Important Points
1. There cannot be a cause of action (in Administrative Law) on the basis of an attempt at fraud which did not materialise.
2. Decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way. Change in policy can defeat a substantive legitimate expectation if it can be justified on Wednesbury reasonableness.

Headnote:(i) Administrative Law-Fraud in public law-Official decisions should not be infected with motives such as fraud, malice or personal self interest-There cannot be a cause of action on basis of an attempt at fraud which did not materialise. (Para 24)
       (ii) Administrative Law-Legitimate expectation-Decision maker can normally be compelled to give effect to his representation in regard to his representation based on previous practice or past conduct unless some overriding public interest comes in the way-Representee must have suffered detriment-Change in policy can defeat substantive legitimate expectation.
       Held : The substantive part of the principle of legitimate expectation is that if a representation is made that a benefit of a substantive nature will be granted or if the person is already in receipt of the benefit that it will be continued and not be substantially varied, then the same could be enforced. The interest in regard to which a legitimate expectation could be had must be one which was protectable. An expectation could be based on an express promise or representation or by established past action or settled conduct. The representation must be clear and unambigious. It could be a representation to the individual or generally to a class of persons. (Para 27)
       The doctrine of legitimate expectation in the substantive sense has been accepted as part of our law and that the decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way. Reliance must have been placed on the said representation and the representee must have thereby suffered detriment. (Para 37)
       Change in policy can defeat a substantive legitimate expectation if it can be justified on Wednesbury reasonableness. The choice of the policy is for the decision maker and not for the Court, The legitimate substantive expectation merely permits the Court to find out if the change in policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. The judgment whether public interest overrides the substantive legitimate expectation of individuals will be for the decision-maker who has made the change in the policy and the Courts will intervene in that decision only if they are satisfied that the decision is irrational or perverse. (Paras 40 & 42)

Judgment

M. Jagannadha Rao, J. - Leave granted.

2. These two appeals have been filed by the Punjab Communications Ltd. (hereinafter called the ‘PCL’), a public-sector undertaking of the State of Punjab against the judgment dated 27.2.1998 of the High Court of Punjab and Haryana in CWP No. 124 of 1998 and against the order in the review application dated 19.3.1998 in RA 138 of 1998. The Transfer Petition (C) No. 680 of 1998 is filed by Sri D.P. Srivastava for transfer of public interest writ petition No. 4112 M/B of 1997 from the Allahabad High Court to this Court as some points are common to the appeals and the writ petition.

3. Though the main judgment in the writ petition has been rendered by the High Court on 27.2.1998, the events which have taken place during the pendency of these appeals have changed the complexion of the case and, according to the respondent-Union of India, the writ petition has practically become infructuous and no relief can be granted. We shall narrate the facts which have given rise to the writ petition and shall also refer to the subsequent events.

4. In September 1993, the Asian Development Bank (hereinafter called the “ADB”) agreed to grant a soft loan of US $ 113 m to the Union of India (1st respondent) for funding a project meant to provide digital wireless telecom facility to 36,000 identified villages in Eastern U.P. The Department of Tele-communications (hereinafter called “DOT”) floated a tender on 9.10.1996 inviting offers open to Indian and foreign companies. There were 14 offers including one from the appellant. The Technical Evaluation Committee (hereinafter called the “TEC”) examined the offers and wherever there were deviations in the offers that were made, the TEC sought clarifications on 3.6.1997 from the bidders to be given by 10.6.1997. The appellant replied and resubmitted the “proveness” certificates which were included in the original bid pagers at pages 226 to 228. This was a certificate dated 28.2.1997 issued by the Chinese Post and Telecommunication Department where the technology submitted by the appellant was stated to have been implemented. After scrutiny, the TEC short-listed the appellant (PCL) and BEL on 7.7.1997. It is the appellant’s case that on account of some pressure brought on respondents 5 (Member (P) Telecom Commission) DOT and Respondent 6 (Advisor (T) Telecom Commission) DOT, the matter was referred by the 5th respondent to a High Level Committee, with a view to obtain an opinion disqualifying the appellant so that the Department could go in for an outmoded `analog’ system (rather than the current `digital’ system) to be provided by some multinational company which was wanting to dump its outmoded `analog’ system in the India. It is the appellant’s case that this was done with a view to enable the issue of a fresh notification calling for fresh tenders pertaining to `analog’ system. It appears that on 23.9.1997, the abovesaid High Level Committee submitted its report stating that there were two `deviations’ in the tenders submitted by the appellant as noticed by the Technical Evaluation Committee in respect of the required specifications. The Committee required the department to negotiate orally with the appellant. It is the appellant’s contention that at an extremely short notice of 2 days, a mock negotiation was held on 29.10.1997, and some oral questions were asked. It is said that the appellant had answered all these questions put by the respondents by means of the appellant’s documents already on record but these were not accepted. According to the appellant no agreed minutes were recorded. On 19.11.1997, a note signed by the 6th respondent, the convenor of the High Level Committee, was prepared stating that the further Technical Evaluation of the project was likely to go beyond 27.11.1997 due to complexities of bids offered by manufacturers and also in view of the want of authentication of the “proveness’ of the system proposed by the appellant. It

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1999 Supreme(SC) 585

Cases Referred (11)