TATA Cellular Vs. Union of India [1994] INSC 401 (26 July 1994)
Mohan, S. (J) Mohan, S. (J) Venkatachalliah, M.N.(Cj) Punchhi, M.M.
CITATION: 1996 AIR 11 1994 SCC (6) 651 JT 1994 (4) 532 1994 SCALE (3)477
ACT:
HEAD NOTE:
The Judgment of the Court was delivered by MOHAN ,J.-- Leave granted.
2.All these appeals can be dealt with under a common judgment since one and same issue requires to be decided.
The brief facts are as under.
3.The Department of Telecommunications, Government of India, invited tenders from Indian Companies with a view to license the operation of "Cellular Mobile Telephone Service" in four metropolitan cities of India, namely, Delhi, Bombay, Calcutta and Madras. Cellular mobile telephone means a telecommunication system which allows two-ways tele- communication between a mobile or stationary telephone to another mobile or stationary unit at a location. It may be within or outside the city including subscriber-cum-dialling and international subscriber-cum-dialling calls. The last date for submission of tender was 31-3-1992. The tender process was in two stages. First stage involved technical evaluation and the second involved financial evaluation.
Those who were short-listed at the first stage were invited for the second stage.
4.Thirty bidders participated initially at the first stage.
The first Tender Evaluation Committee was constituted consisting of senior officers of the Department of Telecommunications.
5.A Telecom Commission was constituted on 6-4-1989 comprising a Chairman and four full-time Members:
1. Member (Production)
2. Member (Services)
3. Member (Technology)
4. Member (Finance) It short-listed 16 companies, 12 of which were eligible without any defect. However, in the case of 4 the Committee recommended condonation of certain defects. Those four were :
1. BPL Systems and Projects Limited
2. Mobile Telecommunication Limited
3. Mobile Telecom Services
4. Indian Telecom Limited Between 19-5-1992 and 27-5-1992 the recommendations were submitted to the Telecom Commission. The matter came up for discussion among the members of the Commission. On 27-5- 1992 the Telecom Commission accepted the recommendations of the Technical Evaluation Committee. The Chairman recommended that the short-list of bidders, the recommendations of the Tender Evaluation Committee and the proposal for financial bids be placed before the Selection Committee at the earliest.
659
6.It requires to be noted, at this stage, that a Selection Committee also described as Apex/High-Powered Committee comprising the Principal Secretary to the Prime Minister and three other Secretaries to the Government of India had been set up by the Minister for final evaluation of the bid.
7.Mr B.R. Nair, a Member (Budget) of Telecom Commission came to be appointed as Member (Services) on 29-5-1992. It appears the Selection Committee met a number of times and discussed the matter with the Minister. He submitted an interim report on 16-7-1992. During this time the Committee not only de novo exercised but also modified the short-list prepared by the Technical Evaluation Committee and approved 14 companies. The Selection Committee also met the representatives of equipment manufacturers for the selection of the licensees. On 20-7-1992, the revised financial bid and the short-list approved by the Telecom Commission were put up before the Minister for approval. On 24-7-1992, further meetings of the Selection Committee were held and the financial bid document was revised. On 28-7-1992, the Selection Committee submitted its final report. Two bidders, namely, M/s Ashok Leyland Ltd. and M/s Vam Organics Ltd. were dropped from the short-list of 16 bidders. On 29- 7-1992, Mr Nair was appointed as Director General of Telecommunications. He was authorised to exercise all powers of Telecom Authority under Section 3 of the Telegraph Act. The Minister approved the issue of financial bids with modification to the short-listed companies as recommended by the Selection Committee on 29-7-1992. The approval took place on 30-7-1992.
8.On 30-7-1992, the financial tenders were issued. It contained seven criteria which had been approved by the Selection Committee. However, no marks were earmarked for any of the criteria. 17-8-1992 was the cut-off date for financial bid document. On this date the bids received from 14 companies were opened and read out to the bidders, who were present. As per the conditions, the quoted rental ceilings and the cities for which the bids were made, were read out.
9.Another Departmental Tender Evaluation Committee consisting of senior officers examined the financial bids of the 14 short-listed companies. It adopted some parameter and devised the marking system which was not done by the Selection Committee. On 2-9-1992, the second Tender Evaluation Committee submitted its recommendations.
However, the matter was referred back to it for a fresh gradation on the basis of 21.75 per cent interest rate in respect of 13 per cent rate which it had earlier adopted.
On 7-9-1992 the recommendations were re-submitte. The Adviser operations recommended only 4 operators based on the evaluation and financial bids. Bharati Cellular was recommended as a first choice for all the four cities, BPL as the second choice for both Delhi and Bombay, TATA Cellular and Skycell as second choice for Calcutta and Madras. This was done since in his view no other bidder qualified for licence. On 10-9-1992 the Chairman of the Tender Evaluation Committee directed that all the documents and recommendations be sent to the Selection Committee for its consideration 660 and for making final recommendations to the Government.
When the file was put up to the Minister on 9-10-1992 he made three important notings :
1. In view of the time taken by the High- Powered Committee the selection process be completed by DoT internally;
2. Only one party may be granted licence for one city; and
3. The actual selection of the licensee should be made primarily on the consideration of rentals and the marks obtained in respect of foreign exchange inflow and outflow criterion and experience of the licensee.
10. On 9-10-1992, in accordance with this note, a list of 8 short-listed companies was prepared. The reasons for rejection of the 6 companies were recorded. The Chairman, in his final recommendation, made on 9-10-1992, noted that Bharati Cellular, Modi Telecom and Mobile Telecom did not fulfil the conditions provided in clause 2.4.7 of Chapter 11 of the financial bid which requires that foreign exchange requirement be met by foreign collaborator. With regard to rejection of 6 bidders Sterling Cellular was rejected because some investigation against them was pending before the CBI. However, the Minister reversed that decision as to the exclusion of Sterling Cellular and Indian Telecom Limited from the list of finally approved bidders and directed that the same be considered.
11.On 10-10-1992, the list was recast. Sterling Cellular was provisionally selected for the city of Madras. On 12-10-1992, the selected bidders were notified of their provisional selection subject to the acceptance of rentals and other terms as might be advised.
12.It is under these circumstances, four writ petitions were preferred bearing CWP Nos. 4030, 4031, 4032 and 163 of 1992. The petitioners were
1. India Telecomp (Petitioner in CWP No. 4030 of 1992)
2. Adino Telecom Limited (Petitioner in CWP No. 4031 of 1992)
3. Kanazia Digital System (Petitioner in CWP No. 4032 of 1992)
4. Hutchison Max Telecom Private Limited (Petitioner in CWP No. 163 of 1992) 13.It was urged before the High Court of Delhi that the decision of the Government in selecting 8 parties, two for each of the cities, was bad on the following grounds- (i) bias (ii)invoking certain hidden criteria (iii)irrelevant considerations (iv)bypassing the Selection Committee (v) selecting otherwise underqualified parties (vi)marketing system which was evaluated by the second Technical Evaluation Committee for grading various bidders.
14.So manipulated thereby a criterion was evolved which was tailormade to knock out the petitioners before the High Court or resulting in 661 knocking out of the petitioner in the case of India Telecomp Limited and Adino Telecom Limited. Hutchison Max Telecom Private Limited urged that it was the highest in the gradation. Its bid was not considered for a technical and flimsy reason; in that, the compliance statement required to be furnished with the bids was not complete. Kanazia Digital System contended that its technical bid was left out on certain wrong premise.
15.Lengthy arguments were advanced before the High Court.
On a consideration of those arguments the writ petitions of Adino Telecom and Kanazia Digital System were dismissed.
CYR No. 4030 of 1992 filed by India Telecomp was allowed. A mandamus was issued to consider afresh the grant of licence to the petitioner therein, after evaluating marks for the rental on the basis the figures of deposits from subscribers given for Delhi and Bombay were accumulated. Similarly, CWP No. 163 of 1992 in which the petitioner was M/s Hutchison Max Telecom Private Limited, was allowed. A direction was issued to reconsider the case of the petitioner, on the basis the compliance filed by it, as it was in order. To that extent the order granting licence to 8 parties (2 for each of the cities) was set aside. This judgment was pronounced on 26-2-1993.
16.After the judgment of the Delhi High Court, the matter was reconsidered in the light of the said judgment. A revised list of provisionally selected bidders was prepared on 27-8-1993. That is as follows :
Position as on 12-10-1992Position as on 27-8-1993 Bombay Bombay Bharati Cellular Hutchison Max BPL Projects & Systems Bharati Cellular Delhi Delhi India Telecomp Ltd. BPL Projects & Systems TATA Cellular Pvt. Ltd. Sterling Cellular Ltd. Calcutta Calcutta Mobile Telecom Ltd. India Telecomp Ltd. Usha Martin Telecom Usha Martin Telecom Madras Madras Skycell Mobile Telecom Ltd. Sterling Cellular Ltd. Skycell It could be seen from the above that TATACellular which was originally selected for Delhi has been left out.
Therefore, it has preferred SLP (Civil) Nos. 14191-94 of 1993. M/s Hutchison Max Private Limited has apprehended that if the judgment of the Delhi High Court is not accepted it is likely to be displaced from the provisional selection list for Delhi. Indian Telecom Private Limited preferred SLP (C) No. 17809 of 1993. India Telecomp preferred SLP (C) No. 14266 of 1993.
17. Mr Soli J. Sorabjee, learned counsel for the appellant, TATA Cellular, argues that this is a two-staged tender. In the first stage, the evaluation had to be made on the basis of technical and commercial considerations. The bidders short-listed at the first stage would then compete in the second stage, 662 namely, the financial bid. Chapter 11 contains general conditions framed into the bid. In paragraph 2.4.7 the financial projection of the proposed cellular mobile service was prescribed. The notes mentioned three criteria :
(i) Entire foreign exchange requirement shall be met by the foreign collaborator.
(ii) Minimum reliance on Indian public financial institutions will be preferred.
(iii) Debt equity ratio should not be more than 2 : 1.
18. It is borne out by records that out of the seven criteria in evaluating the financial bid, six parameters alone were taken into consideration. For rental parameter the evaluation committee took into account the equity rental ceiling, security deposits installation and other charges indicated in the bid which were the same in the case of all the bidders. This was done in order to arrive at an equated or effective figure of monthly rental for each bidder. It is not open to the Committee to totally ignore this criterion when the Chairman's note dated 9-10-1992 specifically states that the companies would be asked to comply with the conditions of financial bid in clause 2.4.7 of Chapter II while granting licences. When this is the position, strangely, the appellant is informed as follows :
"Ministry of Communication (Telecom Commission) New Delhi - 11 000 1 No. /92-TM Dated: 27-8-1993 To, (Kind attention Subject:Tender No. 44-21/9 1 -MMC (FIN) for franchise for Cellular Mobile Telephone Service for Bombay, Delhi, Calcutta and Madras.
Sir, Kindly refer letter of even No. dated 12-10- 1992 informing you that you have been provisionally selected for franchise for providing cellular mobile telephone service at .... on a nonexclusive basis.
2. The matter has been reconsidered in the light of the judgment delivered by the High Court of Delhi in this case. M/s .......... have now been provisionally selected for franchise for providing cellular mobile telephone service at in place of ........... on a non-exclusive basis. The other franchise selected for is M/s with M/s of.......as their foreign partner.
3. The details of the rental, deposits and other terms fixed for the franchise will be intimated to you shortly.
663
4.Kindly get necessary formalities completed by 30-9-1993. Yours faithfully, (S.K. Garg) DDG (TM)" 19. The second ground of attack is bias.
In that, Mr B.R. Nair, Member of Production in the Telecom Commission, who was appointed as Member (Service) on 29-5-1992, participated. From the Adviser the file went to Member (Service). The note of Mr Nair is dated 21-5-1992. He agreed with the recommendation of TEC that four firms which had some deficiencies should be included in the short-list.
They were BPL Systems and Projects, Mobile Telecom, Mobile Communications and Indian Cellular. Therefore, BPL was approved by Mr Nair. Admittedly, Mr Nair's son is employed in BPL Systems and Projects.
20. The High Court in dealing with the allegations of bias made against Mr Nair held:
"Nexus of father and son in the chain of decision-making process is too remote to be of any consequence. It is quite interesting to note that of the four companies which were having some deficiencies in their tender documents in the first stage and were recommended for consideration by the first TEC, three companies including BPL made it to the final list of eight. Plea of bias is not alleged in the selection of other two companies. In the circumstances it is not possible for us to hold any allegation of bias made against Nair." The High Court concluded:
"We do not think in a case like this the mere fact that Nair was part of the machinery to make selection was enough to show that there could be reasonable suspicion or real likelihood of bias in favour of BPL." This finding is wrong. Mr Nair's participation from the beginning would constitute bias. In support of this submission, the learned counsel relies on Manak Lal v. Prem Chand1 (and particularly the passage occurring at SCR p.587), J. Mohapatra & Co. v. State of Orissa2 (SCR at p. 334: SCC p. 112) and Ashok Kumar Yadav v. State of Haryana3 (SCC paragraph 16 at p. 440 and 441). The English decision on this aspect which will support the contention is:
Metropolitan Properties Co. (EG. C.) Ltd. v. Lannon4.
21. In law, there is no degree of bias. Even otherwise in the implementation of the judgment of the High Court of Delhi, if this appellant is to be eliminated, it ought to have been afforded an opportunity. Had that been done it would have pointed out several factors, namely, the omission to consider relevant material, namely, parameter seven, the prejudice caused by the award of marks after the bids were opened. The DoT was obliged to disclose the maximum marks for each criterion at the threshold of the 1 1957 SCR 575: AIR 1957 SC 425 2 (1984) 4 SCC 103, 112: (1985) 1 SCR 322 3 (1985) 4 SCC 417: 1986 SCC (L&S) 88 4 (1968) 3 All ER 304, 310: (1969) 1 QB 577: (1968) 3 WLR 694 664 financial bid in the interest of transparency and to ensure a non-arbitrary selection.
22.In the case of most of the bidders the foreign exchange is not met by the foreign collaborator. In the case of India Telecomp the debt equity ratio is 1 : 1. Their total project cost is stated to be Rs 101 crones. This means Rs 50.50 crores represent equity and the other Rs 50.50 crores represent external commercial borrowing. In this case, the entire foreign exchange is not met by the foreign collaborator. Therefore, there is a breach of the fundamental condition of the bid. This would constitute a disqualification which is a bar at the threshold. Had this condition been strictly applied Bharati Cellular, Modi Telecom, Mobile Communications, Hutchison Max, Skycell Communication would have been eliminated. Likewise, Sterling Cellular also did not fulfil this condition.
23.It was a mandatory condition that a foreign collaborator indicated at the first stage-of tender, could not be changed thereafter. Inter alia on the strength of credentials of foreign collaborators the bid is considered. If a change is allowed it would amount to technical violation of the bid.
Yet in the case of BPL one of its foreign collaborators, namely, McCaw Cellular withdrew from the collaboration. In spite of this, the breach was disregarded. The bidder had to famish proof that he had obtained the approval of foreign collaboration or filed application before the competent authority. BPL had not even filed an application before the competent authority yet its tender was considered and approved. On the very same ground, while Ashok Leyland had been disqualified, equally it should have been applied to BPL.
24. Sterling Cellular had been rejected at various stages of consideration on the ground that there was criminal complaint/investigation pending against it. The Minister had also agreed but reversed that decision on the last day and directed its consideration for inclusion in Madras on the purported ground that Madras was the least popular of the stations and that if any delay is caused due to complications on account of CBI investigation would have the least adverse effect for lack of competition. The High Court noted that no material had been brought on record to show that there was any complaint against Sterling Cellular.
But, factually, to the knowledge of the DoT, a criminal case stood registered against Sterling Cellular in June 1993, before making the final selection. The DoT, instead of rejecting Sterling Cellular on that ground, upgraded it from Madras to Delhi in disregard of the decision of the Minister.
25. Any foreign collaboration has to be approved by an inter-ministerial committee called FIPB. No proposal for foreign collaboration could be evaluated by the TEC without receiving the approval from the FIPB. Even under the tender documents the bidders were required to show that they had applied for such approval.
26. Having regard to all these, the selection is vitiated by arbitrariness or unfairness.
665
27. Mr Harish Salve, learned counsel, appearing for India Telecomp attacks the selection as arbitrary on the following three grounds :
1. Bypassing the Apex Committee and entrusting to a Committee which did not follow the norms.
2. Certain hidden criteria which were not disclosed earlier, were applied not as parameters, but for elimination.
3. There are five glaring errors in the selection. One such error is in the case of Sterling Cellular. It supports its bid on the strength of the foreign exchange that may be obtained from foreign tourists. This is something incomprehensible.
Elaborating these points it is urged that after short- listing, the selection committee did not select at all. The counter-affidavit filed on behalf of the Government of India does not mention that there was a delay by Apex Committee, as held by the High Court. On the contrary, the facts disclose there was no delay whatever.
28. Two hidden criteria were postulated. (i) Persons having less than one lakh experience will not be considered. (ii) If two bidders have the same collaborator in relation to foreign exchange that bid will not be considered. These criteria were evolved after 18-8-1992. When one looks at the conditions of tender, paragraph 2.2.1 talks of subscriber's capacity. That does not mention about the nature of experience. Equally, paragraph 2.4.5 makes no mention about one foreign collaborator for each bidder. In the case of Bharati Cellular it was having only eighty-one thousand lines. The criterion of 80 thousand GSM was prescribed only to favour Bharati Cellular.
29. If no change of foreign collaborator is allowed at the stage of financial assessment after the technical committee has passed its bid, in the case to permit such a change to BPL, is clearly arbitrary.
30. Indian Telecom was excluded because it has the same foreign collaborator, namely, Telecom Malaysia. However, in the case of Bharati Cellular, that test was not applied.
Its collaborator is Talkland Vodaphone. The same Vodaphone has been the collaborator with Mobile Telecom. This would amount to adopting double standards.
31. As against BPL the attack is as under:
1. BPL did not apply to SIA/FIPB but to Reserve Bank of India (RBI).
2. The foreign collaborator was changed in the middle, as submitted above, inasmuch as McCaw Cellular withdrew. The joint venture is gone when McCaw was given up.
3. Mr Nair was biased in favour of BPL.
4. Total marks awarded are five. The idea is indigenous equipment whereas what has been done by BPL is to quote higher customs duty.
32. Insofar as Sterling Cellular is preferred for Delhi that again is arbitrary. There is a CBI inquiry pending against it. Secondly, the foreign 666 exchange is sought to be procured by international roaming and it is awarded 10 marks out of 10.
33. Mr Ashoke Sen, learned counsel, appearing for the Indian Telecom submits, firstly, the limits of judicial review in the matter of this kind will have to be examined.
Such limits could be gathered from Sterling Computers Ltd. v. M & N Publications Ltd.5 and Union of India v. Hindustan Development Corpn.6 which lay down the methods of reaching conclusion.
34. Generally speaking, in entering into contracts, the public authority is not like a private person. The question to be asked is, have the guidelines been laid down, if so laid down, have they been observed? In this case, Indian Telecom was originally allotted Delhi. By reason of reconsideration pursuant to the judgment of the High Court of Delhi, it has now been allotted Calcutta. This is wrong.
35. In clause 7 of the General Conditions it is stipulated that there can be no change of foreign collaborator. In clause 13, a certificate requires to be produced. In a number of cases no such certificate has been produced.
Paragraph 2.4.5 of Chapter 11 of General Conditions lays down one of the parameters is the experience of foreign operating partner. In the case of Bharati Cellular, SFR France Company has no experience. Talkland's sole function is service. Therefore, its experience should not have been added. In paragraph 1.4 the nature of services is listed.
These are not the services offered by Talkland. Hutchison Max did not produce any certificate likewise Bharati Cellular.
36. The argument on behalf of Ashok Leyland, petitioner in Transferred Case No. 49 of 1993 is that it was an eligible bidder but has never been communicated the reason as to why it came to be rejected. On 29-9-1992, the Committee records that reasons must be given. Yet no reasons are furnished to the petitioner. Even though the Tender Evaluation Committee held the petitioner to be qualified yet its bid had been rejected without communicating any reason whatever. In Mahabir Auto Stores v. Indian Oil Corpn.7 (SCC at p. 763, paragraph 18) this Court has held that there is an obligation to communicate the reasons.
37. Mr Koura, learned counsel appearing for Bharati Cellular, in opposing the arguments advanced on behalf of the appellants, submits that service operation should not be read in a narrow sense. In telephone industry there could be operation as well as service. While defining the service, relying on paragraph 2.1 is wrong because services are defined in paragraph 1.4 whereas paragraph 21 refers only to obligations of licensee. Besides, the services are also essential, they should be regarded as a part of operation.
38. Mr G. Ramaswamy, learned counsel, appearing for Skycell states that his client has been awarded Madras city. It is submitted that in the absence of mala fides the individual marking system should not have been 5 (1993) 1 SCC 445 6 (1993) 3 SCC 499 7 (1990) 3 SCC 752 667 interfered with as far as foreign exchange is concerned. In the case of his client regarding the foreign exchange sourcing, inflow is more than the out flow.
39. Mr Anil B. Divan, learned counsel appearing for Mobile Telecom Services submits that though this respondent supports the judgment of the High Court, insofar as it is allowed the writ petition filed by Hutchison Max, the same ought to be reconsidered. The bid of Hutchison Max was rejected since it had filed an incomplete compliance report.
The High Court has chosen to accept the bid of Hutchison Max on four grounds :
1. The approach of the Department was hyper-technical.
2. Compliance statement is akin to verification in a pleading. It cannot be placed on a higher pedestal than verification.
3. The Department ought to have allowed rectification since it was purely a mistake unintentionally made.
4. Inasmuch as the Department had allowed a favourable treatment in the case of Indian Telecom Private Limited and TATA Cellular the same treatment ought to have been accorded to Hutchison Max as well.
These findings are attacked on the following grounds. The tender documents both technical and commercial bid as well as the financial bid clearly lay down the manner of compliance. Clause 3 of the technical bid states, in the event of the compliance report not being enclosed with the offer, the offer shall not be considered. Equally, in relation to financial bid, Chapter I states that any offer received after the due date and time shall be rejected. The various other clauses also postulate a strict compliance.
If, therefore, the bid is incomplete the offer ought to have been rejected. Hence, there is no question of the Department of Telecommunication condoning the defect. If the view of the High Court is to prevail it would amount to allowing a post tender modification on a select basis, that is, on the basis whether the mistake was intentional or unintentional. Where the Department has chosen to reject, the High Court cannot sit in judgment. To state it is like verification of pleading is to overlook that the pleadings are governed by the verification. That is not the case here. The comparison with Indian Telecom and TATA Cellular is also incorrect. In the case of Indian Telecom there is an unconditional compliance. Only in the covering letter a view has been expressed about the economic viability of the services and the bidders' preference. Hence, it cannot be contended that the bid was conditional, in any manner.
Similarly, TATA Cellular was not accompanied in this regard.
40. The allegation against this respondent that the foreign exchange requirement has not been met is incorrect. The documents filed by the respondent clearly show that there is a surplus of approximately three crore rupees, available from the foreign collaborator, in the first year. The allegation of India Telecomp that the bidder was responding on the basis of one party per city and the proposal for licence for a period of 20 to 25 years is factually incorrect. Equally, to state that this respondent quoted a lower 668 customs duty and thereby got higher marks is incorrect. The financial bid of the respondent shows that this had taken customs duty at 95 per cent for the first year when the backlog of the equipment is to be imported. For the subsequent years, the projection was made on a reduced customs duty in view of the announced policy of the Government to reduce customs duty and to bring them in line with international levels.
41. The argument that there is a common collaborator of Bharati Cellular and Mobile Telecom Services proceeds on the footing that Bharati Cellular is collaborating with Talkland. That Talkland has a service privately in agreement with Vodaphone Group. Thus, Vodaphone is the common foreign collaborator of Bharati Cellular and Mobile Telecom. This is not correct. Mobile Telecom has its foreign partner for the purpose of setting up a leading cellular network cooperator of U.K., namely, Vodaphone.
Vodaphone as network operator is the owner of Vodaphone Cellular Network. It is responsible for the setting up of the network in U.K. where cellular network operator can also be a service provider. Vodaphone has been issued a licence as the cellular network operator under Section 7 of the U.K. Telecommunications Act of 1984. It is known as a public telecommunication operator. Vodaphone has about 30 service providers in U.K. including Talkland. It has no equity in Talkland. There are no common directors on the boards of two companies. Vodaphone is the foreign collaborator of Mobile Telecom. It has no collaboration agreement with Bharati Cellular. In regard to Bharati Cellular it has only a collaboration agreement with Talkland which is a mere service provider.
42. Arguing on behalf of Sterling Cellular Mr K. Parasaran, learned counsel submits that the technical competency and capacity to execute the contract by this respondent with its joint venture partner is not in doubt. Sterling Cellular was short-listed by Technical Evaluation Committee itself.
It was amongst the 12 tenderer short-listed in the first list. The joint venture collaborator of Sterling, namely, Cellular Communication is a reputed international company having large-scale operation in U.S.A. As regards the foreign exchange inflow and outflow it is submitted that Sterling Cellular has projected its stand that the foreign exchange inflow will be from foreign tourists and business travelers visiting the city of Delhi. The expression "international roaming" has been used in relation to such foreign tourists and business travellers. Internationally, cellular phones are used by two categories of persons, (1) subscribers residing in the city who would use the phone on a permanent basis, (2) the tourists and business travellers visiting the city who would use the phone on a temporary basis. Inasmuch as the foreign tourists and foreign business travellers make the payment in foreign currency it will be a source of foreign exchange. What is required under the tender condition is the projection of foreign exchange inflow and outflow relating to the cellular phone contract. This means inflow in foreign exchange as a result of the operation of cellular phone system. Hence, the bearing from tourists and business travellers is a very relevant consideration. Like this respondent, Hutchison Max selected for the Bombay city also 669 projected for the foreign exchange openings by the use of cellular phone by tourists and business travellers. The argument that the foreign tourists and business travellers are not likely to use cellular telephone is not correct since the calls made through the cellular telephones are not only cheaper but also available as a 24 hours' companion.
That, of course, is a greater facility. In the note made by the Minister it has been mentioned that the respondent has undertaken to be bound by conditions contained in the tender documents to the effect that the entire foreign exchange requirement shall be met by the foreign collaborator. In fact, the foreign collaborator has also confirmed this.
43. As regards the allegation of CBI inquiry, it is submitted that the learned Judges of the High Court perused the note of the Chairman, Telecom Commission. It was only after this the Court held that there were no strictures against holding company of SCL by the name Sterling Computers Limited, in M&N Publication Ltd. v. MTNL8. It was further held that it appears to have been punished for no sin of it. There was no CBI inquiry on the date of the above judgment. It was after the judgment dated 10-7-1993, the FIR was filed which has been allowed to be proceeded with by way of directions in petition under Section 482 of the Criminal Procedure Code. This Court in Erusian Equipment & Chemicals Ltd. v. State of WB.9 has laid down that pending investigation blacklisting cannot be permitted.
The said 1 ratio will apply to this case.
44. Mr K.K. Venugopal, learned counsel appearing for Hutchison Max submits that this respondent was rejected by the committee. That was questioned in the writ petition.
The High Court directed reconsideration of its bid. With regard to compliance statement it was stated that the company agrees to fully comply with all paragraphs of Chapter II of the General Conditions and Chapter V : Tariffs of Document No. 44-21/91-MMC(FIN) without any deviation and reservation. No doubt, there is a failure, in the first instance, to state about compliance with Chapters 11 and IV This is an accidental omission. It amounts to a clerical error as laid down in Moffett, Hodgkins & Clarke Co. v. City of Rochester10. If it is a mistake in relation to non- essential or collateral matter it could always be condoned.
The Privy Council in Mohd. Ejaz Husain v. Mohd. Iftikhar Husain11 has held that it is always a matter of form and not of substance. Other argument is advanced that there is a defect in the compliance statement.
45. The alternate submission is, the question of error does not arise since the compliance statement was filed on 11-9- 1992 while the contract came to be awarded only on 12-10- 1992. In such a case the question would be what is the scope of judicial review? The court could interfere in the following three categories of cases
1. Quasi-judicial 8 (1992) 4 DLT 24 9 (1975) 1 SCC 70: (1975) 2 SCR 674 10 44 L Ed 373 : 178 US 1108 (1899) 11 AIR 1932 PC 76: 59 IA 92: ILR 7 Luck 1 670
2. Administrative, for example, price fixing
3. Award of contracts Here, the matter is technical in relation to award of contract. Judicial review does not mean the court should take over the contracting powers. The parameters for interference in such matters would be (i) Mala fide (ii) Bias (iii) Arbitrariness to the extent of perversity.
If none of these is present, the court should not interfere.
It must be left to the authorities. The contrary arguments advanced on behalf of the appellants against this respondent are not tenable.
46. Mr F.S. Nariman, learned counsel appearing for BPL in the foremost argues by way of preliminary submissions that three questions will arise at the threshold.
(a) The scope and ambit of judicial review with regard to decisions bona fide arrived at in tender cases (pre- contract).
(b) The applicability of judicial review in these cases.
(c) The interference under Article 136 of the Constitution where the power of judicial review has been exercised by the High Court under Article 226.
47. It is submitted that the reasonableness in administrative law means to distinguish between proper use or improper use of power. The test is not the court's own standard of reasonableness. This Court has reiterated this proposition in G.B. Mahajan v. Jalgaon Municipal Council12.
There is a possibility of fallibility inherent in all fact- findings. To insist upon a strict compliance with each and every tender document is not the law. This Court upheld the waiver of technical, literal compliance of the tender conditions in Poddar Steel Corn. v. Ganesh Engineering Works 1 3. In the present case, the short-listing at the first stage, the allotment of cities at the second stage and the selection of franchisees qua cities at the third stage were after evaluating the financial bid by a collectivity of persons at different level. Therefore, possibility of elimination of arbitrariness is conceived in the system itself. Further, the High Court has analysed properly and come to the proper conclusion. That being so, this Court will not interfere by exercising its powers under Article 136 of the Constitution of India. The argument about hidden criteria would not affect or benefit this respondent directly or indirectly. Even otherwise, the hidden criteria cannot be impugned. There is no mention of any particular criterion on the basis of which the selection was to be made. At the second stage what was required to be kept in mind were the parameters mentioned in paragraph 2.4. The criteria for selection to each of the four cities had to be provided inter alia because the tenderer did not tender for one city alone but for more than one. The allegation of bias on the 12 (1991) 3 SCC 91 (para 43-46) 13 (1991) 3 SCC 273 671 part of Mr Nair is without substance. It is submitted, whenever disqualification on the ground of personal involvement is alleged :
(i) the person involved (for example related) must be the decision-maker;
(ii) there must be sufficient nexus between the decision- maker and the party complaining in order to justify the real likelihood of bias.
48. After a decision is reached the standard of proof of bias is higher as laid down in Vassiliades v. Vassiliades14.
This decision has been referred to by this Court in Ranjit Thakur v. Union of India 15. The learned counsel after referring to the relevant case law submits that cases of bias and ostensible bias had to be regarded in the light of their own circumstances. In this case Mr Subhash Nair is only one of the officers in BPL, which has over 5500 employees and 89 officers of his rank in 27 offices all over India. Mr Nair was not the decision-maker at all. He was one of the recommending authorities. His involvement in the approval and selection of the tender was indispensable. He was originally the Member (Services) on 29-5-1992.
Thereafter he became Director General, Telecommunications by a notification issued by 28-7-1992 by the President of India. As such, he was to exercise all powers of Telegraph Authority under Section 3(6) of the Act. Therefore, the High Court was right in applying the doctrine of necessity.
This doctrine has come up for discussion in Charan Lal Sahu v. Union of India 16.
49. Whatever it may be, Indian Telecom cannot take the point of bias. It took the chance and benefit of being short-listed despite the knowledge of Mr Nair's involvement.
Equally, TATA Cellular did not raise the allegation of bias in the High Court. In fact, it opposed the plea of bias.
50. No doubt, this respondent dropped McCaw as a foreign collaborator. That does not amount to change where one out of two or three collaborators is dropped. This foreign collaborator was required as Condition No. 7 only in financial bid documents not in tender documents. This respondent submitted financial bid on 17-8-1992 showing only two of the collaborators. McCaw was not shown as that was already dropped out. Therefore, the High Court rightly held that McCaw was not taken into consideration in awarding marks for foreign partners' experience. The object of the first stage was not to allot the franchise but to short-list the parties.
51. The learned Solicitor General produced the copies of the relevant documents in the file and took us through the same. It is submitted, after outlining the process of evaluation in the second stage six parameters were adopted by the Committee consisting of Telecom experts who are none other than the senior officers of the Department of Telecommunications. The parameters are as follows :
1. Quoted rental ceiling 14 AIR 1945 PC 38: 221 IC 603: 1945 All LJ 34 15 (1987) 4 SCC 611: 1988 SCC (L&S) 1: (1987) 5 ATC 11 3: (1988) 1 SCR 512 16 (1990) 1 SCC 613 672
2. Project financing plan
3 . Foreign Exchange inflow and outflow
4. Project's plan for cellular equipment within the country including the tie-up with the proposed Indian manufacturers.
5 . Experience of foreign operating partner and
6. Financial strength of parameters/partner companies.
These parameters were assigned marks. The evaluation report including the ranking arrived at by the tender evaluation committee was then put up to the Telecom Commission for further consideration and selection. Due to technical considerations not more than two bidders per city could be accommodated. Paragraph 14 of the bid conditions provided that each bidder must furnish a declaration in a specified form to the bid documents. The declaration given by Hutchison Max was complete. However, its bid had to be rejected on merits in spite of securing high marks.
52. M/s India Telecomp secured the second place for Calcutta. Inasmuch as they had the same foreign partner as Usha Martin which secured a higher place than India Telecomp, it was rejected and the choice went to the next bidder in the marking list. After the above considerations were taken into account, the remaining companies were selected which led to the writ petition. Pursuant to the High Court directions the matter was reconsidered and selections have been made as was done earlier.
53. The principal objection of the Union of India is that the High Court was not justified in scrutinising the tendering process in such detail. The minute examination is unwarranted because the High Court cannot constitute itself the selecting authority. However, no appeal is preferred, as otherwise, it would have further delayed the introduction of very valuable communication facility in this country.
Beyond that, it has no particular interest as to who is selected. However, it becomes necessary to answer the allegations made about the actual selection and whether there was any bias on the part of the selection committee.
The selection process was dictated by the, exigencies of the situation. It is a question, as to what one could settle for, in the given circumstances. The Government was embarking upon a totally new technology project, for the first time. At that stage, it was impossible to predict what kind of response will there be. Therefore, it is impossible to predicate the cut-off limits which could be set or which conditions have to be relaxed or softened. The allegation of bias, it is held, must be a case of reasonable possibility or likelihood of bias. In this case, there is no such reasonable likelihood. Mr B.R. Nair was not influenced directly, or, in any other manner, subtle or otherwise. He did not, in fact, participate in any of the significant or crucial stages in the selection process.
Even otherwise, the relationship is not such as to give reasonable apprehension of bias. In support of this argument reliance is placed on Manak Lal and Ashok Kumar Yadav v. State of Haryana3 (SCC p. 441, para 16). As regards the parameter in relation to project financing it was kept in view by taking into account the estimated number of subscribers, installation charges, monthly rental, any 673 other charges etc. They were included in the competition.
The other parameters of the bidders were treated on the same footing as regards this parameter is concerned. Concerning rental, it was specifically averred in the counter before the High Court that the other charges had also been included while calculating quoted rental.
54. It is not correct to contend that Talkland's experience is not relevant. In the United Kingdom the operation of Mobile Cellular System is handled by the network cooperator and a proper service provider, acting together. The licensee is required to perform the combined functions of a network operator as well as service provider. The duties and functions of a licensee are not limited to making available the services as defined. In fact, the principal obligation of the licensee is expressed generally in paragraph 2. 1. 1. A reading of the other clauses makes it clear that it is incumbent upon the licensee to provide services. Therefore, the experiences of a network operator and the service provider are both important and relevant.
55. In the case of Bharati Cellular the attack is that the cut-off came to be reduced to 80,000 subscribers to accommodate it. Bharati Cellular mentioned in its tender, as on 31-12-1991, the name of SFR France which had 80,000 subscribers. By 31-12-1991, it would have got increased to more than one lakh. In August 1992 when the bids were submitted SFR's line of experience could reasonably be expected to be more than one lakh. SFR France had a GSM licence. Having regard to these facts, it would not be an unreasonable estimate, for the experts, to conclude that Bharati Cellular was having experience of over one lakh lines.
56. It is alleged that the debt/equity ratio of Skycell has not been properly taken. Skycell ratio was 1.5 and was correctly assigned 3 marks.
57. TATA Cellular alleges that Bharati Cellular, Mobile Telecom, Sterling and Skycell have breached note (ii) under para 2.4 which provides that minimum reliance on Indian Public Financial Institutions will be preferred. The bid profess made distinction between loans from Public Financial Institutions and Banks. The criticism of TATA confuses this requirement with loan from Banks. The criterion, it is submitted, was correctly applied.
58. In the evaluation of process open market purchase was left out of consideration.
59. Since Skycell bid for Madras showed that they had projected their operations in Madras for initial years, would be below profitable levels. In such a case, no dividend would have to be paid to the foreign collaborators.
Accordingly, it was concluded that the foreign exchange inflow position was better.
60. International roaming is a relevant consideration.
From the tender document it will be clear that it provides for facility of roaming to visitors. Roaming facility for a tourist is available in the GSM system. Even if this 674 condition has been relaxed in favour of certain bidders, there is nothing wrong. Reliance is placed on G.J. Fernandez v. State of Kamatakal7.
61. With regard to the foreign collaborator of BPL there was no change. French Telecom is one of the foremost in the world in this technology. It remained as foreign collaborator of BPL. Dropping out of McCaw did not violate the bid conditions which were really aimed at preventing a new and, therefore, unknown collaborator being introduced at the financial bid stage. The second Technical Evaluation Committee did not see this as a violation. In any event, where the judgment of the High Court had been given effect to and a proper evaluation has been done, no interference is warranted.
62. Mr Soli J. Sorabjee, learned counsel, in his reply, would submit that as regards the scope of judicial review the American cases cited by Mr K.K. Venugopal would not apply. As laid down in State of U.P v. Maharaja Dharmander Prasad Singh18 judicial review is confined to decision- making process. This being an administrative action the scope of judicial review could be gathered from Council of Civil Service Unions v. Minister for Civil Service19. In Secy. of State for Education and Science v. Tameside Metropolitan Borough Council2O the law has been stated as to when subjective satisfaction could be interfered with under judicial review. This Court also had occasion to deal with similar contracts and stated the law relating to judicial review in Sterling Computers Ltd. v. M&N Publications Ltd.5 (SCC pp. 455 and 458, para 19) and then again, in Union of India v. Hindustan Development Corpn.6
63. The point against Hutchison Max is, the defect in its tender, came to be pointed out, requiring it to comply with the same. In view of the defect Hutchison Max came to be excluded.
64. Mr Nair's participation from the beginning would constitute bias in law.
65. Mr Ashoke Sen, in his reply, would state that in the case of Hutchison Max the mistake was committed in the offer with regard to compliance statement. The principle of bias as laid down in R. v. Essex Justices (Sizer), ex p Perkins21 would apply. Similar passage occurs in de Smith's Constitutional and Administrative Law (4th Edn.) p. 268.
66. Mr Harish Salve, in reply, would urge that the hidden criteria were evolved in relation to common foreign collaborator. This shows that there was lack of candour on the part of the Union. It is mentioned that Talkland was taken into consideration. It is not so, as seen from the file. The conditions were tailor-made to suit Bharati Cellular and BPL.
17 (1990) 2 SCC 488 (para 18) 18 (1989) 2 SCC 505, 524: (1989) 1 SCR 176, 202 19 (1985) 1 AC 374: (1984) 3 All ER 935: (1984) 3 WLR 1174 20 1977 AC 1014: (1976) 3 All ER 665: (1976) 3 WLR 641 21 (1927) 2 KB 475: 1927 All ER Rep 393: 96 UKB 530 675
67. Mr K.K. Venugopal would urge that the rule relating to judicial review should not be applied here because it is one of selection by an a administrative process.
68. Having regard to the above arguments we propose to deal with the matter from the following five aspects :
1. The scope of judicial review in matters of this kind.
2. Whether the selection is vitiated by arbitrariness? (a) regarding financial projection and (b) regarding rental.
3. Bias of Mr Nair whether affected the selection ?
4. Whether the Apex Committee has been bypassed?
5. Evolving of hidden criteria whether valid?
1. Scope of Judicial Review
69. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated, the following are the requisites of a valid tender :
1. It must be unconditional.
2. Must be made at the proper place.
3. Must conform to the terms of obligation.
4. Must be made at the proper time.
5. Must be made in the proper form.
6. The person by whom the tender is made must be able and willing to perform his obligations.
7. There must be reasonable opportunity for inspection.
8. Tender must be made to the proper person.
9. It must be of full amount.
70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government.
But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
71. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy; thus they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review.
676
72. Lord Scarman in Nottinghamshire County Council v. Secretary of State for the Environment22 proclaimed :
" 'Judicial review' is a great weapon in the hands of the judges; but the judges must observe the constitutional limits set by our parliamentary system upon the exercise of this beneficial power." Commenting upon this Michael Supperstone and James Goudie in their work Judicial Review (1992 Edn.) at p. 16 say :
"If anyone were prompted to dismiss this sage warning as a mere obiter dictum from the most radical member of the higher judiciary of recent times, and therefore to be treated as an idiosyncratic aberration, it has received the endorsement of the Law Lords generally.
The words of Lord Scarman were echoed by Lord Bridge of Harwich, speaking on behalf of the Board when reversing an interventionist decision of the New Zealand Court of Appeal in Butcher v. Petrocorp Exploration Ltd. 18-3- 1991."
73. Observance of judicial restraint is currently the mood in England. The judicial power of review is exercised to rein in any unbridled executive functioning. The restraint has two contemporary manifestations. One is the ambit of judicial intervention; the other covers the scope of the court's ability to quash an administrative decision on its merits. These restraints bear the hallmarks of judicial control over administrative action.
74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself.
75. In Chief Constable of the North Wales Police v. Evans23 Lord Brightman said :
"Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made.
Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power." In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms :
"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practiced at the Bar, administrative. It is not intended to take away from those authorities the powers and 22 1986 AC 240, 251: (1986) 1 All ER 199 23 (1982) 3 All ER 141, 154 677 discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)." In R. v. Panel on Takeovers and Mergers, ex p Datafin plc24, Sir John Donaldson, M.R. commented:
"An application for judicial review is not an appeal." In Lonrho plc v. Secretary of State for Trade and Industry25, Lord Keith said: "Judicial review is a protection and not a weapon." It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re26, Lord Fraser observed that :
"Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer."
76. In R. v. Panel on Take-overs and Mergers, ex p in Guinness plc27, Lord Donaldson, M.R. referred to the judicial review jurisdiction as being supervisory or 'longstop' jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power.
77. The duty of the court is to confine itself to the question of legality. Its concern should be :
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or, 5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken.
The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
24 (1987) 1 All ER 564 25 (1989) 2 All ER 609 26 Amin v. Entry Clearance Officer, (1983) 2 All ER 864 27 (1990) 1 QB 146: (1989) 1 All ER 509 678
(i) Illegality : This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesday unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind28, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
78. What is this charming principle of Wednesday unreasonableness? Is it a magical formula? In R. v. Askew29, Lord Mansfield considered the question whether mandamus should be granted against the College of Physicians. He expressed the relevant principles in two eloquent sentences. They gained greater value two centuries later :
"It is true, that the judgment and discretion of determining upon this skill, ability, learning and sufficiency to exercise and practise this profession is trusted to the College of Physicians and this Court will not take it from them, nor interrupt them in the due and proper exercise of it. But their conduct in the exercise of this trust thus committed to them ought to be fair, candid and unprejudiced; not arbitrary, capricious, or biased; much less, warped by resentment, or personal dislike."
79. To quote again, Michael Supperstone and James Goudie; in their work Judicial Review (1992 Edn.) it is observed at pp. 119 to 121 as under :
"The assertion of a claim to examine the reasonableness been done by a public authority inevitably led to differences of judicial opinion as to the circumstances in which the court should intervene. These differences of opinion were resolved in two landmark cases which confined the circumstances for intervention to narrow limits.
In Kruse v. Johnson3O a specially constituted divisional court had to consider the validity of a bye- law made by a local authority. In the leading judgment of Lord Russell of Killowen, C.J., the approach to be adopted by the court was set out. Such bye-laws ought to be 'benevolently' interpreted, and credit ought to be given to those who have to administer them that they would be reasonably administered. They could be held invalid if unreasonable : Where for instance bye-laws were found to be partial and unequal in their operation as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord Russell 28 (1991) 1 AC 696 29 (1768) 4 Burr 2186 : 98 ER 139 30 (1898) 2 QB 91: (1895-9) All ER Rep 105 679 emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient.
In 1947 the Court of Appeal confirmed a similar approach for the review of executive discretion generally in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn31. This case was concerned with a complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to licence performances on Sunday only subject to a condition that 'no children under the age of 15 years shall be admitted to any entertainment whether accompanied by an adult or not'. In an extempore judgment, Lord Greene, M.R. drew attention to the fact that the word 'unreasonable' had often been used in a sense which comprehended different grounds of review. (At p. 229, where it was said that the dismissal of a teacher for having red hair (cited by Warrington, L.J. in Short v. Poole Corpn.32, as an example of a 'frivolous and foolish reason') was, in another sense, taking into consideration extraneous matters, and might be so unreasonable that it could almost be described as being done in bad faith; see also R. v. Tower Hamlets London Borough Council, ex p Chetnik Developments Ltd.33 (Chapter 4, p. 73, supra). He summarised the principles as follows:
"The Court is entitled to investigate the action of the local authority with a view to seeing whether or not they have taken into account matters which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four comers of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which Parliament has confided in them.' This summary by Lord Greene has been applied in countless subsequent cases.
"The modem statement of the principle is found in a passage in the speech of Lord Diplock
