TaxTMI 
TaxTMI 
1994 (7) TMI 307
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....t 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 bidde....
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....ted 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 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 comple....
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....titioner 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 ....
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....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....
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....8) 3 WLR . 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 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 str....
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....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 shortlisting, 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 co....
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....econsideration 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 q....
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....ered. 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 allega....
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....er 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 travelers 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....
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....pters 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 Rochester 44 L Ed 373 : 178 US 1108 (1899). If it is a mistake in relation to nonessential or collateral matter it could always be condoned. The Privy Council in Mohd. Ejaz Husain v. Mohd. Iftikhar Husain AIR 1932 PC 76: 59 IA 92: ILR 7 Luck 1 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 thescope of judicial review? The court could interfere in the following three categories of cases 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 exten....
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....for more than one. The allegation of bias on the 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. Vassiliades AIR 1945 PC 38: 221 IC 603: 1945 All LJ 34. This decision has been referred to by this Court in Ranjit Thakur v. Union of India (1987) 4 SCC 611: 1988 SCC (L&S) 1: (1987) 5 ATC 11 3 (1988) 1 SCR 512. 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 indispensab....
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....ld 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, ....
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....ces 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....
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....ew in Sterling Computers Ltd. v. M&N Publications Ltd. (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 Perkins (1927) 2 KB 475: 1927 All ER Rep 393: 96 UKB 530 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. ....
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....l policy; thus they are not essentially justifiable and the need to remedy any unfairness. Such an unfairness is set right by judicial review. 72. Lord Scarman in Nottinghamshire County Council v. Secretary of State for the Environment 1986 AC 240, 251: (1986) 1 All ER 199 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 restrai....
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.... under appeal. In Amin, Re Amin v. Entry Clearance Officer, (1983) 2 All ER 864, 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 plc (1990) 1 QB 146: (1989) 1 All ER 509, 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,....
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....o 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. Johnson (1898) 2 QB 91: (1895-9) All ER Rep 105 a specially constituted divisional court had to consider the validity of a byelaw 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 emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or co....
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....ountless subsequent cases. "The modem statement of the principle is found in a passage in the speech of Lord Diplock in Council of Civil Service Unions v. Minister for Civil Service19: 'By "irrationality" I mean what can now be succinctly referred to as "Wednesbury unreasonableness". (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn.31) It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at.' " 80. At this stage, The Supreme Court Practice, 1993, Vol. 1, pp. 849850, may be quoted : "4. Wednesbury principle.- A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial review proceedings where the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. 3 1, per Lord Gre....
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....y own limitations as a judge and from those limitations I generalize to the inherent limitations of all appellate courts reviewing rate cases. It must be remembered that this Court sees approximately 1262 cases a year with five judges. I am not an accountant, electrical engineer, financier, banker, stock broker, or systems management analyst. It is the height of folly to expect judges intelligently to review a 5000 page record addressing the intricacies of public utility operation.' It is not the function of a judge to act as a superboard, or with the zeal of a pedantic schoolmaster substituting its judgment for that of the administrator. The result is a theory of review that limits the extent to which the discretion of the expert may be scrutinised by the non-expert judge. The alternative is for the court to overrule the agency on technical matters where all the advantages of expertise lie with the agencies, If a court were to review fully the decision of a body such as state board of medical examiners 'it would find itself wandering amid the maze of therapeutics or boggling at the mysteries of the Pharmacopoeia'. Such a situation as a state court expressed it many years ago....
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....ecision-making body is influenced by considerations which ought not to influence it; or fails to take into account matters which it ought to take into account, the court will interfere. See Padfield v. Minister of Agriculture, Fisheries and Food 1968 AC 997: (1968) 1 All ER 694. If the decision-making body comes to its decision on no evidence or comes to an unreasonable finding so unreasonable that a reasonable person would not have come to it then again the courts will interfere. See Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn.31 If the decision making body goes outside its powers or misconstrues the extent of its powers, then, too the courts can interfere. See Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147: (1969) 1 All ER 208: (1969) 2 WLR 163. And, of course, if the body acts in bad faith or for an ulterior object, which is not authofised by law, its decision will be set aside. See Sydney Municipal Council v. Campbell 1925 AC 338: 1924 All ER Rep 930. In exercising these powers, the courts will take into account any reasons which the body may give for its decisions. If it gives no reasons in a case when it may reasonably be expected to do so....
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.... passage reads as under : "The courts now recognise that the impact on the administration is relevant in the exercise of their remedial jurisdiction. Quashing decisions may impose heavy administrative burdens on the administration, divert resources towards reopening decisions, and lead to increased and unbudgeted expenditure. Earlier cases took the robust line that the law had to be observed, and the decision invalidated whatever the administrative inconvenience caused. The courts nowadays recognise that such an approach is not always appropriate and may not be in the wider public interest. The effect on the administrative, process is relevant to the courts' remedial discretion and may prove decisive. This is particularly the case when the challenge is procedural rather than substantive, or if the courts can be certain that the administrator would not reach a different decision even if the original decisions were quashed. Judges may differ in the importance they attach to the disruption that quashing a decision will cause. They may also be influenced by the extent to which the illegality arises from the conduct of the administrative body itself, and their view of that conduct....
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.... an administrative body functioning in an administrative sphere or quasi-administrative sphere as the present one. Judged from that standpoint of view, though all the proposals might not have been considered strictly in accordance with order of precedence, it appears that these were considered fairly, reasonably, objectively and without any malice or ill-will." 89. In G.B. Mahajan v. Jalgaon Municipal Council12 the concept of reasonableness in administrative law came to be dealt with elaborately by one of us, Venkatachaliah, J. (as he then was). In paragraphs 37 to 41 the Court observed thus : "It was urged that the basic concept of the manner of the development of the real estate and disposal of occupancy rights were vitiated by unreasonableness. It is a truism, doctrinally, that powers must be exercised reasonably. But as Prof. Wade points out : 'The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely f....
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....he figure of the fair and reasonable man. And the spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice, is, and must be, the court itself....' (emphasis supplied) See Davis Contractors Ltd. v. Fareham U.D. C. (1956) 2 All ER 145, 160: 1956 AC 696: (1956) 3 WLR 37 Yet another area of reasonableness which must be distinguished is the constitutional standards of 'reasonableness' of the restrictions on the fundamental rights of which the court of judicial review is the arbiter. The administrative law test of reasonableness is not by the standards of the 'reasonable man' of the torts law. Prof. Wade says : 'This is not therefore the standard of "the man on the Clapham omnibus". It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority may or may not be authorised to do. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called "Wednesbury unreasonableness", after the no....
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....ither accept or reject the lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. In Erusian Equipment & Chemicals Ltd. v. State of W.B.9 this Court observed as under: (SCC p. 75, para 17) 'When the Government is trading with the public, "the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions". The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.' 94. The principles deducible from the above are : (1) The modem trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to....
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....rks. As against this Hutchison Max has only an annual turnover of 75 crores and Rupees 6600 crores of foreign parameters yet it has been awarded 12 marks. Equally, Sterling Cellular whose turnover according to its bid document was 77 crores; the foreign parameter is unknown, it has also been awarded 9 marks. 97. The cut-off date for financial bid document was fixed as 17-8-1992. To examine and evaluate the same a committee was set up. The committee adopted some parameters and devised a marking system. It is as under : Parameter Total Marks Rental 50 Project Financing 8 Foreign Exchange inflow/outflow 10 Purchase plan for Cellular equipment within the country including tie-ups with the proposed Indian manufacturers 5 Experience 15 Financial strength 12 Note : No marks were allotted for the seventh criterion of financial projections of Cellular Mobile Service. The report of the Tender Evaluation Committee on this aspect states as under : "One of the parameters is about the financial projection. The Committee discussed about the reliability of financial projections made by the bidders and came to the conclusion that it is not possi....
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.... IMSI - the Mobile Station International ISDN number - the Mobile Station Roaming number, if allocated at location updating - the temporary Mobile Station Identity, if applicable - the location area where the mobile station has been registered - supplementary service parameters - any other information needed for management of mobile station." All these paragraphs will clearly establish that the system provides for facility of roaming to visitors. International roaming in GSM is well-accepted technique. 101. GSM is defined as a Global System for Mobile communications. The GSM specifications are highly standardised. This means that the systems that are designed as per GSM specifications will be compatible with each other and, therefore, can be easily connected together from day one. 102.Roaming in GSM cellular mobile systems means that a subscriber belonging to one operator can use his telephone to receive and make calls while he is in the area of another operator automatically. When a subscriber goes into the area of another operator, who has a roaming agreement with his another operator, the details of the subscriber available in the HLR (Home Location Re....
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....; family relationship with a party; professional or commercial relationships with a party; and so on. The categories of situations potentially giving rise to a likelihood of bias are not closed. How should the test of disqualification for likelihood of bias be formulated?... A more common formulation of the test is : Would a member of the public, looking at the situation as a whole, reasonably suspect that a member of the adjudicating body would be biased? Another common formulation is : Is there in fact a real likelihood of bias? There is no need, on either formulation, to prove actual bias; indeed, the courts may refuse to entertain submissions designed to establish the actual bias of a member of an independent tribunal, on the ground that such an inquiry would be unseemly. In practice the test of ,reasonable suspicion' and 'real likelihood' of bias will generally lead to the same result. Seldom indeed will one find a situation in which reasonable persons adequately apprised of the facts will reasonably suspect bias but a court reviewingthe facts will hold that there was no real likelihood of bias. Neither formulation is concerned wholly with appearances or wholly with obje....
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....us may influence the decision reached: of R. v. Altrincham Justices, ex p Pennington (1975) 1 QB 549: (1975) 2 All ER 78: (1975) 2 WLR 450. Street, C.J. has stated the law in this respect in yet another New South Wales decision. Ex p Burnett, Re Wurth (1955) 72 WN (NSW) 457. The last cited case involved a former officer of the Department of Education who later sat as a member of the Public Service Board inquiring into alleged false and scandalous allegations made by a teacher against various persons, including the officer in question, and during the course of his judgment Street, C.J. observed : 'Where bias arises not from (pecuniary) interest, the officer must have so conducted himself that a high probability arises of a bias inconsistent with the fair performance of his duties, with the result that a substantial distrust of the result must exist in the minds of reasonable persons.' Put in other words, the issue is not merely whether justice has in fact been done, but whether it has manifestly and undoubtedly been seen to be done. It may, therefore, be improper for the clerk of the court to act as a solicitor for a party. Similarly, it may be unwise for a headmaster to sit i....
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.... from such further facts as he might readily have ascertained and easily verified in the course of his inquiries. In the present case, for example, the facts relied on in the applicant's statement, under R.S.C., Ord. 59, R. 3(2), of the grounds of his application might create a more sinister impression than the full facts as found by this court, all or most of which would have been available to the applicant had he pursued his inquiries on learning that Mr Thomas was a member of the Cornwall County Council, and none of these further facts was disputed at the hearing of this motion. The frequency with which allegations of bias have come before the courts in recent times seems to indicate that the reminder of Lord Hewart, C.J., in R. v. Sussex JJ., ex p McCarthy (supra) that it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done' is being urged as a warrant for quashing convictions or invalidating orders on quite unsubstantial grounds and, indeed in some cases, on the flimsiest pretexts of bias." In Metropolitan Properties Co. (FG.C.) Ltd. v. Lannon4 it was held thus (All ER p. 3 1 0) "... in considering....
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....edge of the relationship which subsists between some members of the tribunal and one of the parties would think that there might well be bias, then there is in his opinion a real likelihood of bias. Of course, someone else with inside knowledge of the character of the members in question might say : "Although things don't look very well, in fact there is no real likelihood of bias." But that would be beside the point, because the question is not whether the tribunal will in fact be biased, but whether a reasonable man with no inside knowledge might well think that it might be biased.' We conclude that the test to be applied can conveniently be expressed by slightly adapting in words of Lord Widgery, C.J. in a test which he laid down in R. v. Uxbridge Justices, ex p Burbridge (1972) Times, 21 June and referred to by him in R. v. McLean, ex p Aikens (1974) 139 JP 261, 266 would a reasonable and fair-minded person sitting in court and knowing all the relevant facts have a reasonable suspicion that a fair trial for the applicant was not possible?" In University College of Swansea v. Cornelius 1988 ICR 735, 739 holds "Cases of bias and ostensible bias had to be regarded in the ....
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....er may also be a person holding a high official position whom the other members may not want to displease. It can be that the other members may not be influenced by the fact that the book which they are considering for approval was written by one of their members. Whether they were so influenced or not is, however, a matter impossible to determine. It is not, therefore, the actual bias in favour of the author-member that is material but the possibility of such bias. All these considerations require that an author-member should not be a member of any such committee or subcommittee." In Ashok Kumar Yadav v. State of Haryana3 this Court emphasised the reasonable likelihood of bias thus : (SCC p. 441, para 16) "This Court emphasised that it was not necessary to establish bias but it was sufficient to invalidate the selection process if it could be shown that there was reasonable likelihood of bias. The likelihood of bias may arise on account of proprietary interest or on account of personal reasons, such as, hostility to one party or personal friendship or family relationship with the other. Where reasonable likelihood of bias is alleged on the ground of relationship, the questio....
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....settled that there must be purity in the administration of justice as well as in administration of quasijustice as are involved in the adjudicatory process before the arbitrators. It is well said that once the arbitrator enters in an arbitration, the arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness. It is not a question of the effect which misconduct on his part had in fact upon the result of the proceeding, but of what effect it might possibly have produced. It is not enough to show that, even if there was misconduct on his part, the award was unaffected by it, and was in reality just; arbitrator must not do anything which is not in itself fair and impartial. See Russel on Arbitration, 18^th Edn., p. 378 and observations of Justice Boyd in Brien and Brien, Re (1910) 2 IR 84. Lord O'Brien in King (De Vosci) v. Justice of Queen's Country (1908) 2 IR 285 observed as follows : 'By bias I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias. I do not think that their vague suspici....
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....er there was a real likelihood of bias. As to how Mr R. Satish Kumar, the son of Mr B.R, Nair, came to be appointed in BPL Systems and Projects is explained in the additional affidavit filed on behalf of BPL Systems & Projects Ltd., Respondent 10, by Mr S. Sunder Rao, Corporate Personnel Manager of BPL Group of Companies, including Respondent 10-Company. The relevant portion is extracted as under : "With regard to the selection and appointment of Shri R. Satish Kumar, I state as follows : That Respondent 10 Company desired to employ certain managers and executives as follows : (i) Sr, Manager, (Push Button Telephone) for New Delhi, Bangalore and Bombay. (ii)Manager (Communications) for Madras, Calcutta and Bangalore. (iii)Territory Manager (Sales) for Delhi, Hyderabad and Madras. (iv)Sales Executives for Delhi, Madras, Kanpur, Chandigarh, Baroda, Kochi, Calcutta, Bhopal, Pune and Coimbatore. These posts were advertised for in several newspapers as follows (i) The Times of India, Delhi and Bombay Edns. (ii)The Hindustan Times, Delhi Edn. (iii)Statesman, Calcutta Edn. (iv)The Hindu, All India Edn. (v) Deccan Herald, Bangalore. These advertisemen....
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....h a Telecom Authority has the right to grant cellular operating licences to the successful party and also reject any bids without assigning any reason. Registration fees, security deposit and other financial charges shall be fixed by the licenser in consultation with the Telecom Authority. This is what is stated in the financial bid. Therefore, Mr B.R. Nair could not dissociate himself from the decision-making process. It is under these circumstances the High Court rightly applied the doctrine of necessity. This Court in Charan Lal Sahu v. Union of India16 dealt with this doctrine which is stated as follows : (SCC p. 694, para 105) "The question whether there is scope for the Union of India being responsible or liable as joint tort-feasor is a difficult and different question. But even assuming that it was possible that the Central Government might be liable in a case of this nature, the learned Attorney General was right in contending that it was only proper that the Central Government should be able and authorised to represent the victims. In such a situation, there will be no scope of the violation of the principles of natural justice. The doctrine of necessity would be appli....
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.... The Chairman and Members of the Telecom Commission were consulted in this regard. It was felt that the rate of interest adopted by the TEC was low, and the maximum lending rate of the State Bank of India as on 1-8-1992 viz. 21.75% is more appropriate to adopt both for refundable and non-refundable deposits and nonreturnable charges. For the non-refundable charges the monthly a mortised value over 5 years at the lending rate, viz., 21.75% should be used for loading the rental, to get at the equivalent rental value which represents the actual monthly burden on the subscribers. As per this guideline, the TEC gave the fresh calculations on 7-9-1992 and a new gradation list was prepared which is placed at Flag 'B'. After examining the TEC report the following points havecome to light- (i) M/s Hutchison Max India Ltd. in their bid document (Annexure D) have not given proper and full compliance. The TEC has observed : 'Compliance to Chapter III (Operative Conditions) and Chapter IV (Financial Conditions) has not been indicated by the bidder.' Thus, it clearly shows that they have not complied with these important conditions which form the very basis of the financial bid. It is e....
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....harati Cellular 41.0 8 1583 0SFR France 2. BPL Systems& Projects Ltd. 33.8 6 1476.8 France Telecom Madras 1. Bharati Cellular 38.5 8 1580 0SFR France 2. Skycell 24.6 10 1571.6 Bell South Calcutta Bharati Cellular 27.1 8 1569.1 SFR France There is no other bidder who qualifies for giving the licence. Even though Tata Cellular fulfils all the conditions but in bid document they have based their calculations on single operator concept. However, we may, if approved by Telecom Commission and High-Power Committee, make a counter-offer to operate on a non-exclusive basis. After the operators are selected, tariff fixation and other licensing terms can be negotiated by the Telecom authorities. A separate note is being prepared for sending to the High-Power Committee based upon the observations that are likely to be made on this note. For approval, please. Member (Services) Member (Production) Member (Finance) Chairman (TC) sd/- (G.T. Nar....
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....-listing and finalising the financial bids and later for selection of the franchisees. The documents relating to short-listing of Paging Service bidders have also been sent separately to the members of the Committee. sd/- (H.R Wagle) Chairman (TC) 10-9-1992 Mos (C) 11-9-1992 D.O. to Principal Secretary with copies to ES./Electronics Secretary may issue sd/ 14/9 PS. - D.O. issued pl. sd/14-9 DDG(TM)" However, the D.O. came to be issued in accordance with the note of 10-9-1992 dissolving the apex committee. Therefore, it is not correct to contend, as urged by Mr Harish Salve, that the apex committee had been bypassed. The learned Solicitor General is right in his submission. 5. Entry of Hidden Criteria - Whether valid? 118. In the original tender document, paragraph 2.2.1 in relation to the Subscriber's Capacity states as follows : "Subscriber Capacity: 1000 with modular expansion up to minimum 40,000 subscribers." In Section 11 of General Condition, clause 1(d) states "Copy of the agreement between the Indian and the foreign partner, if any foreign partner is proposed." Chapter 11 of General Conditions in paragraph 2.4.5 states "....
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....that criterion of experience of one lakh lines helped elimination of Usha Martin in Bombay and created place for BPL Systems and Projects. 121.The criterion of experience was introduced as a ground of disqualification. If the criterion of experience of one lakh lines as a principal condition to qualify for consideration for Bombay and Delhi was introduced uniformly then Bharati Cellular could be disqualified. Thus, a relaxation of 80,000 with the GSM line was introduced. It is important to note the person who evolved this criterion did not consider Talkland as Bharati Cellular's collaborator. 122.As noted above, the learned Solicitor General would submit that as on 31-12-1991 Bharati Cellular had experience of 81,085 lines of SFR France and 1982 lines EMTEL making a total of 83,067 lines. Added to this, Talkland had an experience of 1,70,000 subscribers. The reference to the marks awarded for comparative evaluation in this context is irrelevant. Besides, even assuming that in comparative evaluation the holding of the licence may be given some weight; cannot be made the governing factor in determining the experience of a bidder for the purpose of its eligibility. 123.As a r....
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....the criteria cannot be postulated in the beginning itself. Where the Committee of Experts thought certain criteria have to be evolved in order to subserve the interest of the scheme it is not necessary to have all of them set out in the beginning itself. However, the important question remains after the evolution of the criteria whether they have been uniformly and properly applied, as urged by Mr Ashoke Sen. 126.A careful perusal of the files shows that the Adviser (Operations) selectedBharati Cellular for franchise, with its foreign collaborators SFR France,EMTEL Mauritius. The same was approved by the Chairman in his final proposal which was ultimately approved on 10-10-1992. Thus, it is clear that at no point of time Talkland ever figured as Bharati Cellular's collaborator. SFR France, the foreign collaborator of Bharati Cellular had GSM Paris area (sic) 23-9-1992. As on 31-12-1991 it had 81,085 subscribers with no GSM experience. The number of subscribers was estimated to go up to 1,10,000 by 31-12-1992. On the date of submission of the bid it was expected to cross the one lakh mark. The other collaborator EMTEL Mauritius had only an experience of 1982 lines. In order to....
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....ess Short text Communication of short Alphanumeric messages Graphics Grp. 3 Facsimile Bearer services Data transmission in Asynchronous duplex circuit mode with PSTN 300 bps (V 21) 1200 bps (V 22) Data Transmission in Synchronous duplex circuit mode with PSTN 1200 bps 2400 bps Mobile access in the Asynchronous mode to the packet assembler/disassembler of packet switching network 300 bps 1200 bps Mobile access in the synchronous mode to the packet switching network 2400 bps 4800 bps Supplementary services In the first instance the following supplementary services may be provided : * Calling Number Identification Presentation * Calling Number Identification Restriction * Connected Number Identification Presentation * Connected Number Identification Restriction * Malicious Call Identification * Call Forwarding Unconditional * Call Forwarding on Mobile Subscriber Busy * Call Forwarding on No Reply * Call Forwarding on Mobile Subscriber Not Reachable * Call Transfer * Mobile Access Hunting * Call Waiting * Call Hold * Completion of Call to Busy Subscriber * Three-Party Service * C....
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.... Cellular. Further, ignoring the disjunctive clause, two qualifications were sought to be subsumed to give an undue advantage to Bharati Cellular. Besides, the nature of service is as set out in para 4 of Section IV as stated in Condition 1.4 of Section III. Thus, we hold, (borrowing the words of Donaldson, L.J. Emma Hotels Ltd. v. Secretary of State for Environment34 "we could not see on what basis the Committee had reached its conclusion". 131. If, after excluding the experience of Talkland, whether still Bharati Cellular could fulfil the requisite qualification, namely, 80,000 GSM lines and whether SFR France with EMTEL Mauritius had that experience are matters which require to be factually analysed. The Committee may decide this factual aspect as on the date on which the offer was made i.e. 20-1-1992. If the finding is rendered in favour of Bharati Cellular it will qualify. 132. The other "hidden criteria" alleged is about the same foreign collaborator. The Chairman, Telecom Commission, in relation to these criteria noted : "The element of competition will get vitiated if the two JVs with a common foreign partner were to be selected to provide the service at the same loca....
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....nt venture. This does not violate clause 7 of Chapter 11. (emphasis supplied) 136. Mr F.S. Nariman has rightly placed reliance on the above said two rulings; relevant passages are quoted as under. In G.J. Fernandez v. State of Karnataka17 this Court inter alia observed : (SCC pp. 499-501, paras 13-15) "... In the first place, although, as we have explained above, para V cannot but be read with para 1 and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfils the pre-qualifying requirements set out in para 1, it will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para 1 and disqualify the tenderer. The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the pre-qualifying conditions is a matter which it is for the KPC to assess. We have seen that the documents having a direct bearing on para 1 viz. regarding output of concrete and brick work had been supplied in time. The delay was only in supplying the detail....
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....nce, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination." 137. In Poddar Steel Corpn. v. Ganesh Engineering Works13 this Court observed : (SCC p. 276, para 6) "As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases." 138. The High Court observed thus : &nbs....
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....gh a letter, explaining their earlier noncompliance as typographical error." Section 11, General Conditions, para 3 states as under : "3. Compliance. Point to point compliance report in respect of technical, commercial and views on financial conditions must be submitted. Deviation, if any, must be separately highlighted. In case compliance report is not enclosed with the offer, the offer shall not be considered." The pro forma of the compliance statement is in the following form "This company hereby agrees to fully comply with all Technical, Commercial and General Conditions of Tender Document No. 44-24/91MMC including amendments/clarifications issued by the Department of Telecom without any deviations and reservations. This company also hereby agrees to fully comply with all paragraphs of Chapter II : General Conditions, Chapter III : Operating Conditions, Chapter IV : Financial Conditions and Chapter V : Tariffs of Document No. 44-24/91-MMC (FINANCIAL) without any deviations and reservations. Signature of the authorised signatory of the bidder/operating company For and on behalf of.................................. (Name of the company)" 141. The com....
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....a provision in the city charter that a bid shall not be withdrawn or cancelled until the board shall have let the contract." At page 11 15 it reads : "The complainant is not endeavoring 'to withdraw or cancel a bid or bond'. The bill proceeds upon the theory that the bid upon which the defendants acted was not the complainant's bid; that the complainant was no more responsible for it than if it had been the result of agrarian or the mistake of a copyist or printer. In other words, that the proposal read at the meeting of the board was one which the complainant never intended to make, and that the minds of the parties never met upon a contract based thereon. If the defendants are correct in their contention there is absolutely no redress for a bidder for public work, no matter how aggravated or palpable his blunder. The moment his proposal is opened by the executive board he is held as in a grasp of steel. There is no remedy, no escape. If, through an error of his clerk, he has agreed to do work worth $ 1 0,00,000 for $ 1 0, he must be held to the strict letter of his contract, while equity stands by with folded hands and sees him driven in....
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....ns : (a) Foreign exchange investment profile submitted by the company indicates that there will be a heavy F.E. outflow over 3 years if the Company were to be allotted Bombay or Delhi. (b) Madras is the least popular of the stations along with Calcutta. Rentals quoted are high as pointed in our earlier note. M/s Usha Martin will help bring down the rentals in Calcutta. Allotment of M/s Sterling to Madras will achieve the same purpose. (c) Any delay in allotment of licence to M/s Sterling on account of the CBI investigations will have the least adverse effect in Madras for lack of competition to other licensee. M(S) may kindly examine them again in the light of the observations of MOS (C) and rework out the select list. The case may be put up for approval of MOS (C). sd/- 10- 10- 1992" Then it came to be selected on the approval of the Minister. 146. The High Court in upholding the selection observed thus "The case of Sterling Cellular, however, appears to us to be rather strange. There were no strictures against the holding of this company by the name Sterling Computers Ltd. in M&N Publications Limited v. Mahanagar Telephones Nigam Limited8 by this Cou....
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....ervice at Delhi on a non-exclusive basis. That matter has been reconsidered in the light of the judgment delivered by the High Court of Delhi in this case and a revised list of provisionally selected bidders in the cities of Bombay, Delhi, Calcutta and Madras has been prepared. The revised list does not include mobile telephone service in any of the four cities. The earlier letter of even number dated 12-10-1992 may therefore be treated as cancelled. sd/ (S.K. Garg) DDG (TM) 27-8-1993" From this letter we are not able to fathom the reason for omission. As seen above, Tata Cellular was originally selected for Delhi. By implementation of the judgment of the High Court it has been left out. Before doing so, as rightly urged by Mr Soli J. Sorabjee, this appellant ought to have been heard. Therefore, there is a clear violation of the principle of natural justice. On an overall view we find it has two distinctive qualifications. In that 1. It has not borrowed from any commercial bank. 2. It has an annual turnover from Indian parameters of Rs 12,000 crores and the annual turnover of the foreign parameters of Rs 51,000 crores. Comparatively speaking, the other compa....