( 1 ) THIS writ petition is filed by M/s. Avula Construction Pvt. Ltd. , for a declaration that the award of the work "additions and Alterations to the existing 25 KV over head equipment in Guntur Yard at South end of Vijayawada Division on South Central Railway in connection with extension of Road Nos. 2 and 6" to the second, respondent pursuant to the Tender Notice dated 26-8-1998 as arbitrary and illegal.

( 2 ) THE 1st petitioner is a company registered under the Companies Act and engaged in construction works and in particular, execution of electrical, engineering and fabrication of railway traction works. The 2nd petitioner is a qualified Engineer with vast experience of 16 years in various aspects of overhead equipments, in particular, with railway electrical works. Initially, the 1st petitioner was a Partnership Firm and later on it was converted into a Private Limited Company and they executed various projects worth Rs. 600 lakhs.

( 3 ) THE first respondent issued the Tender notice dated 26-8-1998 inviting eligible contractors to bid for the works of "additions and Alterations to the Existing 25 KV overhead equipment in Guntur Yard at South end of Vijayawada Division on South Central Railway in connection with extension of Road Nos. 2 and 6". According to Clause 8 of the Tender Schedule, the tendered should have executed 25kv traction OHE works of atleast 10km. The tenderer shall submit complete details of the works executed in the past and the works presently under execution as per proforma given in Form 5 along with the completion reports/ performance reports, if issued for the work executed/under execution by him. The annual turnover of the tenderer should be at least Rs. 25,00,000. 00 during any of the last five years.

( 4 ) ALONG with the petitioners, seven other contractors purchased the Tender Schedules and six contractors submitted the completed Tender Schedules. The tenders were opened on 6-10-1998. The 2nd respondent quoted Rs. 39,29,958. 70 and stood as L1, while the 1st petitioner quoted Rs. 39,97,050. 00 and stood as L2. The 1st respondent awarded the work to the 2nd respondent on 7-12-1998. Aggrieved by the same, the present writ petition is filed.

( 5 ) THE main argument of the learned Counsel for the petitioners is that the 2nd respondent is not qualified under the Tender Notification, as he docs not fulfil the qualification prescribed. In view of the settled proposition of law in Ramana v. I. A. Authority of India, AIR 1979 SC 1628, awarding tender in favour of an unqualified person is arbitrary and the Court under Article 226 of the Constitution of India, should set it aside in the interest of public.

( 6 ) THE learned Counsel for the petitioner submits that one of the qualifications required under the Tender Notification is that the tenderer should have executed 25 KV traction OHE works of at least 10 KM. The 2nd respondent is a Partnership Firm started only in April, 1998 with one Sri G. Ram Mohan Rao as the Managing Director. Sri G. Ram Mohan Rao was earlier a Partner of a partnership concern under the name and style M/s. Surya Industries, Vijayawada with effect from 31-1-1997 and retired from the said partnership on 31-3-1998. Neither Sri Ram Mohan Rao nor the 2nd respondent had ever executed any 25 KV traction OHE work of atleast 10 KM or of value of at least Rs. 25 lakhs. Therefore, they did not fulfil the qualification and hence they are not eligible for the award of tender.

( 7 ) IN the counter/affidavit filed by Sri G. Ram Mohan Rao, the Managing Director of the 2nd respondent-firm, it is stated that he has executed three works of 25 KV overhead equipment works of 10 KM while he was working as a partner in M/s. Surya Industries, Vijayawada. It is further stated that the aggregate work done by him in the aforesaid three works for exceeds the minimum stipulated amount of Rs. 25 lakhs. Further, the Railway authorities assigned three other works, which he was completed to their s