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1. In view of the time taken by the High-

Powered Committee the selection process be completed by DoT internally;

2. Only one party may be granted licence for one city; and

3. The actual selection of the licensee should be made primarily on the consideration of rentals and the marks obtained in respect of foreign exchange inflow and outflow criterion and experience of the licensee.

10. On 9-10-1992, in accordance with this note, a list of 8 short-listed companies was prepared. The reasons for rejection of the 6 companies were recorded. The Chairman, in his final recommendation, made on 9-10-1992, noted that Bharati Cellular, Modi Telecom and Mobile Telecom did not fulfil the conditions provided in clause 2.4.7 of Chapter 11 of the financial bid which requires that foreign exchange requirement be met by foreign collaborator. With regard to rejection of 6 bidders Sterling Cellular was rejected because some investigation against them was pending before the CBI. However, the Minister reversed that decision as to the exclusion of Sterling Cellular and Indian Telecom Limited from the list of finally approved bidders and directed that the same be considered.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

Based on these principles we will examine the facts of this case since they commend to us as the correct principles.

2. Whether the selection is vitiated by arbitrariness?

95. Mr Soli J. Sorabjee, learned counsel appearing for Tata Cellular argued that there are clear instances of arbitrariness. Criterion No. 2.4.7 has been totally ignored and excluded. This has been so admitted. No marks have been awarded on this score under this criterion. Note II of the same General Conditions 2.4.7 says minimum reliance on Indian Public Financial Institutions will be preferred. This requirement has been breached by Bharati Cellular, Mobile Telecom, Sterling Cellular and Skycell Communication. They have borrowed from commercial banks 4.87 per cent, 4.87 per cent, 43.48 per cent and 34.41 per cent respectively. This criterion carries 8 marks. In spite of the borrowings they have been awarded 6, 8 (full marks), 5 and 7 respectively. The company, Tata Cellular, which had not borrowed at all from the commercial banks, has been awarded only 4 marks. It requires to be noted that borrowing from commercial banks was prohibited by Reserve Bank of India.

Mr B.R. Nair, Member (Production) made the following note:

"I agree with the recommendations of the Evaluation Committee that the four firms must be in paragraph 3 of page 1/N should be included in

74 (1910) 2 IR 84 75 (1908) 2 IR 285 76 (1991) 4 SCC 584, 667 77 1971 AC 297: (1969) 3 All ER 275: (1969) 3 WLR 706 the short-list. Thus, there would be 14 companies in the short-list instead of 16 recommended by Adviser (0)."

111. On 8-9-1992, Mr Nair, as Member of the Committee, agreed to a noting that only three companies, Bharati Cellular, BPL Systems and Projects and Skycell qualified for selection. After further discussion, 8 companies came to be selected and the note was accordingly put up on 9-10-1992. This recommendation is agreed to by Mr Nair.

DDG (TM) A brief note, copies of TEC report, financial tender document have been sent to the High-Power Committee. The note was shown to Member (S) before dispatch.

(emphasis supplied) sd/ 10-9-1992 Adv. (O) sd/-

G.T Narayanan 14-9-1992"

117.On 10-9-1992 the Chairman (TC) made the following note:

"In pursuance of the orders of the MOS (C), a Committee consisting of Principal Secretary to the Prime Minister, in his capacity as Chairman, Foreign Investment Promotion Board, Secretary Finance, Secretary Electronics and Chairman Telecom Commission was appointed to make recommendations regarding selection of the franchisees to provide Cellular Mobile Telephone Service in the four metro cities. This Committee examined the bids received against the tenders floated on the basis of Tender Evaluation Committee report and made recommendations to MOS (C) regarding short-listing of the bidders and the financial bids document. The financial bids from the short-listed bidders have now been received and examined in the Department. The recommendations of the Evaluation Committee are being forwarded to the members of the High-Level Committee appointed by MOS (C) for examination and making recommendations to the Government regarding final selection of the franchisees.