The tendering authority has the right to lay down reasonable terms and conditions in the tender notice, and the court will not interfere unless arbitrariness, unfairness, or irrationality is established.

G. D. SHARMA, J. - The petitioner is a partnership firm and engaged in executing various kinds of civil works including earth works. The firms is registered as "A" Class Contractor by the State Government : M.E.S. Department; Hindustan Petroleum Corporation and State Bank of India. Respondent No. 1 has sanctioned Rail link between Qazigund to Baramulla within the Kashmir Valley. The execution of the project has been entrusted to respondent No. 2 which is Government of India undertaking. To start with the execution of the project respondent No. 2 published tender notice No. Ircon/Co./NR.Stn. Yard (E/W) 97061 dated 20.1.2000. The tender notice provided three packages namely, package A-1, package A-2 and package A-3. These package are reproduced hereunder :

"(1) Package A-1. - Earth work etc. in embankment for the construction of Railway yard at KAKAPORA.

Estimated cost Rs. 4.00 Crores (Approx.)

Earnest money Rs. 2.00 Lacs.

Tender cost Rs. 2,500.

Time of completion 14 (fourteen) months.

(2) Package A-2. - Earth work etc. in embankment for the construction of Railway yard at PAMPORE.

Estimated cost Rs. 5.50 Crores (Approx.)

Earnest money Rs. 2.75 Lacs.

Tender cost Rs. 2,500.

Time of completion 14 (fourteen) months.

(3) Package A-3. - Earth work etc. in embankment for the construction of Railway yard at NOWGAM.

Estimated cost Rs. 10.00 Crores (Approx.)

Earnest money Rs. 5.00 Lacs.

Tender cost Rs. 2,500.

Time of completion 14 (fourteen) months."

As per terms of the tender notice a tenderer had to satisfy the eligibility criterion for technical capability and competence as well as financial capacity and organisational resources. Furthermore, a tenderer has to satisfy the conditions that he was a Kashmiri contractor. Any tender notice received without following documents could be summarily rejected. Those conditions are reproduced below :

"1.1. As a proof of technical capability and competence, you should have completed at least one work of nature similar to that of this tender costing not less that 1/3rd of the value of the cost of the respective tender in the preceding three years.

1.2. As a proof of sufficient financial capacity and organisational resources you should have an average turnover during the last three years of at least 50% of the respective tender value.

1.3. As a proof of being considered a Kashmiri contractor, the following both conditions are to be satisfied :

(a) The contractor/firm should have an office in Kashmir Valley.

(b) The contractor/firm should be operating in Kashmir Valley and their owner/partner or partners having majority share should be State subject of Kashmir Valley.

The documentary proof regarding (a) and (b) above should be submitted as part of the technical bid (Packet-I).

1.4. If the documents/information submitted are found to be wrong/fraudulent at any stage, the contract may be terminated and the work executed at your risk and costs."

The petitioner's technical capability as well as financial capacity and organisational resources as stated in conditions 1.1 and 1.2 were found lacking and as such the form was not invited for the allotment of the contracts. The firm also filed a civil suit for declaration and mandatory injunction and the plaint was returned for presentation before the competent forum. The petitioner firm had given the tender notice in respect of Package A-2 and Package A-3. The estimated cost of Package A-2 was Rs. 5.50 crores and the earth works were to be executed at Pampore. As per condition 1.1, the petitioner was required to demonstrate that he had completed at least one work of nature similar to that of this tender costing not less then 1/3rd of the value of the cost of the tender in the preceding three years. In other words, for complying condition of package A-2, the contractor was required to show that it had executed the works to the extent of Rs. 1.03 crores within three preceding years. With regard to Package A-3 a contractor was required to show that he execu