Cosmo Tours & Travels & Ors. vs Union Of India & Ors.
2010 Latest Caselaw 1884 Del

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*        IN THE HIGH COURT OF DELHI AT NEW DELHI
30.

+                                   W.P.(C) No. 8971 of 2009

         COSMO TOURS & TRAVELS & ORS.              ..... Petitioners
                     Through: Mr. Rajiv Dutta, Senior Advocate with
                     Mr. Ashish Mohan and Mr. Kumar Dushyant,
                     Advocates.

                           versus

         UNION OF INDIA & ORS.              ..... Respondents
                       Through: Mr. Ravinder Agarwal, Advocate for
                       UOI.
                       Mr. Manu Shalia, Advocate for R-3.

         CORAM: JUSTICE S. MURALIDHAR
         1. Whether reporters of local paper may be allowed

            to see the order?                                           No
         2. To be referred to the report or not?                        Yes

         3. Whether the report should be referred in the digest?        Yes


                                     ORDER

%                                    12.04.2010

CM No. 6410 of 2009

Exemption allowed subject to all just exceptions.

The application is disposed of.

W.P.(C) No. 8971 of 2009 & CM Nos. 6409 & 7555 of 2009

1. Petitioner No.1 is a company incorporated in Russia having its registered

office in Moscow. Petitioner No.2 is its Managing Director who is an Indian

citizen. The prayer in this writ petition is to quash the conditions contained

in the request for proposal („RFP‟) issued on the website of the Indian

Embassy in Russia on or around 29th April 2009 pertaining to issuance of a

fresh tender for „visa outsourcing‟ on behalf of the Indian Embassy in

Russia.

W.P.(C) No.8971 o f 2009 page 1 of 10

2. The precise conditions contained in the above RFP which according to the

Petitioners, are arbitrary and unreasonable are as under:

"(b) The bidder must have experience of operating a centre for visa services on behalf of a Diplomatic Mission or Missions for at least one year with electronic data entry, dealing with at least 250 applications per day on an annual average basis."

3. As pleaded in the petition in para B, the above condition according to the

Petitioners was "arbitrary and tailor-made to ensure a monopoly is created in

favour of M/s. VFS Global Ltd. which, in the submission of the Petitioner, is

the only agency (at least in Russia) capable of fulfilling the aforesaid

condition."

4. The Petitioners state that Petitioner No.1 has been in the field of travel

and tourism and has de facto been performing "all the duties and functions

of an agent handling visa applications for the Indian Embassy, Moscow

since 2002." It is submitted that the above condition "draws an irrational

classification between agencies which have previously operated a centre for

visa services on behalf of a Diplomatic Mission and those agencies which

have experience in handling visa application without running a visa center."

It is stated that the above classification has no rational nexus with the object

sought to be achieved. It is further stated that on an average in a year only a

maximum of 200 applications can be handled by the Indian Embassy in

Moscow and, therefore, no tenderer would be able to comply with the

condition of handling 250 applications per day. Further it is not as if every

Indian Embassy abroad requires compliance with the above condition by a W.P.(C) No.8971 o f 2009 page 2 of 10 visa outsourcing agency. Even for the Indian Embassy in the United States

of America, no such condition has been imposed for the purposes of

awarding the contract of visa outsourcing. It is pointed out that of the 44

visa outsourcing centres of Indian Embassies abroad, contracts have been

awarded for 22 visa centres to VFS Global Ltd., which fulfills the above

criteria. Contracts for 2 visa centres have been awarded to TT Services Ltd.

In 20 other centres the above criteria has not been stipulated and they have

been awarded to entities other than VFS Global and TT Services Ltd. Such

visa outsourcing work is being carried on successfully in those 20 centres. It

is therefore submitted that the impugned condition imposed in the RFP

issued for Indian Embassy in Moscow is arbitrary and unreasonable.

5. This Court did not grant any interim order in favour of the Petitioner. It

was however clarified that the award of any contract in the meanwhile

would be subject to the final outcome of the writ petition. During the

pendency of the writ petition, the contract of visa outsourcing in the Indian

Embassy in Moscow was awarded to Respondent No.3 TT Services Ltd.

which was thereafter added as a party Respondent to the present writ

petition.

6. Mr. Rajiv Dutta, learned Senior counsel appearing for the Petitioner

referred to the prevaricating stand of the Respondents at various points of

time in the present matter. There was a flip-flop as regards the RFP

conditions. Initially, when the RFP was first issued in May 2009, it was felt

that the conditions for qualification were harsh and, therefore, should be

withdrawn. Later, some of the conditions were withdrawn. However, in the W.P.(C) No.8971 o f 2009 page 3 of 10 RFP issued in April 2009 the above conditions were re-introduced.

According to Mr. Dutta, the impugned conditions are inconsistent with the

mandatory requirement of Rule 137 of General Financial Rules („GFR‟) as

well as guidelines of the CVC. Both these require the conditionalities

attached to a tender not to be very harsh so as to create a monopoly of a few

qualified bidders. He also placed reliance upon the decision of the Supreme

Court in Meerut Development Authority v. Association of Management

Studies JT 2009 (6) SC 169.

7. Mr. Ravinder Agarwal, learned counsel appearing for the Union of India,

on the other hand, raises a preliminary objection to the maintainability of the

petition. Relying upon the decision of the Supreme Court in Indo-China

Steam Navigation Co. Ltd. v. Jasjit Singh 1983 ELT 1392 (SC) and of this

Court in Star India P. Ltd. v. The Telecom Regulatory Authority of India

146 (2008) DLT 455 he submits that Petitioner No.1 being a foreign

company could not possibly seek to enforce any fundamental right under

Article 19(1)(g) of the Constitution of India. He submitted that although the

petition was made to appear as one seeking the enforcement of the

fundamental right under Article 14 of the Constitution of India, it was in fact

seeking enforcement of the fundamental right under Article 19(1)(g) of the

Constitution. It is pointed out that it is not as if only one party qualified in

the bidding process. There were three such parties which were invited for the

negotiations at the bidding stage. In fact, the contract was awarded not to

M/s. VFS Global Ltd. but to TT Services Pvt. Ltd. Therefore the very basis

of the challenge by the Petitioner was non-existent. Relying upon the

judgment of the Supreme Court in Association of Registration Plates v.

W.P.(C) No.8971 o f 2009 page 4 of 10 Union of India (2005) 1 SCC 679, it is submitted that it was ultimately for

the Government to prescribe the conditions for bidding. Merely because the

Petitioner did not possess the necessary qualification, cannot be a ground for

holding the impugned conditions to be arbitrary.

8. Learned counsel appearing for the TT Services stressed that the running of

a visa centre was very different from the work of a visa agent which was

really the experience that the Petitioner No.1 had. On the other hand, the

visa centre in Moscow which is now being run by TT Services has involved

a huge financial outlay for making it operational.

9. This Court has considered the above submissions. The first question that

arises is whether the petition in the present form is maintainable at the

instance of Petitioner No.1 which happens to be a Russian company.

Although Petitioner No.2 is its Managing Director and is an Indian citizen,

the challenge is in fact by Petitioner No.1 whose bid was unsuccessful for

the contract of visa outsourcing.

10. As long as the writ petition only seeks enforcement of the fundamental

right under Article 14 of the Constitution which fundamental right is

available to all persons, there should be no difficulty in entertaining such

writ petition on behalf of Petitioner No.1. If, however, as is contended by

the learned counsel for Respondents, what is sought to be enforced is a right

under Article 19(1)(g) of the Constitution, then obviously the writ petition

would not be maintainable. This position has been explained by the

Supreme Court in Indo-China Steam Navigation Co. Ltd. in the following W.P.(C) No.8971 o f 2009 page 5 of 10 words:

"The plain truth is that certain rights guaranteed to the citizens of India under Art. 19 are not available to foreigners and pleas which may successfully be raised by the citizens on the strength of the said rights guaranteed under Art. 19 would, therefore, not be available to foreigners. That being so, we see no substance in the argument that if S. 52A is construed against the appellant, it would be invalid, and so, the appellant would be able to resist the confiscation of its vessel under Art. 31(1). We ought to make it clear that we are expressing no opinion on the validity of S.52A under Art. 19(1)(f). If the said question were to arise for our decision in any case, we would have to consider whether the provisions of S. 52A are not justified by Art. 19(5). That is a matter which is foreign to the enquiry in the present appeal."

11. The present petition is being entertained only because the challenge by

the Petitioners to the impugned conditions RFP issued by the Respondents

for visa outsourcing at the Indian Embassy in Moscow is limited to the

extent that such conditions are alleged to be arbitrary and unreasonable and,

therefore, violative of Article 14 of the Constitution.

12. It is plain from the RFP that the Indian Embassy in Moscow was seeking

to use the latest and best practices worldwide in the field of visa outsourcing.

The Respondents were entitled to insist upon possession by bidders of

appropriate and adequate experience in handling of visa centres for

Diplomatic Missions abroad. Learned counsel for the Respondents is

justified in pointing out that the experience of a visa agent, which is what the W.P.(C) No.8971 o f 2009 page 6 of 10 Petitioner No.1 was, is very different from running a full-fledged visa centre.

A visa centre does not merely forward applications for visa to the Embassy,

as is usually done by a visa agent. At a visa centre, a preliminary screening

of all the applications is done keeping in view the criteria prescribed by the

country‟s embassy abroad. That is not a mechanical exercise and requires

expertise. If for performing that task, the Government requires a certain

minimum experience in handling visa application for Diplomatic Mission

abroad having modern technology that cannot be termed as arbitrary. The

number of applications that are required to be dealt with on a daily basis also

is best left to the assessment of the Respondents. This Court is unable to

hold that any of the above conditions is either arbitrary or unreasonable.

13. It was submitted by Mr. Dutta, the learned Senior counsel appearing for

the Petitioners that in so far as the requirement concerning the use of the

latest technology in the visa centres, the Petitioner has no quarrel. It is

aggrieved essentially by the requirement of having to show experience of

one year in running a visa centre for a Diplomatic Mission abroad. This

virtually ruled the Petitioner out of reckoning.

14. This Court notes that the process for inviting the tenders by outsourcing

started more than 2 years ago when in May 2007 the first RFP was made

known. Some of its conditions were deleted in the second RFP which came

a year later. Thereafter some of the conditions were deleted and some

included in yet another RFP which was issued in April 2009. As already

held by this Court, the said conditions are neither arbitrary nor unreasonable.

The Petitioners should have known at least since May 2007 that they had to W.P.(C) No.8971 o f 2009 page 7 of 10 keep abreast with the latest technology. They cannot be heard to complain

that the conditions were harsh or imposed all of a sudden. In a competitive

world, the one who can provide the best service will be preferred.

15. The reliance upon the observations of the Supreme Court in the Meerut

Development Authority case is misdisplaced. In para 17 of the said decision

it was held that if any of the conditions were tailor-made to suit only one

party to the exclusion of "all other contesting parties," then the Court might

be persuaded to interfere. However, that is not the case here. At least three

parties qualified in the pre-bid stage. They were invited for negotiations.

Therefore, it is not, as if only one party qualified and was awarded with the

contract. Further the premise on which the Petitioner approached this Court

was that the conditions were tailor-made to suit M/s. VFS Global Ltd.

However, as it turned out, the contract was not awarded to M/s. VFS Global

Ltd. but to TT Services Ltd. Therefore, the very premise on which the

Petitioner approached this Court has been shown to be non-existent.

16. In Association of Registration Plates it was pointed out by the Supreme

Court in para 38 as under:

"38. In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. Unless the action of tendering Authority is found to be malicious and misuse of its statutory powers, tender conditions are unassailable. On intensive examination of tender conditions, we do not find that they violate the equality clause under Article 14 or W.P.(C) No.8971 o f 2009 page 8 of 10 encroach on fundamental rights of a class of intending tenderer under Article 19 of the Constitution. On the basis of the submissions made on behalf of the Union and State authorities and the justification shown for the terms of the impugned tender conditions, we do not find that the clauses requiring experience in the field of supplying registration plates in foreign countries and the quantum of business turnover are intended only to keep out of field indigenous manufacturers. It is explained that on the date of formulation of scheme in Rule 50 and issuance of guidelines thereunder by Central Government, there were not many indigenous manufacturers in India with technical and financial capability to undertake the job of supply of such high dimension, on a long term basis and in a manner to ensure safety and security which is the prime object to be achieved by the introduction of new sophisticated registration plates."

Further, it was observed in para 42 of the same decision that "merely

because a few manufacturers like the Petitioners do not quality to submit the

tender, being not in a position to satisfy the terms and conditions laid down,

the tender conditions cannot be held to be discriminatory."

17. Turning to the requirement of the GFR, this Court finds that although

Rule 137 states that the specifications worked out "should meet the basic

needs of the organisation without including superfluous and non-essential

features," under Rule 160 it has been emphasised that "all Government

purchases should be made in a transparent, competitive and fair manner, to

secure best value for money." It has further been emphasised in Rule 160 (i)

that the text of the bidding document "should be self-contained and W.P.(C) No.8971 o f 2009 page 9 of 10 comprehensive without any ambiguities". Even the CVC in its guidelines

has emphasised that the conditions for qualification should not be too

onerous. However it has been emphasised that tender should be invited from

"firms having requisite experience depending upon the size of the contract in

a fair and transparent manner." This Court does not find anything in the

impugned conditions which are inconsistent with the requirements of the

GFR or the CVC guidelines.

18. For the aforementioned reasons, this Court finds that the impugned

conditions in the RPF for visa outsourcing in the Indian Embassy in Moscow

cannot be said to be arbitrary and unreasonable. No ground is made out for

holding that the impugned conditions are violative of Article 14 of the

Constitution of India.

19. The writ petition is accordingly dismissed with costs of Rs.10,000/-

which will be paid by the Petitioners to the Respondent UOI within four

weeks. The applications are dismissed.

S. MURALIDHAR, J.

APRIL 12, 2010
dn




W.P.(C) No.8971 o f 2009                                           page 10 of 10