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1994 Supreme(SC) 1112

M.K.MUKHERJEE, S.C.AGRAWAL
New Horizons LTD. – Appellant
Versus
Union Of India – Respondent


Advocates:
ANIL KATIYAR, ATISHI DIPANKAR, C.S.VAIDYANATHAN, K.K.VENUGOPAL, MAN MOHAN SINGH, N.N.GOSWAMY, P.CHAUDHARY, P.P.SINGH, PARAG P.TRIPATHI, PRAMOD DAYAL, SOLI J.SORABJI, T.C.SHARMA

Judgement Key Points

Key Points: - The Court analyzes whether NHL’s joint-venture structure allows its constituents’ experience to count for eligibility (!) (!) (!) (!) . - It assesses whether excluding NHL on the grounds of experience was arbitrary or irrational under Tata Cellular and Wednesbury principles (!) (!) (!) . - It discusses whether "experience" can be considered from the constituents of NHL (TPI, LMI, WML, IIPL) and whether lifting the corporate veil is appropriate to determine eligibility (!) (!) (!) (!) (!) (!) (!) (!) . - It contrasts the tender notice wording about "experience" with the actual eligibility interpretation and the role of the joint venture in fulfilling those criteria (!) (!) (!) (!) (!) . - It concludes that non-consideration of NHL due to lack of in-name experience, when NHL is a joint venture with constituents having relevant experience, results in arbitrariness and irrationality, justifying quashing the award to Respondent 4 for 1995 and reopening tender for that year (!) (!) (!) . - The judgment emphasizes the government’s obligation to act fairly and reasonably in contract awards and to consider the economic realities of a joint venture in evaluating credentials (!) (!) (!) .

How to determine whether NHL's experience should be considered for tender eligibility when NHL is a joint venture with constituents having relevant experience?

How to assess whether the Tender Evaluation Committee acted arbitrarily or irrationally in excluding NHL’s tender on the ground of experience, considering the advertisement and notice terms?

What is the appropriate standard for lifting the corporate veil or considering the economic realities of a joint venture in evaluating tender qualifications for public contracts?


The Judgment of the Court was delivered by S.C. AGRAWAL, J.- Leave granted.

2. In the past the telephone directory used to be printed by the Department at its own cost for the purpose of supplying the same to the telephone subscribers. It was an item of expenditure. Today, the telephone directory has become a source of revenue for the State. This has become possible by making it a medium for advertising by industrial and commercial concerns. A section in distinct "yellow pages" devoted exclusively to advertisements is contained in the directory. The person who undertakes the printing of the directory procures the advertisements from private parties and collects the charges for the same. In return, he supplies a prescribed number of directories free of cost to the Department and also pays to the Department a certain amount by way of royalty. The contract for printing and publishing the telephone directory is normally awarded by inviting tenders and selecting the best offer from among the tenders which are so received. This practice has been in vogue for some time. In Sterling Computers Ltd. \. M & N Publications Ltd. this Court has dealt with the award of such a contract for printing











































































































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