( 1 ) THIS writ petition has been filed against four respondents. First respondent Mahanagar Telephone Nigam Limited (MTNL) is a Government company within the meaning of section 617 of the Companies Act, 1956; second and third resndents are respectively United India Periodicals Ltd. (UIP) and United Database (India) Private Limited (UDI) [udi Is a wholly owned subsidiary of UIP] and were given the contract for the publication of telephone directories for Delhi and Bombay under an agreement dated 14 March 1987; and the fourth respondent is Sterling Computers Limited (Sterling ). The agreement dated 14 March 1987 was entered into between the MTNL and UIP, but then on the request of UIP its subsidiary company UDI was allowed to execute the job under the agreement on behalf of UIP.

( 2 ) AN agreement dated 26 September 1991 called "supplemental agreement" was executed between all the respondents whereby Sterling got associated with UIP and UDI for publication of the directories for Delhi and Bombay. As to what are the terms of the original agreement and the supplemental agreement we will examine a little later as a great deal of arguments had been addressed on the effects and purport of these agreements and particularly the supplemental agreement which is being challanged.

( 3 ) THE petitioner pray as under :-

(A) Issue a writ and or order and or direction declaring that the sub contract dated 26. 9. 91 entered into by MTNL with back date with 2nd, 3rd and 4th respondents herein for purportedly subcontracting the printing of the telephone directories for Delhi and Bombay for the period from 1991 to 1996-1997 to be illegal, null and void and unconstitutional; (b) Issue a writ and order or direction in the nature of mandamus calling upon the first respondent to perform its public duty to act fairly, to quash the so called supplemental agreement dated 26. 9. 91 (Annexure P-3) as also the tripartite agreement dated 19. 7. 91; (c) To issue a writ and or order in the nature of prohibition, prohibiting the first respondent from entering into any franchise or other franchise with the second, third and 4th respondent for publishing of telephone directories at Delhi or Bombay without following a fair and proper procedure namely wide advertise- ment, inviting tenders and ensuring that the best offers are obtained in respect of publishing of telephone directories. Government of India in the Ministry of Communications, Department of Telecommunications, took a policy decision regarding publication of telephone directories and conveyed the same to all General Managers Telephones by letter dated 12 June 1986. In this letter difficulties faced by the department in publishing telephone directories of its own were pointed out. Paras 4 and 5 of this letter spell out the policy decision. These are :-

"4. Of late certain offers have been received from private parties for undertaking the complete job of printing of telephone directories including supply of paper and collection of advertisements. Discussions were also held with some of these parties and it appears, that at least for large telephone systems, the advertisement revenues will not only cover the total cost of bringing out the directories but also bring in some surplus which could be made available to the Department. 5. The Telecom Board has considered the matter in the light of the difficulties experienced in the past and the proposals received now. It has now been decided that a new policy be adopted for all the Telephone Districts, the main features of which would be as follows: (i) The telephone directory shall be printed once a year. (ii) Offers should be invited for comprehensive contracts for printing, binding and supply of paper, advertisement and delivery of adequate number of directories. The notice inviting tender should clearly bring out the specifications as also the usual contractual conditions including the penalty clauses for delays and inferior performance, as p