Nokia India Private Limited vs Mahanagar Telephone Nigam ...
2003 Latest Caselaw 814 Del

JUDGMENT

1. Rule D.B.

2. Since the subject-matter of the writ petition does not brook any delay and we have heard learned counsel for the parties at considerable length, we proceed to dispose of the matter finally at this stage itself.

3.The petitioner, a company incorporated under the Companies Act, 1956, claiming to be the Indian arm of a world renowned company in the field of telecommunication equipments and technology, calls in question the decision taken on their representations by the Chairman-cum-Managing Director (CMD in short) of the Mahanagar Telephone Nigam Limited (for short the MTNL), a public sector undertaking, also engaged in providing telecommunication services in Delhi and Mumbai. By the impugned decision, the CM has rejected petitioner's representation praying for condensation of a few minutes delay in submission of the tender documents and its acceptance and consideration along with other bids received by the MTNL.

4. Briefly stated, the background facts are as follows:

The MTNL floated a tender, dated 5 October 2002, inviting bids under two bid system (Techno-commercial and Financial bid) for the turnkey project for commissioning 400K Lines GSM Technology equipment at Delhi and Mumbai each. The value of the tender was approximately Rs.600 Crores. Originally, the last date for submission of bids by the prospective bidders was up to 1400 hours of 16 December 2002. However, the last date was extended to 1400 hours of 21 May 2003. Consequently, the date for opening of techno-commercial bids was also extended to 21 May 2003 at 1500 hours. As per the process of selection, the technical bids were to be opened first and after its evaluation, the financial bids of only eligible bidders were to be opened and the tender was to be awarded accordingly. According to the petitioner, for the submission of tender documents, on 21 May 2003, their representatives reached the porch of the Jeevan Bharti building in Connaught Circus, New Delhi at 1355 hours. On reaching there, they found that the lifts were not available to reach the 12th floor of tower No.1 of the building, where MTNL's corporate office is situated as some of the lifts were not functioning. Their two representatives rushed to the 12th floor along with a couple of bid boxes and other documents, to be filed in the office of the MTNL. On reaching the 12th floor (just before 1400 hours i.e. before the deadline for submission of bids), they found that no responsible person was available in the conference room to accept the bid boxes. As they were searching for the staff concerned, one of their representatives managed to locate one Mr. Balbir Singh, SDE, who was requested to accept the bid documents. Mr. Singh did not accept the documents and instead consulted his senior officer namely, one Mr. Khuggar, who advised him to accept the bid documents since it was only 1402 hours. Mr. Singh returned to the conference room and started entering the name of the petitioner in his register but, on objection being raised by the other bidders, the bid documents were not accepted. It is also stated that Mr. Khuggar had also confirmed the time of submission of the bid documents as 1404 hours.

Thereafter, the two representatives of the petitioner made written representations to the CMD, narrating the sequence of events and praying for condensation of delay and acceptance of the tender documents. It is alleged that though no formal outcome/decision of the meeting, which was stated to have been held between the officials of MTNL, was conveyed but petitioner's tender documents were removed from the premises of MTNL. The technical bids of other tenderers were however opened by 5.30 PM. Aggrieved by the inaction of the CMD, on 22 May 2003, the petitioner made a representation to the Minister of State for Communication, requesting him to intervene in the matter for the larger interest of the MTNL. Having failed to receive any response from the minister, the present writ petition was filed.

5. The petition is resisted by the respondents. In the affidavit in opposition, while disputing that the delay in submission of the tender documents by the petitioner was on account of non-availability of lifts, it is stated that complete bid documents having not been submitted by the prescribed time, there being no ground to condone the delay or relax the deadline for submission of bid, as per the terms and conditions of the tender, the MTNL had no option but to reject and return the same. It is submitted that as such there is no ground for this Court to interfere with the impugned decision in exercise of its extraordinary jurisdiction of judicial review.

6. In the rejoinder affidavit, it is submitted that the CMD having recently, in similar circumstances, in the case of M/s. Lucent Technologies, condoned the delay, he had, in the instant case failed to exercise his discretion in public interest, by arbitrarily disallowing the petitioner to participate in the tender, his impugned decision be set aside and the respondent be directed to entertain the tender of the petitioner for consideration.

7. We have heard Mr. Kapil Sibal, learned senior counsel for the petitioner and Mr. Soli J. Sorabjee, learned Attorney General of India for the MTNL.

8. Relying on Clause 21 of the tender conditions, Mr. Sibal has vehemently contended that since the said Clause confers a discretion on the CMD to accept the bids received after the due time, on its own terms the said Clause cannot be taken as inflexible, rigid or mandatory and, as there was substantial compliance with the same, the discretion should have been exercised in favor of the petitioner and their bid should have been entertained. It is maintained that the discretion vested in the CMD had not been properly exercised, as abnormal and extraordinary circumstances did prevent the petitioner from presenting the bid by the prescribed time; that the decision of the CMD without making proper enquiry on its stand is arbitrary, particularly as the technical bids having been opened at 1730 hours instead of the scheduled time at 1500 hours, the time was not the essence of the acceptance of the tender. More so when a larger number of bids would have been in the interest of the MTNL and public as it would have ensured healthy and fair competition.

9. In support of the proposition that had the bid been accepted even after the prescribed time, but before all the bids were opened no prejudice would have been caused to anyone, learned counsel relied on a decision of this Court, dated 8 July 2003, in M/s. Budhiraja Electricals Limited Vs. DSIDC (CWP 4229/2003) to contend that the CMD should not have insisted on a strict and literal compliance of Clause 21. .....not later than ..........", in Clause 20 of the tender conditions emphatically prescribed the deadline for submission of bids; (ii) bids received ...........after the prescribed time ..........as per Clause 20 shall be rejected......" and (iii) the provision for a contingency of rejection and return of bids for non-compliance with the clause, leave no room for doubt that the tender conditions are mandatory and admit of no exception or relaxation. In support of the proposition, reliance is placed "may be rejected", as appearing in the old clause of the tender documents, have been consciously replaced by the words "shall be rejected" in the new Clause, the intention of the amendment is clear, namely to make it mandatory and, therefore, ...the process of tender/bid and award of contracts it is necessary that the tender conditions are complied with scrupulously otherwise it will encourage and provide scope for discrimination, arbitrariness and favoritism, which are totally opposed to the rule of law and our constitutional values. Finally, it is urged that the CMD having exercised his discretion after making proper enquiries, his decision cannot be termed as irrational or perverse, warranting interference by this Court.

10. Though, learned senior counsel for both the sides have addressed us at some length on the question whether Clause 21 of the tender conditions is mandatory or directory, we feel that, having regard to the facts of the case, where, admittedly, complete tender documents were not presented by the petitioner by the stipulated time and the petitioner having in fact invoked the power of the CMD to condone the delay in the submission of the tender documents and the CMD having in fact taken a decision on their representation, it is unnecessary for us to go into this question. Thus the only question which survives for consideration is as to whether the decision taken by the CMD on petitioner's representation warrants interference by this Court.

11. Scope of interference with an administrative action has been subject matter of various decisions of the Supreme Court. The basic principle of judicial review to judge the validity of the administrative action, which has been consistently followed in this country, is commonly called "Wednesbury principles" expounded in Associated Provincial Picture Houses Limited Vs. Wednesbury Corporation (1948) 1 KB 223. In this decision Lord Greene M.R. said that interference with an administrative action was not permissible unless one or the other following conditions were satisfied, namely, the order was contrary to law, or relevant factors were not considered, or irrelevant factors were considered; or that the decision was one which no reasonable person could have taken on a particular set of facts.

12. Dealing with the same subject in Tata Cellular Vs. Union of India , the Apex Court, while observing that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism, said that the judicial review is concerned not with the merits of the decision but with the manner in which the decision was made. Their Lordships of the Supreme Court culled out the following three broad grounds upon which an administrative action could be subjected to control by judicial review:

(ii) irrationality, namely, Wednesbury unreasonableness.

13. Again, in Apparel Export Promotion Council Vs. A.K. Chopra , the Apex Court observed thus:

...the administrative authority after following the principles established by law and the rules of natural justice and the individual has received a fair treatment to meet the case against him, the court cannot substitute its judgment .... it was in defiance of logic or moral standards. ...

14. ...

15. Thus, what emerges from all these decisions is that judicial review under Article 226 of the Constitution cannot be converted into an appeal. Judicial review is not directed against the decision but is confined to the examination of the decision-making process. Where an administrative action is questioned as arbitrary under Article 14 of the Constitution, the role of the Court is confined to "Wednesbury principles". In other words, while examining an administrative decision, what has to be borne in mind is whether the administrative order is rational or reasonable; arrived at after following the principles established by law and by taking into account all the relevant factors and is not manifestly unreasonable that no reasonable authority, entrusted with the power in question, could reasonably have made such a decision. If the decision is within these parameters, the Court cannot substitute its decision for that of the administrative authority.

16. Applying these broad principles on the facts in hand, we are of the considered view that the present case falls short of what the law requires so as to justify interference by us.

17. Since a lot of emphasis is laid on Clause 21 of the tender documents, at this stage, we may take note of the said Clause, which reads as under:

Any bid received by the Purchaser after the prescribed time for submission of the bid as per Clause 20, shall be rejected and returned unopened to the bidder. However, in abnormal/ extraordinary circumstances, where CMD MTNL considers that the delays...

18. The Clause envisages that any bid received after the prescribed time for submission of the bids shall be rejected. A discretion is, however, conferred on the CMD to receive a bid submitted after the prescribed time where, under abnormal and extreme circumstances, he considers the delay to be beyond the control of the bidder. It is true that when a discretion is vested in an authority, the exercise of such power is coupled with a duty and it must be exercised in favor of the affected party if the conditions stipulated in the relevant provision are fulfillled. Nevertheless, the satisfaction in regard to the fulfilllment of the conditions has to be of the authority concerned.

19. Thus, the short question which falls for our consideration is whether the decision taken by the CMD, to the effect that the petitioner has failed to make out a case for acceptance of a complete bid after the prescribed time, can stand the test of Wednesbury principles or not?

20. As noticed above, the stand of the petitioner, as reflected in the two representations, dated 21 May 2003, is that they could not submit complete tender documents by the prescribed time because the boxes containing the bids had to be carried to the 12th floor of the building by climbing the stairs because of the non-availability of the lift. The main thrust of Mr. Sibal's argument is that the satisfaction of the CMD to the effect that the delay in tendering the bid documents was not beyond the control of the petitioner as there were no abnormal and exceptional circumstances, as pleaded by them, was arrived at without making proper enquiries and the petitioner's representations had been rejected arbitrarily, without application of mind, under pressure from other bidders. The submission is that the case of the petitioner throughout had been that the boxes containing bid documents could not reach the 12th floor on time because of "non availability" of the lift, whereas what is stated in the reply affidavit of the respondent is that the CMD had reached the afore noted conclusion after conducting an enquiry from the Estate Officer whether all the lifts were "working" or not. This, according to the learned counsel, shows that the decision of the CMD is based on irrelevant consideration which also reflects total non-application of mind on his part.

21. Pursuant to our direction, the original file dealing with the representations, made by the petitioner has been produced before us. The file was inspected by Mr. Sibal also. As per the said record, on receipt of the first representation, a note was put up by the Divisional Engineer to the DGM (MM-II), stating the factual position. In the said note, while controverting the stand of the petitioner that the bids had reached between 1405 to 1410 hours and noting that these were available on 12th floor only at 1415 hours, it has been recorded that the representative of the petitioner had met the said officer on 1404 hours without bid documents and had informed him that the bids were lying downstairs and were being brought up. Till 1408 hours the bids were not available. It appears that on receipt of the said note, the DGM after making enquiries from the Estate Manager, noted that three out of the four lifts were in working order...

22. Having gone through these nothings, we are unable to read any illegality or irrationality into the decision taken by the CMD as alleged. The issue before the CMD was whether the petitioner was in any way handicapped in getting his bid boxes to the 12th floor on account of non-availability of the lift, as claimed by them. Non-availability of a lift could be because of non-working of the lifts or because of the passenger traffic. Though, having regard to the entire exercise in question, namely, the tender process, which was time bound, even the non-availability of the lift may not constitute an abnormal or exceptional circumstance, as the petitioner was aware that the bid documents were to be submitted on the 12th and/or 13th floor of the building, and, therefore, the CMD could have declined to intervene in the matter at the threshold but having regard to the fact that CMD chose to go into the cause for delay, it is unnecessary for us to comment on this aspect of the matter. Be that as it may having glanced through the record produced before us, we find it difficult to hold that the decision of the CMD is based on irrelevant factors, as alleged by the petitioner. We have no hesitation in holding that the impugned decision does not suffer from the vice of arbitrariness or that it is so manifestly unreasonable that no reasonable authority, properly instructed on the facts of the case, could have made such a decision, warranting our interference in judicial review.

23. We are also unable to persuade ourselves to agree with learned counsel for the petitioner that entertainment of petitioner's bid would have been in the larger public interest and in the interest of the MTNL as well because petitioner's bid would have ensured more competitiveness amongst the bidders. As observed by the Apex Court in Patel Engineering Company (supra), to maintain the sanctity and integrity of the process of tender, the tender conditions are required to be complied with scrupulously.

24. For the foregoing reasons, we do not find any ground to interfere with the impugned order. The writ petition is misconceived and is accordingly dismissed with costs, quantified at Rs. 25, 000/-. Out of the said amount, Rs. 10, 000/- shall be deposited by the petitioner with the Delhi High Court Legal Services Committee within a week from today. The rule is discharged.