Telephone Cables Ltd. vs Bharat Sanchar Nigam Ltd. And Ors.
2001 Latest Caselaw 1866 Del

JUDGMENT

Mukul Mudgal, J.

1. This is an application for interim relief in a writ petition in which the petitoner has challenged the award of a part tender to respondent No.4, M/s. NICCO Corporation Ltd. (hereinafter referred to as the "NICCO') by the Bharat Sachar Nigam Ltd (hereinafter referred to as BSNL) which is a public sector undertaking and indisputably amenable to writ jurisdiction. The petitoner is M/s Telephone Cables Ltd., the respondent No.1 is Bharat Sanchar Nigam Ltd., the respondent No. 2 is the Director (MMT), BSNL, the respondent No.3 is the CGM(QA), BSNL & respondent No.4 is the NICCO Corporation Ltd. The writ petition avers as under:

On 27.3.01, the respondent No.1 invited tenders for supply of 441 LC KM (expand) of Polythene Insulated Jelly Filled (PIJF) cables. Different shares of the tendered quantity is awarded to the bidders in accordance with their Vendor Rating (VR) consisting of 3 components namely Delivery Rating (DR) having a weightage of 30%, Price Rating (PR) having a weightage of 60% and Quality Rating (QR) having a weightage of 10%.

The bidders are evaluated and allocated the shares in the tendered quantity as per their vendor Rating which is based upon Price Rating, Delivery Rating and Quality Rating and the DR was arbitrarily altered at the request of respondent No.4 thereby entitling it to a higher amount which the petitoners claim that it is not entitled to get. The Petitoner challenges the unilateral alteration of the delivery rating in favor of respondent No.4. The Delivery Rating depends upon the past performance generally over a period of two years which is considered the window period as per clause 19.3.1 and representations can be made by those seeking to get their Delivery Rating altered within the period specified. The petitioner's claim is that if it had emerged as V-1 vendor it would have been awarded the quantity of 15.2 LCKM as V-1 vendor gets 30 percent of the tendered quantity in the particular Cable Size. The petition challenges the order in favor of M/s NICCO Corporation, the respondent No.4, which was said to be given the benefit of an arbitrary method of altering and enhancing its DR which has had the effect of displacing the petitioner form its V-1 position in 10 x 0.5 (UA) Cable Size, and increase in 5.37 LCKM in the quantity awardable to respondent No.4 at the cost of the petitioner. While seeking alteration of the Delivery Rating the respondent No.4 claimed that during the window period it was affected by floods in their factory in Kalyani at West Bengal and accordingly invoked Force Majeure clause and initially the relief on this score was granted by respondent Nos.1 to 3 extending the delivery period by 30 days only and further enhancement of this already extended period of 30 days was made only after the opening of the tender. The petitioner challenges the latter and the second extension of the delivery period in favor of respondent No.4. The relief given to the respondent No.4 was illegal and such relief given in May/June 2001 ought not to have been taken into account for revising the Delivery Rating in respect of a tender for which the date of NIT is 27th March 2001 and the date of bid of opening is 22nd May 2001. The Learned Senior Counsel for the petitioner, Shri Amarjit Singh Chandhiok, has also relied upon Clause 22(d) of the Tender Conditions of the Bid Document to contend that any modifications obtained by the supplier on his request made after the date of NIT which affects the existing Delivery Rating will not be taken into account. It was also contended that there was no scope, reason or occasion to revaluate respondent No.4's DR particularly after the opening of the tender on 22nd May, 2001. The petitoner thus averred that respondent No.4 was being unduly favored and at the expense of the petitioner.

2. Mr. Mukul Rohtagi, the learned Addl. Solicitor General raised the plea that the writ petition is not maintainable in view of the arbitration Clause 20.1 which reads as follows:

20.1 In the event of any question, dispute or difference arising under this agreement or in connection therewith (except as to the matters, the decision to which is specially provided under this agreement), the same shall be referred to the sole arbitration of the CMD, BSNL, New Delhi or in case his designation is changed or his office is abolished, than, in such case to the sole arbitration of the officer for the time being entrusted (whether in addition to his won duties or otherwise) with the functions of the CMD, BSNL or by whatever designation such an officer may be called (hereinafter referred to as the said officer), and if the CMD, BSNL or the said officer is unable to unwilling to act as such, then to the sole arbitration of some other person appointed by the CMD, BSNL or the said officer. The agreement toll appoint an arbitrator will be in accordance with the Arbitration and Conciliation Act 1996.

There will be no objection to any such appointment on the ground that the arbitrator is a BSNL Servant or that he has to deal with the matter to which the agreement relates or that in the course of his duties as a BSNL Servant he has expressed his views on all or any of the matters in dispute. The award of the arbitrator shall be final and binding on both the parties to the agreement in the even of such an arbitrator to whom the matter is originally referred, being transferred or vacating his office or being unable to act for any reason whatsoever, the CMD, BSNL or the said officer shall appoint another person to act as an arbitrator in accordance with terms of the agreement and the person so appointed shall be entitled to proceed from the stage at which it was left out by his predecessors.

3. It was further submitted that the impugned extension sought by respondent No.4 was in respect of a past contract where the petitioner was not a party and in this petition such an extension cannot be collaterally challenged. He further relied upon the judgments . He further submitted that i so far as respondent No.1 is concerned, it has been held that there must be some element of public interest involved before the interference by way of an interim order can be granted. He further submitted that both the petitoner and the respondent No.4 had got orders worth Rs. 70 crores each and thus there was no element of public interest involved as sought to be canvassed by this writ petition.

4. Mr. Kapil Sibal, learned senior counsel, appearing for respondent No.4, in addition to the pleas of Mr. Mukul Rohtagi, learned Addl. Solicitor General, submitted that even if the petition were to be succeed, the price at which the tendered goods were to be brought would remain the same and there is no benefit to the Government and the public and consequently no public interest necessiating interference under Article 226 of the Constitution of India is involved. He further submitted that a dispute merely qua quantity cannot be the subject matter of a writ petition. He further submitted in in December 2000 while seeking the change in Delivery Rating, it could not have been contemplated that there will be a fresh tender in March 2001 and that such a decision in favor of respondent No.4 would affect the petitoner particularly when no mala fides are alleged.

5. In rejoinder, Mr. Chandhiok submitted that the plea of the arbitration clause being a bar to the writ petition jurisdiction cannot be considered as it only applies after the contract had been entered into and in so far as the present case is concerned, it is governed by Clause 30 of the NIT which reads as under:

30. Court jurisdiction: The contract shall be governed by Indian Laws and courts at Delhi/New Delhi will have jurisdiction to entertain any dispute or claim arising out of this tender till issue of authorisation letters of Circles for placement of Purchase Orders (POs).

He further stated that the present writ petition has been filed prior to the stage at which the contract is to be entered into. He further submitted that it is evident that the respondent No.1 has itself stated in its counter affidavit that extension of period of 30 days was granted to the respondent No.4 and the period of 45 days sought to be relied upon by the respondent No.4 in order to claim higher amount is not even borne out the stand taken by the respondent No.1.

6. Considering the rival pleas as to maintainability I am of the view that this petition cannot be thrown at the threshold on the ground of the existence of an arbitration clause. Prima facie it appears that it is Clause 30 of the NIT which governs the present petition and not the arbitration clause as no contract had been entered into at the relevant time bringing into play Clause 20.1, the arbitration clause which may have the effect of affecting the maintainability of this writ petition.

7. However, coming to the merits of the matter, I am not prima facie satisfied that the recalculation of Delivery Rating in respect of the past contract which alteration according to the petitoner operates favorably qua the respondent No.4 at the cost of the petitoner can be considered sufficient to grant an interim order in favor of the petitoner and evaluating the balance of convenience. The petitoner is not suffering because it has also got an order of equal amount worth Rs. 70 crores and this is a significant & relevant factor in considering the grant of interim relief to the petitoner in the writ jurisdiction. The recalculation and the calculation of the Delivery Rating is in term of complex technical formula and prima facie the petitoner had not been able to demonstrate that the extension of 30 days to 45 days by respondents 1 and 2 in favor of respondent No.4, was of such a nature as to require to grant of a an interim order in favor of the petitioner. Furthermore, the plea of the petitoner that at the relevant time, the respondent No.4's manufacturing output was NIL and the supply of cables by respondent No.4 in November 1998 prior to the floods could not be taken into account and cannot be gone into in writ jurisdiction, particularly at the interim stage. The Tender Evaluation Committee has gone into the evaluation of the rival tenders and at the initial stage this court cannot sit in judgment over the decision of the Tender Evaluation Committee, particularly in a complex and technical matter.

8. Accordingly, I am of the view that interim relief, claimed by the petitioner cannot be granted. However, the award & operation of the tender will be subject to the result of the writ petition.