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Madras HC restrains S. Rly from awarding tender to highest bidder

Our Legal Correspondent

Chennai , Aug. 12

THE Madras High Court has accepted the plea of a Chennai-based tenderer that his being the lowest quotation for replacement of signalling gears should be awarded the contract instead of the highest bidder.

Mr Justice R. Balasubramanian, who heard the petition, granted the interim injunction restraining the Chief Signal & Telecom Engineer/Projects, Southern Railway, Chennai, from accepting the tender of a Hyderabad-based firm, which had allegedly quoted higher rates than the petitioner.

The petitioner, Phonix Technology Corporation Pvt Ltd, which is engaged in the manufacture of telecommunication equipment, submitted to the first respondent (Chief Signal & Telecom Engineer/Projects), its tender in response to the tender notice for replacement of signalling gears at five stations in the Palakkad Division of the Southern Railway.

The petitioner contended that it was ranked as the `lowest tenderer' having quoted minus 8 per cent of the Railway assessed value.

However, the petitioner submitted that the first respondent called only the second respondent firm (Gangi Reddy Construction Ltd, Hyderabad) for negotiations even though its quotation was higher.

According to the petitioner, it had been denied the award of the contracts in the previous tenders because of the arbitrary selection procedure adopted by the Railways.

If the petitioner was selected for awarding the contract, the Railways would benefit to the extent of Rs 12 lakh to Rs 15 lakh, as its rates were competitive compared to the second respondent.

The first respondent, the petitioner argued, was under a legal obligation to call it for negotiations and follow a selection procedure, which was fair and reasonable and in public interest.

The petitioner prayed for the issue of a direction to the first respondent to call it for negotiations relating to the tender notice dated March 22, 2004, pending disposal of the writ petition.

The Judge ordered the issue of an interim injunction restraining the first respondent from processing and awarding the contract to the second respondent or any other third parties pending writ petition No 22706 of 2004.

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