{"id":219542,"date":"2002-05-31T00:00:00","date_gmt":"2002-05-30T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/p-sharma-consultants-pvt-ltd-vs-mahanagar-telephone-nigam-on-31-may-2002"},"modified":"2016-12-21T00:01:39","modified_gmt":"2016-12-20T18:31:39","slug":"p-sharma-consultants-pvt-ltd-vs-mahanagar-telephone-nigam-on-31-may-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/p-sharma-consultants-pvt-ltd-vs-mahanagar-telephone-nigam-on-31-may-2002","title":{"rendered":"P. Sharma Consultants Pvt. Ltd. vs Mahanagar Telephone Nigam … on 31 May, 2002"},"content":{"rendered":"
Delhi High Court<\/div>\n
P. Sharma Consultants Pvt. Ltd. vs Mahanagar Telephone Nigam … on 31 May, 2002<\/div>\n
Author: A D Singh<\/div>\n
Bench: A D Singh, M B Lokur<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
Anil Dev Singh, J.<\/p>\n
 1. This is a writ petition where by the petitioner seeks the following reliefs:-\n<\/p>\n
 “(a) a writ in the nature of Mandamus issuing a direction or such
\nappropriate writ upon the Respondent No. 1 to 3 not to take any
\nsteps contrary to or in contradiction of the Tender Specifications
\ncontained in Tender Notice No. AGM(MM-III)\/CRPS\/99-2000\/40
\ndated 17.7.2000.\n<\/p>\n
 (b) a writ in the nature of prohibition or such appropriate writ
\nrestraining Respondent Nos. 1 to 3 and each one of them from
\ntaking any steps in furtherance of the counter offer till the
\ndisposal of the present petition.\n<\/p>\n
 (c) a writ and\/or direction in the nature of certiorari or such
\nappropriate writ quashing the Purchase Order issued to
\nRespondent No. 4.\n<\/p>\n
 (d) a writ in the nature of Mandamus directing the Respondent No. 3
\nto award the Tender as per the specification and requirement
\nspecified in the Tender Documents.\n<\/p>\n
 (e) Pass such other or orders, direction or directions as this
\nhon’ble court may deem fit in the facts and circumstances of the
\ncase.”\n<\/p>\n
 2. The petitioner is a company incorporated under the Companies Act, 1956, and
\ndeals in telecom equipments, etc. The first respondent is Mahanager Telephone Nigam
\nLimited (MTNL) which is providing telecom network at Delhi. The second respondent
\nis the Chief General Manager of the MTNL, and the third respondent is the General
\nManager (MM), if its Delhi Unit. The fourth respondent is a company incorporated
\nunder the Companies Act, 1956 and is also dealing in telecom equipments.\n<\/p>\n
 3. The third respondent issued a notice dated July 17,2000 inviting sealed tenders
\nin two parts comprising of technical-commercial and financial bids, for supply of five
\nunits of Cable Record Purification System (CRPS) along with accessories. The
\npetitioner as well as the fourth respondent submitted their commercial and technical
\nbids on August 25,2000 in response to the aforesaid notice. The technical bids of the
\npetitioner and the fourth respondent were opened on August 25,2000 itself. Both the
\nbids were evaluated by the MTNL. The tenderers were asked to depute their respective
\ntechnical experts to explain how the systems offered by them were in conformity with
\nthe equipment sought vide tender enquiry dated July 17,2000. They were also asked to
\nmake their respective presentations.\n<\/p>\n
 4. On January 4, 2001, the financial birds of the petitioner and the fourth respondent
\nwere opened. It is not disputed that the petitioner and the fourth respondent offered
\ntheir systems as per the following details:-\n<\/p>\n
  PETITIONER:\n<\/p>\n
 1. System capable of automatically scanning 1200 termination at a time at the
\nMain Distribution Frame (MDF).\n<\/p>\n
 2. System equipped with portable equipment capable of automatically scanning
\n100 pairs at the Secondary Distribution Frame (SDF) (at the pillar\/cabinet).\n<\/p>\n
 3. Price per unit = Rs. 2,46,35,824.\n<\/p>\n
  FOURTH RESPONDENT:\n<\/p>\n
 1. System capable of automatically scanning and testing up to 800 termination
\nat a time at the MDF.\n<\/p>\n
 2. System capable of automatically scanning 2000 pairs at the SDF.\n<\/p>\n
 3.Price per unit = Rs. 2,15,14,320.\n<\/p>\n
 The petitioner by its letter dated February, 1,2001 to the respondent objected to the
\nbid of the fourth respondent on the ground that it did not meet the tender specifications.
\non March 16,2001, the petitioner and the fourth respondent were also asked to make
\ncertain clarifications. On March 19,2001, the petitioner addressed a letter to the second
\nrespondent stating that the clarifications were being sought for favoring the fourth
\nrespondent. It seems that in the meantime a technical committee evaluated the tenders
\nof the petitioner and the fourth respondent and preferred the equipment offered by the
\nlatter. consequently, on July 2001, the MTNL placed a purchase order on the
\nfourth respondent for supply of one unit of the CRPS.\n<\/p>\n
 5. On August, 8, 2001, the Assistant General Manager, MTNL, wrote a letter to the
\npetitioner giving counter for supply of CRPS. The letter reads as under:-\n<\/p>\n
 ” Please refer the above tender enquiry opened on 25-8-2000, wherein
\nyou had quoted your rates etc. I am directed to counter offer you the rates
\nof Rs. 2,15,14,320\/- net including comprehensive warranty of three years
\nwith following configuration, terms & condition, instead of
\nRs. 2,46,35,824\/- each as quoted by you.\n<\/p>\n
 1. Software updates is to be supplied free of cost for seven years.\n<\/p>\n
 2. System must scan 800 pairs on MDF & 2000 pairs on pillars
\nside. (as per TEC specification No. G\/CRP-01\/01 dt. May ’97).
\nAlso following configuration for shoes must be provided with
\nthe system.\n<\/p>\n
 (A) MDF side\/configuration of top shoes.\n<\/p>\n
 (i) Pouyet MDF shoes-400 P Kit 2 Nos.\n<\/p>\n
 (ii) Krone shoes-400 P Kit 2 Nos.\n<\/p>\n
 (iii) Fetex shoes-400 P Kit 2 Nos.\n<\/p>\n
 (B)  SDF side\/configuration of top shoes.\n<\/p>\n
 Krone shoes 400 P Kit 5 No   <\/p>\n
 3. During warranty and post warranty period you will not charge
\nany thing extra towards service charges for installation of
\nadditional hard ware or for upgradation of equipment. Also
\nyou have to supply, at your own cost, all necessary spares,
\nwhich have not been included in the offer as part of the
\nrequirement.\n<\/p>\n
 4. Post warranty AMC charges after three years warranty will be
\npaid in following manner:\n<\/p>\n
 (a) 4th year AMC charges= Rs. 14.0 lacs  <\/p>\n
 (b) 5th—–do—–=Rs. 14.5 lacs  <\/p>\n
 (c) 6th—–do—–=Rs. 15.5 lacs  <\/p>\n
 (d) 7th—–do—–=Rs. 16.0 lacs   <\/p>\n
 5. CRPS must be compatible with MTNL CSMS.\n<\/p>\n
 6. The system to be supplied must fulfilll all the requirements and
\nconditions as required in the tender.\n<\/p>\n
 If the above counter rates are acceptable to you, then please confirm
\nwithin 10 days of the receipt of this letter failing which it will be treated
\nthat counter offer rates are not acceptable to your firm and the case will be
\nclosed without further correspondence.”\n<\/p>\n
 In response, the petitioner vide its letter dated August 13,2001 stated that the counter
\noffer given by the MTNL was not as per the tender specifications and bill of material
\nasked for in the tender. It was also stated that the MTNL was changing its own
\nspecifications to accommodate the fourth respondent. The letter reads as follows:-\n<\/p>\n
 “With reference to the above mentioned subject letter dated May 22nd
\n2001 singed on August 8th, 2001 handed over to us on August 9th, 2001 we
\nwould like to bring to your notice the following:\n<\/p>\n
 1) That the Counter Offer given to us vide the above
\nmentioned subject letter is not as per the Specifications and
\nBill of Material asked for in the tender as per Annexure-A
\nof Section XII. (Copy enclosed four your ready reference).\n<\/p>\n
 2) That the Bill of Material mentioned in the counter offer is
\nas per our competitors, which clearly shows that out
\ncompetitors M\/s ARM are being favored and MTNL is
\nchanging its own specifications to accommodate our
\ncompetitor. Also refer to our previous letter dated March
\n19th, 2001 while submitting our clarifications in this regard.
\n(Copy enclosed for your reference).\n<\/p>\n
 3) The Bill of Material asked for in the above mentioned
\nsubject letter is also in contradiction to Clause 8 of
\nAnnexure-A of Section XII which states that the system
\nshould be portable. A 2000 pair system scanner at the SDF
\nis in no way portable to be taken out in the filed. Please
\nalso refer to Query No. AGM(MM-III)\/CRPS\/2000-2001
\ndated March 16th, 2001 (copy enclosed for your ready
\nreference) wherein MTNL had asked for clarification from
\nboth the companies if the system offered shall be able at
\nthe SDF. This again proves that in spite of getting
\nclarifications MTNL has changed its own requirements to
\naccommodate our competitors and it also shows that the
\nreply given by our competitors M\/s ARM is false and
\nmisleading and that their system cannot perform as per the
\nqueries asked.\n<\/p>\n
 4) To accommodate our competitor some officials of MTNL
\nare also not taking into account the inoperatability of the
\nsystem It is a well-known fact that from the Vertical at the
\nMDF a cable does not go to one SDF and is bifurcated and
\nterminated at more than one pillar\/cabinet. Because of this
\nreason MTNL probably asked for a small portable 100 pair
\nscanner\/tester at the SDF and a bigger 1200 pair
\nScanner\/tester at the MDF so it can move the portable
\nscanner from SDF to SDF to completely scan and test the
\ncable coming from the MDF. It is clear from this that some
\nofficials form MTNL have completely ignored its own
\ntechnical requirements\/specifications, practibility and
\noperatability of the system to accommodate our
\ncompetitors in spite of they themselves asking for these
\nvery clarifications vide their letter dated March 16th, 2001.\n<\/p>\n
 This points to a definite bias and mal-intention on the part of some
\nofficials of MTNL, which we have from the beginning being pointing out
\nto MTNL that our competitors are being favored. We hereby express our
\nextreme disappointment at the way this tender has and is being handled
\nand there is only one conclusion from this   favoritism of M\/s. ARM for
\nsome unknown, unexplainable reasons.\n<\/p>\n
 In light of the above you are requested to kindly look into the matter and
\nget a revised offer letter issued as per the Bill of Material asked for in the
\ntender originally. Pending receipt of your letter we hereby reserved our
\nright to submit our acceptance of your above subject mentioned letter.”\n<\/p>\n
 On October, 4,2001, the petitioner wrote another letter to the Chief General Manager,
\nMTNL, stating that it had not received any reply to its letter dated August 13, 2001.
\nThe petitioner expressed its apprehension that the MTNL was proceeding to procure the
\nsystem from the fourth respondent in spite of the fact that the same was not in
\nconformity with the configuration and technical specifications as laid down in the
\ntender documents as well as the TEC specifications. It is note worthy that the
\npetitioner did not signify its acceptance to the counter offer given to it by the second
\nrespondent.\n<\/p>\n
 6. The petitioner on October 18, 2001 filed the instant writ petition alleging, inter
\nalia, that the bid of the fourth respondent was not in conformity with the specifications
\nlaid down in the tender documents. The petitioner also claimed that the placing of the
\npurchase order for one equipment on the fourth respondent was result of malafide
\naction of the MTNL. The petitioner along with the writ petition also field an
\napplication for interim relief.\n<\/p>\n
 7. By order dated October 19,2001, the learned Single Judge, before whom the
\nmatter came up, directed that no further action pursuant to the purchase order placed on
\nthe fourth respondent will be taken. However, on November, 23, 2001, on hearing the
\nlearned counsel for the parties, the learned Single Judge vacated the interim order on the
\nground that there had been laches on the part of the petitioner in moving the court under
\nArticle 226 of the Constitution. The order dated November 23, 2001 passed by the
\nlearned Single Judge was challenged by the petitioner before the Division Bench by
\nmeans of a Letters Patent Appeal. The order was set aside with a direction that the
\nmatter of stay be reconsidered as the Division Bench was of the opinion that there was
\nno laches on the part of the petitioner in filing the writ petition. A Special Leave
\nPetition was filed by the fourth respondent from the order o the Division Bench. The
\nSupreme Court by its order dated May 8, 2002 modified the order of the Division Bench
\nand directed that the writ petition be taken up for hearing by the learned Single Judge
\nand disposed of on merits before the summer vacation. The Supreme Court while
\ndisposing of the Special Leave Petition took note of the submission that the fourth
\nrespondent had already placed an order for one unit with the manufacturing company
\nlocated in Israel and the same was shipped on April 22, 2002. The Supreme Court, in
\nview of the fact that the equipment had already been ordered and was on board, directed
\nthat the equipment will be supplied by the fourth respondent to the MTNL in Delhi but
\nthe supply will be subject to the final decision in the petition. The writ petition has
\nbeen placed before us in view of the amendment in Sub-rule (xviii)(a) of Part B of
\nChapter 3 of the High Court Rules and Orders, Volume V, vide notification dated April
\n11, 2002.\n<\/p>\n
 8. The hearings in the case took place on May 22, 2002, MAY 24, 2002 and May
\n27, 2002, at which the learned counsel for the parties were heard at length. Mr. Prag P.
\nTripathi, the learned Senior Advocate appearing for the petitioner, submitted that
\naccording tot he tender Cable Record Purification System (CRPS), which is required to
\nbe supplied to the MTNL, should be capable of automatically scanning up to 1200
\ntermination at the MDF and 100 pairs at the SDF\/Cabinet Pillar. The learned senior
\ncounsel also pointed out that the tender postulates that the system shall be equipped
\nwith portable equipment which can be taken out in the filed for scanning 100 pairs at
\nthe SDF. According to him, the configuration of the system offered by the fourth
\nrespondent is not consonance with the tender documents and, therefore, the tender of
\nthe fourth respondent ought to have been rejected by the MTNL. The learned counsel
\ncanvassed that the acceptance of the tender of the fourth respondent, which was not in
\naccordance with the specifications stipulated in the NIT, was illegal and needs to be
\nquashed.\n<\/p>\n
 9. The real issue which requires determination is whether or not the equipment
\noffered by the fourth respondent was in keeping with the tender specifications. In order
\nto resolve the issue it will be necessary to refer to the NIT and instructions to the
\ntenders for purchase and supply of CRPS withe accessories. In para 4.3.3 of the
\nGeneric Requirements, G\/CRP-01\/01. May-97, which forms part of the NIT, it is
\nprovided that the system shall be capable of automatically scanning 10 to 1000
\ntermination at a time, at the MDF, cabinet, pillar and Distribution points. Correction
\nhas been made in para 4.3.3 of the Generic Requirements, G\/CRP-01\/01. May-97, as per
\nthe TEC specifications. The correction reads as follows:-\n<\/p>\n
  “Page No. 7: Para No. 4.3.3: Same as condition No. 7 and 8 of
\nSection-XII of NIT.”\n<\/p>\n
 Conditions No. 7 and 8 of Section-XII (Specification-Annexure-A) of the NIT also
\nneeds to be noticed. These are mentioned at page 69 of the paper book and read as
\nunder:-\n<\/p>\n
 “7. The system shall be capable of automatically scanning up to
\n1200 termination at a time, at the MDF.\n<\/p>\n
 8. The system shall be equipped with portable equipment which
\ncan be taken out of filed and shall be able to automatically can
\n100 prs. at the cabinet\/pillar.”\n<\/p>\n
 A reference may now be made to Annexure ‘E’ (Tender’s Quotation) which is part of
\nthe Generic Requirements. Annexure ‘E’ is a form which a tenders is required to fill
\nup. Annexure ‘E’, being the focal point around which controversy has been built up,
\nneeds to be set out:-\n<\/p>\n
 “MAHANAGAR TELEPHONE NIGAM LIMITED, DELHI.\n<\/p>\n
(A Government of India Enterprise) <\/p>\n
ANNEXURE ‘E’ (Tender’s Quotation) <\/p>\n
 (i) Tenderers telegraphic address…..\n<\/p>\n
 (if available) <\/p>\n
 (ii) Tenderer Telephone\/Fax No……\n<\/p>\n
 From \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 To, <\/p>\n
 Asstt. General Manager (MM-III) <\/p>\n
9, CGO Complex, MTNL BLDG, <\/p>\n
TELEPHONE EXCHANGE LODHI <\/p>\n
ROAD,  NEW DELHI-110003.\n<\/p>\n
 Dear Sir, <\/p>\n
 1. I\/We submit the sealed tender for supply of Cable Record
\nPurification System (CRPS) with all accessories both hardware and
\nsoftware capable of simultaneously scan & test 800 prs. (E-10B trype,
\nKrone type and Pouyet type MDF tag blocks) terminated on a 2000 prs.
\nCapacity pillar which has 800 Primary pairs & 1200 Distribution Cable
\npairs terminated on it.\n<\/p>\n
 2. I\/We have thoroughly read\/understood the technical requirement
\nand General terms & conditions given in Annexure A & B and other
\nAnnexure also (CX to F) and agree to abide by them.\n<\/p>\n
 3. The rates of each items used in Cable Record Purification System
\n(CRPS) and the total cost of the Equipment as a whole is given in the
\nfollowing format.\n<\/p>\n
  Sl.No
\n  Description of item
\n  Unit Rate
\n  Quantity
\n  Cost<\/p>\n
  1.<\/p>\n
  2.<\/p>\n
  3.<\/p>\n
  4.<\/p>\n
  5.<\/p>\n
  6.<\/p>\n
  7.<\/p>\n
  8.<\/p>\n
  9.<\/p>\n
  10.<\/p>\n
 Total Cost     Read & Understood\nGrand total of the system   Sign. of Tenderer:\n      Date :\n      Seal of the Co.\"\n \n \n\n<\/pre>\n
 10. As is evident from para 1, CRPS system should be capable of simultaneous
\nscanning and testing of 800 pairs (E-108 type, Krone type and Pouyet type MDF tag
\nblocks) terminated on a 2000 pairs Capacity pillar having 800 Primary pairs and 1200
\nDistribution Cable pairs terminated on it. In other words, of the configuration of the
\nequipment should be such which has the capacity to simultaneously test 800 lines on
\nthe MDF side and 2000 lies on the SDF side. NIT also provides that technical
\nspecification No. G\/CCRP-01\/01.May-97 will supersede the General Terms and
\nConditions and prevail in the event of any contradiction between the relevant clauses.
\nThe said condition at page 26 of the paper book reads as follows:-\n<\/p>\n
  “The “General Terms and Conditions” are applicable for this
\ntender however, the clauses mentioned in the conditions and technical
\nspecification No. G\/CCRP-01\/01. May-97 will supersede the General
\nTerms and conditions and prevail in case of any contradiction in respect of
\nrelevant clauses.”\n<\/p>\n
 The NIT also empowers the purchaser to modify\/alter any terms or conditions as along
\nas they are uniformly applied to all the bidders. Keeping in view the aforesaid basic
\nand salient provisions of the NIT, it has to be seen whether or not the tender submitted
\nby the fourth respondent is in keeping with the requisite specifications.\n<\/p>\n
 11. It is true that in case Annexure ‘E’ was not part of the NIT, more particularly
\nGeneric Requirements, G\/CRP-01\/01.MAY-97, it could be argued that the tender of the
\nfourth respondent ought to have been rejected out rightly as it falls short of the
\nrequirements laid down in Conditions 7 and 8 of Section XII of the NIT which require
\nthat the system should be capable of automatically scanning up to 1200 terminations at
\nthe MDF, and the same time it should be able to automatically scan 100 pairs at the
\nCabinet Pilar. The capability of the equipment offered by the fourth respondent on the
\nMDF side less as it can test 800 lines on that side. However, its capability on the
\nSDF side is ore as ti can test 2000 lines on that side. But if Annexure ‘E’ is part of
\nthe Generic Requirements G\/CRP-01\/01.MAY-97 and consequently part of the NIT,
\ncan it be said that the tender of the fourth respondent was not in conformity with the
\nNIT. The learned senior counsel for the petitioner submitted that the Annexure ‘E’ is
\nnot a part and repository of technical specifications. He invited our attention to para 4
\nof Section-II of the NIT, ‘Instructions of Bidders’. He submitted that para 4, which
\ngives list of bid documents, does not speak of Annexure ‘E’. It may be mentioned that
\npara 4 refers to various Sections only and the annexure to the tender have not been
\nseparately mentioned therein. The annexure are part of the sections. Therefore, no
\nsignificance can be attached to the non-inclusion of Annexure ‘E’ in para 4 para 4.1
\ndivides the bid documents into Sections. Technical specification is comprised in
\nSection (XII) of the bid documents. This section has been described as follows:-\n<\/p>\n
  “xii) Technical Specification of generic requirements
\nNo.G\/CRP-01\/01\/.May-978 with latest amendment.”\n<\/p>\n
 Annexure ‘E’ is part of the aforesaid generic requirements which has several
\nannexure. None of he annexure has been separately mentioned in para 4.1 of the
\nNIT. Therefore, the contention of Mr. Tripathi that Annexure ‘E’ cannot be part of
\ntechnical specifications because of not being specifically mentioned and referred to in
\npara 4.1 of the NIT, is devoid of force.\n<\/p>\n
 12. The next question which arises for our consideration is whether specifications-Annexure-A, provided at page
\n69 of the paper book, will prevail. According to the clause at page 26 of the paper book
\n(NIT), the technical specifications provided in G\/CCRP-01\/01. May-97 will supersede
\nthe General Terms and Conditions and prevail in case of any contradiction between the
\nrelevant clauses. Therefore, in the light of the said clause, Annexure ‘E’ being part of
\nthe Generic Requirements will prevail. Tender of the fourth respondent being i
\nconformity with the specifications provided in Annexure ‘E’ is to beyond the scope of
\nthe NIT. The learned counsel for the petitioner, however, submitted that in case of
\nconflict between the earlier clause and the later clause, effect must be given to the
\nearlier clause. In support of his submission he relied upon the decision of the Supreme
\nCourt in  Radha Sunder Dutta v. Mohd. Jahadur Rahim,<\/a> , in which it
\nwas held as follows:-\n<\/p>\n
“If, in fact, there is a conflict between the earlier clause and the later
\nclauses and it is not possible to give effect to all of them, then the rule of
\nconstruction is will-established that it is the earlier clause that must
\noverride the later clauses and not ‘vice versa’. In  Forbes v. Git, (1922) 1
\nAc 256 at p. 259; (AIR 1921 PC 209 at p. 211) (J), Lord Wrenbury stated
\nthe rule in the following terms:\n<\/p>\n
  “If in a deed an earlier clause is followed by a later clause
\nwhich destroys altogether the obligation created by the earlier cause, the later clause is to be rejected as repugnant and the earlier
\nclause prevails. In this case the two clauses cannot be reconciled
\nand the earlier provision in the deed prevails over the later.”\n<\/p>\n
 13. The rule of construction applied by the Supreme Court in the aforesaid case will
\nhave no application to the instant case as the NIT specifically lays down that the
\ntechnical specifiations provided in G\/CCRP-01\/01.May-97 will supersede the General
\nTerms and Conditions.\n<\/p>\n
 14. We do not see how the petitioner can maintain that the bid submitted by the
\nfourth respondent was not in keeping with the specifications provided in the NIT.
\nAnnexure ‘E’ was part and parcel of bid documents, the bid being in conformity
\nwith Annexure ‘E’ cannot be said to be not in keeping with the specifications laid down
\nin the bid documents. Mr. Tripathi submitted  that even the understanding of the
\nMTNL was that the technical specifications provided in para 4.3.3., as  corrected by the
\nTEC which were reflected in Conditions No. 7 and 8 at page 69 of the paper book, were
\nthe specifications which the tenderers were required to comply with. In this regard, he invited our attention to the letter of the fourth respondent dated October 21, 2000. In this letter, which was addressed to the Deputy General Manager, MTNL, a reference
\nwas made to a discussion between the representatives of the fourth respondent and the
\nDeputy General Manager, MTNL. The relevant part of the letter, on which reliance has
\nbeen placed by the petitioner, reads as follows:-\n<\/p>\n
 “xx xx xx  <\/p>\n
 During the discussion we have been given to understand that the above
\nsystem configuration was incorrect and it was a mistake of MTNL, as the
\nwrong configuration has been mentioned in the Annexure ‘E’ of MTNL
\ntender documents, calling for Tenderer’s quotation. The correct system
\nconfiguration is as below:-\n<\/p>\n
 The system  shall be capable of automatically scanning up to 1200
\npairs at a time at the MDF cabinet and 100 pairs at the street cabinet.\n<\/p>\n
 xx xx xx”\n<\/p>\n
 Apart from the aforesaid letter, the learned senior counsel for the petitioner also invited
\n our attention to the clarifications which were sought by the MTNL from the petitioner
\nby former’s letter dated March 16, 2001. The clarifications were required regarding the
\nfollowing items:-\n<\/p>\n
 1. Please confirm whether the system offered shall be able to
\nsimultaneously scan 1200 pairs at MDF and 100 pairs at SDF?\n<\/p>\n
 2. Please confirm whether the system offered is capable of
\nscanning\/testing 1200 pairs at the MDF with no scanner present at
\nthe SDF?\n<\/p>\n
 3. Please confirm whether during three years warranty and two years
\ncomprehensive AMC, all the spares\/components required for
\nproper working of the system  will be supplied by you without
\nadditional cost to the MTNL?\n<\/p>\n
 4. Please confirm whether the bill of material quoted by you is
\ncomplete and exhaustive and an additional equipment\/spare parts
\nwill be required for the configuration we have asked for?\n<\/p>\n
 5. Please confirm whether you will be supplying software up
\ngradation free of cost for the next seven years as required in the
\ntender?\n<\/p>\n
 On the basis of the aforesaid letter and the clarifications sought, it was vehemently
\ncontended that the understanding of the MTNL was also to the effect that the MTNL
\nrequired system which could scan up to 1200 termination at the MDF and 100 at the
\nSDF. Mr. Tripathi submitted that the action of the MTNL cannot be judged in the
\nlight of the explanation subsequently given by the MTNL for placing the purchase
\norder of the equipment on the fourth respondent. In support of his submission he
\nreferred us to a decision of the Supreme Court in  Mohinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and Ors.<\/a> , wherein it was held as follows:-\n<\/p>\n
“8. The second equally relevant matter is that when a statutory
\nfunctionary makes an order based on certain grounds, its validity must be
\njudged by the reasons so mentioned and cannot be supplemented by fresh
\nreasons in the shape of affidavit or otherwise. Otherwise, an order bad in
\nthe beginning may, by the time it comes to Court on account of a
\nchallenge, get validated by additional grounds later brought out. We may
\nhere draw attention to the observations of Bose J. in  Gordhandas Bhanji
\n:\n<\/p>\n
 Public orders, publicly made, in exercise of the a statutory
\nauthority cannot be construed in the light of explanations
\nsubsequently given by the officer making the order of what he
\nmeant, or of what was in his mind, or what he intended to do.\n<\/p>\n
 Public orders made by public authorities are meant to have public
\neffect and are intended to affect the actions and conduct of those to
\nwhom they are addressed and must be construed objectively with
\nreference to the language used in the order itself.”\n<\/p>\n
 15. We have considered the submission of the learned senior counsel for the
\npetitioner. His submission does not lead us to the conclusion that Annexure ‘E’ was
\nnot to be given primacy in view of the alleged understanding of the aforesaid
\nrespondent. The decision of the Supreme Court in  Mohinder Singh Gill’s case (supra)
\nis hardly of any assistance to the petitioner. It is well settled that once an order of an
\nauthority is issued it must be judged on the basis of the reasons specified therein and
\nthose reasons cannot be improved upon by giving further reasons in the shape of
\naffidavits. Turning to the instant case, we have Annexure ‘E’ which was always part of
\nthe NIT and was not introduced subsequently with a view to justify the award of the
\ncontract to the fourth respondent. Annexure ‘E’ specifically lays down the
\nconfiguration of the CRPS required by the MTNL. The judgment of the Supreme Court
\nin Mohinder Singh Gill (supra) has no application to the facts of the instant case. In
\ncase the parties were suffering from any misconception it cannot affect the
\nspecifications contained in Annexure ‘E’ and their binding force. Therefore, the
\naforesaid letter dated October 21, 2000 and the clarifications sought from the petitioner
\nare also hardly of any significance. It is, however, true that the parties may have
\nentertained doubts and misgivings about the interpretation of the tender documents.
\nThe MTNL did not take care to issue an NIT which was clear enough and which would
\nhave not left and party guessing about the specifications of the equipment which was
\nrequired to be supplied. There could be an element of doubt in the minds of the parties
\nas to whether Annexure ‘E’ would have supremacy or Conditions 7 and 8 at page 69 of
\nthe paper book would prevail. We do not wish to fathom and reason why the MTNL
\ndid not take care to draft the NIT in such a way so as not to leave any manner of doubt
\nabout the specifications of the CRPS so that the tenders would know what was the
\nexact requirement of the MTNL and what they were bargaining for. In any event, the
\npetitioner has not been prejudiced inasmuch as a counter offer was given to the
\npetitioner vide letter dated August 8, 2001, as quoted above, for supply of CRPS which
\ncould scan 800 pairs at the MDF and 2000 pairs on pillar side. The petitioner vide
\nletter dated August 13, 2001 stated that the counter offer was not as per the
\nspecifications and bill of material required under the tender. It was also
\nstated that a
\nrevised offer letter be issued as per the bill of material. Thus it appears that the
\npetitioner did not accept the counter-offer. It was submitted by the learned senior
\ncounsel for the petitioner that the counter offer was given at a point of time when
\nalready purchase order had been issued to the fourth respondent. According to him,
\nthe counter offer made to the petitioner was not genuine.\n<\/p>\n
 16. In so far as the plea of the petitioner that the counter offer was given to the
\npetitioner after the purchase order was placed on the fourth respondent is concerned,
\nthe same cannot be questioned as it is a fact that the purchase order was placed on the
\nfourth respondent by means of a communication dated May 22, 2001\/July 31, 2001 and
\nthe counter offer to the petitioner was made by means of a communication dated May
\n22, 2001\/August 8, 2001. But this is hardly of any consequence. by means of the
\npurchase order dated May 22, 2001\/July 31, 2001, the fourth respondent is required to
\nsupply only one unit and we are told that the unit is subject to the approval of the
\nMTNL and the TEC before it is accepted by the MTNL. According to the learned
\nAdditional Solicitor General appearing for the MTNL, further purchase order on the
\nfourth respondent will be placed only after trying the system for a period of six months.
\nThus, it is clear that in case the unit supplied by the fourth respondent works efficiently
\nonly then the further orders for two more units will be placed on it. In case the
\npetitioner would have accepted the counter offer, the MTNL would have placed the
\norder for two units on it subject to the petitioner’s willingness to supply the equipment
\nat the same rate as is being supplied by the fourth respondent. It appears to us that the
\nMTNL, despite the confusion created by it, has acted fairly. After the MTNL sought
\nclarifications from the bidders, a committee was formed to consider as to which of the
\ntwo systems would suit the MTNL. The financial bids of the tenders were considered
\nand evaluated and it was found that the bid of the fourth respondent was lower by Rs. 38
\nlakhs approximately. It was then the MTNL placed an order for one unit with the
\nfourth respondent and made a counter offer to the petitioner to supply the equipment at
\nthe rate as offered by the fourth respondent. It may be noted that Annexure ‘E’ was
\nnot only a part of the present tender but was also a part of an earlier tender as well and,
\ntherefore, the argument of the learned counsel for the petitioner that the MTNL had
\ndeviated from the tender specifications and that Annexure ‘E” was product of ‘hurry of
\nbusiness’ is not well founded. Since the MTNL considered the system offered by the
\nfourth respondent to be more suitable than the system offered by the petitioner and the
\nconfiguration of the system match the specifications given in Annexure ‘E’, there was
\nnothing wrong in the action of the MTNL in accepting the tender of the fourth
\nrespondent especially when the bid of the fourth respondent was lower by Rs. 38 lakhs
\nper unit than the bid of the petitioner. Even if Annexure ‘E’ was not part of the NIT,
\nthe MTNL was empowered to modify, alter any terms and conditions of the tender as
\nlong as they were uniformly applied to all the tenders. If the MTNL has the power to
\nmodify the tender, we do not see any reason why the MTNL cannot insist on the the
\ncompliance by the tenders with specifications which are provided in Annexure ‘E’.
\nMore so when Annexure ‘E’ is a part and parcel of the tender documents.\n<\/p>\n
 17. Moreover, Annexure ‘E’, which according to the learned counsel for the
\npetitioner was not part of the tender documents, was nevertheless filled up and
\nsubmitted by the petitioner. It is not clear why this was done if Annexure ‘E’ was not
\nrequired to be filled up. Besides, at no point of time the petitioner represented against
\nthe inclusion of Annexure ‘E’ as a part of all the documents required to be filled up, nor
\nwas any protest made at any point of time.\n<\/p>\n
 18. The learned senior counsel for the petitioner submitted that the action of the
\nMTNL in placing the order on the fourth respondent is arbitrary and cannot be
\ncountenanced in law. This argument in fact stems from the charge that the MTNL made
\ndeviation from the tender specifications in accepting the tender of the fourth respondent
\nresulting in prejudice and injustice to the petitioner. In support of his submission he
\nrelied upon the decision of the Supreme Court in  G.J. Fernandez v. State of
\nKarnataka and Ors.<\/a> , wherein it was observed as under:-\n<\/p>\n
  “…The second consequence, indicated by this Court in earlier
\ndecisions, is not that the KPC cannot deviate from these guidelines at all in
\nany situation but that any deviation, if made, should not result in
\narbitrariness or discrimination. It comes in for application where the non-conformity
\nwith, or relaxation from, the prescribed standards results in
\nsome substantial prejudice or injustice to any of the parties involved or to
\npublic interest in general. For example, in this very case, the KPC made
\nsome changes in the time frame originally prescribed. These changes
\naffected all intending applicants alike and were not objectionable. In the
\nsame way, changes or relaxations in other directions would be
\nunobjectionable unless the benefit of those changes or relaxations were
\nextended to some but denied to others…”\n<\/p>\n
 19. While there cannot be any dispute with the principle enumerated by the
\nSupreme Court in the aforesaid decision, the premise on which the petitioner has
\nproceeded is based on misconception. We may again point out, even at the cost of
\nrepetition, that the aforesaid Annexure ‘E’ lays down the specifications of the
\nequipment in question. While accepting the tender of the fourth respondent the MTNL
\nhas not deviated from Annexure ‘E’ as Conditions 7 and 8 must give way to Annexure
\n‘E’. Besides, the action of the MTNL is not arbitrary or discriminatory. It also does
\nnot cause any prejudice and injustice to the petitioner as the MTNL gave an opportunity
\nto the petitioner to supply the equipment by giving a counter offer to it, but the
\npetitioner did not accept the same. Even during the course of arguments, the petitioner
\ndid not show any inclination to supply the system of the configuration mentioned in
\nAnnexure ‘E’ at a price tendered by L-1 (lowest tenderer).\n<\/p>\n
 20. It is significant to note that there are only two manufacturers of the equipment
\nrequired by the MTNL and both of them have given their bids. There is no third
\nmanufacturer and if any corners have been cut by the MTNL, it is after fully consulting
\nand discussing the matter with both the tenderers who were entitled to suitably modify
\ntheir offers, if necessary, in view of the requirements of the MTNL.\n<\/p>\n
 The learned counsel for the petitioner also cited the decisions of the Supreme
\nCourt in  Poddar Steel Corporation v. Ganesh Engineering Works and Ors,<\/a> , and  Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar
\nMunicipal Corporation and Ors.,<\/a> . Both the decisions turn on their on
\nfacts and have no bearing on the facts of the instant case as the terms of the tender have
\nnot been deviated from by the MTNL or the fourth respondent.\n<\/p>\n
 21. In  Raunaq International Limited v. I.V.R. Construction Ltd. and Ors.,<\/a> , on which reliance was placed by the learned Additional Solicitor General, it
\nwas held that unless the Court is satisfied that there is a substantial amount of public
\ninterest, or the transaction is entered with mala fide, intent, the court should not
\nintervene under Article 226 in disputes between two rival tenders. It was further
\nheld that award of a contract, whether it is by a private party, or by a public body or the
\nState, is essentially a commercial transaction and in arriving at a commercial decision,
\nconsiderations which are of paramount importance are commercial in nature. The
\nSupreme Court enlisted the following considerations:-\n<\/p>\n
 “(1) Price at which the other side is willing to do the work.\n<\/p>\n
 (2) Whether the goods or services offered are of requisite
\nspecifications.\n<\/p>\n
 (3) Whether the person tendering has ability to deliver the goods or
\nservices as per the specifications.”\n<\/p>\n
 22. It appears to us that the MTNL while awarding the contract to the fourth
\nrespondent kept in view the aforesaid considerations. The petitioner has not placed any
\nevidence on record to show that the contract has been awarded to the fourth respondent
\nmala fide or at the cost of public interest. We are told that the equipment offered  by the
\npetitioner costs Rs. 38 lakhs more than the one offered by the fourth respondent. It is
\nnot the allegation of the petitioner that the equipment offered by the fourth respondent
\nis in any manner inferior or of a substandard quality.\n<\/p>\n
 23. In  Tata Cellular v. Union of India,<\/a> , the Supreme Court
\nexamined the scope of judicial review in case of award of contract by a public
\nauthority. It was held that the principle of judicial review applied to the exercise of
\ncontractual powers by the Government bodies in order to prevent arbitrariness or
\nfavoritism. The Supreme Court, however, pointed out that there are inherent
\nlimitations in the exercise of power of judicial review. The Supreme Court on review
\nof string of authorities held as follows:-\n<\/p>\n
 “(1) The modern trend points to judicial restraint in administrative action.\n<\/p>\n
 (2) The court does not sit as a court of appeal but merely reviews the
\nmanner in which the decision was made.\n<\/p>\n
 (3) The court does not have the expertise to correct the administrative
\ndecision. If a review of the administrative decision is permitted it
\nwill be substituting its own decision, without the necessary expertise,
\nwhich itself may be fallible.\n<\/p>\n
(4) The terms of the invitation to tender cannot be open to judicial
\nscrutiny because the invitation to tender is in the realm of contract.\n<\/p>\n
 (5) The Government must have freedom of contract. In other words, a
\nfair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasiadministrative sphere. However, the decision can be tested by the
\napplication of the “Wednesbury principle” of reasonableness and the
\ndecision should be free from arbitrariness, not affected by bias or actuated by mala fides.\n<\/p>\n
 (6) Quashing decisions may impose heavy administrative burden on the
\nadministration and lead to increased any unbudgeted expenditure.”\n<\/p>\n
 24. Applying the aforesaid parameters, we do not find that there is any scope for
\ninterfering with the award of the purchase order in favor of the fourth respondent.\n<\/p>\n
 25. In  Air India Ltd. v. Cochin International Airport Ltd.,<\/a> , it
\nwas held that the State, its corporations, it s instrumentalities and agencies have a public
\nduty to be fair to all concerned, but when some defect is found in the decision making
\nprocess, the court must exercise discretionary power under Article 226 with great
\ncaution and should exercise it only in furtherance of public interest and not merely on
\nthe making out of a legal point. It was also observed that the court should always keep
\nthe larger interest of the public in mind in order to decide whether its intervention is
\ncalled for or not, and only when it comes to a conclusion that overwhelming public
\ninterest requires interference, the Court should intervene. Keeping in view the
\naforesaid dictum of the Supreme Court, no interference is called for in view of the fact
\nthat there is no overwhelming public interest requiring interference by us. We are not
\nconvinced that any defect has crept into the decision making process while awarding
\nthe contract to the fourth respondent.\n<\/p>\n
 26. During the course of arguments, the learned counsel for the fourth
\nrespondent, on instructions of his client, has undertaken to provide units having capacity
\nto simultaneously test 1200 lines on the MDF side and 2000 lines on the SDF side
\nwithout any extra charge and at the tendered price. We are told that one unit has
\nalready been handed over by the fourth respondent to the MTNL. As per the
\nundertaking, the learned counsel for the fourth respondent stated that the same shall be
\nupgraded.\n<\/p>\n
 27. Mr. Tripathi, learned senior counsel for the petitioner, urged that the
\nspecifications given in Annexure ‘E’ have not been placed before the TEC for
\napproval. Nothing has been brought on record to show that the approval of the TEC
\nwas necessary. MTNL being the purchaser is the best judge to assess its requirements.\n<\/p>\n
 28. The learned senior counsel for the petitioner claimed that the equipment
\ntendered by the petitioner is a portable one while the equipment tendered by the fourth
\nrespondent is not portable. The learned counsel for the MTNL and the fourth
\nrespondent dispute the fact that the equipment offered by the fourth respondent is not
\nportable. On the own showing of the petitioner, the equipment of the fourth respondent
\ncan be carried to the site in vans. When the equipment can reach at site, it cannot be
\nsaid that the equipment is not portable.\n<\/p>\n
 29. All the pleas of the petitioner having failed and we having found that the action
\nof the MTNL is not contaminated by arbitrariness and mala fides, we decline to
\nintervene in the matter. Accordingly, the writ petition is dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court P. Sharma Consultants Pvt. Ltd. vs Mahanagar Telephone Nigam … on 31 May, 2002 Author: A D Singh Bench: A D Singh, M B Lokur JUDGMENT Anil Dev Singh, J. 1. This is a writ petition where by the petitioner seeks the following reliefs:- “(a) a writ in the nature of Mandamus […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-219542","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nP. Sharma Consultants Pvt. 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