Escotel Mobile Communications ... vs Union Of India
1997 Latest Caselaw 320 Del

JUDGMENT

C.M. Nayar, J.

(1) The present petition is directed against the respondents for quashing the Circular No. 842-65(B)/95 dated January 16, 1997 issued by respondent No. 1. The said Circular may be reproduced as follows: "NO.842-56(B)/95Dated: 16.01.97 To 1. M/s Modicom Network (P) Ltd. 2. M/s J.T.Mobiles Ltd. 3. M/s Escotel Mobile Communications (P) Ltd. 4. M/s Aircell Diglink India Ltd. Sub: Service Area for Cellular Mobile Telephone Service in Punjab & Haryana circles. Dear Sir, Some queries has been raised regarding whether Panchkula belongs to Punjab or Haryana circle. In the above regard, it is clarified that the service areas for Haryana & Punjab Telecom Territorial circles will be the area of these circles as on the date of tender for the service. In the present case, Panchkula being part of Punjab Telecom circle will be included in the service area of licences for Punjab circle. The licensers for Haryana circle are not allowed to operate the service in Panchkula. (KULDIP SINGH) Director (V AS-I)"

By Tender No. 11-28/94-MMT(TM), respondent No. 1 invited tenders for Cellular Mobile Telecommunication Services in telecom territorial circles as stated in the tender Notice. The Notice Inviting Tenders reads as follows: "PARTI Section I Department Of Telecommunication (GOVERNMENT Of INDIA) Notice Inviting Tenders Mmt Cell Tender No. 11-28/94-MMT(TM) Tender available from 16-1-95 Due date-31.3.1995, 10.30 Am Opening date - 31.3.1995; 11 Am The Department of Telecom proposes to introduce Cellular Mobile Telephone Service in the following Telecom Territorial Circles except areas specifically excluded as mentioned below in the country. 1. Andaman & Nicobar 2. Andhra Pradesh 3. Assam 4. Bihar 5. Gujarat 6. Haryana (Except the local areas served by Faridabad and Gurgaon Telephone Exchanges) 7. Himachal Pradesh 8. Jammu & Kashmir 9. Karnataka 10.Kerala 11. Madhya Pradesh 12. Maharashtra (Except the local areas served by Kalyan Telephone District). 13. North East 14. Orissa 15. Punjab 16. Rajasthan 17. Tamil Nadu (Except area covered by Maraimalai Nagar Export Promotion Zone (MEZP), Minjur and Mahaballipuram). 18. Uttar Pradesh (Except the local telephone area of Ghaziabad, Noida) 19. West Bengal. Note : Following 4 Metropolitan cities for which tenders have already been invited are excluded from the scope of this tender: (1) Delhi (2) Bombay (3) Calcutta (4) Madras. On behalf of President of India sealed tenders are invited from Indian Companies registered under Indian Companies Act, 1956 for providing this service workable on Licence by the Dg, Telecom on NON-EXCLUSIVE basis. Tenderers are free to bid for all or any number of the Circles cited above. Offer should conform to Groupe Speciale Mobile (GSM) standards in the 900 MHz band. The Selected Licensee Will Have To Provide And Operate The Service According To The Terms And Conditions Laid Down By The Department Of TELECOM. The Intending tenderers may obtain copy of the tender documents containing conditions along with relevant specifications from the section officer (MMT), Room No. 1222, Sanchar Bhawan, 20 Ashoka Road, New Delhi from 16.01.1995 between 3 Pm to 4 PM. on payment of Rs. 50,000.00 (Rupees Fifty Thousand only, NON-REFUNDABLE). The payment will be accepted in the form of a Crossed, Account Payee Demand Draft drawn on any Scheduled Bank in New Delhi in favour of the "Pay & Accounts Officer (HQRS), Deptt. of Telecom, New Delhi".

The schedule of area of service for Mobile Cellular Telephone Service will also show Haryana as one of the areas (except the local areas served by Faridabad and Gurgaon Telephone Exchanges). Reference is also made to general conditions as incorporated in the tender documents to reiterate that Panchkula will form part of Haryana on the basis of its geographical position. Clause 2.4 reads as follows:    "2.4DOT reserves the right to operate Cellular Mobile Telephone Service itself or through a designated public authority in any or all geographical areas mentioned above."  

The clarification on tender document is referred to in clause 3 which reads as follows:    "3.CLARIFICATION On Tender DOCUMENT: Prospective bidders, if they so desire, may send any of their queries on the clauses of this tender in writing to Director (MMT), D.O.T., Sanchar Bhawan, 20, Ashoka Road, new Delhi-110 001 so as to reach latest by 1600 hrs. of 15th February, 1995. Consolidated replies to the relevant queries so received will be circulated to all the prospective bidders which shall form part of these Tender Document."  

The replies to queries received in terms of the above clause find place in tender documents filed as Annexure P-2 to the writ petition. Paragraphs 15.1 and 50.1 along with answers read as follows:     

 "15.1After award of licence there should be no change/reduction in the service area awarded to the licensee in the event Government may alter/modify the boundaries of the presently defined Telecom circles .............. Yes 50.1 Please confirm whether per geographical area referring to per circle awarded to the licensee .......... YES"
 

The licence agreement dated December 12, 1995 was entered into between the parties. Clause I of this Agreement may be referred to as follows: "1. In consideration of observance of mutual convenants as well as the licence fee payable in advance in terms of schedule 'B' and due performance of all the terms and conditions on the part of the licensee, the Licensor does hereby grant on non-exclusive basis licence to establish, maintain and operate Cellular Mobile Telephone Service up to the subscriber's terminal connection in the area "HARYANA Circle except local area served by Faridabad and Gurgaon Telephone Exchanges" (hereinafter called the Area on the terms and conditions mentioned in Schedule "B" annexed hereto." The learned counsel next refers to the following communications to reiterate that the petitioners had actually bid for Haryana circle which will include Panchkula as well: "Date: 9th Feb. 1996 To The Chairman, Telecom Commission, Ministry of Communication, Sanchar Bhawan, New Delhi-110001. Kind Attn. : Mr. Kuldip Singh Director (V AS-I) . SUB: Submission of Engineering details as per Clause no. 13.3 of License Agreement for Cellular Mobile Telephone Service in Haryana, Kerala & UP(West). Dear Sir, In accordance to the condition mentioned in Clause 13.3. of the License Agreement for Cellular Mobile Telephone Service in Haryana, Kerala & U.P. (West), we hereby duly submitting the Engineering Details, within the period of 2 months of signing the Licence Agreement. . The Engineering Details enclosed covers Clause no. 13.3.(a)(b) & (c). The Clause 13.3. (d) where the detail maps indicating all Transmitter sites with coverage. Msc & Bts site etc. are to be submitted, will be made available to you as soon as the sitting clearance from Wpc & Sacfa as well as the Maps of the restricted areas are arranged. Kindly feel free to contact us if you need any further details. "ESCOTEL/DOT/IS/ACK 9th August, 1996 Reminder - 2 The Ddg (VAS) Department of Telecommunications Sanchar Bhawan Ashok Road New Delhi. Sub: Identification of Physical Geographical Boundaries; Gsm Cellular Service Areas; Haryana, UP-West and Kerala Dear Sir, Reference is made to our letter no. DOT/2/ACK dated 22nd May, 1996 and subsequent reminder dated dated 8th July, 1996. We had requested your goodself to kindly identify and lay down detailed physical geographical boundaries of our service area with respect of adjoining circles/areas such as; Delhi/Punjab/Rajasthan/UP-West/Tamil Nadu/Karnataka, etc. In particular, we wanted to know the physical geographical boundaries for Noida/Ghaziabad/Dadri/ Faridabad/Gurgaon/ Panchkula and Chandigarh. As now, we are in the final phase of the implementation of our network and preparing launch of our service. We will request you that we may please be intimated on the subject so that subsequently there are no disputes with our adjoining operators. The sites were allotted to the petitioners in Panchkula, Haryana which will be indicated from reading of the communication dated September 20, 1996 filed as Annexure P-9 which reads as follows: September 20,1996 Memorandum Sub: Siting clearance of 14 sites for Cellular Mobile Telephone Service in Haryana Circle by Escotel Mobile communications Limited The undersigned is directed to refer to your application (s) on the above subject and to say that the Standing Advisory Committee on Radio Frequency Allocation (SACFA) in its meeting held on 26.7.1996 has approved the following sites with the parameters against each and conditions indicates as per Annexure 1 and 2 respectively. This clearance does not imply the authorisation of frequency or grant of licence for which a separate application may be filed. Similar references are made to various documents filed with the writ petition to reiterate that Panchkula forms part of Haryana Circle as the town is geographically included in Haryana and the bid of the petitioners will, therefore, include that town as well for its services. Respondent No. 1 has filed its counter affidavit where in it is pleaded as follows: A. The tenders were invited for the operation of Cellular Mobile Telephone Service in 20 Telecom territorial circles on a non-exclusive licence basis. M/s Escotel Mobile Communications Ltd. was one of the bidder companies who participated in the tender. B. The tender provided in detail all the conditions along with details of the areas where the services were to be provided. The service areas for which the tender was invited were the "Telecom Territorial Circles" and not the geographical boundaries of the States. For example, the North East Circle comprises more than one Indian State whereas there are two telecom circles in U.P. namely U.P.(East) and U.P.(West). Moreover, Annexure Ii of the tender provided a list of offices from where the detailed data on the specific areas covered in each territorial circle could be obtained and the bidders were given ample time and information to clarify each and every detail before submitting their completed tender forms. C. The petitioner company was well aware of this method of demarcation of the service areas and this is very clear from the fact that the petitioner is also a licensee for the telecom territorial circle of U.P.(West). Therefore, it is contended that Haryana Telecom circle was not defined as Haryana except the local areas served by Faridabad, Gurgaon Telephone Exchanges. There is clear misrepresentation that the term geographical areas in the tender refers to the telecom circle awarded to the petitioners. Panchkula. is not a part of Telecom circle, therefore, there was no/question of explicitly mentioning it to have been excluded from the Haryana telecom circle. Respondents 2 and 3 have also filed their counter affidavits wherein emphasis is made that the Department of Telecom only proposed to introduce Cellular Mobile Telephone Service in the Telecom Territorial circle and the inclusion of a town on geographical basis in that circle was never intended to. Panchkula is part of Chandigarh Telecom circle which is a part of Punjab circle. The petitioners never bid for that circle and, therefore, they are not entitled to any relief in this writ petition. The petitioners, in any case, have entered into licence agreement dated December 12, 1995 with respondent No. 1. There is a specific arbitration clause for settlement of disputes between the parties. The same reads as follows: "ARBITRATION Of Disputes '(a) In the event of any question, dispute or difference arising under this licence or in connection thereof, except as to the matter, the decision of which is specifically provided under this licence, the same shall be referred to the sole arbitration of the Director General, Telecommunications, or in case his designation has changed, or his office is abolished, then, in such case, to the sole arbitration of the officer for the time being entrusted, whether in addition to the functions of the Director General, Telecommunications or by whatever designation such officer may be called (hereinafter referred to as the said officer), and if the Director General, Telecommunications or the said officer is unable or unwilling to act assuch, to the sole arbitration, then so other person appointed by the Director General, Telecommunications or the said officer. (b) There will be no objection to any such appointment that the arbitrator is a Government servant, or he has to deal with the matter to which the licence relates, or that in the course of his duties as a Government Servant, he has expressed views on all, or any of the matter in disputes or in differences. The award of the arbitrator shall be final and binding on the parties. It is a term of this licence, that in the event of such Arbitrator, to whom the matter is originally referred to, being transferred or vacating his office, or being unable to act for any reason whatsoever, such Director General, Telecommunications or the said officer shall appoint another person to act as Arbitrator, in accordance with the terms of the licence and the person so appointed shall be entitled to proceed with reference to the stage at which it was left out by his predecessor. (c) The Arbitrator may, from time to time, with the consent of the parties, enlarge the time for making and publishing the award. The Arbitration Act, 1940, the rules made thereunder and any modification thereof, for the time being in force, shall be deemed to apply to the arbitration proceedings as above. (d) Upon any and every reference as aforesaid, the assessment of costs and incidental expenses in the proceedings for the award shall be at the discretion of the Arbitrator."

(2) The present petition on the basis of the averments and contentions as made above, will clearly establish that the disputes have arisen between the parties as to whether Panchkula will form part of Haryana Telecom circle or will be included in Chandigarh/Punjabi circle. The matter is not free from doubt and the present proceedings under Article 226 of the Constitution of India will not be an appropriate remedy as the controversy raised between the parties will require adjudication of facts and the interpretation of tender documents. The licence agreement provides an arbitration clause which will determine the inter-se disputes and differences between the parties. The petitioners are, therefore, provided with an equally efficacious alternative remedy which they can take recourse to.

(3) The learned counsel has raised the plea that respondents I and 2 are bound by the principles as incorporated in the doctrine of Promissory Estoppel. The respondents have clearly by words and subsequent conduct held out to the petitioners that Panchkula will form part of the Haryana Telecom circle whereas the learned counsel for the respondents have argued that there has been no unequivocal promise which intended to create legal relations or affect a legal relationship between the parties. The doctrine has been explained in the judgment of the Supreme Court as reported in M/s Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh and others . The relevant passage may be referred to as below: "The true principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre-existing relationship between the parties or not."

(4) The facts of the present case and the contentions raised in this petition cannot positively establish that respondents I and 2 have held out any clear and unequivocal promise. The matter will require consideration as to whether the bid submitted by the petitioners for Haryana Telecom circle will include Panchkula or whether it will form part of Chandigarh and Punjab circle and this can only be adjudicated by appropriate proceedings as envisaged in the agreement entered into between the parties. This contention can also not be entertained and is liable to be rejected.

(5) In view of the above, there is no merit in this petition and the same is dismissed in limine.

(6) Nothing expressed herein shall be construed as decision on merits of the claims of the parties in case they choose to avail of any other remedy as provided in law.