The main legal point established in the judgment is the importance of adhering to tender conditions, the concept of fair play in administrative actions, and the need for caution in exercising discretionary power under Article 226.

Mukul Mudgal, J.

1. The petitioner, Schmid Telecom India Pvt. Ltd. is a company incorporated under the provisions of the Companies Act, 1956, was a tenderer for a notice of tender issued by the Airport Authority of India, the respondent No. 1 in March-April, 2006 being tender No. CNS(P)-02/2006-07 for supply installation, testing and commissioning of Voice Communication System for installation in Airports under it.

2. The facts as averred by the petitioner are as follows:

(a) In April/May, 2006, the petitioner submitted its bid. On 16th May, 2006, the respondent No. 1 sought certain documents from the petitioner in support of its bid which documents were supplied by the petitioner on 17th May, 2006. Further clarification was sought from the petitioner by the respondent No. 1 by letter dated 18th July, 2006, which reads as follows:

AAI/Proc/VCCS/2005-CNS(P) Dated:18/07/06

To,

M/s Schmid Telecom India Pvt. Ltd.

Schmid Telecom AG

Binzstrasse 35

CH-8045 Zurich

Switzerland

SUB : Tender No. CNS(P)-11/2006-07 for VCS System.

Kind Attention: Mr. Rajan Mehra, Managing Director.

Sir, Kindly refer to the bid documents submitted to AAI in response to the above tender on 08/05/06. AAI is in process of evaluating the technical bid. Following points need to be clarified.

1. Para No. 3.4(I), 3.5 (c), 4.1, 4.2.4(d), 5.8, 6.5.6 (Flashing indicating within 50 ms), 6.5.7, 7.1 : Relevant information regarding the above points is not provided in the technical description of validate the points. It is requested to provide detailed information so that the compliance of the points may be verified.

2. Para No. 4.2.2 (c) : Provision of wireless instructor/ supervisor headset is not indicated. Relevant information in this regard may be provided.

3. Para No. 4.3.7: System capability of recording directly from switch and recording all records irrespective of volume level at the touch screen of operator position could not be ascertained. Clarification may be provided.

4. Para No. 6.2.3: Interface cards for interfacing 5 MFC circuits have been quoted against requirement of 8, the same may be clarified. Also clarify that the interface cards being supplied will be compatible for MFC-5 signaling format also.

5. Para No. 8.1, 10.1 and 10.2 : Amendments for these points were issued by us. The compliance statements do not reflect the amendment and compliance of these points. Necessary documentation supporting the compliance may also be provided.

Relevant information in respect of the points mentioned above may be submitted latest by 26.07.06. It may be noted that in accordance with Para 9.2 of Section-A of tender document if sufficient and relevant information is not submitted the tender will be considered not responsive. No further correspondence will be made thereafter.

Thanking you,

Yours faithfully Sd/-

A.K. Kapur Asstt. G.M.(CNS-P)

.(b) The said letter dated 18th July, 2006 was responded to by the petitioner on 26th July, 2006.

(c) On 8th January, 2007, the petitioner came to know that the respondent No. 1 had allowed respondent No. 2, M/s Frequents GmBH, to submit another revised bid in August, 2006, without notice or knowledge of the petitioner or other bidders. Since the original bid of the respondent No. 2 was not in conformity with the terms of the tender document and this was done illegally and arbitrarily, to resurrect the bid of the respondent No. 2, the respondent No. 1 permitted rebiding from all the bidders including the respondent No. 2. The petitioner had submitted its original and one revised bid in November-December, 2006 whereas the respondent No. 2 was given opportunity to submit two revised bids one in August, 2006 and another in November, 2006. The price bids were opened by the respondent No. 1 on 12th December, 2006. However, the original bids of the petitioner and respondent No. 2 were not opened.

(d) On 2nd January, 2007, a letter was sent by respondent No. 1 to the petitioner which reads as follows:

Date: 02/01/07

To,

M