Judgment

JAYACHANDRA REDDY, J.:- All these Special Leave Petitions arise out of the common judgment of the High Court of Delhi in Civil Writ Petitions Nos. 1152 and 982 1157/92. We heard these matters for considerable length of time. Eminent counsel appearing on both sides advanced detailed arguments. After the conclusion of the hearing it was represented that having regard to the constraint of time factor, namely that the contracts with the Railways entered into by the manufacturers who are parties, have to be completed very soon the judgment in these matters has to be delivered as early as possible or at least the conclusions have to be given soon. We are conscious of the fact that it is likely to take considerable time to deliver a detailed judgment. However, having gone through the records carefully and after due consideration of the various arguments advanced, we have reached the conclusions given hereunder and we propose to deliver the detailed judgment at a later stage giving all the reasons in support of these conclusions. We, however, think it necessary to state a few relevant facts and the issues involved in a concised form before we set out our conclusions.

2. Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons. Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability. There are 12 suppliers in the field who have been regularly supplying these items. Two new firms Simplex and Beekay also entered the field. Among them admittedly M/s. H.D.C., Mukand and Bharatiya are bigger manufacturers having capacity to manufacture larger quantities. On 25-10-91 a limited Tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well as the above two new entrants for the year namely from 1-4-92 to 31-3-93. The last date for submission of offers to the Ministry of Railways was 27-11-91 by 2-30 p.m. and the tenders were to be opened on the same day at 3 p.m. It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1-9-91 and that the Railways reserved the right to order additional quantity up to 30 of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period. The offers were to remain open for a period of 90 days. On that day the tenders were opened in the presence of all parties. The price quoted by the three manufacturers i.e. M/s. H.D.C., Mukand and Bharatiya was an identical price of Rs. 77,666/- per bogie while other tenderers quoted between 83,000/- and 84,500/- per bogie. After the tenders were opened and before the same could be finalised, the Government of India announced two major concessions namely reduction of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel. The tenders were put up and placed before the Tender Committee of the Railways which considered all the aspects. The Committee concluded that three of the tenderers namely M/s H.D.C., Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1-7-91 and 1-9-91, have apparently formed a cartel. The Tender Committee also noted that the rates quoted by them were the lowest. Taking into consideration the reduction of Rs. 1500/- as a result of the concessions in respect of the reduction of custody duty on the import of steel scrap and dispensation of the freight equalisation fund for steel, the Tender Committee concluded that the reasonable rate would be Rs. 76,000/- per bogie. On the question of distribution of quantities to the various manufacturers the Tender Committee decided to follow the existing procedure. The Tender Committee signed these recommendations on 4-2-92 but on the same day the Member (Mechanical) of the Comm