IMPORTANT POINT
Advertisements are issued calling for tenders only for common use items which are normally available in open market with a wide range of sources.

JUDGMENT :

R. Banumathi, J.

This appeal assails the order dated 27.10.2005 passed by the High Court of Delhi allowing the appeal in LPA No.2448 of 2005 thereby directing the Union of India to issue an advertisement in leading newspapers having wide circulation inviting tenders for the submarine batteries mentioning the detailed technical specifications and the appellants to consider all the products which meet the technical specifications and thereby proceed to select the best product in accordance with law.

2. The subject-matter involved in the present case is submarine batteries required for the Indian Navy. Indian Navy has three types of submarines for which three different types of batteries are used. Type-I battery for EKM submarines, Type-II battery for SSK class submarines and Type-III battery for Foxtrot class submarines. Initially, these batteries were imported from the Original Equipment Manufacturer. In view of the recurring requirement of the batteries, subsequently a decision was taken to progress their indigenisation. Director General Quality Assurance (DGQA) working under the Ministry of Defence has a detailed procedure to ‘develop/indigenise’ critical items/spares. As per the said procedure, the Government identifies the possible vendors and assesses their capacity/technical qualifications and thereafter a development order is placed on the proposed supplier. During this period of development of the spares, the Government carries out regular inspection and the product is developed under the aegis of officials of the Defence Ministry and officers of the DGQA are associated throughout the development process right from the time of sourcing of raw materials to ensure that the product not only meets the technical qualifications but is fully reliable and free from any errors in actual performance.

3. By following the above rigorous procedure, M/s. Standard Batteries Ltd. was developed as an indigenous manufacturer for supplying Type-III submarine batteries. M/s. Standard Batteries Ltd. was subsequently developed as a manufacturer of Type-I submarine batteries in the year 1988. M/s. Exide Industries Ltd. was developed as an indigenous manufacturer of Type-II submarine batteries in 1989. In the year 1998, M/s. Standard Batteries Ltd. sold its business to M/s. Exide Industries Ltd. Since then, M/s. Exide Industries Ltd. has become a single vendor in supplying batteries for all three classes of submarines to the Indian Navy. Officers of DGQA are constantly associated with the manufacturing of the submarine batteries in Exide Industries Ltd. as and when they are required by the Indian Navy. As M/s. Exide Industries Ltd. has become the single vendor, in 2004, Government started exploring the possibility of developing another supplier as second source for submarine batteries. But as per the policy, the Government cannot register anyone for supply of submarine batteries without following the procedure or putting the vendor through the process of the development. In any event, the requirement of the supervision of DGQA in development of the product and thirteen quality tests intended to test submarine batteries could never be dispensed with.

4. The respondent made its representation in October 2004 to the Ministry of Defence claiming that it had developed submarine batteries and that they are under internal evaluation. On 31.03.2005, the respondent requested the Ministry of Defence for a development order so that the respondent can be developed as the second source of submarine batteries and the respondent agreed to undergo stringent tests before it could be registered for supplying the product. As the residual life of the existing batteries was coming to an end, in July 2005, the Government has been processing the request by the Navy to purchase submarine batteries. Since only M/s. Exide Industries Ltd. was then the only approved supplier of all types of submarine batteries, it was proposed to issue ‘Request For Proposal’ (RFP)