George Agencies vs The Chief General Manager
2022 Latest Caselaw 4489 Ker

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                        PRESENT
          THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 13TH DAY OF APRIL 2022/23RD CHAITHRA, 1944
                 WP(C) NO. 3621 OF 2022
PETITIONER:

         GEORGE AGENCIES
         JALALIYA COMPLEX, MASJID ROAD, ALUVA-
         683101,REPRESENTED BY ITS PROPRIETOR-
         MR.P.K.GEORGE.

         BY ADVS.
         ABRAHAM VAKKANAL (SR.)
         PAUL ABRAHAM VAKKANAL
         VINEETHA SUSAN THOMAS
         ROHITH C.


RESPONDENTS:

    1    THE CHIEF GENERAL MANAGER,
         BHARAT SANCHAR NIGAM LTD, O/O THE CHIEF GENERAL
         MANAGER, BSNL, KERALA CIRCLE, DOOR SANCHAR
         BHAVAN, PMG JUNCTION,
         THIRUVANANTHAPURAM-695033.
    2    THE PRINCIPAL GENERAL MANAGER(S&M-CM),
         BHARAT SANCHAR NIGAM LTD., O/O THE CHIEF
         GENERAL MANAGER,
         BSNL, KERALA CIRLCLE,DOOR SANCHAR BHAVAN,
         PMG JUNCTION,
         THIRUVANANTHAPURAM-695033.
    3    THE DEPUTY GENERAL MANAGER(S&M-CM),
         BHARAT SANCHAR NIGAM LTD., O/O THE CHIEF
         GENERAL MANAGER,
         BSNKL,KERALA CIRCLE, DOOR SANCHAR BHAVAN,
         PMG JUNCTION,
         THIRUVANANTHAPURAM-695033.
    4    THE PRINCIPAL GENERAL MANAGER,
         BHARAT SANCHAR NIGAM LIMITED, O/O THE PRINCIPAL
         GENERAL MANAGER,
         ERNAKULAM, KOCHI, PIN-682016.
 W.P.(C) No.3621/2022
                             :2:


    5      THE DEPUTY GENERAL MANAGER(EB/MKTG),
           BHARAT SANCHAR NIGAM LTD, O/O THE PRINCIPAL
           GENERAL MANAGER, ERNAKULAM,KOCHI, PIN-682016.
    6      THE ASSISTANT GENERAL
           MANAGER(COML/MAREKETING/PV),
           BHARAT SANCHAR NIGAM LTD.O/O THE PRINCIPAL
           GENERAL MANAGER, ERNAKULAM, KOCHI,PIN-682016.

           BY ADV PREMJIT NAGENDRAN

     THIS WRIT PETITION (CIVIL) HAVING COME UP         FOR
ADMISSION ON 13.04.2022, THE COURT ON THE SAME         DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.3621/2022
                                       :3:




                           N. NAGARESH, J.

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                       W.P.(C) No.3621 of 2022

          `````````````````````````````````````````````````````````````
                Dated this the 13th day of April, 2022

                            JUDGMENT

~~~~~~~~~

The petitioner, who is doing business as a

franchisee of BSNL, Kerala Circle, prays to quash Ext.P3(a)

and order dated 14.01.2022 referred to in Ext.P7 and to

declare that the petitioner is entitled to be allotted and issued

with the Letter of Intent (LOI) by the official respondents for

the franchiseeship of BSNL at Aluva, Ernakulam, petitioner

being the selected third successful bidder in pursuance of

Ext.P1 EOI.

2. The petitioner states that he commenced his

BSNL franchiseeship in Aluva Circle as a proprietary concern

in 2011 and continued till 30.09.2021. W.P.(C) No.3621/2022

3. Ext.P1 notice inviting Expression of Interest (EOI)

for BSNL franchiseeship was issued on 07.07.2021. As per

Ext.P1, the evaluation of bidders was to be done by a

Selection Committee. The selection was to be as per the

selection criteria provided in Section 3(1)(a) and shortlisting

was to be done. The top three contenders were to be called

for interview/presentation. Before the interview, the

evaluation and recommendation made by the Selection

Committee has to be approved by the Circle Head.

4. Pursuant to Ext.P1, three successful bidders were

shortlisted by the Selection Committee. The petitioner was

the third selectee. The petitioner was called for interview

scheduled on 18.10.2021 as per Ext.P2. The petitioner

participated in the interview. As there was no further

information regarding the selection, the petitioner made

enquiry on 04.01.2022. On 05.01.2022, the 3rd respondent

informed the petitioner that the LOI was issued to the first

and second successful candidates and since they did not

execute agreement, it has been decided to invite fresh EOI. W.P.(C) No.3621/2022

5. Immediately, the petitioner sent Ext.P3 e-mail

pointing out that he being the third selected candidate, he will

be automatically eligible for issuance of LOI, when the first

and second candidates declined to accept. The petitioner

requested the respondents to issue LOI to the petitioner. To

the repeated communications of the petitioner, the petitioner

was issued with Ext.P7 e-mail stating that the EOI for BSNL

Aluva Territory has been cancelled and fresh EOI will be

floated.

6. The petitioner states that Ext.P3(a) and Ext.P7

communications are illegal, irrational and arbitrary. The

petitioner being the third successful bidder, when the first

and second successful bidders declined to execute

agreements, the petitioner ought to have been necessarily

issued with LOI and permitted to execute agreement.

7. The 3rd respondent does not have the power to

cancel Ext.P1 selection proceedings, contended the

petitioner. The Circle Head has no power to recall or cancel

an EOI after completing the selection process. The W.P.(C) No.3621/2022

cancellation is without any cogent reason and has been done

in a whimsical manner. The petitioner alleged that there is

an element of bias harboured by the official respondents

towards the petitioner. The respondents are therefore

compellable to issue LOI to the petitioner and appoint him as

franchisee, contended the petitioner.

8. Respondents 1 to 6 resisted the writ petition filing

counter affidavit. The respondents stated that the petitioner

participated in the EOI proceedings knowing the terms and

conditions and the petitioner is now turning around and

attacking the terms and conditions of the notification. The

petitioner indeed has a legal right to compete in the EOI

proceedings, but has no legal right to get it. The right of the

petitioner to get the franchiseeship is subject to the decision

by the Chief General Manager, BSNL, Kerala Telecom

Circle.

9. The respondents submitted that in 2018, when the

current CM S&D Policy, 2018 was brought in, the petitioner

was permitted to migrate to this policy. The agreement with W.P.(C) No.3621/2022

the petitioner expired on 31.12.2020. Once the agreement

period expires and a new EOI is not finalised, the

respondents have options either to extend the agreement or

to give the franchiseeship to another existing franchisee. In

the petitioner's case, the BSNL decided to extend the

agreement with the petitioner. The performance of the

petitioner during the tenure ending on 31.12.2020 was not

satisfactory. Nevertheless, the agreement was renewed as

issuance of new notification was to take time.

10. The respondents stated that the petitioner

franchisee failed to perform minimum bench mark of 50% for

the last two quarters. The petitioner was given warning

letters, Exts.R6(a), R6(b) and R6(c). The petitioner was

granted extension till 31.12.2021. Thereafter, no extension

was granted since the performance was very poor.

11. The respondents stated that in the EOI

proceedings pursuant to Ext.P1, three applicants were

shortlisted and the petitioner was the third candidate. The

petitioner's application was processed despite the fact that W.P.(C) No.3621/2022

his performance was poor. It was for the said reason that the

respondents decided to go for a fresh EOI notification when

the candidates ranked at Serial Nos.1 and 2 declined to

execute agreement. The respondents have discretion not to

award the contract to a successful bidder for good and

sufficient reasons. The petitioner has no right to insist that

he should be appointed as franchisee.

12. I have heard the learned counsel for the petitioner

and the learned Standing Counsel representing the

respondents.

13. The petitioner responded to Ext.P1 Notice Inviting

Expressions of Interest for appointment as franchisee of

BSNL. After a process of selection, the petitioner was

assigned rank No.3. The candidates at rank Nos.1 and 2

declined to accept the Letter of Intent and to execute

agreement. Thereupon, the respondents informed the

petitioner that the EOI for BSNL Aluva Territory has been

cancelled and fresh EOI will be floated. The petitioner states

that after a due process of selection, when the petitioner was W.P.(C) No.3621/2022

ranked at No.3 and when the candidates at rank Nos.1 and 2

declined to accept the Letter of Intent, the petitioner ought to

have been issued with Letter of Intent and appointed as

franchisee. According to the petitioner, the Circle Head is the

issuing authority of Ext.P1. The cancellation has been

effected by the 3rd respondent-Deputy General Manager. It is

illegal.

14. The selection process and criteria for appointment

as franchisee are contained in Section 3 of the CM-

Franchisee Sales and Distribution Policy, 2018. Section 3

reads as follows:

Section 3: Selection process and criteria

A. Expression of Interest Route:

a. In order to induct franchisees, BSNL shall invite Expression of Interest (EOI) from the willing parties. BSNL reserves the right to initiate the process for appointing a In order to induct franchisees, BSNL franchisee even if there is a franchisee currently serving the territory or a part of the territory. Hereafter, any territory, for which EOI is invited, is referred to as 'eligible territory. Eligible territories could include:

• Vacant territories: Territories likely to be vacated in next three months or already vacated due to termination of franchisee, tenure completion of franchisee, or non-appointment of franchisee in W.P.(C) No.3621/2022

the past. If a notice of termination (with a 30-day deadline for termination of franchisee) has been served to the franchisee, the territory can be considered as vacant territory.

• Redefined territory: BSNL reserves the right to redefine territories for realignment/ balancing of franchisee territories. If there is need proposal with justification will have to be sent to the corporate office and the required change will be effected only after approval from corporate office by Director-CM.

b. EOIs are to be floated and finalized at circle level. The approving authority will be the Head of circle.

c. Circle must invite EOI from willing parties for eligible territories.

d. To evaluate the bidders, a Selection committee comprising of three members will be formed for each SSA. Each selection committee will consist of

SSA head DGM(Finance) Sales head of the SSA

The entire evaluation process will be conducted at SSA itself. The interview of the shortlisted bidders will be held at the Circle Office before a committee comprising of

GM(S&M)-CM SSA Head of the respective SSA DGM(Finance) Office of CGMT

e. After evaluation by the selection committee, the recommendation of the selection committee shall be approved by circle Head. Lol to successful bidder shall be issued by the EOI issuing authority with the instruction to submit the requisite PBG at the concerned SSA within 15 days time frame for signing the agreement. The contract shall be awarded for a period of three years to the W.P.(C) No.3621/2022

successful bidder(s) as per the terms and conditions stipulated in the EOI and in the sales & distribution policy document.

f. Selection by committee:

If no qualified application is received against any franchisee territory in EOI, measures stated in para-C of section-3 below may also be taken. g. BSNL reserves the right to revise some sections of Sales & Distribution policy according to change in business environment. SSA shall notify all such changes to franchisees. Franchisee will be assumed to be in agreement with revised norms unless notified to BSNL in three week's time. Any party who wishes to discontinue the agreement can do the same by providing a 60 days notice. h. Interested party must submit bid security declaration (Annexure B) i. BSNL reserves the right to reject any application of franchisee for any reason, without liability, the information provided by the franchisee/ gathered by BSNL shall become BSNL's property even if application is rejected and can be used by BSNL in any manner it deems fit.

j. The decision of BSNL will be final and binding.

It is therefore evident that the EOIs are invited by the Circle

Office. It is a Selection Committee as provided under Section

3A(d) which makes the evaluation. After evaluation by the

Selection Committee, the recommendations will have to be

approved by the Circle Head.

15. In the selection process pursuant to Ext.P1, the

petitioner was invited for interview. After the evaluation W.P.(C) No.3621/2022

process, the petitioner was ranked at No.3 among the three

shortlisted candidates. Those who were ranked at Nos.1 and

2 declined to accept the Letter of Intent. The respondents did

not issue a Letter of Intent to the petitioner who was

assigned rank No.3 and instead, proceeded to re-notify the

EOI.

16. Ordinarily, when a select list of three candidates is

drawn after a selection process and the results at rank Nos.1

and 2 declined to accept the offer, the respondents are

expected to make the offer to the candidate at rank No.3.

The respondents would state that the petitioner was an

existing franchisee of the BSNL and his past performance

was not up to the mark so as to qualify him for appointment.

The petitioner was issued warning letters at least three times

pointing out that the performance of the petitioner for the

past quarters was poor and the petitioner failed to achieve

the minimum benchmark for the last two quarters. This

statement made by the respondents is not denied by the

petitioner. The respondents will therefore be justified in not W.P.(C) No.3621/2022

offering the franchiseeship to the petitioner.

17. The mere fact that the petitioner was ranked at

No.3 will not give a right to the petitioner to get appointment

or to get an offer of appointment, when candidates at rank

Nos.1 and 2 declined to accept the offer. Nowhere in Ext.P1

there is a commitment that if the first successful bidder is not

willing, it will be given to the second bidder. The respondents

will be perfectly justified in not making the offer to the

petitioner who is ranked at No.3, based on his past

performance. Section 3A(i) of Ext.P1 provides that BSNL

reserves the right to reject any application of franchisee for

any reason, without liability.

18. The learned counsel for the petitioner would

submit that the term "application of franchisee" appearing in

Section 3A(i) should be read as to mean any application

made by a franchisee after being appointed as a franchisee

and hence the said clause cannot govern the applicants for a

franchiseeship. This Court is unable to accept the said

proposition for the reason that Section 3 deals with selection W.P.(C) No.3621/2022

process and criteria. Therefore, when Section 3A(i) of Ext.P1

refers to "any application of franchisee", it would only mean

any application submitted for franchiseeship.

19. The further argument of the petitioner is that the

1st respondent-Circle Head is the authority who has issued

Ext.P1 Notice Inviting EOI and therefore only the 1 st

respondent has the power to go for a fresh notification. Here,

the said power is exercised by the 3 rd respondent. A reading

of Ext.P7 would show that the decision to cancel Ext.P1 EOI

was taken by the office of the Chief General Manager, Kerala

Circle. The fact that the communication was sent by the 3 rd

respondent will not give any cause of action to the petitioner.

20. The BSNL though is an instrumentality of the State

is engaged in a commercial activity in a very competitive

field. The scope of judicial review in matters relating to

contracts is very limited. The petitioner, though ranked at

No.3 in the select list was not offered Letter of Intent, based

on past performance. There is no element of arbitrariness,

irrationality or perversity in the action of the respondents. W.P.(C) No.3621/2022

Though the petitioner has alleged bias against the

respondents, the petitioner has not proved bias producing

sufficient materials.

In the facts and circumstances of the case, this

Court find no reason to interfere with the decision taken by

the respondents. The writ petition fails and it is consequently

dismissed.

Sd/-

N. NAGARESH, JUDGE aks/12.04.2022 W.P.(C) No.3621/2022

APPENDIX OF WP(C) 3621/2022

PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTIFICATION -EOI NO.KRLCO-15/13(12)/8/2020-S AND M-CM DATED 7-7-2021.

Exhibit P2 TRUE COPY OF THE COMMUNICATION DATED 16-10-2021 ISSUED TO THE PETITIONER TO APPEAR FOR THE INTERVIEW ON 18-10-2021 Exhibit P3 TRUE COPY OF THE EMAIL DATED 4.1.2022 SENT BY PETITIONER TO THE 3RD RESPONDENT.

Exhibit P3(A) TRUE COPY OF THE REPLY EMAIL DATED 5-

1-2022 SENT BY 3RD RESPONDENT TO PETITIONER.

Exhibit P3(B) TRUE COPY OF THE REPLY EMAIL DATED 5-

1-2022 SENT BY PETITIONER TO THE 3RD RESPONDENT.

Exhibit P4 TRUE COPY OF THE REPLY EMAIL DATED 8-

1-2022 SENT BY PETITIONER TO THE 3RD RESPONDENT.

Exhibit P5 TRUE COPY OF THE EMAIL DATED 11-1-2022 SENT BY PETITIONER TO THE 3RD RESPONDENT.

Exhibit P6 TRUE COPY OF THE EMAIL DATED 15-1-2022 SENT BY THE PETITIONER TO THE 3RD RESPONDENT.

Exhibit P7 TRUE COPY OF THE EMAIL DT.18-1-2022 SENT BY 6TH RESPONDENT ALONGWITH THE COMMUNICATION OF 5TH RESPONDENT, TO THE PETITIONER.

RESPONDENTS ETS R6(a) COPY OF LETTER OF 5TH RESPONDENT DT 3.3.2021 R6(b) COPY OF LETTER OF 5TH RESPONDENT DT 25.3.2021 R6(c) COPY OF LETTER OF 5TH RESPONDENT DT 26.7.2021