UNION OF INDIA AND ORS. versus HINDUSTAN DEVELOPMENT CORPN. AND ORS. ETC. ETC.

UNION OF INDIA AND ORS. versus HINDUSTAN DEVELOPMENT CORPN. AND ORS. ETC. ETC.

There was not enough material to hold that H.D.C., Mukand, and Bhartiya actually formed a cartel; suspicion based on identical pricing was insufficient for reprisal. Dual pricing was not malafide but, in principle, is justified only where categories of suppliers are distinct and such differentiation is rational. The three major manufacturers, having agreed to supply at Rs. 67,000, form a distinct category; smaller manufacturers may justifiably be paid a higher price established by the Tender Committee. Reduction of quota by way of reprisal was not justified due to lack of firm evidence of cartel. The fixation of Rs. 67,000 as price for all without expert consideration was unwarranted; the...

Parties
Petitioner: Union of India and Others; Respondent: Hindustan Development Corporation and Others
Jurisdiction
India
Judgment Date
14 January 1993
Procedural Posture
Special Leave Petition (civil) / Supreme Court Appellate Judgment Following High Court Decision
Outcome
Appeals disposed of; Supreme Court modified and set aside parts of the High Court's direction; directions issued to Tender Committee for fresh determination.
Legal Topics
Government Contracts, Cartel Allegation, Dual Pricing, Tender Process, Article 14: Equality Before Law, Distribution of Quota in Tenders
Contract Law Administrative Law Constitutional Law Government Contracts Cartel Allegation Dual Pricing Tender Process Article 14: Equality Before Law +1 more

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Parties

Union of India and Others

Petitioner

Hindustan Development Corporation and Others

Respondent

Procedural Posture

Special Leave Petition (civil) / Supreme Court Appellate Judgment Following High Court Decision

Legal Issues

  1. 1 Whether the three manufacturers (H.D.C., Mukand, Bhartiya) formed a cartel in tendering for supply of cast steel bogies.
  2. 2 Whether the adoption of dual pricing by Railway Board was discriminatory and violative of Article 14 of the Constitution.
  3. 3 Whether lowering the quota for the three manufacturers was justified.

Ratio Decidendi

There was not enough material to hold that H.D.C., Mukand, and Bhartiya actually formed a cartel; suspicion based on identical pricing was insufficient for reprisal. Dual pricing was not malafide but, in principle, is justified only where categories of suppliers are distinct and such differentiation is rational. The three major manufacturers, having agreed to supply at Rs. 67,000, form a distinct category; smaller manufacturers may justifiably be paid a higher price established by the Tender Committee. Reduction of quota by way of reprisal was not justified due to lack of firm evidence of cartel. The fixation of Rs. 67,000 as price for all without expert consideration was unwarranted; the...

Court Disposition

Appeals disposed of; Supreme Court modified and set aside parts of the High Court's direction; directions issued to Tender Committee for fresh determination.

Orders

  • Tender Committee directed to reconsider and fix a reasonable price for supply by smaller manufacturers after considering the Rs. 67,000 offer and data from H.D.C., Mukand.
  • If the price fixed for smaller manufacturers is more than Rs. 67,000, only they will supply at that higher rate; H.D.C., Mukand, and Bhartiya will supply at Rs. 67,000 as committed.