TMI Blog1994 (7) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... han not, such decisions are made qualitatively by experts.The Government must have freedom of contract. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. It is clearly established that the system provides for facility of roaming to visitors. International roaming in GSM is well-accepted technique.The roaming can be easily extended internationally and is already being done in parts of Europe. Since the systems are compatible, all that is required is an agreement between the operators for revenue sharing etc. Thus, we find the argument that paragraph 2.4.7, namely, the financial projection of the proposed Cellular Mobile Cellular and the 7th criterion having been left out of consideration cannot be accepted. Mr B.R. Nair’s involvement did not vitiate the selection on the ground of bias. Since we have reached this conclusion we are not going to the other questions argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the first stage. The first Tender Evaluation Committee was constituted consisting of senior officers of the Department of Telecommunications. 5. A Telecom Commission was constituted on 6-4-1989 comprising a Chairman and four full-time Members: 1. Member (Production) 2. Member (Services) 3. Member (Technology) 4. Member (Finance) It short-listed 16 companies, 12 of which were eligible without any defect. However, in the case of 4 the Committee recommended condonation of certain defects. Those four were 1. BPL Systems and Projects Limited 2. Mobile Telecommunication Limited 3. Mobile Telecom Services 4. Indian Telecom Limited Between 19-5-1992 and 27-5-1992 the recommendations were submitted to the Telecom Commission. The matter came up for discussion among the members of the Commission. On 27-5-1992 the Telecom Commission accepted the recommendations of the Technical Evaluation Committee. The Chairman recommended that the short-list of bidders, the recommendations of the Tender Evaluation Committee and the proposal for financial bids be placed before the Selection Committee at the earliest. 6.It requires to be noted, at this stage, that a Selection Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as referred back to it for a fresh gradation on the basis of 21.75 per cent interest rate in respect of 13 per cent rate which it had earlier adopted. On 7-9-1992 the recommendations were re-submitte. The Adviser operations recommended only 4 operators based on the evaluation and financial bids. Bharati Cellular was recommended as a first choice for all the four cities, BPL as the second choice for both Delhi and Bombay, Tata Cellular and Skycell as second choice for Calcutta and Madras. This was done since in his view no other bidder qualified for licence. On 10-9-1992 the Chairman of the Tender Evaluation Committee directed that all the documents and recommendations be sent to the Selection Committee for its consideration and for making final recommendations to the Government. When the file was put up to the Minister on 9-10-1992 he made three important notings : 1. In view of the time taken by the High-Powered Committee the selection process be completed by DoT internally; 2. Only one party may be granted licence for one city; and 3. The actual selection of the licensee should be made primarily on the consideration of rentals and the marks obtained in respect of foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement required to be furnished with the bids was not complete. Kanazia Digital System contended that its technical bid was left out on certain wrong premise. 15.Lengthy arguments were advanced before the High Court. On a consideration of those arguments the writ petitions of Adino Telecom and Kanazia Digital System were dismissed. CYR No. 4030 of 1992 filed by India Telecomp was allowed. A mandamus was issued to consider afresh the grant of licence to the petitioner therein, after evaluating marks for the rental on the basis the figures of deposits from subscribers given for Delhi and Bombay were accumulated. Similarly, CWP No. 163 of 1992 in which the petitioner was M/s Hutchison Max Telecom Private Limited, was allowed. A direction was issued to reconsider the case of the petitioner, on the basis the compliance filed by it, as it was in order. To that extent the order granting licence to 8 parties (2 for each of the cities) was set aside. This judgment was pronounced on 26-2-1993. 16.After the judgment of the Delhi High Court, the matter was reconsidered in the light of the said judgment. A revised list of provisionally selected bidders was prepared on 27-8-1993. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criterion when the Chairman s note dated 9-10-1992 specifically states that the companies would be asked to comply with the conditions of financial bid in clause 2.4.7 of Chapter II while granting licences. When this is the position, strangely, the appellant is informed as follows : "Ministry of Communication (Telecom Commission) New Delhi - 11 000 1 No. /92-TM Dated: 27-8-1993 To, (Kind attention Subject:Tender No. 44-21/9 1 -MMC (FIN) for franchise for Cellular Mobile Telephone Service for Bombay, Delhi, Calcutta and Madras. Sir, Kindly refer letter of even No. dated 12-10-1992 informing you that you have been provisionally selected for franchise for providing cellular mobile telephone service at .... on a nonexclusive basis. 2. The matter has been reconsidered in the light of the judgment delivered by the High Court of Delhi in this case. M/s .......... have now been provisionally selected for franchise for providing cellular mobile telephone service at in place of ........... on a non-exclusive basis. The other franchise selected for is M/s with M/s of.......as their foreign partner. 3. The details of the rental, deposits and other terms fixed for the franchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appellant is to be eliminated, it ought to have been afforded an opportunity. Had that been done it would have pointed out several factors, namely, the omission to consider relevant material, namely, parameter seven, the prejudice caused by the award of marks after the bids were opened. The DoT was obliged to disclose the maximum marks for each criterion at the threshold of the financial bid in the interest of transparency and to ensure a non-arbitrary selection. 22. In the case of most of the bidders the foreign exchange is not met by the foreign collaborator. In the case of India Telecomp the debt equity ratio is 1 : 1. Their total project cost is stated to be Rs 101 crones. This means Rs 50.50 crores represent equity and the other Rs 50.50 crores represent external commercial borrowing. In this case, the entire foreign exchange is not met by the foreign collaborator. Therefore, there is a breach of the fundamental condition of the bid. This would constitute a disqualification which is a bar at the threshold. Had this condition been strictly applied Bharati Cellular, Modi Telecom, Mobile Communications, Hutchison Max, Skycell Communication would have been eliminated. Like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and entrusting to a Committee which did not follow the norms. 2. Certain hidden criteria which were not disclosed earlier, were applied not as parameters, but for elimination. 3. There are five glaring errors in the selection. One such error is in the case of Sterling Cellular. It supports its bid on the strength of the foreign exchange that may be obtained from foreign tourists. This is something incomprehensible. Elaborating these points it is urged that after shortlisting, the selection committee did not select at all. The counter-affidavit filed on behalf of the Government of India does not mention that there was a delay by Apex Committee, as held by the High Court. On the contrary, the facts disclose there was no delay whatever. 28. Two hidden criteria were postulated. (i) Persons having less than one lakh experience will not be considered. (ii) If two bidders have the same collaborator in relation to foreign exchange that bid will not be considered. These criteria were evolved after 18-8-1992. When one looks at the conditions of tender, paragraph 2.2.1 talks of subscriber s capacity. That does not mention about the nature of experience. Equally, paragraph 2.4.5 mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 13, a certificate requires to be produced. In a number of cases no such certificate has been produced. Paragraph 2.4.5 of Chapter 11 of General Conditions lays down one of the parameters is the experience of foreign operating partner. In the case of Bharati Cellular, SFR France Company has no experience. Talkland s sole function is service. Therefore, its experience should not have been added. In paragraph 1.4 the nature of services is listed. These are not the services offered by Talkland. Hutchison Max did not produce any certificate likewise Bharati Cellular. 36. The argument on behalf of Ashok Leyland, petitioner in Transferred Case No. 49 of 1993 is that it was an eligible bidder but has never been communicated the reason as to why it came to be rejected. On 29-9-1992, the Committee records that reasons must be given. Yet no reasons are furnished to the petitioner. Even though the Tender Evaluation Committee held the petitioner to be qualified yet its bid had been rejected without communicating any reason whatever. In Mahabir Auto Stores v. Indian Oil Corpn. (1990) 3 SCC 752 (SCC at p. 763, paragraph 18) this Court has held that there is an obligation to communicate the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been rejected. Hence, there is no question of the Department of Telecommunication condoning the defect. If the view of the High Court is to prevail it would amount to allowing a post tender modification on a select basis, that is, on the basis whether the mistake was intentional or unintentional. Where the Department has chosen to reject, the High Court cannot sit in judgment. To state it is like verification of pleading is to overlook that the pleadings are governed by the verification. That is not the case here. The comparison with Indian Telecom and Tata Cellular is also incorrect. In the case of Indian Telecom there is an unconditional compliance. Only in the covering letter a view has been expressed about the economic viability of the services and the bidders preference. Hence, it cannot be contended that the bid was conditional, in any manner. Similarly, Tata Cellular was not accompanied in this regard. 40. The allegation against this respondent that the foreign exchange requirement has not been met is incorrect. The documents filed by the respondent clearly show that there is a surplus of approximately three crore rupees, available from the foreign collaborator, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional company having large-scale operation in U.S.A. As regards the foreign exchange inflow and outflow it is submitted that Sterling Cellular has projected its stand that the foreign exchange inflow will be from foreign tourists and business travelers visiting the city of Delhi. The expression "international roaming" has been used in relation to such foreign tourists and business travellers. Internationally, cellular phones are used by two categories of persons, (1) subscribers residing in the city who would use the phone on a permanent basis, (2) the tourists and business travelers visiting the city who would use the phone on a temporary basis. Inasmuch as the foreign tourists and foreign business travellers make the payment in foreign currency it will be a source of foreign exchange. What is required under the tender condition is the projection of foreign exchange inflow and outflow relating to the cellular phone contract. This means inflow in foreign exchange as a result of the operation of cellular phone system. Hence, the bearing from tourists and business travellers is a very relevant consideration. Like this respondent, Hutchison Max selected for the Bombay city also proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lways be condoned. The Privy Council in Mohd. Ejaz Husain v. Mohd. Iftikhar Husain AIR 1932 PC 76: 59 IA 92: ILR 7 Luck 1 has held that it is always a matter of form and not of substance. Other argument is advanced that there is a defect in the compliance statement. 45. The alternate submission is, the question of error does not arise since the compliance statement was filed on 11-9-1992 while the contract came to be awarded only on 12-10-1992. In such a case the question would be what is thescope of judicial review? The court could interfere in the following three categories of cases 2. Administrative, for example, price fixing 3. Award of contracts Here, the matter is technical in relation to award of contract. Judicial review does not mean the court should take over the contracting powers. The parameters for interference in such matters would be (i) Mala fide (ii) Bias (iii) Arbitrariness to the extent of perversity. If none of these is present, the court should not interfere. It must be left to the authorities. The contrary arguments advanced on behalf of the appellants against this respondent are not tenable. 46. Mr F.S. Nariman, learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sufficient nexus between the decision maker and the party complaining in order to justify the real likelihood of bias. 48. After a decision is reached the standard of proof of bias is higher as laid down in Vassiliades v. Vassiliades AIR 1945 PC 38: 221 IC 603: 1945 All LJ 34. This decision has been referred to by this Court in Ranjit Thakur v. Union of India (1987) 4 SCC 611: 1988 SCC (L S) 1: (1987) 5 ATC 11 3 (1988) 1 SCR 512. The learned counsel after referring to the relevant case law submits that cases of bias and ostensible bias had to be regarded in the light of their own circumstances. In this case Mr Subhash Nair is only one of the officers in BPL, which has over 5500 employees and 89 officers of his rank in 27 offices all over India. Mr Nair was not the decision-maker at all. He was one of the recommending authorities. His involvement in the approval and selection of the tender was indispensable. He was originally the Member (Services) on 29-5-1992. Thereafter he became Director General, Telecommunications by a notification issued by 28-7-1992 by the President of India. As such, he was to exercise all powers of Telegraph Authority under Section 3(6) of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s India Telecomp secured the second place for Calcutta. Inasmuch as they had the same foreign partner as Usha Martin which secured a higher place than India Telecomp, it was rejected and the choice went to the next bidder in the marking list. After the above considerations were taken into account, the remaining companies were selected which led to the writ petition. Pursuant to the High Court directions the matter was reconsidered and selections have been made as was done earlier. 53. The principal objection of the Union of India is that the High Court was not justified in scrutinising the tendering process in such detail. The minute examination is unwarranted because the High Court cannot constitute itself the selecting authority. However, no appeal is preferred, as otherwise, it would have further delayed the introduction of very valuable communication facility in this country. Beyond that, it has no particular interest as to who is selected. However, it becomes necessary to answer the allegations made about the actual selection and whether there was any bias on the part of the selection committee. The selection process was dictated by the, exigencies of the situation. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which had 80,000 subscribers. By 31-12-1991, it would have got increased to more than one lakh. In August 1992 when the bids were submitted SFR s line of experience could reasonably be expected to be more than one lakh. SFR France had a GSM licence. Having regard to these facts, it would not be an unreasonable estimate, for the experts, to conclude that Bharati Cellular was having experience of over one lakh lines. 56. It is alleged that the debt/equity ratio of Skycell has not been properly taken. Skycell ratio was 1.5 and was correctly assigned 3 marks. 57. Tata Cellular alleges that Bharati Cellular, Mobile Telecom, Sterling and Skycell have breached note (ii) under para 2.4 which provides that minimum reliance on Indian Public Financial Institutions will be preferred. The bid profess made distinction between loans from Public Financial Institutions and Banks. The criticism of Tata confuses this requirement with loan from Banks. The criterion, it is submitted, was correctly applied. 58. In the evaluation of process open market purchase was left out of consideration. 59. Since Skycell bid for Madras showed that they had projected their operations in Madras for initial y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect Hutchison Max came to be excluded. 64. Mr Nair s participation from the beginning would constitute bias in law. 65. Mr Ashoke Sen, in his reply, would state that in the case of Hutchison Max the mistake was committed in the offer with regard to compliance statement. The principle of bias as laid down in R. v. Essex Justices (Sizer), ex p Perkins (1927) 2 KB 475: 1927 All ER Rep 393: 96 UKB 530 would apply. Similar passage occurs in de Smith s Constitutional and Administrative Law (4th Edn.) p. 268. 66. Mr Harish Salve, in reply, would urge that the hidden criteria were evolved in relation to common foreign collaborator. This shows that there was lack of candour on the part of the Union. It is mentioned that Talkland was taken into consideration. It is not so, as seen from the file. The conditions were tailor-made to suit Bharati Cellular and BPL. 67. Mr K.K. Venugopal would urge that the rule relating to judicial review should not be applied here because it is one of selection by an a administrative process. 68. Having regard to the above arguments we propose to deal with the matter from the following five aspects : 1. The scope of judicial review in matters of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judges; but the judges must observe the constitutional limits set by our parliamentary system upon the exercise of this beneficial power." Commenting upon this Michael Supperstone and James Goudie in their work Judicial Review (1992 Edn.) at p. 16 say : "If anyone were prompted to dismiss this sage warning as a mere obiter dictum from the most radical member of the higher judiciary of recent times, and therefore to be treated as an idiosyncratic aberration, it has received the endorsement of the Law Lords generally. The words of Lord Scarman were echoed by Lord Bridge of Harwich, speaking on behalf of the Board when reversing an interventionist decision of the New Zealand Court of Appeal in Butcher v. Petrocorp Exploration Ltd. 18-3-1991." 73. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court s ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer." 76. In R. v. Panel on Take-overs and Mergers, ex p in Guinness plc (1990) 1 QB 146: (1989) 1 All ER 509, Lord Donaldson, M.R. referred to the judicial review jurisdiction as being supervisory or longstop jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power. 77. The duty of the court is to confine itself to the question of legality. Its concern should be : 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. committed a breach of the rules of natural justice, 4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Russell of Killowen, C.J., the approach to be adopted by the court was set out. Such bye-laws ought to be benevolently interpreted, and credit ought to be given to those who have to administer them that they would be reasonably administered. They could be held invalid if unreasonable : Where for instance bye-laws were found to be partial and unequal in their operation as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord Russell emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient. In 1947 the Court of Appeal confirmed a similar approach for the review of executive discretion generally in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn (1948) 1 KB 223: (1947) 2 All ER 680. This case was concerned with a complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to licence performances on Sunday only subject to a condition that no childre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at. " 80. At this stage, The Supreme Court Practice, 1993, Vol. 1, pp. 849850, may be quoted : "4. Wednesbury principle.- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. 3 1, per Lord Greene, M.R.)" 81. Two other facets of irrationality may be mentioned. (1) It is open to the court to review the decision-maker s evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary of State for Environment (1980) 41 P CR 255, the Secretary of State referred to a number of factors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substituting its judgment for that of the administrator. The result is a theory of review that limits the extent to which the discretion of the expert may be scrutinised by the non-expert judge. The alternative is for the court to overrule the agency on technical matters where all the advantages of expertise lie with the agencies, If a court were to review fully the decision of a body such as state board of medical examiners it would find itself wandering amid the maze of therapeutics or boggling at the mysteries of the Pharmacopoeia . Such a situation as a state court expressed it many years ago is not a case of the blind leading the blind but of one who has always been deaf and blind insisting that he can see and hear better than one who has always had his eyesight and hearing and has always used them to the utmost advantage in ascertaining the truth in regard to the matter in question . The second consideration leading to narrow review is that of calendar pressure. In practical terms it may be the more important consideration. More than any theory of limited review it is the pressure of the judicial calendar combined with the elephantine bulk of the record in so many revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts powers or misconstrues the extent of its powers, then, too the courts can interfere. See Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147: (1969) 1 All ER 208: (1969) 2 WLR 163. And, of course, if the body acts in bad faith or for an ulterior object, which is not authofised by law, its decision will be set aside. See Sydney Municipal Council v. Campbell 1925 AC 338: 1924 All ER Rep 930. In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it gives no reasons in a case when it may reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusion, and act accordingly. See Padfield case (as AC pp. 1007, 1061) (supra)." 84. We may usefully refer to Administrative Law Rethinking Judicial Control of Bureaucracy by Christopher F. Edley, JR (1990 Edn.). At p. 96 it is stated thus : "A great deal of administrative law boils down to the scope of review problem; defining what degree of deference a court will accord to an agency s findings, conclusions, and choices, including choice of procedures. It is misleading to speak of a doctrine , or the law , of scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect on the administrative, process is relevant to the courts remedial discretion and may prove decisive. This is particularly the case when the challenge is procedural rather than substantive, or if the courts can be certain that the administrator would not reach a different decision even if the original decisions were quashed. Judges may differ in the importance they attach to the disruption that quashing a decision will cause. They may also be influenced by the extent to which the illegality arises from the conduct of the administrative body itself, and their view of that conduct. The current approach is best exemplified by R. v. Monopolies and Mergers Commission, ex p Argyll Group plc (1986) 1 WLR 736, 774: (1986) 2 All ER 257, CA 87. Sir John Donaldson, M.R. in R. v. Monopolies and Mergers Commission, ex p Argyll Group plc45 observed thus : "We are sitting as a public law court concerned to review an administrative decision, albeit one which has to be reached by the application of judicial or quasijudicial principles. We have to approach our duties with a proper awareness of the needs of public administration. I cannot catalogue them all but, in the present context, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged that the basic concept of the manner of the development of the real estate and disposal of occupancy rights were vitiated by unreasonableness. It is a truism, doctrinally, that powers must be exercised reasonably. But as Prof. Wade points out : The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must therefore resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. Decisions which are extravagant or capricious cannot be legitimate, But if the decision is within the confines of reasonableness, it is no part of the court s function to look further into its merits. "With the question whether a particular policy is wise or foolish the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the reasonable man of the torts law. Prof. Wade says : This is not therefore the standard of "the man on the Clapham omnibus". It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority may or may not be authorised to do. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called "Wednesbury unreasonableness", after the now famous case in which Lord Greene, MR. expounded it." (emphasis supplied) 90. Referring to the doctrine of unreasonableness, Prof. Wade says in Administrative Law (supra) : "The point to note is that a thing is not unreasonable in the legal sense merely because the court thinks it is unwise." 91. In Food Corpn. of India v. Kamdhenu Cattle Feed Industries51 it was observed thus : (SCC p. 76, para 7) "In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which nonarbitrariness is a significant facet. There is no unfette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination and without unfair procedure. 94. The principles deducible from the above are : (1) The modem trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change inflow/outflow 10 Purchase plan for Cellular equipment within the country including tie-ups with the proposed Indian manufacturers 5 Experience 15 Financial strength 12 Note : No marks were allotted for the seventh criterion of financial projections of Cellular Mobile Service. The report of the Tender Evaluation Committee on this aspect states as under : "One of the parameters is about the financial projection. The Committee discussed about the reliability of financial projections made by the bidders and came to the conclusion that it is not possible for them to verify the reliability of the projections which are based on individual postulations about the number of subscribers, traffic, tariff, financial structure etc. For this purpose we have to go by the data furnished by the bidders at its face value. In any case the financial data, having relevance to evaluation of the tender have well been covered under various parameters." Annexure 1 to the Report of the said Committee shows the manner in which parameters and their weighers were given to each criterion. The debt/equity ratio is 1.5 for city of Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications. The GSM specifications are highly standardised. This means that the systems that are designed as per GSM specifications will be compatible with each other and, therefore, can be easily connected together from day one. 102.Roaming in GSM cellular mobile systems means that a subscriber belonging to one operator can use his telephone to receive and make calls while he is in the area of another operator automatically. When a subscriber goes into the area of another operator, who has a roaming agreement with his another operator, the details of the subscriber available in the HLR (Home Location Register) of the home MSC (Mobile Switching Centre) are obtained by the visitor MSC and placed in the VLR (Visitor Location Register). The subscriber can originate and receive calls without feeling any difference. The roaming can be easily extended internationally and is already being done in parts of Europe. Since the systems are compatible, all that is required is an agreement between the operators for revenue sharing etc. 103.Thus, we find the argument that paragraph 2.4.7, namely, the financial projection of the proposed Cellular Mobile Cellular and the 7th criterion having been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bias; indeed, the courts may refuse to entertain submissions designed to establish the actual bias of a member of an independent tribunal, on the ground that such an inquiry would be unseemly. In practice the test of ,reasonable suspicion and real likelihood of bias will generally lead to the same result. Seldom indeed will one find a situation in which reasonable persons adequately apprised of the facts will reasonably suspect bias but a court reviewingthe facts will hold that there was no real likelihood of bias. Neither formulation is concerned wholly with appearances or wholly with objective reality. In ninety-nine cases out of a hundred it is enough for the court to ask itself whether a reasonable person viewing the facts would think that there was a substantial possibility of bias." 107. Geoffrey A. Flick in his work on Natural Justice Principles and Practical Application, 1979 Edn., at pp. 11 8-120, states 52 157 Kan 622, 143 P 2d 652, 655 "Personal Involvement : Whenever a decision maker becomes personally involved with one of the parties there arises the suspicion that a determination may not be reached exclusively on the merits of the case as discussed at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary) interest, the officer must have so conducted himself that a high probability arises of a bias inconsistent with the fair performance of his duties, with the result that a substantial distrust of the result must exist in the minds of reasonable persons. Put in other words, the issue is not merely whether justice has in fact been done, but whether it has manifestly and undoubtedly been seen to be done. It may, therefore, be improper for the clerk of the court to act as a solicitor for a party. Similarly, it may be unwise for a headmaster to sit in judgment upon a case involving a former pupil who had been adversely criticised in a detailed staff report signed by the headmaster some three months previously even where the existence of the report has been forgotten. R. v. Abingdon Justices, ex p CousinS (1964) 108 Sol Jo 840." 108.The leading cases on bias may now be seen. In R. v. Camborne Justices,ex p Pearce (1954) 2 All ER 850: (1955) 1 QB 41: (1954) 3 WLR 415 it was held : (All ER p. 855) "In R. v. Essex Justices ex p PerkinS21 Avory, J., said We have here to determine, however, whether or not there might appear to be a reasonable likelihood of his being biased. And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the courts in recent times seems to indicate that the reminder of Lord Hewart, C.J., in R. v. Sussex JJ., ex p McCarthy (supra) that it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done is being urged as a warrant for quashing convictions or invalidating orders on quite unsubstantial grounds and, indeed in some cases, on the flimsiest pretexts of bias." In Metropolitan Properties Co. (FG.C.) Ltd. v. Lannon4 it was held thus (All ER p. 3 1 0) "... in considering whether there was a real likelihood of bias, the court does not look at the mind of the justice himself or at the mind of the chairman of the tribunal, or whoever it may be, who sits in a judicial capacity. It does not look to see if there was a real likelihood that he would, or did, in fact favour one side at the expense of the other. The court looks at the impression which would be given to other people. Even if he was as impartial as could be, nevertheless, if right minded persons would think that, in the circumstances, there was a real likelihood of bias on his part, then he should not sit. And if he does sit, his decision cannot stand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, C.J. in a test which he laid down in R. v. Uxbridge Justices, ex p Burbridge (1972) Times, 21 June and referred to by him in R. v. McLean, ex p Aikens (1974) 139 JP 261, 266 would a reasonable and fair-minded person sitting in court and knowing all the relevant facts have a reasonable suspicion that a fair trial for the applicant was not possible?" In University College of Swansea v. Cornelius 1988 ICR 735, 739 holds "Cases of bias and ostensible bias had to be regarded in the light of their own circumstances. The circumstances of this case could have no relevance to other cases." 109.The Indian Law can be gathered from the following rulings. In Manak Lal v. Dr Prem Chandl it was held thus: (SCR p. 58 1) "But where pecuniary interest is not attributed but instead a bias is suggested, it often becomes necessary to consider whether there is a reasonable ground for assuming the possibility of bias and whether it is 66 (1983) 1 All ER 490,494 likely to produce in the minds of the litigant or the public at large a reasonable doubt about the fairness of the administration of justice. It would always be a question of fact to be decided in each case. The principle , says Halsbu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "This Court emphasised that it was not necessary to establish bias but it was sufficient to invalidate the selection process if it could be shown that there was reasonable likelihood of bias. The likelihood of bias may arise on account of proprietary interest or on account of personal reasons, such as, hostility to one party or personal friendship or family relationship with the other. Where reasonable likelihood of bias is alleged on the ground of relationship, the question would always be as to how close is the degree of relationship or in other words, is the nearness of relationship so great as to give rise to reasonable apprehension of bias on the part of the authority making the selection." In Ranjit Thakur v. Union of India15 the law was stated by one of us, Venkatachaliah, J. (as he then was) as under : (SCR p. 520: SCC p. 618, para 17) "As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party. The proper approach for the judge is not to look at his own mind and ask himself, however, honestly, Am I biased? ; but to look at the mind of the party before him." Reference was made therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artial. See Russel on Arbitration, 18 th Edn., p. 378 and observations of Justice Boyd in Brien and Brien, Re (1910) 2 IR 84. Lord O Brien in King (De Vosci) v. Justice of Queen s Country (1908) 2 IR 285 observed as follows : By bias I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias. I do not think that their vague suspicions of whimsical, capricious and unreasonable people should be made a standard to regulate our action here. It might be a different matter if suspicion rested on reasonable grounds was reasonably generated but certainly mere flimsy, elusive, morbid suspicions should not be permitted to form a ground of decision." (emphasis supplied) In Union Carbide Corpn. v. Union of India (1991) 4 SCC 584, 667 this Court observed thus (SCC p. 667, para 161) "But the effects and consequences of noncompliance may alter with situational variations and particularities, illustrating a flexible use of discretionary remedies to meet novel legal situations . One motive says Prof. Wade for holding administrative acts to be voidable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Territory Manager (Sales) for Delhi, Hyderabad and Madras. (iv)Sales Executives for Delhi, Madras, Kanpur, Chandigarh, Baroda, Kochi, Calcutta, Bhopal, Pune and Coimbatore. These posts were advertised for in several newspapers as follows (i) The Times of India, Delhi and Bombay Edns. (ii)The Hindustan Times, Delhi Edn. (iii)Statesman, Calcutta Edn. (iv)The Hindu, All India Edn. (v) Deccan Herald, Bangalore. These advertisements appeared between 26-8-1991 and 29-8-1991. The eligibility conditions for the candidates was specified and with regard to the post of Territory Manager (Sales) it was mentioned that the candidates should be an Electronics/Electrical Engineer with 5/6 years experience of office automation products, Computer, Telecom equipments, etc. In response to advertisement Shri R. Satish Kumar applied for the post of Territory Manager (Sales) vide his letter dated 28-8-1991 enclosing thereby his bio-data. As per practice of the Respondent-Company the bio-data of all the applicants were scrutinised by the Personnel Department and thereafter by the Assistant General Manager of the Respondent-Company. Thereafter the shortlisted candidates were called for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult and different question. But even assuming that it was possible that the Central Government might be liable in a case of this nature, the learned Attorney General was right in contending that it was only proper that the Central Government should be able and authorised to represent the victims. In such a situation, there will be no scope of the violation of the principles of natural justice. The doctrine of necessity would be applicable in a situation of this nature. The doctrine has been elaborated, in Halsbury s Laws of England, 4th Edn., p. 89, paragraph 73, where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification, they might be authorized and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity. An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribunal can be constituted." Therefore, we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... points havecome to light- (i) M/s Hutchison Max India Ltd. in their bid document (Annexure D) have not given proper and full compliance. The TEC has observed : Compliance to Chapter III (Operative Conditions) and Chapter IV (Financial Conditions) has not been indicated by the bidder. Thus, it clearly shows that they have not complied with these important conditions which form the very basis of the financial bid. It is evident that the bidder has serious reservations about financial conditions and operative conditions and if granted a licence, there is a possibility of litigation. (ii)Since we require good operators with experience the minimum of 10 marks out of 15 for this parameter is considered a must and those bidders who have scored less than 10 for this parameter should be disqualified. This represents an experience of handling of 1 lakh cellular phones or 80,000 with a GSM licence. (iii)In accordance with the policy of the Government for encouraging foreign exchange investment only those who do foresee the inflow of foreign exchange should be considered. For this parameter the TEC had allocated 5 marks to those bids which were foreign exchange neutral. Those getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on single operator concept. However, we may, if approved by Telecom Commission and High-Power Committee, make a counter-offer to operate on a non-exclusive basis. After the operators are selected, tariff fixation and other licensing terms can be negotiated by the Telecom authorities. A separate note is being prepared for sending to the High-Power Committee based upon the observations that are likely to be made on this note. For approval, please. Member (Services) Member (Production) Member (Finance) Chairman (TC) sd/- (G.T. Narayanan) Adviser (Operations) 8-9-1992 The proposal on pre-page with all the relevant calculation sheets and TEC report, copy of the F.B. document, may please be sent to the HighPower Committee nominated by NOS (C) for its consideration and for making final recommendations to the Government Re selection of the licensees. sd/ 10-9-1992 Adv. (0) out of stn. DDG (TM) A brief note, copies of TEC report, financial tender document have been sent to the High-Power Committee. The note was shown to Member (S) before dispatch. (emphasis supplied) sd/ 10-9-1992 Adv. (O) sd/- G.T Narayanan 14-9-1992" 117.On 10-9-1992 the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icitor General is right in his submission. 5. Entry of Hidden Criteria - Whether valid? 118. In the original tender document, paragraph 2.2.1 in relation to the Subscriber s Capacity states as follows : "Subscriber Capacity: 1000 with modular expansion up to minimum 40,000 subscribers." In Section 11 of General Condition, clause 1(d) states "Copy of the agreement between the Indian and the foreign partner, if any foreign partner is proposed." Chapter 11 of General Conditions in paragraph 2.4.5 states "Experience of the Foreign operating partner;" On 8-9-1992 Mr G.T. Narayanan, Adviser (Operations) in his note in the file inter alia stated as follows : "Since we require good operators with experience the mini mum of 10 marks out of 15 for this parameter is considered a must and those bidders who have scored less than 10 for this parameter should be disqualified. This represents an experience of handling of 1 lakh cellular phones or 80,000 with a GSM licence." These hidden criteria came to be evolved in the following context. The Apex Committee indicated the parameters in which it stated that "... the committee decided to consider foreign companies who have experience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arati Cellular had experience of 81,085 lines of SFR France and 1982 lines EMTEL making a total of 83,067 lines. Added to this, Talkland had an experience of 1,70,000 subscribers. The reference to the marks awarded for comparative evaluation in this context is irrelevant. Besides, even assuming that in comparative evaluation the holding of the licence may be given some weight; cannot be made the governing factor in determining the experience of a bidder for the purpose of its eligibility. 123.As a result of 8-9-1992 recommendations, Bharati Cellular got all the four cities. BPL Systems and Projects got two out of four cities. Only Skycell got Madras. No fourth party got any city. Having realised that this decision will patently be unacceptable a relaxation was made on 9-10-1992 one day before the final decision whether those with less than one lakh lines experience could be considered for Calcutta and Madras. Even, on 9- 10- 1992, Bharati Cellular was evaluated vis-a vis SRF France and EMTEL Mauritius. There was no mention of Talkland. On 10-10-1992, Bharati Cellular was again evaluated vis-a-vis its collaborators SFR France and EMTEL Mauritius. In the affidavit filed in the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that at no point of time Talkland ever figured as Bharati Cellular s collaborator. SFR France, the foreign collaborator of Bharati Cellular had GSM Paris area (sic) 23-9-1992. As on 31-12-1991 it had 81,085 subscribers with no GSM experience. The number of subscribers was estimated to go up to 1,10,000 by 31-12-1992. On the date of submission of the bid it was expected to cross the one lakh mark. The other collaborator EMTEL Mauritius had only an experience of 1982 lines. In order to make Bharati Cellular qualify Talkland is also included as a foreign collaborator. This is factually wrong, as noted above, because at no point of time Talkland was thought of as foreign collaborator for Bharati Cellular. Even then, as seen from the file, Talkland is providing marketing, sales, customer care, billing services to both Vodaphone and Cellnet under contracts with both of them. This is evident from the material produced before us. It states : "Talkland s sole function is to distribute radiotelephone services. Unlike SFR in France it neither sets up nor manages networks. In the U.K. these two activities have been separated by the 1984 Telecommunications Act. While two operator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Connected Number Identification Presentation * Connected Number Identification Restriction * Malicious Call Identification * Call Forwarding Unconditional * Call Forwarding on Mobile Subscriber Busy * Call Forwarding on No Reply * Call Forwarding on Mobile Subscriber Not Reachable * Call Transfer * Mobile Access Hunting * Call Waiting * Call Hold * Completion of Call to Busy Subscriber * Three-Party Service * Conference Calling * Closed User Group * Advice of Charge * Freephone Service * Reverse Charging (Called or Calling MS) * Barring of All Outgoing Calls * Barring of Outgoing International Call except those directed to the Home PLMN Country. * Barring of All Incoming Calls * Barring of Incoming Calls when Roaming Outside the Home PLMN Country." 128. The reliance placed by Mr Koura and learned Solicitor General on paragraph 2. 1.1 of Section III of Commercial Conditions to include services is not correct because that speaks of the obligations of the licensee. That is obvious as seen under: " 2.1 Obligations of the Licensee: 2.1.1 The licensee shall operate and provide the SERVICES. He will be solely responsible for the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date on which the offer was made i.e. 20-1-1992. If the finding is rendered in favour of Bharati Cellular it will qualify. 132. The other "hidden criteria" alleged is about the same foreign collaborator. The Chairman, Telecom Commission, in relation to these criteria noted : "The element of competition will get vitiated if the two JVs with a common foreign partner were to be selected to provide the service at the same location." 133. Concerning this criterion the attack against BPL Systems and Projects, its foreign collaborator came to be changed in the middle and yet in violation of the conditions laid down in Chapter 11, clause 7 of the General Conditions. Originally, there were the following three foreign collaborators 1. France Telecom Mobile International, France 2. McCaw Cellular Commns. Inc., USA 3. LCC Inc., USA At the second stage of financial bid, the name of the third partner has come to be omitted. This is the argument of Mr Soli J. Sorabjee and Mr Harish Salve. The dropping of McCaw resulted in a change of the joint venture which was not permissible. This is answered by Mr F.S. Nariman, as noted above, that the deficiencies in tender conditions could be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the pre-qualifying conditions is a matter which it is for the KPC to assess. We have seen that the documents having a direct bearing on para 1 viz. regarding output of concrete and brick work had been supplied in time. The delay was only in supplying the details regarding hollow cement blocks and to what extent this lacuna affected the conditions in para 1 was for the KPC to assess court may place on the NIT, the way in which the tender documents issued by it has been understood and implemented by the KPC is explained in its note , which sets out the general procedure which the KPC was following in regard to NITs issued by it from time to time. Para 2.00 of the note makes it clear that the KPC took the view that para 1 alone incorporated the minimum prequalifying/ eligibility conditions and the data called for under para V was in the nature of general requirements . It further clarifies that while tenders will be issued only to those who comply with the prequalifying conditions, any deficiency in the general requirements will not disqualify the applicant from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases." 138. The High Court observed thus : "We also do not find any error on the part of the respondents in treating the financial bid of BPL in order if at that stage BPL dropped one of its three foreign collaborators (which were named by it at the technical bid stage) as otherwise financial bid satisfied all the criteria and dropping of one of the collaborators made no difference." It further observed : "We, therefore, find that stand of the petitioner that any undue preference had been given to some of the companies cannot be upheld. We even otherwise do not find that deviation or relaxation in the standards prescribed has resulted in any arbitrariness or discrimination. (See in this connection G.J. Femandez v. State of Kamataka17.) We do not think it is necessary for us to go into each and every deficiency as alleged by the petitioner we find that the action of the respondents had been bona fide. Motiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Chapter V : Tariffs of Document No. 44-24/91-MMC (FINANCIAL) without any deviations and reservations. Signature of the authorised signatory of the bidder/operating company For and on behalf of.................................. (Name of the company)" 141. The compliance statement, as submitted by Hutchison Max Telecom, is as under: "Compliance Statement This Company hereby agrees to fully comply with all Technical, Commercial and General conditions of Tender Document No. 44-24/91MMC including amendments/clarifications issued by the Department of Telecom without any deviations and reservations. This Company also hereby agrees to fully comply with all paragraphs of Chapter II : General Conditions and Chapter V : Tariffs of Document No. 44-24/91-MMC (FINANCIAL) without any deviations and reservations. Signature of the authorised signatory of the bidder/operating company. For and on behalf of HUTCHISON MAX TELECOM PRIVATE LIMITED sd/ (Ashwani Windlass) Director" In all the four separate tender documents similar compliance statements were filed. 142. Therefore, obviously, there is no reference to either Chapter III Operating Conditions or Chapter IV : F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error of his clerk, he has agreed to do work worth $ 1 0,00,000 for $ 1 0, he must be held to the strict letter of his contract, while equity stands by with folded hands and sees him driven into bankruptcy. The defendants position admits of no compromise, no exception, no middle ground. (82 Fed Rep 256)" 144. The alternate submission is the question of even clerical error does not arise here because one month before acceptance Hutchison Max had sent the compliance form. Where the matter is purely technical the court should not exercise the power of judicial review. We find great force in this submission. We are clearly of the opinion that the mistake is in relation to a non-essential matter that is in relation to peripheral or collateral matter. There has been every intention to comply with the terms of the bid. For an accidental omission it cannot be punished. We concur with the High Court. 145. Regarding Sterling Cellular the note dated 9-10-1992 inter alia states as under : "This J.V has the Indian partner M/s Sterling Computers Ltd. which is under investigation by CBI, in respect of their dealings with MTNL for publication of directories. Delhi H.C. has in recent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the holding of this company by the name Sterling Computers Ltd. in M N Publications Limited v. Mahanagar Telephones Nigam Limited8 by this Court and the strictures were only against MTNL and United India Periodicals Pvt. Ltd. (UPI) and United Database (India) Pvt. Ltd. (UDI). M/s Sterling Computers Ltd. had got associated with UPI/UDI in getting a supplementary agreement for publication of telephone directories for the cities of Bombay Delhi. This supplementary agreement was struck down. The Supreme Court in appeal Sterling Computers Limited v. M N Publications Limited5 against the judgment also did not appear to have made any strictures. There was nothing on the record of the respondents to suggest that any CBI enquiry was pending against this company. There was no FIR and no preliminary report adverse to the company and we feel the ghost of CBI has been unnecessarily brought into play. The company appears to have been punished for no sin of its. However, since the company has not complained we will leave the matter at that. , It is submitted by Mr Parasaran that as on the date of the judgment no inquiry was pending. It was only after 10-6-1993 an FIR was filed by CBI whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores and the annual turnover of the foreign parameters of Rs 51,000 crores. Comparatively speaking, the other companies do not possess such high credentials yet it has been awarded low marks with regard to the reliance on Indian public financial institutions and financial strength of the parameters/partner companies. These qualifications could have been validly urged had it been heard. Then, we do not know what decision could have been arrived at. 149. India Telecomp had been omitted for the following reasons as indicated in note dated 9-10-1992: "India Telecomp (Partner Telecom Malaysia) Limited experience. Telecom Malaysia already selected as partner of M/s Usha Martin Inc. Calcutta." We cannot find fault with this reasoning since there can be only one foreign collaborator. It cannot have Telecom Malaysia as its collaborator since Usha Martin has the same foreign collaborator. 150. In the case of Ashok Leyland, the noting, as seen above, is as under: "In both cases of (i) M/s Ashok Leyland and (ii) M/s Vam Organic Chemicals Ltd. a joint venture company has not been formed as stipulated in the tender, and there is no indication of the equity structure or the extent of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
