Hbl Nife Power Systems Ltd. vs Union Of India (Uoi) And Anr.
2005 Latest Caselaw 1407 Del

JUDGMENT

Vikramajit Sen, J.

Page 1494

1. In this writ petition it has been prayed that a writ, order or direction be issued to the Respondents requiring it to issue RFP (Request For Proposal) to the Petitioner in respect of Submarine Batteries Types I, II and III as the Petitioner is already registered with DGQA for various items including advanced batteries and sample cells, which are alleged to be the most critical part of submarine battery; cancelling the Proprietary Article Certificate (PAC) issued to Exide Batteries; and directing the Respondents to forthwith issue RFP to the Petitioner also for the Submarine Battery for the period up to 2009/2010.

2. It has been contended by learned Senior counsel appearing for the Petitioner that the Director, Ministry of defense, Department of defense Production had recommended the avoidance of a monopolistic situation and encouragement of the 2nd source for timely supply of various types of batteries required by the Indian Navy; a similar recommendation of the Deputy Secretary (N-IV), Ministry of defense is dated 8.2.2005. It has been contended that the Petitioner holds registration certificate issued by the Controllerate of Quality Assurance (Electronics) for various batteries and that the Petitioner's customer includes leaders in the Aviation, Communication, defense, Railways and other industries. It cannot be disputed that the list of Petitioner's customers is exceptional and extraordinary. Attention has also been drawn on behalf of Petitioner to letters dated 6.1.2004 containing the Petitioner's resolve that "to fill in the void of a second source of this strategic military equipment, we have invested in the development of batteries for submarines, as this is a logical extension of our design and manufacturing capability. In addition, to provide comprehensive satisfaction of customer needs we have entered into a professional arrangement with DEVELEC of France who have designed and supplied state of the art battery Management Systems."

Page 1495

3. The grievance is that despite the passage of close to two years a final decision on the quality of the Petitioner's product has not been taken despite carrying out a detailed presentation on 19th and 20th February, 2004. The Petitioner has also relied on its letter dated 18.3.2005 and Representation made to the Ministry of defense on its behalf by Members of Parliament.

4. So far as the prayer for cancellation of the PAC to Exide Batteries is concerned, the Petitioner has failed to implead the concerned party even though an objection to this effect had been raised during earlier hearings. An adverse Order should not be passed against a person who is not a party in the petition. In any event even if the Petitioner were to be developed as a 2nd source of supply of submarine batteries this would not be a ground for cancellation of the PAC to Exide Batteries. Furthermore, the Petitioner must successfully cross all the stages envisaged under the Policy of the Government before it would be entitled to challenge a PAC issued to another parties especially when its grant is not irregular or contrary to the policy. Till then it would not have a right to supply the subject material.

5. Steps envisaged under the Policy have been disclosed in the Counter Affidavit. It has been stressed by learned counsel for the Respondent, and not controverter by learned counsel for the Petitioner, that the Petitioner is fully aware of the policy as it had been followed when the Petitioner was being developed as a supplier of torpedo batteries. It appears that the DGQA Standing Orders through which an alternative source is proposed to be developed, including in respect of submarine batteries, comprises the following:

(a) The Indian Navy raises a development indent for the second source after the approval of the Competent Financial Authority (CFA) and forwards the same to DQA(N). The approval of the development indents also involves the sanction of the necessary developmental cost that would have to be paid to the prospective supplier for the development of the product (in this case the submarine batteries). This process generally takes 3-4 months depending on the financial implications involved.

(b)The DQA(N) then identifies possible vendors in consultation with Ministry of defense/NHQ/CII. This process would take about 2 months since it involves correspondence with the various manufacturers.

(c) On identification of the prospective manufacturers their capacity assessment is carried out to assess their competence, in terms of their technical expertise, infrastructure, quality organisation, credentials etc., to undertake the required development. This activity would take 2-3 months.

(d) On completion of the above assessment the tender enquiry is floated to the qualified manufacturers on a competitive basis as prescribed in the normal procurement process. This activity would take at least 03 months since it involves approval by the Ministry of defense of the process followed up to this stage.

(e) The standard government procedure for procurement, viz. obtaining techno-commercial quotes, technical evaluation of the quotes, contract Page 1496 negotiation and placement of order, is followed at this stage. This activity takes 03 months in view of inter-alia protracted correspondence is involved.

6. Reliance has been placed on Ministry of defense Office Memorandum dated 11.10.1999 to the effect that "pending successful development of a new source, the order should be placed on the developed source(s) for the required quantity as indented by the Services by following the usual procedure laid down in this regard in order to ensure that the requirement of services and of production are met fully and without delay". Attention has also been drawn to the Petitioner's letter dated March 31, 2005 which contained the Petitioners' expectation that Ministry of defense will place a Development Order on the Petitioner so that it could constitute a 2nd source.

7. The Counter Affidavit also discloses that for the purpose of issuance of a RFP Certificate of Registration by the DGQA is an essential requirement. This certification could only have been issued in respect of submarine batteries after it is found that (a) they pass three dimensional shock tests. (b) hydrogen evolution, (c) charge retention test, (d)test for charging time, (e) discharge test, (f) insulation resistance, (g) air consumption, (h) effectiveness of colling, (j) tilt test, (k)weight and dimension of fully charged cell, (l) life cycle test and (m)warranted capacity test. It is palpably obvious that these are stringent tests which obviously must be satisfied before the life of serviceable, valuable and extremely expensive machinery such as a submarine are put at risk.

8. Matters of Policy are determined by the Executive. Representations have been made by other persons including Members of Parliament to the defense Minister, who has called back relevant files and reviewed the matter. The defense Minister has rejected the Representations made on behalf of the Petitioner.

9. In order to justify the exercise by the High Court of the extraordinary jurisdiction under Article 226 of the Constitution it must be shown that an infraction of a citizen's right has occurred. Otherwise the Court should steer clear from an inquiry into the expediency of a Policy. It may interfere where the Policy offends Wednesbury Reasonableness. Citizens rights are infracted where a Policy is applied in a discriminatory, mala fide or incorrect manner.

10. The extant Policy followed by the Ministry of defense has not been challenged in this writ petition. Therefore, it must be adhered to meticulously, especially since the defense of India is vitally in issue. If the extant Policy envisages selection or shortlisting of a party for purposes of raising a development indent for an alternative indigenous source of equipment, this stage must be successfully crossed before venturing further into the issuance of RFP and thereafter issuance of a PAC. In order to ascend to the latter stage the Petitioner must possess a registration, not just of sundry batteries and cells, but specifically of submarine batteries. Avowedly such a registration has not been achieved and attained by the Petitioner.

Page 1497

11. The circumstances of this Court do not warrant the exercise of extraordinary powers under Article 226 of the Constitution. Having said that I feel compelled and constrained to observe that there has been an inordinate delay in taking requisite steps for considering the viability of the Petitioner as another source of supply of equipment such as submarine batteries. It should not take the Ministry of defense two years to decide whether the Petitioner should be 'developed' as a 2nd source of supply. It is this delay which has directly resulted in the filing of this Petition.

12. The writ petition is dismissed.