that this non-disclosure conditions. Petitioner contends amounts to deliberare suppression fact, existence of which would automatically Respondent ineligible for technical evaluation Petitioner, Respondents have consciouslY and circumvented an essential and mandatory condition of the tender, thereby vitiating the entire evaluation process According to convenientlY

4.1 Petitioner clarihes that they do not dispute technical qualifrcations or experience of the 6s Respondent per se. Their challenge is confined solelY to the legaliq/ and to consider the 6th proPrietY of ResPondents' decision Respondent's bid despite its failure to disclose a termination that directly attracts disqualification clause' Petitloner specifically denies the assertion made in paragraph 7 of the counter a-f{idavit, wherein Respondents claim that bid of the 6th objective, transParent, and ln an ResPondent was evaluated ftr"*. t2 lawful manner. It is stated, Respondents thems: ves admitted that the factum of termination and debarme : : of the 6e Respondent by Northern Railway came to their kt owledge only after such information was brought to their at t :ntion by L2 bidder, subsequent to the identification of L1 bidder. This admission, according to Petitioner, conclusively er; ablishes that the 6d Respondent suppressed information .r hich it was mandatorily obliged to disclose through Anne> ure XX and declarations required under Condition .', 3(iii) Such suppression, Petitioner states, is fatal to the 6th Respondent's eligibility a nd ought to have resulted ir immediate drsqualification.

4.2. Petitioner denies Respondents' conte r ion that stay of debarment by the Hon'ble Delhi High C r urt justified consideration of the 6h Respondent's financial bi,l It is pointed out, the sta]. order dated, 28.06.2024 only stayed -he operation of debarment, and did not stay or set aside ,r rmination of contract by Northern Railways. Termination, rccording to Petitioner, remains valid, subsisting and l ru-rchallenged, therefore, continues to have iegal consequen,; s, including disqualihcation under the tender conditions. ( onsequently, 13 reliance on the stay order is wholly misplaced and does not cure the suppression committed by the 6fr Respondent' Petitioner further disputes reliance of Respondents 4 .3. on the assertion that more than thirty works have been awarded to the 6ft Respondent subsequent to the stay order' Such subsequent awards cannot legitirnize suppression of material facts in the present tender, nor do they have any bearing on interpretation or applicability of Condition 2 B 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 iliegal act lawful'

4.4. Petitioner candidly admits that they participated in someofthetendersinwhichthe6ftRespondentwasar,varded work orders; however, it is clarified that at the relevant time' they were not aware of the Northern Railway termination They cametoknowofthesaidterminationonlyrecently'and therefore no adverse inference can be drawn from their earlier Petitioner specihcaily denies the contention of that submission of Annexure XX by the 6m participation. Respondents llt:,1:. t4 Respondent remains valid by virtue of the sta'/ order. It is reiterated thzrt on the date of submission of tender termination order was vety much in force and had attained finrr ity, zrs it was not challenged by the 6e Respondent. Therefore, t:r furnished in Annexure XX is incorrect, misle;r : declaration ling and in violation of the tender conditions. Pelitioner states, Respondents' I 4.5. separate decision of Guntakal Division of S r Railway, whcrein the 6ft Respondent was dis multiple reasons including termination by Norl l only highligh[s the inconsistency and arbitra - present evaluation. According to Petitioner, Gunt correctly Considered termination as a disqualihcation, whereas Respondents ignorcc :ference to uth Central luahfied for ern Railway, ness in the rkal Division 3round for the same material facl- without justification. This inconsislr nt approach, Petitioner s[ates, clearly demonstrates that tL e evaluation committee in the present case failed to adhere to I re mandatory requirements of the tender.

4.6. tt is the specihc and categorical case of Petitioner that the 6tt' Respondent suppressed terminatior of Northern Railway cor,.1-ract, which squarely attracts Conditi'r r 2.8(ii) of the 15 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 6h 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 ald 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 treal the 6ft Respondent as technically-qualified in the tender process initiated pursuant to Tender Notice dated 15.05.2025. Petitioner contends that such qualihcation was accorded in complete disregard of the mandatory conditions governing the &h, l6 tender, with particular reference to Conditions 1 6andTof Annexure XIX as well as the declaration envi ;aged under Annexure XX. It is the specific assertion of Petitio rer that non- compliance with these essential requirements goe r; [o the root of the eligibilitl, scrutiny and materially affects the legitimacy of the technical evaluation undertaken by the Respondent authorities.

7. The principal grievance advanced b--. Petitioner is that the 6th Respondent did not disclose the act that its contract with Northern Railway had been trr minated on

21.06.2024 and that, consequent thereto, it had I :en debarred from participating in future tender processes. \ccording to Petitioner, this was precisely the nature of materi I information that Annexure XX obligated every bidder to c isclose, and omission of such a fact amounted to suppress Lr n of a vital circumstancr: having a direct bearing on bicldr:: 's eligibility. Petitioner asserts that this failure to disclose a Cisqualifying event, by itself, renders the bid of the 6m Res: rndent non- responsive and liable to be rejected at the threshoi I B. Respondent - Raiiways, on the other h Lnd, contend that technical evaluation was undertaken strictly i r conformity I7 a withthetenderconditionsandthegoverningprocedural guidelines. They assert that the 6fr Respondent furnished al1 the requisite declarations, both the Petitioner and the 6dl Respondent were initially found technically-qualilled 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 6ft Respondent's eligibilitY' This Court is not convinced with the explanation S. 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 6e Respondent's contract had been terminated by Northern Railway and that such termination had neither h" 18 been stayed nor set aside as on the date of subrri;sion of bids. The interim order of the Hon'ble Delhi High Courr. certains only to debarmenl aspect and does not suspend o negate the subsisting termination. Consequently, the obliga -: tn of the 6ft Respondent to disclose termination remained : rerative and binding in its entirety.

10. Suppression of materiai information o this nature, which has a direct and substantial bearing o r a bidder's eligibili[2, cannot be treated as inconsequenti: [. The legal regime governing tenders requires that evaluatior be conhned strictly lo ther conditions stipulated in the tender cr cument, ald adherence to such conditions is fundamental to me intaining the credibility and fairness of the process. A bidder, rv ro withholds information, which is material and expressly r,: Iuired to be truthfully disclosed, cannot seek to retain the Ldvantage of continued parlicipation in the tender. Such an onr ssion strikes at the core of the eligibilit5r assessment and is rLr t capable of being retrospectively cured by referring to sub s :quent work orders purportedly issued by other authorities or ry relying on the fact that other Railway Zones may have perrr itted the 6fr Respondent to particiBate following the stay of deb I -ment order. 19 Respondents' submission that Petitioner had 1 1. participated in earlier tender processes in which the 6ft Respondent was also a bidder is of no legal relevance to the present controversy. trvery 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' disqualihed the 6h 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. ru. 20

13. In view of the foregoing discussion, tt is Court is of the considered opinion that the decision of Resp rndents 3, 4 and 5 to treat the 6d Respondent as technrr ally-quaiified constitutes violation of the mandatory requircr rents of the tender. Where eligibility criteria are expressly and tnequivocally prescribed in lhe tender document, neither bidders nor evaluating authorities are vested with discretion to overlook, dilute or circumvent them. Once it is shown thar. e bidder has failed to meet such requirements by suppressing I raterial facts that were required to be disclosed. decision to qualify that bidder cannot be -legally-sustained. Accordingl.. this Court concludes that qualifrcation of the 6e Respondent is arbitrary, contrary to the governing tender conditions and vi- lted by non- disciosure of essential information. The impr_.1 ned action, therefore, fails to withstand judicial scrutiny and i liable to be set aside.

14. For the foregoing reasons and in view o. the findings recorded hereinabove, this Court hotds that tt Respondents 3,4 and 5 in qualifying the 6trr Re e action of ;pondent in Tender dated 15.05.2025 is contrary to the manrl rtory tender dqnditions and cannot be sustained. Non-discloslr : bv the 6h 2 Respondent of termination of its Northern Railway contract constitutes a matcrial suppression that vitiates the entire evaluation Process. Accordingly, the Writ Petition is allowed The 15 qualification of the 6s 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. l6 ConsequentlY, Miscellaneous Applications, if any shall stand closed / SD/- U.SUOHA SISTAN TR SECTION OFFICER //TRUE COPY// To, 1 2 Nilayam' Secunderabad' 500003 RailwaY, Secunderabad- rrra Gen€f?l Manager, South Central Railway' Rqi uni"" ot lndia-500003' The Additional General Manager' South Central . 1t^:t::""'ral' Mechanical Ensineer' South central Railwav' secunderabad- Ensineer-coachins' so-uth Central Railwav' , and Housekeepins Manager' south centrar Railwav , 6. One CC to SRI PRASAD RAO VEMULAPALLI' Advocate [OPUC] 7. One CC to SRI B'VAMSHIDHAR REDDY' Advocate IOPUCI 8. One CC to SRI V'T'KALYAN' SC FOR CENTRAL GOVT IOPUCI nP.i,",3"*13,i31:rXm:Ull"','i+[Y&ATt':'?ii3:I?Sffi U:rf; :,r"rt"5-"J[BBo.'t""k I::rfilt%FlJ:'r"dXSSI e*ruor

10.Two CD CoPies BSR Y? HIGH COURT DATED: 1511212025 l ORDER WP.No.23084 of 2025 ( o l-iE .1 ui I 6 O 1 0r i; 2t25 z * :-- l D-l'l;ll '-\ '- ALLOWING THE WRIT PETITION, WITHOUT COSTS \z'Pi"\ F'r"