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Issues Involved:
1. Formation of Cartel 2. Reasonable Price Fixation 3. Dual Pricing 4. Allocation of Quotas 5. Legitimate Expectation Summary: 1. Formation of Cartel: The Supreme Court found that there was no sufficient material to conclusively determine that M/s. H.D.C., Mukand, and Bharatiya formed a cartel. However, the identical pricing quoted by these manufacturers gave rise to a suspicion of cartel formation. The authorities, including the Minister, acted in a bona fide manner in suspecting the formation of a cartel based on the identical pricing and post-tender behavior of these manufacturers. 2. Reasonable Price Fixation: The High Court's direction that all suppliers should supply bogies at Rs. 67,000 was deemed unsustainable by the Supreme Court. The Tender Committee was directed to reconsider the reasonable price, taking into account the offers and data provided by M/s. H.D.C. and Mukand, and other relevant aspects. The Tender Committee should fix a reasonable price at which the manufacturers would be able to supply. 3. Dual Pricing: The Supreme Court held that dual pricing may be reasonable under certain circumstances. The Railways' decision to adopt dual pricing was found to be bona fide and not mala fide. M/s H.D.C., Mukand, and Bharatiya were considered to form a distinct category capable of supplying at Rs. 67,000 per bogie, while smaller manufacturers belonged to a different category. A different price for smaller manufacturers was not discriminatory. 4. Allocation of Quotas: The Supreme Court found that the reduction of quotas to the three big manufacturers by the Minister, based on the suspicion of cartel formation, was unjustified. The three big manufacturers should be allotted quantities as per the Tender Committee's recommendations. The allocations to smaller manufacturers need not be disturbed, and necessary adjustments could be made in the subsequent year. The Railways were allowed to exercise the 30% option if not already exercised. 5. Legitimate Expectation: The Supreme Court acknowledged the concept of legitimate expectation, emphasizing that the Government must act fairly and not arbitrarily. The manufacturers had a legitimate expectation based on past practices and policies. However, the final decision must consider public interest and be reasonable. The Court found that the authorities acted within their rights and followed a rational policy aimed at preventing monopolistic tendencies and encouraging competition among manufacturers. General Submissions on Tender System and Economic Policy: The Supreme Court reiterated that the Government, in a welfare state, has wide powers in regulating and dispensing special services like contracts. The Government must act fairly and not arbitrarily, and its actions should be based on rational and reasonable grounds. The Court emphasized the importance of preventing monopolistic tendencies and ensuring healthy competition, aligning with the Directive Principles of State Policy and public interest.
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