ORDER
A.P. Misra, J.
1. Heard learned counsel for the parties.
2. The petitioner by means of this writ petition has sought for quashing the express telegram dated 6th March, 1993 for limited tender as per list Annexure-1 to the petition issued by respondents and further directing respondents to advertise the tender notice at large, not confining it to existing handling contractors to contract with respondent company.
3. The ground of challenge by the petitioners is that the condition as specified in the said impugned tender is discriminatory in the nature which excludes other material handlers to favour the contractors already handling the iron and steel of SAIL, Further contention is that the similar condition was imposed by the respondents inviting the said tender and was challenged by the petitioners by means of filing earlier writ petition (Writ Petition No. 29337 of 1992) in which the interim order was passed in favour of the petitioner and thereafter on the basis of the undertaking given by the respondents the said tender was withdrawn. After withdrawing the said tender the present tender was invited specifying the same conditions which is in fact to give favour to those contractors who are working with SAIL, and, therefore, the said tender is not sustainable in view of the aforesaid back-grounds. Earlier the tender was invited by the respondent (SAIL) on 30th, July 1992 and the same was challenged in the aforesaid writ petition. It is not necessary for us to go through the order passed in the earlier writ petition.
4. According to petitioners they are contractors having handled the iron and steel at SAIL Stock Yard, Naini to the tune of 70,000 tons in one year. After aforesaid express telegram the petitioners approached the respondent through letter dated H-3-93 but the Branch Manager refused to receive the same as the petitioners’ names were not in the list of the persons who are already working in the different Stock Yard of SAIL. In April, 1992 tender notice for appointment of handling contractor at Allahabad was issued with condition that the experience of handling of steel materials of at least 28,000 MT during any of the last five financial years should be there. When the petitioners challenged by means of the aforesaid writ petition, an interim order was obtained, but respondent-company postponed the tender indefinitely without assigning any reason. This was published on 30-8-92, Annexure-VlI to the petition. Thereafter in that writ respondents moved an application and also gave an undertaking to cancel the tender on which the petition was dismissed on 31-1-1993 as
infructuous. Thereafter the impugned express telegram dated 6-3-93, Annexure-I to the petition which in term is a limited tender permitting participants only as per list was invited. This also provided the condition to have experience of handling of stock mate-rials of 28,000 MT during any of the last five financial years.
5. The main ground of challenge is that the impugned tender’s condition is violative of Art. 14 which is discriminatory excluded the petitioners from being considered thus illegal. The petitioners admittedly have not handled such work since 1985 but assert their experience of handling the stock materials. Next repudiating respondents’ stand it was urged that respondent (SAIL) is ‘State’ within the meaning of Art. 12 of the Constitution of India. We would first dispose of the later question first. SAIL is a successor of Hindustan Steel Ltd. Hon’ble Supreme Court while considering the case of Hindustan Steel Ltd. in Workmen of Hindustan Steel Ltd. v. Hindus Steel Ltd., 1984 Supp SCC 554, held that company to be ‘State’ within the meaning of Art. 12 of the Constitution. This view is endorsed in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguli, 1986 (3) SCC 156 : (AIR 1986 SC 1571), in Bihar State Harijan Kalyan Parishad v. Union of India, 1985 (2) SCC 644: (AIR 1985 SC 983) and in Sterling Computers Ltd. v. M/s. M. & N. Publication Ltd., 1993 (I) JT 187 : (1993 AIR SCW 683). Repelling this respondent relying in the case of Chandra Mohan Khanna v. NCERT, AIR 1992 SC 76: (1991 AIR SCW2749), whereinthefollowing view has been taken:
“Financial contribution by the State is not conclusive to bring a corporation under definition of ‘State’ under Art. 12”.
In support, it is stated that under new economic policy of liberalisation and integration of SAIL, it has been decided to disinvest 48% of the share capital in a phased manner. Foreign companies are to be invited to invest and thus only because of SAIL continue to be a Government company of the Central Government it would not be “State”.
6. Having considered, we do not find this argument to be sustainable. Even after liberalisation policy, Central Government so far has disinvested 15.52% of the total share capital. Even ultimately disinvested in future will only be to the extent of 48% only. We do not find any such change has come to declare SAIL as not coming within ‘State’ under Art. 12 of the Constitution. Even now every principle and policy decision and control continue to be that of the Central Government. The principles on the basis of which SAIL is declared as a ‘State’ still exists. The aforesaid decision is still applicable and accordingly we hold SAIL to be “State” within the meaning of Art. 12 of the Constitution of India.
7. Next, the main argument, challenging the impugned limited tender is based oil Article 14. It is said to be arbitrary and discriminatory. The condition mentioned therein purposefully excludes the petitioners and by shrinking field of eligibility gives favour to others. This is projected on two grounds: firstly (a) providing for an eligibility of having experience for the last five financial years, secondly (b) inviting the tender only as per list is to give the contract to favour done. For the latter grounds learned counsel for the petitioners strongly relied on the case of Ras-bihari Panda etc. v. State of Orissa, AIR 1969 SC 1081-, relevant portion of which is quoted below:
“Validity of the schemes adopted by the Government of Orissa for sale of Kendu leaves must be adjusted in the light of Article 19(l)(g) and Article 14. Instead of inviting tenders the Government offered to certain old contractors the option to purchase Kendu leaves for the year 1968 on terms mentioned therein. The reason suggested by the Government that these offers were made because the purchasers had carried out their obligations in the previous year to the satisfaction of the Government is not of any significance. From the affidavit filed by the State Government it appears that the price fetched at public auctions before and after January 1986 were much higher than the prices at which Kendu leaves were offered
to the old contractors. The Government realised that the scheme of offering to enter into contracts with the old licensees and to renew their terms was open to grave objection, since it sought arbitrarily to exclude many persons interested in the trade. The Government then decided to invite offers for advance purchases of Kendu leaves but restricted the invitation to those individuals who had carried out the contracts in the previous year without default and to the satisfaction of the Government. By the new scheme instead of the Government making an offer, the existing contractors were given the exclusive right to make offers to purchase Kendu leaves. But in so far as the right to make tenders for the purchase of Kendu leaves was restricted to those persons who had obtained contracts in the previous year the scheme was open to the same objection. The right to make offers being open to a limited class of persons carrying on trade in Kendu leaves and also new entrants into that business. It was ex facie discriminatory, and imposed unreasonable restrictions upon the right of persons other than existing contractors to carry on business. In our view, both the schemes evolved by the Government were violative of the fundamental right of the petitioners under Art. 19(l)(g) and Art. 14 because the schemes gave rise to a monopoly in the trade in Kendu leaves to certain traders and singled out other traders for discriminatory treatment.”
Here the Government had the monopoly to purchase Kendu leaves with right to sale and dispose. This sale has to be for public benefit and not for private gain. State affidavit showed price fetched at public auction both before and after impugned settlement with old contractors were much higher. Then settlements only with old contractors because their past work was satisfactory thus restricted offer to a limited class of persons this was held to have shut out all other class of persons carrying trade thus held violative of Art. 14.
8. But facts in the present case are different. In that case Government did not invite tender and settled with certain old
contractors, that too for a usual long period. Here as yet there is no settlemenl with any one and the settlement is to be by tender. Thus no possibility of any favoured settlement Then impugned tender is said to be only for six months.
9. Next reliance is placed in the c?.se of Sterling Computers Ltd. v. M/s. M. & N. Publication Ltd., 1993(1)JT(SC) 187:{1W3 “AIR SCW 683), the relevant portion of which is quoted below:
“From the facts of the case of Kasturi Lal Lakshimi Reddy (supra) it shall appear that every year the State used to auction the blazes in different forests. Most of the contractors bidding at the auction had their factories outside Jammu & Kashmir. A decision was taken that from the year 1979-80 onwards resin extracted from its forests should not be allowed to be exported outside the territories of the State and should be utilised only by the industries set up within the Stale. There were certain forests which were out of access on account of their distance from the roads and no contractor could be found for taking tapping contracts even on the basis of royalty. The Chief Conservator of Forests and other Forest Officers at a meeting took a decision which was also confirmed at a subsequent meeting, between the Forest Minister, the Forest’ Secretary and the Chief Conservator of Forest, that the blazes for such inaccessible areas should be allotted to some private party. In view of that decision the second respondent who had earlier addressed a letter to the State Government offering to set up a factory for manufacture of resin turpentine oil and other derivatives in the State and had sought for allotment of 10,000 metric tons of resin annually was sanctioned the allotment of 11.85 lacs blazed in the inaccessible areas for a period of ten years on the terms and condi-tions set out in the order. This was challenged in the aforesaid case. This Court said that whatever be its activity the Government is still the Government and is, subject to restraints inherent in its position and as such every activity of the Government which has a public element in it must be reasonable and not arbitrary. However, the allotment of the
contract in favour of the second respondent was upheld. It was pointed out that the blazes were situated in inaccessible areas and in spite of the offers given no bidders were attracted and as such the State had no option but to allot the said contract on basis of the offer made by the second respondent.”
10. In this case the Government decision to settle the blazes of inaccessible areas to be allotted to private party without tender. Though in view of facts of that case even that settlement was approved but court did re-mark that every activity of Government is subject to restraints inherent. Thus its every activity has a public element and thus must be reasonable and not arbitrary.
11. Again this was a case of settlement without tender. The settlement was for ten years. This is absent in the present case. Here the settlement is through tender and confined to six months only i.e. a case of short tender.
12. Next repelling the contention that it is in rejoinder affidavit and it is urged that clause 4 of invitation to tender shows that during first year of operation of the contract 20500 MT of steel is expected to be handled. As new facts were stated in the rejoinder affidavit and thus in reply in the supplementary counter-affidavit this has been denied. It is urged that clause by inadvertence the word ‘first year’ was not scored and later part of that clause specifically refers about six months. It has been asserted there and strongly contended that contract is limited to six months only. Further petitioner’s contention at Ahmedabad Stock Yards under the garb of limited tenders, Srichand Rolling Mills was granted, has worked for more than one year has also been denied. It is stated it was given on 23-10-92 only for six months only and not for one year. Similarly denied the case of Bharatpur Steel Yards in the case of “Star Wires”. It was not given under short term or limited contract but an open tender for five years which was extended for three years. We accordingly hold the impugned limited tender is of six months only and on exigency and facts and circumstances there could be a limited tender till regular lender is proceeded or finalised, if an enterprize or
a unit is facing any difficulty and delay of an open tender, which takes some time might retard its effective functioning. Of course this should not be resorted to defeat the very objective of the open tender. We further find this limited contract till regular and open tender is given to the Stock Yard of Naini, Allahabad, which according to the respondent has remained stand still for a long time as a result of which SAIL and the consumer including various Government departments are suffering great loss could not be said to be illegal. Further limiting it to the list of handling contractors who worked at Stock Yards for SAIL in the easter region could not be said to be out of malice or for providing unjust enrichment to such contractors.
13. Last and the main challenge to the impugned order is pertaining to the eligibility of experience as mentioned therein especially the experience of ‘last five financial years’. This condition excludes “many including the petitioners, this discriminatory and violative of Art. 14 of the Constitution. The argument is that public functionary viz. ‘State’ in all matters especially in the matter of contract should not restrict the field of eligibility. The aforesaid term not only eliminated petitioners but many such though otherwise having experience of handling such materials at the stock yards. Respondents’ case is that in view of increasing production of the plants, increas-ing materials to the stock yards, the handling required has become more expertised. It has introduced modernisation in some of the Stock Yards in India and modernisation of many in offing including Naini Stock Yards of Allahabad. Keeping that a policy decision has been taken by SAIL to have revised terms and conditions of handling contract to increase the efficiency. The impugned condition is not confined to Naini but is applicable to all its Stock Yards of India. It is neither on account of malice nor for any oblique motive. Whenever any condition is imposed with an object of increasing the efficiency, for a belter out put, for improvement of proficiency even if it restricts the field of eligibility could not be said to be discriminatory or violative of Art. 14 of the Constitution of India. Discrimination under this is discrimination
among the same class of persons similarly placed, not among different class of persons dissimilarly placed. Persons having experience for the last five financial years is a class in itself. If authority among this class treats persons discriminatory, may be a case of violation. The provision of having experience of having handled work of 28,000 MT steel materials at a stock yard in last five financial year is a provision of having persons with more experience of handling, who has been doing such job for the last five years. A person not having handled such work for this period could not be said to be persons of having experience in recent past and exclusion of any such person is not out and of any malice but to get more experienced persons for increasing the efficiency which could never be held to be violative of Article 14. Admittedly in this case petitioners do not possess any such experience nor it handled such work even in any one of the last five financial year preceding the date of the limited tender.
14. Hon’ble Supreme Court in M/s. C. J. Fernandez v. State of Karnataka, AIR 1990 SC 958, also held that condition of sufficiency or otherwise of experience of a contractor in the matter of tender could not be held to be illegal. Tn view of what we have expressed above even this last argument of petitioners is not sustainable. We hold the condition:
“the experience of handling of steel mate-rials of at least 28,000 MT during any of the last five financial years should be there.”
is not violative of Art. 14 of the Constitution of India as it is neither discriminatory nor arbitrary.
15. In view of the aforesaid findings we decline to exercise our discretion to-hold the impugned tender to be violative of Article 14 of the Constitution. Accordingly, this writ petition fails and is dismissed. As this petition is being disposed of finally at the stage of admission, we order costs on the parties.
16. Petition dismissed.