Call for fresh tender to operate taxis from Central: Madras HC directs Southern Railway

Disposing of the petitions from Bharathi Cabs and Fast Track seeking to quash the tender notification and the letter awarding the contract respectively, Justice SM Subramaniam said, “The successful bidder after selection and the issuance of acceptance certificate, would acquire the right of legitimate expectations that he will be permitted to operate the cab services in central station. However, because of the interim order granted by this court, Ani Technologies Private Limited (ATPL) was unable to operate the cab services.”

However, observing that allowing ATPL to function for a year would cause financial loss to Southern Railway while preventing it from operating the cabs as per the contract would prejudice to it, the judge held that a balanced approach was required in the interest of all concerned, and directed ATPL to operate the taxi services from September 24, 2018 to March 23, 2019.

Justice Subramaniam then directed Railways to proceed with the fresh tender notification by providing an opportunity to all the eligible persons, including the petitioners in both the writ petitions, and finalise the tender before the expiry of the six-month period.

As per the case, Southern Railways had issued a tender notification on August 2, 2017 for parking and operation of call taxi stand at Moore Market Complex/Chennai Central Railway Station. While the reserve price for the one-year contract was fixed at Rs 2.17 crore, the tender was finalised in favour of ATPL for Rs 60 lakh originally and to Rs 70 lakh after negotiations. Accordingly, Southern Railway issued the acceptance certificate in favour of ATPL on October 26, 2017.

But Bharathi Cabs challenged this, contending that Railways finalised the tender at much lesser than the reserve price quoted, and that they were ready to pay more than the price fixed by the Railways. It submitted that though it had not participated in tender owing to the high reserve price, it has locus standi to challenge the tender because of the revenue loss to the Railways. 

Fast Track, which sought to quash the allotment letter issued to ATPL, submitted that their bid was rejected over meagre margin and flimsy grounds.

Southern Railway claimed it has followed all procedures as contemplated under the rules and regulations for conducting tenders.