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2001 Supreme(Guj) 824
Gujarat High Court
Judgename :K.M.MEHTA
Bharti Teletech Limited - Appellant
Versus
Chief General Manager Tele-communication,ahmedabad - Respondent
SPECIAL CIVIL APPLICATION 3657 of 2001
Decided On : 12/19/2001
Headnote:(a) Constitution of India, 1950 — Art. 226 — Govt. Contract — Tender matter — Scope of judicial review — Held, it is extremely limited where there is neither any allegation of mala fide nor allegation of exercise of power for collateral or extraneous purpose against officers of the State.
In Court view the scope of judicial review in contract matters particularly tender matter is extremely limited. Particularly in this case the petitioners have not made any allegation of malafide. Petitioners have not made any allegation of exercise of power for collateral purpose or there is no allegation that the authorities have exercised power for extraneous purpose.
[Para 42.1]
(b) Constitution of India, 1950 — Art. 226 — Prayer to quash respondents letter dated 2.5.2001 regarding acceptance of tenders and placing of orders accordingly — Acceptability — Court considered the whole matter in its limited scope of judicial review in such matter and held, it calls for no judicial interference — Respondents Nos. 1 and 2 have entered into contract with concerned respondents with adequate reasons and distribution of contract by respondents is quite reasonable and fair and same is not arbitrary — It is in accordance with socio economic justice and directive principles of State policy — Govt. has acted in the form of certain healthy standards and norms — In the circumstances, petition deserves to be dismissed.
Court is of the view that the Government-respondent has not acted arbitrarily. In Court view the respondent Nos. 1 and 2 have entered into contract with the concerned respondents and they have entered into contract with adequate reasons and distribution of contract by respondents Nos. 1 and 2 is quite reasonable and fair and the same is not arbitrary and it is in accordance with socio economic justice and directive principles of State Policy. The Government has acted in the form of certain healthy standards and norms. The contention of the petitioner cannot be accepted. The action of the Government is not arbitrary and Government has not taken any irrational or irrelevant element while awarding contract. In Court view the action of the Government in awarding the contract is justifiable on the terms of the terms and valid principle of law. The Government has acted in public interest of saving large amount of money while awarding the contract to the concerned respondents. In Court view when this Court is judging the awarding of contract by respondent Nos. 1 and 2 to other respondents this Court has to see the development of subject of Public Law doctrine governing public contract in this behalf. The same is in consonance with the principles laid down by the Honourable Apex Court in various decisions. There is no violation of the terms and conditions of the contract and there is no violation of the principles of the judgment of the Honourable Supreme Court in this behalf.
[Para 42.5]
It is no doubt true that the respondent Nos. 1 and 2 herein is a State. The respondent Nos. 1 and 2 have also provided equal opportunities to all people to compete in the contract. The respondent Nos. 1 and 2 have also not selected other persons arbitrarily but based upon the terms and conditions of the contract. Government has also filed affidavit in reply and has also shown how the Government has tried to maximise the public interest. The respondent No. 1 has also offered best terms and services in this behalf. Court have also considered the contract in this behalf. The terms and conditions of the contract are not detrimental to public interest and there is no arbitrariness in the choice of the parties. There is no denial of equal opportunities to the persons who have filled in the tender. The respondent No. 1 Government has also acted within the procedure and has also acted as per the procedure laid down in awarding the contract. Government has acted reasonably and bonafide. Court has extracted the contentions of the respondent No. 1 from the affidavit in reply and also the contentions of the contending respondents to show that the Government has acted reasonably and bonafide. In Court view, the action of the Government is quite legal and proper and this Court will not interfere with the said decision in this behalf. In the circumstances, the petition deserves to be dismissed.
[Para 43]
The cartel, therefore, is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity. Analysing the object of formation of a cartel in otherwords, it amounts to an unfair trade practice which is not in the public interest. The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers. However, the determination whether such agreement unreasonably restrains the trade depend on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolizes the same.
[Para 41]
( 1 ) ). Bharat Teletech Ltd. and Ors. , petitioners have filed this petition with a prayer for a writ of certiorari or a writ of mandamus quashing the letter dated 2. 5. 2001 placing advance purchase order of 2,25,000 nos of electronic push button telephone instruments of the total order value of Rs. 6. 05 crores on the respondent No. 3. The petitioner further prayed for a writ of certiorari for quashing and setting aside the order by which 84,620 nos of electronic push button telephone instruments of total order value of Rs. 2. 28 crores on Tata Telecom Ltd. respondent No. 4. The petitioner further prayed that this Court may issue a writ of mandamus directing the respondents nos. 1 and 3 viz. Chief General Manager (Tele-communications. Bharat Sanchar nigam Ltd. Gujarat Telecom Circle, Ahmedabad and Bharat Sanchar Nigam Ltd. New delhi (BSNL) to place upon purchase order as provided by Clauses 4. 1 to 4. 3 of special Conditions of Contract in Sec. III of the tender in this behalf. Facts
( 2 ) THE petitioner No. 1 is a company incorporated under the Companies Act, 1956. The petitioner No. 2 is the authorised representative of petitioner No. 1 company.
( 3 ) IT is the contention of the petitioners that respondent Nos. 1 and 2 are the "state" within the meaning of Arts. 1 and 2 of the Constitution and are amenable to the writ jurisdiction of this Court.
( 4 ) THE petitioner No. 1 has been manufacturing the said electronic push button telephone instrument since 1986 with an installed annual capacity of manufacture 3 million union. It has supplied more than 10 million of the said telephone instrument to department of Tele-communications till today.
( 5 ) IT has been contended in the petition that by virtue of Tender Enquiry No. MP/epbt/00-01/301 dated 24. 1. 2001 the respondent Nos. 1 and 2 invited bids for supply of 4. 5 lacs electronic push button telephone instruments. In the proposed tender the bids were to be submitted in two parts. The petitioner No. 1 submitted technical and priced bids as per the terms and conditions of the tender. It was an essential condition of the tender that the price bids would be opened and considered of only those bidders whose technical bid was substantially responsive and complaint of the terms and conditions of the tender and accepted by the Tender Opening Committee. The following provisions of the tender are relevant and significant:"section 1 Notice Inviting Tender. Maximum number of bidders on whom orders are likely to be placed is 5 (5) section-III Special Conditions of The Contract (SCC) 4. 1 The purchaser reserves the right to limit the number of technically and commercially responsible bidders to distribute the orders for supply. It may not be practicable to distribute the orders to all bidders who meet the technical specifications and commercial conditions as in some cases the quantity ordered on each supplier will be too small to be viable both for supply and use by BSNL. The distribution of purchase orders would, therefore, be limited to the maximum number suppliers as indicated in the Notice Inviting Tender (Section-I) 4. 2 The order quantity on the lowest bidder (L-l) and on the remaining selected bidders will be determined as follows: number of bidders. Distribution of the order on whom purchase quantities orders are placed 2 : 70% to L land 30% to L 2 3 : 50% to L 1 and remaining quantity to the other two selected bidders in inverse ratio of their evaluated prices 4 : 40% to L 1 and remaining quantity to the rest selected bidders in inverse ratio of their evaluated prices 5 to 9 : 30% to L 1 and remaining quantity to the rest selected bidders in inverse ratio of their evaluated price. 10 and above : 20% to L 1 and remaining quantity to the rest selected bidders in inverse ratio of their evaluated prices 4. 3 If two or more bidders quote the same composite price, their bids will be treated as one bid for the purpose of determining the total order quantity for them as p
