Judgment:
ORDER
G. Rohini, J.
1. The petitioners herein are Advertising Agencies, who have been undertaking jobs of publishing advertisements, creative art works and other related works. Having been registered with Indian Newspapers Society (INS), they were also empanelled as the Advertising Agencies of the 2nd respondent - South Central Railway w.e.f. 1998, 2004 and 2000 respectively for undertaking its works of advertisements.
2. It is not in dispute that pursuant to the said empanelment, the petitioners are handling the creative publicity campaigns, release of advertisements and production of other publicity related works of the South Central Railways and they have been continuing as such till date.
3. While so, the second respondent published a notification dated 31.05.2009 inviting applications from advertising agencies for fresh empanelment prescribing the following minimum eligibility criteria:
1. The agency should be 'fully accredited' with the INS for the last three years as on the date of opening of applications.
2. The agency should have the minimum turnover of rupees one crore per annum for the past three completed financial years.
4. The petitioners 1 & 2 have got only provisional accreditation from INS. Though the 3rd petitioner was fully accredited by INS it was only w.e.f. 1.9.2006 and thus all the 3 petitioners could not satisfy Condition No. 1 that the Advertising Agency should be 'fully accredited' with the INS for the last three years. Hence the present writ petition seeking a Mandamus declaring the action of the Respondents in issuing Notification in PUB/409/09 which was published in news papers dated 3-5-2009 calling for applications for empanelment of Advertising Agencies for publishing the Advertisements, Campaigns and Schemes of the South Central Railway of a Maximum period of two years with a condition that the Agency Should be Fully Accredited with the Indian News papers Society (INS) for the last three years as on the date of opening of applications as illegal, unjust arbitrary thereby violative of the rights guaranteed under Article 14, 19(1)(g) and 21 of the Constitution of India and contrary to the instructions issued by the Railway Board dated 30-5-2007 apart from tainted with the mala fides and consequently set aside the notification in PUB/409/09 to the extent of the condition that the Agency should be Fully Accredited with the Indian Newspapers Society (INS) for the last three years as on the date of opening of applications.
5. At the outset, it is necessary to notice the relevant rule with regard to accreditation as provided under the Rules and Regulations of Accreditation for the Advertising Agencies:
(a) An advertising agency would be eligible for provisional accreditation...if it has placed business of the value of Rs. 35,00,000/- or more during a continuous period of twelve months preceding grant of accreditation and the same has been spread over a minimum of five principal clients at least one of whom is engaged in advertising of a national character. Provided that the advertising agency should have been in business for a minimum period of twenty four months prior to submission of application for accreditation.
(b) A provisionally accredited agency may be granted full accreditation if it applies for the same after a minimum period of twelve months since the grant of provisional accreditation and if it has transacted business of at least Rs. 70,00,000/- in the period of twelve months or less immediately preceding the date of application. The agency should also fulfill the requirement of the number of clients as provided for being eligible for provisional accreditation.
6. It is not in dispute that earlier the second respondent did not insist on full accreditation of the Advertising Agencies for three years as a condition precedent for empanelment of the Advertising Agencies and for the first time such a condition was prescribed in the impugned notification, dated 03-05-2009.
7. It is primarily contended on behalf of the petitioners that the said condition prescribed by the second respondent is contrary to the instructions given by the Railway Board dated 30-5-2007. It is also contended that such a condition has not been insisted upon by any of the other regions of the Railways such as Southern Railways and South Western Railways.
8. While alleging that the impugned condition has been prescribed only to eliminate the petitioners from the zone of consideration and to select the candidates who are to the liking of the General Manager of the second respondent, who is going to retire on 30-05-2009, it is further contended by the petitioners that the impugned notification, which does not contain any reasons for deviating from the age old practice is arbitrary and illegal. It is also contended that the impugned condition is nothing but imposing an unreasonable restriction resulting in violation of the rights guaranteed to the petitioners under Article 19(1)(g) and Article 21 of the Constitution of India.
9. In the counter affidavit filed on behalf of the respondents the allegation that the impugned notification is contrary to the instructions issued by the Railway Board dated 30-05-2007 has been denied. It is further stated that the South Central Railway wanted to empanel the best advertising agencies following a fair and transparent process and therefore, the impugned condition with regard to the eligibility criteria has been prescribed in the tender notice dated 03-05-2009 so that the best available Advertising Agencies are empanelled. It is further stated that the other zonal Railways like Northern Railway, New Delhi, North Central Railway, Allahabad and South East Central Railway, Bhilaspur are also following this eligibility criteria of 'fully accredited with INS' for empanelling Advertising Agencies.
10. It is further stated that in Hyderabad/ Secunderabad there is a plethora of Advertising Agencies and to ensure that the best are selected through a transparent process, the second respondent has formulated the minimum eligibility criteria. It is further stated that there are a number of agencies satisfying the condition of 'fully accredited for the past three years' and the allegation that such a condition was imposed to eliminate the petitioners is without any basis. It is further stated that the disputed condition is followed all over the country by many of the zonal Railways and the allegation of the petitioners that this condition is imposed for the first time only in Andhra Pradesh to eliminate the petitioners is absolutely baseless.
11. I have heard the learned senior counsel appearing for the petitioners and the learned Counsel appearing for the respondents in detail and perused the material on record.
12. Para 4.2 of the Instructions of the Railway Board dated 03-05-2007 runs as under:.A panel of INS accredited advertising agencies (not less than two and not more than six) may be formed for a period of one year (extendable to one more year). Detailed terms/ conditions, criteria of selection, the number of agencies to be empanelled, etc., may be formulated/decided by the respective Railway/Units.
13. As per the above provision the Advertising Agency should be a INS accredited Advertising Agency and the Railway Board did not expressly specify that it should be fully accredited with INS much less that such accreditation should be for a period of three years.
14. In the circumstances, it is the contention of the petitioners that the impugned condition that the agency should be fully accredited with the INS for the last three years as on the date of the opening of applications is contrary to the Railway Board's Instructions.
15. On the other hand, it is contended on behalf of the respondents that what is laid down by the Railway Board is only the basic minimum eligibility criteria and it is always open to the second respondent to make the condition more restrictive to ensure that the best available agencies are empanelled and as such the impugned condition does not in any way violate the Railway Board guidelines.
16. As noticed from the Rules of Accreditation for the Advertising Agencies, the accreditation by INS is of two types -(i) provisional accreditation, and (ii) full accreditation.
17. Though it is contended on behalf of petitioners that there is no difference as such in the work being undertaken by the fully accredited or provisionally accredited agencies, on a careful reading of the rules and regulations of accreditation, I am unable to agree.
18. The relevant rule with regard to accreditation (extracted above) shows that there is a substantial difference with regard to the value of the business transacted by the agency as well as the minimum period of transacted business. Moreover, a full accreditation can be granted only where a provisionally accredited agency puts in a minimum period of 12 months since the grant of provisional accreditation. Thus it is clear that a fully accredited agency possesses more infrastructure facilities and turnover in the business apart from higher experience than a provisionally accredited agency. Apparently, the 2nd respondent thought that empanelling fully accredited advertising agencies would be advantageous to the Railways. May be that for the first time the 2nd respondent insisted upon full accreditation as a condition precedent for empanelment of the advertising agencies, however since such insistence is for the purpose of choosing the best available advertising agencies in the interest of the Railways, the same cannot be found fault with.
19. It is also relevant to note that para 4.2 of the Railway Board instructions merely provided that the empanelled Advertising Agency should be INS accredited. In the absence of any stipulation that such accreditation should be either provisional or full and particularly having regard to the latter part of 4.2 of the Instructions which enables the respective Railway units to formulate/decide the detailed terms/conditions, criteria of selection, I am of the opinion that it is always open to the second respondent to prescribe an appropriate condition to suit its requirement. In the absence of any prohibition as such from prescribing a condition requiring full accreditation for the last three years there is no reason to hold that the impugned condition is in violation of the Instructions of the Railway Board.
20. The learned senior counsel appearing for the petitioners further contended that the requirement of full accreditation of the agencies retrospectively for the last three years is impossible of compliance and it amounts to deliberate elimination of the petitioners from participation thereby violating the fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India.
21. The above contention is also without any substance since the impugned condition is only aimed at improving the quality of the empanelled advertising agencies. May be that the three petitioners in the writ petition are not able to satisfy the requirement of full accreditation for the last three years as on the date of opening of the application, however the plea that the said condition is impossible of compliance is without any basis and cannot be accepted. As already noticed, there is lot of difference in the standards and experience possessed by the provisionally accredited and fully accredited agencies and apparently full accreditation is a higher standard when compared to provisional accreditation. This is also evident from the fact that full accreditation would be granted after a minimum period of twelve months from the grant of provisional accreditation provided it has transacted business of Rs. 70 lakhs in the period of twelve months or less immediately preceding the date of application. Hence, the condition prescribed by the 2nd respondent to achieve high standards cannot be held to be arbitrary or illegal. The classification sought to be made by the 2nd respondent between the provisional and full accreditation has undoubtedly a rationale behind it and apparently the purpose is to empanel the best and more experienced advertising agencies. Hence, it cannot be said that there is no nexus with the object sought to be achieved.
22. The mala fides sought to be attributed to the General Manager of the 2nd respondent being extremely vague and lacking in material particulars cannot be accepted. At any rate, absolutely no case could be made out to show that there was any deliberate attempt on the part of the 2nd respondent to exclude the petitioners from participating in the tender process with a view to confer benefit on some third parties. As a matter of fact, this is a case where the petitioners failed to satisfy the eligibility criteria specified in the impugned tender notice. When the 2nd respondent in its discretion thought it fit to restrict the participants who are better experienced and possessed better infrastructural facilities, the same cannot be termed as arbitrary or unreasonable classification.
23. The law is well-settled that the terms of the invitation to tender is not open to judicial scrutiny because the invitation to tender is in the realm of contract. The Tender Inviting Authority has got the power to prescribe the qualifications and experience keeping in view the nature of the work for which the tenders are invited. The same cannot be subjected to judicial scrutiny unless they are so arbitrary or irrational or ex facie in violation of Article 14 of the Constitution of India. Merely because one of the unqualified bidders feels that some other terms would have been fair or logical, the tender conditions cannot be held to be bad or discriminatory.
24. For the aforesaid reasons, the impugned action of the second respondent cannot be held to be arbitrary or illegal and the interference by this Court is not warranted on any ground whatsoever.
25. Accordingly, the writ petition is dismissed. No costs.