Karnataka High Court
Electronic Enterprises vs Karnataka Power Corporation Ltd on 14 October, 1993
Equivalent citations: ILR1994KAR125, 1994(1)KARLJ590
ORDER Shivashankar Bhat, J.
1. A disappointed tenderer is the petitioner. In September 1992, the first respondent invited sealed tenders in two parts, for supply and erection of Public Address System, required at the Thermal Power Station, from those 'who have successfully designed, manufactured, erected and commissioned and similar or higher capacity of Public Address System (Distributed Type) which have been in successful operation for a period of around two years in atleast two different thermal power stations reckoned as on the date of opening of Part-I'. It was stated that Part-1 shall comprise of technical commercial terms and conditions along with the earnest money deposit of Rs. 25,000/- and Part-II shall comprise of prices only. Last date for submitting tenderers was 6.11.1992 upto 1.00 noon and Part-l was to be opened on the same day at 3.00 p.m. in the presence of the tenders who choose to be present; Part-II was to be opened at a date to be intimated later.
2. Petitioner, the 2nd respondent and two others sent their tenders. According to the petitioner, tender of the 2nd respondent was rejected as it had not submitted the certificate of experience in the field of two power stations as required in the tender notification. It is further asserted by the petitioner that second respondent was not manufacturing PAS system distributed type, but has been manufacturing Micro Processing System. Petitioner had objected to consider the tender of the 2nd respondent as ineligible to submit the tender. Petitioner learnt that the, 1st respondent was intending to enter into a contract with the 2nd respondent, despite the rejection of the tender and the higher quotation given by the second respondent. Hence the Writ Petition, mainly to restrain the 1st respondent from entering into the contract with the second respondent.
3. Writ Petition was filed on 22.7.1993 (though dated 8.7.1993). On 23.7.93 Court directed one of the Standing Counsel of the first respondent to take notice. On 28.7.1993, Ruie was issued on which date, Sri Raghavan entered appearance for the first respondent. In view of the urgency and as the question involved works at a Thermal Station, Writ Petition was heard early.
4. Mainly two questions are raised by the petitioner:
(1) Awarding of the contract to the second respondent was illegal and arbitrary as the second respondent was ineligible even to send any tender.
(2) The process of awarding the contract was vitiated by unreasonableness and unfairness, because, the first respondent arbitrarily loaded the quoted price of the petitioner, without a similar loading of the 2nd respondent's quotation. Further, while the first respondent insisted that the petitioner should supply materials of Philips make; no such condition was imposed on the 2nd respondent, who is allowed to supply its own make.
5. These allegations and contentions are seriously denied by the respondents; first respondent (referred to as 'KPC', in a few places, hereafter), averred in its pleading that Part-1 of the bid was opened on 6.11.1992 and requisite classifications and confirmation were sought from each of the tenderers and thereafter all of them were informed that Part-ll would be opened on 31.12.1992. The quoted price by each of them was as follows:-
SI. No. Bidders Quoted cost.
1.
M/s. Building Network Automation (respondent No. 2) 36,16,757/-
2. M/s. Electronics Enterprises (Petitioner) 34,25,781/-
3. M/s. Motwane Private Limited 33,14,850/-
4. M/s. Philips India 52,47,160/-
Since every one of the tenderers had deviated from the technical and commercial conditions of the tender, price quoted by each of them had to be suitably modified taking into account of financial implications on the first respondent due to deviations and/or departures from the standard specifications. The evaluated cost was worked out as follows:-
SI.No. Bidders Evaluated cost.
1.
M/s. Building Network Automation (Respondent No. 2) 37,86,427/-
2. M/s. Electronics Enterprises (Petitioner) 40,89,890/-
3. M/s. Motwane Private Limited 44,79,796/-
4. M/s. Philips India 56,23,001 /-
As to the alleged pre-qualification, it was pleaded by the first respondent that, there was no such eligibility condition at all; it is averred that, "the stipulation in the notice inviting tender to the effect that the tenderer should have successfully designed etc., a similar or higher capacity of Public Address System (distributed type) which have been in successful operation for a period of around two years in atleast two different Thermal Power Stations is not a condition of eligibility or a pre-qualification for a tenderer. This stipulation has been mentioned in the Notice Inviting Tender only as a measure of assessing the capability of a tenderer and it does not debar or prevent this respondent from considering the tender of any bidder if this respondent is satisfied on an objective assessment of facts that the bidder is capable of executing the tendered work. In the instant case, vide para 2.5 of Annexure Rl the Chief Engineer has opined that the stipulation in the NIT in this regard was with a view to avail PA system of proven, design and that all the four bidders have executed considerable PA system both for Thermal station and other utilities".
As to the capacity of the second respondent, the first respondent points out,--
"With regard to the capacity and/or capability of respondent-2 this respondent respectfully invites attention of this Hon'ble Court to paragraph 4.3 of Annexure Rl wherein it is clear that the 2nd respondent has executed the design, manufacture, installation and commissioning of Public address system at (1) Mettur Thermal Power Station for the Marshalling Yard, (2) Naval Training Base, Cochin, (3) Cochin Refiners. For each of the works 2nd respondent has also furnished certificates of good performance. The 2nd respondent has also executed centralised and distributed amplifier PA system in many Industrial fields and defence including defence establishments. With a view ascertain the performance of the PA system supplied and commissioned by the 2nd respondent, the Executive Engineer of this respondent inspected the same at Cochin Refinery and INS 'DRONAGHARYA' at Cochin, a Naval Warship. As per the feed back furnished by the concerned authorities, the performance of the system and the customer service rendered by the second respondent was satisfactory. It also appears that the respondent No. 2 has also executed the following other works, namely:
1. P:A System of LIC of Madras
2. PA system for Defence Staff service College at Ooty.
3. Two Channel Communication System to BHEL/ISG Division/Bangalore.
4. Crowd Control and surveillance system for Nehru Stadium at Madras.
The 2nd respondent also has standing orders from Neyveli Lignite Corporation and Vishanka Patnam Port Trust".
6. The contention that only 'Philips make' was insisted from the petitioner, is not found in the Writ Petition; it was an argument developed by Sri Gopal Hegde before the Court. The Managing Director of the first respondent accorded approval to award, the contract to the second respondent on 25.5.1993 and letter of intent was placed with it on 31.5.1993. Detailed order was issued on 12.7.1993. First respondent also denied the assertion of the petitioner that the petitioner had been asked to keep its offer upto 15.6.1993; first respondent averred that this was a voluntary act of the petitioner and the first respondent was not responsible for it.
7. It is not necessary to refer to the lengthy statement of objections of the second respondent, having regard to the contentions advanced before me. Though the petitioner asserts that tender of the second respondent was rejected on 6.11.1992 when Part-l was opened, there is nothing on record to substantiate this assertion.
8. Neither the tender notification, nor the tender form provides anywhere that the tenderer shall produce satisfactory proof to the effect that he or it had "successfully designed, manufactured, erected and commissioned a similar or higher capacity of PAS which have been in successful operation for a period of around two years in atleast two different thermal power stations reckoned as on the date of opening of Part-l". Nowhere, there is a statement (as usually found in similar notifications) that tenders submitted by a person not falling within the above description, would be rejected. Clause (2) of Tendering Conditions enumerates several qualifications. Nowhere, the above referred requirement is mentioned as a qualification of the tenderers. Clause 2.01(g) states that the tenderer shall provide evidence that he is a qualified manufacturer, has designed, manufactured, tested and commissioned three or more equipment similar to that specified, each of which is in successful commercial operation for not less than two years. There was, also, no condition in the tender condition that only Philips make would be accepted.
9. It is quite clear that reference to the experience in atleast two different thermal stations, in the NIT (Notice Inviting Tender) -
(Annexure - A) was by way of guidance only and not as a qualification. The nature of the work itself indicates that, it was to design, manufacture, etc., and install a Public Address System.
Reference to the Thermal Stations was necessary to indicate the peculiar condition under which the PAS shall have to function. If a tenderer had an experience of designing and installing such PAS in any other place, under conditions similar to that of a Thermal Power Station, there is no reason to disqualify such a tenderer. In fact, the scope of the eligibility restriction should not be stringent to reduce the area of competition. Courts discourage a restriction which reduce the competition and deprives opportunity to qualified persons from competing in the tender proceedings. It is in the areas where special expertise is required or the nature of the work is such that only a particular experience has to be insisted upon as a qualification, restriction as to eligibility is technically adhered to. Further, if from the NIT, tender forms, and other stipulations, it is revealed that a class of persons are denied eligibility to submit tenders, but, while considering the tenders, the said restriction is ignored the resultant decision to award the contract would be vitiated by unfairness and unreasonableness, because, there will be a denial of opportunity to several others who could have equally competed for the contract, along with the person who was awarded the contract ultimately. Here, those who did not submit the tenders are prevented from submitting the tenders by the language of the NIT, tender form or other announced stipulations.
10. The relevant principle involved can be deduced from a few Decisions cited by the learned counsel.
11. In JASBHAI MOTIBHAI DESAI v. ROSHAN KUMAR, HAJI BASHIR AHMED AND ORS. AIR 1976 SC 578 ( 1976 ) 1 SCC 671 , the question was whether a proprietor of a cinema theatre could question the action of the District Magistrate in granting a 'No objection certificate' (NOC) to another person for the location of a cinema theatre at the site of the latter. Grant of NOC was governed by statutory Rules and should be preceded by inviting objections from the public to the request for the grant of NOC and the objections, if any, shall have to be considered. While rejecting the Writ Petition (affirming the dismissal order of the High Court), the Supreme Court inter alia, held at page 586:
"The Act and the Rules with which we are concerned, are not designed to set norms of moral or professional conduct for the community at large or even a section thereof. They only regulate the exercise of private rights of an individual to carry on a particular business on his property. In this context, the 'person aggrieved' must receive a strict construction.
Did the appellant have a legal right under the statutory provisions or under the general law which has been subjected to or threatened with injury? The answer in the circumstances of the case must necessarily be in the negative. .
The Act and the Rules do not confer any substantive justiciable right on a rival in a cinema trade, apart from the option, in common with the rest of the public, to lodge an objection in response to the notice published under Rule 4.".
It was further held that no right of the petitioner under the general law was infringed by the grant of NOC to a prospective rival in the business.
12. Earlier in NAGAR RICE & FLOUR MILLS v. NT. GOWDA , the same principle had been evolved and applied. It was held that a competitor in the same line of business cannot question the permission given to another for the change of location of rice mill assuming that the permission granted was illegal; every one has a fundamental right to carry on a legal trade and restriction on such a right has to be strictly construed and the restriction imposed ought to be in the interests of the general public. Therefore,-
"Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Article 19(6) but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents Would have no locus, standi for challenging the grant of the permission, because no right vested in the respondents was infringed".
13. There is a difference between the case where a person is excluded from an opportunity to carry on a trade, and a case where, a person is permitted to enter the competition in the field of trade. In the former case, opportunity is denied, resulting in the violation of Article 14 of the Constitution; similarly, exercise of the fundamental right to trade under Article 19(1) is prevented; competition is inherent in the trade and in fact efficiency and service to the general public will be increased only by a proper competition in the trade. That is why, an opportunity created to expand the scope for competition among the traders is not restrained in the exercise of Writ jurisdiction. However, if a person is not meted out an equal treatment and is denied of a fair consideration and opportunity given to one outweighs the skeleton opportunity to give to another, it may be a case of unfairness inviting Judicial scrutiny under Article 14 of the Constitution. For example, if the State invites competition and while considering the respective cases of the rivals, case of one of them is not looked into at all, or a different test or consideration is applied in favour of one, denying the benefit of such a consideration to another, the ultimate decision of the State selecting the favoured one would be invalid, because, such a selection is the result of an unfair process in arriving at the decision. Normally, it is not in the public interest to allow such a 'decision taking process' to be adopted by the State.
14. This principle has been brought out, again, in M/s. G.J. FERNANDEZ v. STATE OF KARNATAKA AND ORS.:
"Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if a party does not strictly comply with the requirements of Paras III, V or VI of the NIT, it is open to the KPC to decline to consider the party contract and if a party comes to Court saying that the KPC should be stopped from doing so, the Court will decline relief. The second consequence, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the KPC made some changes in the time frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxation in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce a document by the time stipulated but would have applied had it known that the rule was likely to be relaxed. But neither of these situations is present here. Sri. Vaidhyanathan says that in this case one of the applicants was excluded at the preliminary stage. But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance. The question, then, is whether the course adopted by the KPC has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxation of time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less. But, we are inclined to agree with the respondent's contention that while the rule in Ramana's case (supra) will be readily applied by Courts to a case where a person complains that a departure from the qualifications has kept him out of the race, injustice is less apparent where the attempt of the applicant before the Court is only to gain immunity from competition. Assuming for purposes of argument that there has been a slight, deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, MCC is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits. The appellant had no doubt also urged that the MCC had no experience in this line of work and that the appellant was much better qualified for the contract. The comparative merits of the appellant viz-a-viz MCC are, however, a mater for the KPC (counselled by the TCE) to decide and not for the Courts".
The words 'injustice is less apparent where the attempt of the applicant before the Court is only to gain immunity from competition' highlights the approach to be adopted by the Courts. However, the competitor should have the basic qualification to perform the job.
15. The object of the judicial scrutiny, under Article 226 of the Constitution, of the decision taken by the State and its instrumentalities, while awarding a contract, is mainly to safeguard public interest.
In INDIAN HUME PIPE CO. LTD. v. BANGALORE WATER SUPPLY AND SEWERAGE BOARD , it was observed at page 1140:
"The object of the judicial examination is to see whether the public interest would suffer, by the transaction in question, and the State has failed to play fairly while entering into the transaction. Court's jurisdiction is invoked usually, by one of the parties, who made the tender offering to purchase the public property or articles put up for sale at a price which he asserts as the highest, or offering to supply goods or works to the Government or a State instrumentality, at a rate which he asserts as the lowest. In such a situation, Court is not concerned as to how far, the party's interest suffered, by non-acceptance of his tender. The judicial review is permitted, in order to safeguard the public interest".
Recently, in STERLING COMPUTERS LIMITED v. M&N PUBLICATIONS LIMITED AND ORS. , the Supreme Court held:
"At times it is said that public authorities must have the same liberty as they have in framing the policies, even while entering into contracts because many contracts amount to implementation or projection of policies of the Government. But it cannot be overlooked that unlike policies, contracts are legally binding commitments and they commit the authority which may be held to be a State within the meaning of Article 12 of the Constitution in many cases for years. That is why the Courts have impressed that even in contractual matters the public authority should not have unfettered discretion. In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. But even in such matters they have to follow the norms recognised by Courts while dealing with public property. It is not possible for Courts to question and adjudicate every decision taken by an authority, because many of the Government Undertakings which in due course have acquired the monopolist position in matters of sale and purchase of products and with so many ventures in hand, they can come out with a plea that it is not always possible to act like a quasi judicial authority while awarding contracts. Under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. If the decisions have been taken in bona fide manner although not strictly following the norms laid down by the Courts, such decisions are upheld on the principle laid down by Justice Holmes, that Courts while judging the constitutional validity of executive decisions must grant certain measure of freedom of 'play in the joints' to the executive".
However,--
"The norms and procedures prescribed by government and indicated by Courts have to be more strictly followed while awarding contracts which have along with commercial element a public purpose as in the present case".
At page 198 (para -19) Court said:
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the 'decision making process'".
Therefore, Court held in para-20:
"If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract, But, once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of Article 14 of the Constitution, the Courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractual matters and any interference by Court amounts to encroachment on the exclusive right of the executive to take such decision".
16. Primary approach is to examine the, "decision taking" process in awarding the contract. If the procedure basic in nature is not ignored and there was objective consideration of different options available, Court cannot act as an appellate authority and substitute its own opinion. Certain basic procedure to make it 'fair play in action' and objective consideration of all relevant facts to ensure unarbitrariness are always insisted upon, while testing the process involved in entering into contracts by the State. Vast latitude is allowed to the State, to accept one or the other options available, when it is clear that under the particular set of circumstances, reasonably more than one option is available as to the course of action to be taken and arrive at a decision; In the background of the entire facts and material on record, if it is shown that deviations from the normal rule and wrong application of one or a few norms did not affect adversely, the public interest, Court may decline to interfere with the decision taken. The strictness required in the matter of following the rules and applying the norms may not be insisted upon always by the Court if it is a case of permitting a wider competition and the complaint is that, in the decision taking process, State did not prevent a person from competing with the complainant on the ground of alleged ineligibility. If the illegality goes to the root of the qualification and the qualification required should be insisted upon in the interest of public, certainly, Court would strike down the decision awarding a contract in favour of an unqualified person. For example, when experience in Iron & Steel trade is the basic qualification as stated in the tender notification in the matter of supplying iron and steel, it cannot be said that an experienced sugar manufacturer could be awarded with the contract to supply iron and steel. Experience in the field relevant to the subject matter of the contract, if announced as necessary, then, a total inexperience in the field would be indicative of extraneous factor influencing the decision making process. However, if the experience required is stated in certain absolute terms, still, if it is possible to find out an equivalent experience in the same field in another person, it may not be unreasonable to consider the offer of such a person also; here capability of the person to discharge the contractual obligation which is the basic requirement, could be considered as shown to exist. Suppose the tender notification invites tenders for supply of food articles to a hospital from those who are experienced in supplying such articles to hospitals, and a person who has been supplying food articles to hostels for several years also sends his tender and the State finds his tender acceptable and the person competent, can it be said the decision is arbitrary, only because, tender notification required only persons having experience in supplying food articles to hospitals to send the tenders? I do not think so. Decision may be upheld by the Court, if the decision is otherwise not unfair or unreasonable for any other reason.
17. Exclusion, of any person, from the competition is an exception; general rule is to permit every one to offer the tender, subject to the requirement of basic eligibility and qualification.
18. Mr. Gopal Hegde contended that the pre-eligibility imposed for submitting the tender should be insisted upon always and failure to abide by the consideration of tender notification, vitiates the tender procedure. RAM GAJADHAR NISHAD v. STATE OF U.P. AND ORS. , was relied. Tenders were invited from the parties to give their offers for lease of the right of the collection of a toll ferry; tenders had to be submitted by August 25, 1987 and they were to be opened at 3.30 P.M. on the same day. Tenders were to be in Parts I and II. Part II required that tenderer has to submit solvency certificate as to his financial status being more than Rs. 4 Lakhs; it was further stated that Part I would be opened when all the conditions of Part II have been complied with. The petitioner was able to get the solvency certificate only on 28th August and it was filed on November 2, 1987. The rejection of the tender on the ground of failure to submit solvency certificate within the prescribed date was challenged. The Supreme Court held, at page 488:
"It is quite clear that the tender form that was submitted by the appellant did not fulfil all the requirements of the tender notice, that is, the solvency certificate which was filed was more than three months old and the new solvency certificate duly granted by the Collector was not filed within the time specified in the tender notice, that is, on August 25, 1987. But it was filed much later on September 2, 1987. The Commissioner has already considered the validity of the tender filed by the appellant in accordance with the direction made by the High Court pursuant to the order made in Writ Petition No. 206/1987 and the Commissioner by his order dated May 10, 1988 has held that the appellant did not comply with this mandatory condition, namely, filing of solvency certificate within the last date of submission of the tender as well as character certificate and so the Commissioner did not open the tender form submitted by the appellant on this ground".
19. The contention that the delay was technical and did not affect the tender, was not accepted. One basic fact involved in the above case requires to be noted; the tender had to be opened on 25.8.1987; on the said date solvency certificate was not available; hence, tender of the petitioner could not have been opened at all. Secondly, it was a case where the authority thought it proper to reject the tender for want of solvency certificate on the date of opening of the tenders. Such a decision cannot be held to be unreasonable. Where two views are possible with reference to a set of facts, one of those views taken by the authority cannot be considered as arbitrary. These aspects run through the Decision of the Supreme Court.
20. In the instant case before me, if for any reason, the KPC had rejected the tender of the 2nd respondent on the ground of the requisite experience stated in the tender notification by insisting on its terms too technically, in all probability, this Court may not interfere with such a decision. The approach of the Court is to see whether the action of the authority while considering the tenders, was unreasonable and arbitrary and whether in the circumstances, no reasonable person would adopt the particular course of action adopted by the said authority.
21. In Fernandez case (supra) the Court clearly laid down that in some areas the authority has a wide discretion to relax the terms of tender notification; however, such a relaxation should not be such as to deny another similarly situated and eligible person from an opportunity to compete in the tender proceedings.
22. Sri Raghavan also referred to PODDAR STEEL CORPORATION v. GANESH ENGINEERING WORKS AND ORS. , to show that literal compliance with tender notification is not always insisted upon. Here the Supreme Court approved a similar observation of the Bombay High Court in B.D. YADAV AND M. MESHRAM v. ADMINISTRATOR OF THE CITY OF NAGPUR AIR 1984 Bombay 351, Mr. Raghavan also referred to a Decision of the Allahabad High Court rendered in M/s. ARTEE MINERALS, FARIDABAD ETC v. STATE OF UTTAR PRADESH AND ORS. AIR 1983 Allahabad 416, in this context. I do not consider it necessary to multiply the Citations, the principle being finally clarified by the Supreme Court in Fernandez's Case.
23. Next question pertains to the alleged loading of the prices. The letter dated 27.4.1993 from the Chief Engineer of the first respondent to its Managing Director (filed as Ann.R1 by the first respondent) explains the reason for loading the quotations. Regarding the price quoted by the petitioner, it is stated that petitioner has deviated in respect of penalty guarantee and security deposit clauses and therefore these are cost loaded. Instead of security deposit of 10%, petitioner indicated a deposit of 5% only. Similarly instead of maximum penalty of 10% notified in NIT, petitioner had offered 1/2 % per week of the undelivered portion of the contract value subject to a maximum of 5%. If the first respondent had rejected the petitioner's tender on this ground, probably, petitioner could not have questioned the rejection. Cost loading has been done in respect of the quotations of others also depending on the deviations. No arbitrariness is found in the procedure because, a uniform procedure for all was followed.
The above letter also shows that petitioner had not quoted for some of the items of start up and essential spares and hence the highest cost quoted among other bidders was cost loaded to the petitioner in respect of the short quoted items.
24. It was also contended that the second respondent's equipments were not ready and the experiment conducted by installing them for checking was found unsatisfactory. Following was read from the above letter Ann.R1:
"In the detailed discussions held with M/s. BNA regarding interphasing with the existing systems, the firm had stated that interphasing with the Motwanes system of unit-3 would be simple as both the systems are of distributed amplifier type. Whereas with the Philips system units I & II and common outlying areas, interphasing will have to be done at the pre-amplifier stage, as the philips system is of centralised amplifier type. In order to verify the capability of M/s. BNA in providing interphasing features, this firm was asked to practically demonstrate to interphasing feature with the existing systems at RTPS. M/s. BNA expressed that they can carry out this with some components of equipments presently ready with them which may only generally indicate schemes of interphasing and not give the required satisfactory performance, but for proper interphasing the equipments are to be designed and made. However, a preliminary demonstration was conducted on 12/13.3.1993 at RTFS, wherein the interphasing with Motwane's system and with Philips system of units I and II were successful. But in respect of the common facilities in common outlying areas, the paging level was found to be very feable as the interphasing could only be tried by connecting at the amplifier input stage instead of at the pre-amplifier stage, as we had advised M/s. BNA not to meddle with the existing centralised amplifier unit. The copies of the report from the site and the clarifications furnished by M/s. BNA are enclosed herewith for kind reference. The technical clarifications furnished by M/s. BNA are enclosed herewith for kind reference. The technical clarifications furnished by the firm are found to be in order and it is examined at the pre-amplified stage of the Philips system the paging signals from Unit-4 system would be similar to the working of existing Philips system and high degree speech intelligibility could be obtained. Therefore, it is analysed and concluded that M/s. BNA have the capability in providing proper interphasing feature in their system so that the PA system of Unit-4 can be satisfactory interphased with the PA system of Unit I, II and III and of the common facilities in the outlying areas.
In view of the above, it is recommended for the acceptance of the lowest to offer of M/s. Building Network Automation Pvt. Ltd., Bangalore, for supply, installation and commissioning of Public Address System for Unit-4 and for placement of the order on them".
Above passage was read with the letter Annexure 'B' dated 7.12.1992 written to the petitioner by the first respondent seeking certain clarifications. In this letter petitioner was asked to confirm that 'the make of the main equipment offered is of Philips only'. Earlier, the letter said:
"Please note that your equipments being offered for Unit 4 has to be interphased with the existing Philips centralised P.A. system of Unit 2 and distributed PA system of M/s. Motwane for unit 3. All the materials required for the interphasing has to be supplied by you. Please confirm the compliance".
25. It was contended that when first respondent insisted with the petitioner that make should be of Philips, second respondent was permitted to supply its own 'make'. Mr. Raghavan, the learned Counsel for the first respondent pointed out that, petitioners' tender specified the manufacturers name as 'Philips/equipment'. However, price quoted was the same. In this context, first respondent had to seek clarification as to the 'make' of the equipments. Nowhere, there was an insistence even in the tender form or conditions as to the 'make'. If petitioner had confirmed that it would supply its own 'make', a similar experimentation as in the case of second respondent would have been conducted.
26. Explanations offered by the first respondent as to 'cost loading' and the 'make' seems to be acceptable and reasonable. It is also necessary to note here that the other two tenderers viz., Philips and Motwane have not made a grievance of the procedure adopted by the first respondent and Motwane had also offered its own 'make'. At the time of arguments, Mr. Raghavan placed before me a letter dated 21.4.1993 addressed to the first respondent by Philips stating that 'effective 1992', petitioner was no longer the dealer of Philips; the letter reads:
"This is to inform you that effective 1992 they are no longer our dealer. They were our dealer earlier and as such they would have produced to you copies of letters issued by our Delhi office during that period..........
xx xx xx We have not effected any supplies of communication system to them in the recent past nor we intend to supply in future.
In view of this, we cannot understand how they have quoted for our make......"
27. Petitioner relied on a few letters written to the first respondent to contend that there was assurance held out that contract would be awarded to it. But these are one sided letters and the correctness of the facts stated in them were seriously disputed on behalf of the first respondent.
28. It is not possible for the Court to accept these assertions of the petitioners, specially in the context of the contract having already awarded to the second respondent in May 1993 itself. These letters seem to be written to create an impression that contract has not been finalised.
29. For the reasons stated above, all the contentions of the petitioner are rejected.
Consequently this Petition fails and is dismissed. Rule discharged. No costs.