TaxTMI 
TaxTMI 
2017 (8) TMI 342
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....ith interim prayer, directed as follows:- "Therefore, at this stage, we feel that only the following order should be passed: Both the petitioners are permitted to submit 2 applications instead of one. One application may be for 4.4. MHz and the other application will be for a minimum of 5 MHz and may extend up to 8.8, if the petitioners so desire. We have been informed at the Bar that two applications may not be possible to be submitted because it is online. We are not sure whether the same because it may not be possible. Therefore, we direct that it is for the petitioners to decide what application they will submit online but they may also simultaneously submit one application offline in hard copy with the Secretary, Department of Telecommunication, Union of India on or before 16th February, 2015. The Union of India may proceed with the assessment of the applications but no final decision in the matter shall be taken without permission of this Court. Furthermore, any preliminary decision taken shall also be subject to the result of the present writ petition. Admittedly, the licences of the petitioners are expiring only in December, 2015, and, therefore, we would like to e....
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....hin ten days from the completion of date of auction, that is, 25th March, 2015. Learned senior counsel would further submit that the entire design of the "Notice Inviting Tender" is gloriously faulty and solely because the auction has taken place and money is likely to be collected, would not be a justification for the modification of the interim order. Having heard learned counsel for the parties, we are inclined to modify the order to the extent that the Union of India would be at liberty to finalize the auction and proceed thereafter, but all the successful bidders shall be intimated that the said finalization is subject to the final result of the special leave petition, as well as the transferred cases." 4. At that juncture, Mr. Mukul Rohatgi, learned Attorney General undertook that the competent authority of the Union of India would intimate the successful bidders to get themselves impleaded as parties. 5. It was observed by the Court that the said impleaded parties are entitled to file respective affidavits stating their stand and stance in the said affidavits. On that day itself, the Court disposed of the special leave petitions as it was felt that nothing rea....
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.... 70.00 15.0 Total 470.75 418.05 52.7 b) What is the possibility of getting the non-vacating spectrum from the defence band and within what time? 5. With reference to query (b), it is humbly submitted that the Answering Respondent is making all sincere efforts for getting the spectrum vacated from Defence and other users. Historically, all the identified 75 MHz spectrum mobile services in 1800 MHz band in all 22 service areas was with defence and other users prior to 2001 when it was allocated for the first time for commercial mobile services in India after co-ordination with the then existing users. Spectrum in 1800 MHz band was coordinated by defence on a case to case basis either in the entire service area or in parts of the service area (i.e. District-wise). Based on the coordination received from Defence, spectrum in 1800 MHz band was allotted, from time to time, for commercial use by Telecom Service Providers. This spectrum is in spots over the complete 75 MHz. in January 2015, it has been decided in consultation with the defence, that, instead of the case by case approach adopted historically, out of above referred 75 MHz, 55 MHz will be allotted to telec....
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....m in this band is proposed to be included for the next auction. Similarly 440 MHz spectrum in 2500 MHz band was allocated to BSNL and MTNL in 2007-08. However 160 MHz spectrum was surrendered by them. TRAI has been requested to expedite recommendations for reserve price and associated conditions. A total quantum of 600 MHz of spectrum in this band, including that surrendered by the BSNL/MTNL is available. It is humbly submitted that channeling plan adopted in India for 2500 MHz band is not as per standard International Mobile Technology (IMT) band considering the issues relating to techno-economic feasibility and availability of commercial eco-systems. The feasibility of inclusion of spectrum in 2500 MHz band in the forthcoming auction appears to be poor. (All bands other than 2300 MHz and 2500 MHz are in Frequency Duplex Division (FDD) mode). (c) Whether an auction can be held in respect of the available spectrum, regard being had to what has been stated in (a) and (b) above? 8. With reference to query (c), it is submitted that the next auction would be held as and when reasonable quantity of spectrum is available and the answering respondent is making all efforts to make av....
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.... if so, what would its formula and how it would be interpreted and applied? While calculating the cap, if that exercise is undertaken, whether the commercially available spectrum should be included in the computation of such caps? (e) The successful bidders who have got less than five and in case they fail in the next auction, how they can deal with the spectrum? To elaborate, though they can surrender or trade any spectrum or share the same as per guidelines, they do have a choice to hold it or the Union of India would take steps in that regard as per law. 14. The Telecom Regulatory Authority was also consulted with reference to query (d) and (e) as posed by the Hon'ble Court in the order dated 14.5.2015. The TRAI had furnished its comments upon the same vide its letter dated 2nd July 2015. The relevant extracts are reproduced below:- "1.14 The Authority examined the views of all the TSPs and the provisions of various NIA issued till date. The Authority is of the opinion that at present there is no need to modify the existing spectrum cap (50% of the spectrum assigned in each of the 800/900/1800/2100/2300/2500 MHz and 25% of the total spectrum assigned in all these ....
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....place shortly. At present, there is no rule/statute to take back the spectrum which has been awarded after participating in a competitive process and as per commercial decisions of the bidder taking into consideration the techno-economic requirements in a service area. Presently, the aforesaid comments of TRAI are under consideration of the Government of India." The said affidavit that was filed meeting the issues framed by the Court was countered by the petitioners stating, inter alia, that the respondent No. 1 has, in its affidavit, remained silent on the Chart which was submitted by the petitioners and by not responding to the chart/table of the petitioners, the respondent No. 1 has really not met the issue. It is put forth that the respondent No. 1 does not dispute the submission of the petitioners that out of the 75 MHz of Spectrum, 55 MHz has been earmarked for commercial use and it is also apparent that the respondent No. 1 has not consulted Telecom Regulatory Authority of India (TRAI) on the availability of spectrum, especially since TRAI's recommendation dated 15.10.2014 contained a statement on the availability of spectrum which contradicts the statement made by the re....
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....he remaining LSAs which would be applicable for expiring licensees as well as new entrants. Though these recommendations were reiterated by TRAI in its response dated 24.11.2014 to the back-reference received from DoT on the recommendations of TRAI dated 15.10.2014, yet they were not accepted without any fathomable reason. The NIA has fixed different minimum bidding criteria for different spectrum bands and classified the bidders into "existing licensees", "expiring licensees" and "new entrants" and fixed different bidding criteria for each category and such classification does not indicate that there is any intelligible or discernible basis for the fixation of the criteria and there is no nexus between the criteria and the object sought to be achieved through the auction and, hence, the criteria is a case of "suspect classification". It is so because no reason or justification has been furnished in support of the innumerable classes created by the criteria; and it is a case of classification and micro-classification which will inevitably favour one or more bidders in certain service areas and disfavour other bidders. In this regard, learned counsel for the petitioners has relied o....
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.... resource which is held by the Government in public trust for the benefit of the people. The Government is obliged under law to ensure that there is most efficient utilization of the spectrum available as has been held in Centre for Public Interest Litigation and others v. Union of India and others (2012) 3 SCC 1. A corollary of this is that the Government should disclose the spectrum that is available with it and that too with specific reference to each service area. Rule of law and the principle of transparency demand that the Government should make public the time schedule and the periodicity with which it intends to hold the auction. As per the spectrum chart for 1800 MHz furnished by the petitioners and not objected to by the Government, there was 216.4 MHz spectrum in the 1800 MHz commercial band which had been unaccounted for, which is neither lying with the Defence nor with the Telecom Operators and such an action is contrary to law. DoT itself admitted in January, 2015 that 55 MHz of spectrum out of total 75 MHz in 1800 MHz band is available for commercial use to the TSPs, but failed to take any effective measures for releasing the said spectrum despite repeated requests o....
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....always given due weightage to the recommendations of TRAI. Further, the Government of India does not want to compromise quality to be offered by the service providers in consumer interest and, therefore, did not accept the recommendations of TRAI. The endeavour of the Government contained in the NIA for the auction conducted in March, 2015 is not based on any classification except that all service providers must have a minimum of 5 MHz if they want to deploy any mobile technology benefitting the consumer and even TRAI concurred with the view that minimum 5 MHz quantum was the appropriate minimum quantum to be set. Reduction of minimum quantum of spectrum to 3 MHz instead of 5 MHz for new entrants would be contrary to TRAI's own recommendations on the issue of spectrum auction, wherein TRAI has been consistently holding that 5 MHz is the minimum amount of spectrum required to ensure that any technology can be deployed with the allocated spectrum. 19. Fragmented spectrum allocation to address the present issues in few service areas will only be a short term solution but will have long term negative impact for the sector as the objective is to have broadband solution that offers th....
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....r a minimum of 0.6 MHz so that he may come to the level of 5 MHz, may also bid for more than that. The idea would be that he has to bid as a new entrant for the next time when his licence would expire and his allocated 4.4 MHz spectrum is put to auction. 21. The endeavour of DoT is that everybody should have minimum 5 MHz as less than 5 MHz will not be good for the consumer keeping in view the evolution and innovation and in order to achieve the same, DoT has to be far-sighted as the spectrum is being allotted for a period of 20 years. Assuming that there is classification, then, that is based on an intelligible differentia between two sets of people, i.e., (1) new entrants including the expiring licensees and (2) existing licensees, both of whom ought to have minimum 5 MHz so as to be able to deploy on any mobile technology. An existing licensee may not require 5 MHz to meet the traffic requirements and only a fraction of 5 MHz would meet the requirements, and small chunk addition would improve traffic handling capabilities and reduce call drops due to congestion. Moreover, in case an existing licensee chooses to only retain what it has in terms of spectrum before, then it will....
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....e the bid was lower than the 900 band and it has also bid for the 900 band spectrum and remained unsuccessful, and that cannot form the basis to assert that there is any discrimination caused or that there is a flaw in the NIA. That apart, the investment already made in the past 20 years is an investment which will be used even with the 1800/800 band technologies and any future investment according to the needs of the time will be made by them in their commercial wisdom and to say that they were "knocked out of the auction because of the NIA design" is totally fallacious as they purchased spectrum in other bands. The submission that thousands of crores of investment have been made entirely overlooking the lakhs of crores revenue generated which is one of the fundamental purposes of auction especially of spectrum. 23. As regards the submission of the petitioners for moulding of the relief and for laying down principles for the future, the prayers do not remotely so indicate and, furthermore, the policy of auction in such matters is a complex phenomenon, and the Court may not think of laying down guidelines for future. The argument that in case of a renewal of a licence, the licen....
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....mpetitive environment. Pursuant to the NTP-2012, these principles have guided the decisions needed to strike a balance between the interest of users/consumers, service providers and government revenue. Revenue maximization is not the sole objective of the Government as alleged by the TSPs. The auction terms have been structured in a way keeping in mind the public interest and the fact that the TSPs have to serve the public (consumers) for the years to come, i.e., the spectrum is allotted in a transparent manner for a period of 20 years. 25. There are various factors that the DoT is required to take into account while determining the auction structure. Ultimately, the DoT should be permitted to determine the auction structure consistent with the scheme of the TRAI Act (as has been done in the earlier auctions and the instant one). It cannot be left to the option of the telecom service providers and their narrower self interest to determine the structure and timing of auctions. Capping has been kept in vogue to have a bigger field and it is based on a rational principle. For arriving at the cap, only two parameters are to be seen - (a) the total spectrum assigned in that service a....
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....the case of interpretation of statutes. 29. The NIA, being an invitation to offer, and Clause 5.3.1 being one of the Clauses thereof, and the said Clause not being under challenge, any meaning other than the literal meaning of the said Clause would have to be by consent of both the parties. It is not open to one party to unilaterally, at the stage of NIA, seek an interpretation of a Clause in a manner of their choice and if there is a difference of opinion in the manner of interpretation, it is the interpretation of the party who is offering the contract that ought to be adopted. Should there be cause for the Court interpreting or thereby requiring, through mandamus, the Offering Party (i.e., the State) to interpret the Clause contrary to their way of interpretation or literal interpretation, this would only be done on the very limited grounds of judicial review, in which case, while a certiorari would issue to strike down the Clause as being arbitrary (which issue is not put in question before the Court), a mandamus will not issue to require the State to interpret the Clause in a given way and make an offer in accordance with the interpretation given by the Court, which is what....
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....the terms and conditions relating to NIA more so, in the sphere of auction of spectrum. The 2013 auction included the spectrum allegedly surrendered by BSNL/MTNL in calculating the Spectrum cap, while it has not been done so in the present auction (i.e., 2015 auction), and the fact that the surrendered spectrum was included earlier and not in the present year does not give rise to legitimate expectation, for it does not bind the State to follow the same because the fundamental principles of maximization of revenue and sub serving of the public interest at large require change. It is well settled that the concept of legitimate expectation has no role to play where the State action is as a public policy or in the public interest unless the action taken amounts to an abuse of power. The court does not interfere with the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard that leaves to the deciding authority the full range of choice which the legislature is presumed to have intended. 33. The grievance raised by the petitioners is that the design of the auction skewed price discovery and resul....
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....uthority of India ("TRAI") on 28-8-2007 for grant of Unified Access Service licence (for short "UAS licence") with 2G Spectrum in 800, 900 and 1800 MHz at the price fixed in 2001, which were approved by the Department of Telecommunications (DoT), were contrary to the decision taken by the Council of Ministers on 31-10-2003? (iii) Whether the exercise undertaken by DoT from September 2007 to March 2008 for grant of UAS licences to the private respondents in terms of the recommendations made by TRAI is vitiated due to arbitrariness and mala fides and is contrary to public interest? (iv) Whether the policy of first-come-first-served followed by DoT for grant of licences is ultra vires the provisions of Article 14 of the Constitution and whether the said policy was arbitrarily changed by the Minister of Communications and Information Technology (hereinafter referred to as "the Minister of Communications and Information Technology"), without consulting TRAI, with a view to favour some of the applicants? (v) Whether the licences granted to ineligible applicants and those who failed to fulfil the terms and conditions of the licence are liable to be quashed?" ....
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....t adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy applicants. When it comes to alienation of scarce natural resources like spectrum, etc. it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. 96. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction by giving wide publicity so that all eligible pers....
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....ed to hold as follows:- "129. Hence, it is manifest that there is no constitutional mandate in favour of auction under Article 14. The Government has repeatedly deviated from the course of auction and this Court has repeatedly upheld such actions. The judiciary tests such deviations on the limited scope of arbitrariness and fairness under Article 14 and its role is limited to that extent. Essentially, whenever the object of policy is anything but revenue maximisation, the executive is seen to adopt methods other than auction. 130. A fortiori, besides legal logic, mandatory auction may be contrary to economic logic as well. Different resources may require different treatment. Very often, exploration and exploitation contracts are bundled together due to the requirement of heavy capital in the discovery of natural resources. A concern would risk undertaking such exploration and incur heavy costs only if it was assured utilisation of the resource discovered: a prudent business venture would not like to incur the high costs involved in exploration activities and then compete for that resource in an open auction. The logic is similar to that applied in patents. Firms a....
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....that a market prescribes to a good. However, this valuation is a function of several dynamic variables: it is a science and not a law. Auction is just one of the several price discovery mechanisms. Since multiple variables are involved in such valuations, auction or any other form of competitive bidding, cannot constitute even an economic mandate, much less a constitutional mandate. 148. In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra vires the constitutional mandate. 149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private en....
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....ms of the clauses in the contract, referring to various passages from the 2G case and considering the view of TRAI and the pronouncement in Natural Resources Allocation, In Re (supra), the two-Judge Bench answered thus:- "In para 82 of Natural Resources Allocation, In re (supra), this Court was categorical that the findings of 2G Case (supra) were limited to the case of spectrum. Similarly, in para 146, this Court observed that this Court "respects the mandate and wisdom of the executive" in the matter of choosing the most suitable method of distribution of natural resources. This Court noted that this is clearly a matter of an economic policy entailing an intricate economic choice and the Court lacks necessary expertise to make such choice. In the light of the observation in para 82 that at least in the matter of disposal of spectrum, auction is the only "permissible and intra vires method for disposal". Therefore, the submission of the licensees is required to be rejected." 41. Having adumbrated to the previous litigations, we shall presently refer to the NIA and deal with the submissions keeping in view the law in the field. Clause 5.3 of the NIA which deals with spe....
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...."existing licensees", "expiring licensees" and "new entrants" have been introduced. The submission is that there was no warrant to put a cap and further fix a minimum bidding criteria. The argument on behalf of the petitioners is that the above auction being non-competitive is vitiated. The proponement of the Union of India is that provisions had been provided by excluding some and permitting some to top up regard being had to the commercial interest and keeping in view the interest of the consumers. That apart, it has been urged that there is room for new entrants who may invest and allow better competition and also there would be avoidance of monopoly by the big players. The thrust of the matter is whether the clause is so arbitrary and erroneous as to invite the frown of Article 19. To put it differently, it is to be considered whether the classification is without any basis and whether the postulate is so unreasonable that a prudent sense of commerce will abhor to give it any space. 43. Having adumbrated to the previous litigations, we shall presently refer to the NIA. Clause 3 of the NIA deals with the eligibility and conditions. Clause 3.1 provides the eligibility criteria....
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....ation for participating in Auction. Total Spectrum assigned for unpaired and both unlink and downlink spectrum in case of paired spectrum is taken into account." 44. Clause 3.3 deals with unified licences, Clause 3.4 provides for associated licences, Clause 3.5 deals with prospective new entrants, Clause 3.6 speaks of roll out obligations and Clause 3.6.1 provides for roll out obligations for spectrums in 1800 MHz, 900 MHz and 800 MHz band in service areas other than metro service areas. Clause 4 provides for auction details which are categorized into various compartments, namely, confidentiality and anti-competitive activity, application requirements, ownership compliance certificate, principal qualification conditions, earnest money deposit, payment terms and various other aspects. Clause 5 deals with spectrum in 1800 MHz, 900 MHz and 800 MHz bands - auction rules. Clause 5.1 deals with the conduct of auction and Clause 5.2 states about overview of the auction stages. Clause 5.3 provides spectrum holding capping rule. Clause 5.3.2 reads as under:- "3.2 Cap in 1800 MHz band The spectrum cap for each operator in each of the Service Areas in 1800 MH band is c....
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....ere is increase in the available spectrum which includes fresh spectrum and surrendered spectrum by some operators, yet there has been unjustified reduction in the available spectrum for commercial allocation instead of increasing proportionately; that some of the petitioners are debarred from holding what they are holding in praesenti; that the recommendation of TRAI should have been given adequate weightage by the respondents with regard to the principle of capping and availability of spectrum for commercial allocation by way of auction; that the available quantum should have been at least notionally added for the purpose of determining the cap which has not been done as a consequence of which the auction becomes wholly arbitrary; that the exclusion of the surrendered spectrum from the process of calculation is irrational and unreasonable and that there is no transparency in the auction. As noted earlier, on behalf of the respondent-Union of India, emphasis is laid on providing a cap as that would facilitate availability of minimum amount of spectrum for ensuring benefit to the consumers and also to allow new entrants who may require a certain minimum amount of spectrum for estab....
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....he other and when a free competitive market was provided, there is no ground to attach the auction by calling it unfair or non-transparent. As far as the exclusion of the spectrum is concerned, it has been set forth that certain quantum of spectrum has been reserved for the defence. It is also put forth that subject to process and requirement of harmonization of available spectrum, it shall be put to auction in the future auctions. The process of harmonization, as is known, is quite complex and it is required to be carried with the defence in order that they may vacate spectrum without compromising their operational requirements. That apart, there is a requirement of contiguous chunk without clubbing it with auctioned spectrum. In any case, the petitioners cannot insist for re-writing the terms of the tender conditions and they cannot demand that the whole thing should be put to auction and no capping rule can be applied. 48. Capping rule is basically a formula which has worked out as an experimentation, as the completion of the auction as shown. The cap as compared has the aggregate of total spectrum assigned in the service area and the total spectrum being put to auction. If t....
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.... principles laid down by this Court as regards the fundamental principle of holding auction, we think it apt to deal with the contention pertaining to TRAI's recommendation and non-acceptance of the same. The Union of India sent the reference back to the TRAI. The question in this context that requires to be posed is whether the recommendations of TRAI are binding on the Central Government. 51. Section 11 of the TRAI Act deals with the functions of the authority, that is, TRAI. The said provision empowers it to make recommendations either suo motu or on a request from the licensor on certain matters. The provisos appended to the said Section, being relevant, are extracted hereunder:- "Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central Government: Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new licence to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the d....
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....f a licence, as in the present case, the recommendations of TRAI will not prevail and instead the decision of the Central Government will be final and binding. The Court has further laid down that TRAI, being an expert body, discharges recommendatory functions under clause (a) of sub-section (1) of Section 11 of the TRAI Act and discharges regulatory and other functions under clauses (b), (c) and (d) of sub-section (1) of Section 11 of the TRAI Act and it being an expert body, the recommendations of TRAI under clause (a) of sub-section (1) of Section 11 of the TRAI Act have to be given due weightage by the Central Government but the recommendations of TRAI are not binding on the Central Government. The Court has further ruled that the regulatory and other functions under clauses (b), (c) and (d) of sub-section (1) of Section 11 of the TRAI Act have to be performed independent of the Central Government and are binding on the licensee subject only to an appeal in accordance with the provisions of the TRAI Act. Thus, the interpretation made in the said case makes it clear that the recommendations given by TRAI are not binding but deserve to be given due weightage. Certain areas have b....
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....d. v. I.V.R. Construction Ltd. and others (1999) 1 SCC 492, it has been held that the award of a contract, whether it is by private party or by a public body or the State, is essentially a commercial transaction and prudent principle of commerce do weigh while making a commercial decision. 56. In Monarch Infrastructure (P) Ltd. v. Ulhasnagar Municipal Corpn. and others (2000) 5 SCC 287, this Court was concerned with the question relating to NIT issued by Ulhasnagar Municipal Corporation for appointment of agents for collection of octroi and revision of terms and conditions thereof. The Court held that it cannot say whether the conditions are better than what were prescribed earlier, for in such matters, the authority calling for tenders is the best judge. The Court declined to restore status quo ante. 57. In Cellular Operators Association of India & Others v. Union of India & Others (2003) 3 SCC 186, this Court, after referring to Tata Iron & Steel Co. Ltd. v. Union of India and another (1996) 9 SCC 709, held that where legal issues are intertwined with those involving determination of policy and a plethora of technical issues, courts of law have to be very wary and must exer....
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....are not open to judicial scrutiny, the same being in the realm of contract; that the Government must have a free hand in setting the terms of the tender; that it must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere and the courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias and the courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide. 60. In Bannari Amman Sugars Ltd. v. Commercial Tax Officer and others (2005) 1 SCC 625, this Court was concerned with the question relating to withdrawal of benefits extended to the appellant therein as subsidy and it was held that while taking policy decision, the Government is not required to hear the persons who have been granted the benefit which is sought to be withdrawn. 61. In Global Energy Ltd. and another v. Adani Exports Ltd. and others (2005) 4 SCC 435, this Court reiterated t....
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....ies in the matter of formulating conditions of a tender document and awarding a contract. The Court also laid emphasis on public interest and the prudence in applying the principle of restraint where the action is fair and reasonable and does not smack of mala fide. It was also emphasized that the courts cannot interfere with the terms of the tender prescribed by the Government simply because it feels that some other terms in the tender would have been fair, wiser or logical. 64. In Maa Binda Express Carrier and another v. North-East Frontier Railway and others (2014) 3 SCC 760, this Court held that the scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of decisions of this Court which clearly recognise that the power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, and the submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept and, therefore, the bidders participating in the tender....
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....has not been put to auction which tantamounts to hoarding by the Central Government; that an endeavour has been made by the authorities to keep the real competitors away by providing a cap and resultantly making the bid non-competitive; that the classification made in the NIA is hit by unreasonableness with no objective to serve because the condition of buying of 5 MHz of spectrum is not applicable to the existing/non-expiring licensees and providing minimum bidding option for different categories is wholly discriminatory; and that the surrendered spectrum or unused spectrum should have been notionally added so that there would have been fairness in auction, and that would have met the concept of legitimate expectation. 67. As the factual score depicts, the NIA had stipulated capping and simultaneously allowed certain categories to bid for a lesser quantum to enhance the existing spectrum with them so that they can reach a particular level. The reason shown by the respondents is that a minimum spectrum is determined to enhance the efficiency and capability of the service providers so that the arrangement can be beneficial to the consumers and they can avail requisite benefit and....
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....hin the 1800 MHz band, the exact frequencies to be allotted to TSPs and those to be used by the defence have been earmarked. It is the stand of the Central Government that, the process of allotting all the frequencies identified to TSPs will require some time since there are operational networks of the defence in the segment identified for telecom services in 1800 MHz band. Similarly, frequency spots have been allotted to various TSPs in the segments identified for use by the defence. It has been averred that the discussions have started with the defence for harmonizing the spectrum in 1800 MHz band and TSPs have also been consulted as they too have to shift their networks to new spots. According to the respondent-Union of India, the operational network of the defence is required to be continued until alternate arrangements are available for seamless operation of defence networks or else it would compromise the national security and regard being had to the same, no time frame can be set as to when the said quantum would be available for public auction. 69. Additionally, it is put forth that the evolution of the telecommunication sector is a continuous process world-wide. New ban....
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....usion due to techno-economic facets. 70. As we find, the decision taken by the Central Government is based upon certain norms and parameters. Though criticism has been advanced that it is perverse and irrational, yet we are disposed to think that it is a policy decision which subserves the consumers' interest. It is extremely difficult to say that the decision to conduct the auction in such a manner can be considered to be mala fide or based on extraneous considerations. 71. The grievance that has been stressed upon by the petitioners is that they had spent quite a sum at the time of grant of initial licence and they had a legitimate expectation to participate in the auction in every aspect and not to be kept at bay in certain areas for some unfathomable reason as a consequence of which they have not been able to get what they earlier had. According to them, the doctrine of "legitimate expectation" cannot be curtailed in this manner. The aforesaid argument has a basic fallacy. The principle of "legitimate expectation" can never override public interest and when there is larger public interest, the question of legitimate expectation does not arise; and in any case, in the pres....
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....pretation to the tender documents that is not acceptable to the constitutional Courts but that by itself is not a reason for interfering with the interpretation given." 73. The said decision has been concurred with by another two-Judge Bench in Montecarlo Ltd. v. NTPC Ltd. 2016 (10) SCALE 50 stating thus:- "24. We respectfully concur with the aforesaid statement of law. We have reasons to do so. In the present scenario, tenders are floated and offers are invited for highly complex technical subjects. It requires understanding and appreciation of the nature of work and the purpose it is going to serve. It is common knowledge in the competitive commercial field that technical bids pursuant to the notice inviting tenders are scrutinized by the technical experts and sometimes third party assistance from those unconnected with the owner's organization is taken. This ensures objectivity. Bidder's expertise and technical capability and capacity must be assessed by the experts. In the matters of financial assessment, consultants are appointed. It is because to check and ascertain that technical ability and the financial feasibility have sanguinity and are workable and realistic....
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.... the petitioners is that the auction is anti-competitive and on the other, the submission of the Central Government is that it is a healthy competition and avoidance of any kind of monopoly. There is also assurance in the reply that whatever has been left will be put to auction after getting the clearance from the defence and further keeping in view the aspect of techno-economic and commercial eco-system feasibility. As far as the allocation to the defence and its need is concerned, it can be said that it is always in the realm of public interest and it subserves the interest of the nation. As far as the economic feasibility is concerned, multifold economic aspects have to be taken into consideration and as a resultant effect, as shown during the process of auction, the bids became higher and higher and there has been real competition whereby the offers have been raised. There is remotely any allegation that attempt has been made to scuttle the competition. On the contrary, bidders have been allowed to bid and enhance their offer as a prudent commercial men would do. Therefore, it cannot be said that there has been no attempt to maximize the revenue. It will not be inapposite to no....
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....n, the contention of legitimate expectation has been associated. We have already repelled the submission pertaining to legitimate expectation. If there has been a reduction for a particular entity because of the terms and conditions of the tender, it has to accept it, for he cannot agitate a grievance that he could have obtained more had everything been added notionally. Notionally adding up or not adding up, we think, is a matter of policy and that too a commercial policy and in a commercial transaction, a decision has to be taken as prudence would command. In this regard, reference to the decision in Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I) Ltd. and others (1997) 1 SCC 738 would be apt. In the said case, the Court referred to the authority in Tata Cellular (supra) and thereafter opined that though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any ....