M/S Key Systems v. Chief General Manager, BSNL Kerala Circle & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **WEDNESDAY,THE 19TH DAY OF DECEMBER 2018/28TH AGRAHAYANA,1940** **WP(C).No. 28812 of 2018** ## **PETITIONER:** **M/S.KEY SYSTEMS REPRESENTED BY ITS MANAGING PARTNER, K.C.JOSEPH, AGED 58, S/O. K.K.CHACKO, MADEENA COMPLEX, INDIRA JUNCTION, ALAPPUZHA - 688013** **BY ADVS. SRI.R.T.PRADEEP K.C.HARISH M. BINDUDAS** ## **RESPONDENTS:** |**1**|**CHIEF GENERAL MANAGER**| |---|---| ||**BHARAT SANCHAR NIGAM LIMITED, KERALA TELECOM**| ||**CIRCLE, PMG JUNCTION,**| ||**THIRUVANANTHAPURAM - 695 001**| |**2**|**GENERAL MANAGER**| ||**BHARAT SANCHAR NIGAM LIMITED, BSNL BHAVAN, PICHU**| ||**IYER JUNCTION, NEAR IRON BRIDGE P.O., ALAPPUZHA -**| ||**688011.**| |**3**|**ASSISTANT GENERAL MANAGER (S AND M - CM)**| ||**BHARAT SANCHAR NIGAM LIMITED, CTO BUILDING, NEAR**| ||**IRON BRIDGE P.O., ALAPPUZHA - 688011**| |**4**|**CHOICE ENTERPRISES**| ||**REPRESENTED BY ITS PROPRIETOR, SHIBU, PULIMOOTTIL**| ||**BUILDINGS, MULLACKAL,**| ||**ALAPPUZHA - 688 001.**| **BY ADVS. SRI.PREMJIT NAGENDRAN, SC, BHARATH SANCHAR NIGAM LTD. SRI.MATHEW JOHN (K) SRI.MATHEW DEVASSI** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13.11.2018, THE COURT ON 19.12.2018 DELIVERED THE FOLLOWING:** W.P.(C).No.28812/18 2 ## **JUDGMENT** ## 1. This writ petition is filed seeking the following reliefs:- “i) To issue a writ of certiorari or any other appropriate writ, order or direction calling upon the records pertaining to allotment of franchiseeship of Kayamkulam territory in Alappuzha SSA to the 4[th] respondent and quash the same. ii.To issue a writ of mandamus or any other appropriate writ, order or direction to respondents 1 to 3 to allot franchisee-ship of Kayamkulam territory in Alappuzha SSA to petitioner pursuant to Exhibit P4 within such time fixed by this Hon'ble Court.” - 2.Heard Sri.R.T.Pradeep learned counsel for the petitioner, Sri.Premchand Nagendran, learned counsel appearing for respondents 1 to 3 and Sri.Mathew John, learned counsel appearing for the 4[th] respondent. - 3.The petitioner, who had submitted an expression of interest for allotment of franchise for products and services of the BSNL in the Kayamkulam territory in Alappuzha Secondary Switching Area (SSA for short) challenges the decision taken to allot franchise to the 4[th] respondent on the ground that such decision was against the policy formulated by the 1[st] respondent. W.P.(C).No.28812/18 3 4. The learned counsel relies on a decision of the Apex Court in M/s. **Supreme Mahavir (JV) and others v. Municipal Corporation of Greater Mumbai and others** [AIR 2013 Bombay 118]. in support of the contention where the tenderer fail to fulfill the eligibility criteria provided in the tender notice, the decision to treat the bid of that tenderer as responsive would be arbitrary and violative of Article 14 of the Constitution of India. It is stated that there is a limit of 33% of franchise in the same SSA provided in the policy which can be extended by the 1[st] respondent upto 50%. It is stated that any extension over 50% is beyond the power of the 1[st] respondent as well. It is contended that Exhibit P2 policy is formulated by the BSNL for distribution of frachiseship all over the country and no departure is possible from the sale by respondents 1 to 3. It is stated that there are five territories in Alleppey Secondary Switching Area. Since 50% of five would workout to 2.5 and a territory cannot be adopted partially, the 2.5 has been rounded off to 3. It is stated that this only amounts to an interpretation of Exhibit P2 policy by the 1[st] respondent who is fully empowered also and that the challenge to the allotment of franchise on that ground is not tenable. W.P.(C).No.28812/18 4 5.The learned standing counsel appearing for the respondents would place reliance on the decision of this Court in **T.P constructions v. Chief Engineer, Kerala State Housing Board** [2018 (1) KLT 866] in support of his contention that the authority inviting tender should be given the freedom to interpret the policy conditions to make the same viable and practical. It is further contended that there are no allegation of _mala fide_ or arbitrariness in the actions of the respondents. The petitioner as well as the 4[th] respondent who had submitted expression of interest had been interviewed and the 4[th] respondent was found more suitable. The learned counsel relies on the decision of the Apex court in **Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd** . [AIR 2016 SC 4305] to contend that in the matter of award of contract interference by the constitutional courts is permissible only when mala fide, intention to favour someone, arbitrariness, irrationality or perversity was established. In the instant case, it is contended that since there is no allegation of _mala fides_ involved in the decision and since the matter related only to an interpretation of the policy, as W.P.(C).No.28812/18 5 evidenced by Exhibit P2, this Court would not be justified in issuing any writ as sought for. - 6.The 4[th] respondent has also placed a counter affidavit on record. - 7.I have considered the contentions advanced. It is the specific contention of the learned counsel appearing for respondents 1 to 3 that all that has been done to the instant case is to provide a viable solution in the matter of award of franchise. The number of territories in the Secondary Switching Area being five, the 1[st] respondent had the power to grant franchisee in respect of 2.5 of such territories to one tenderer. Franchise in respect of a part of a territory could not have been awarded. A rounding off was, therefore, required. The 1[st] respondent has chosen to round off the 2.5 territories which could be granted to the next higher whole number that is '3'. In the absence of any allegation of arbitrariness or _mala fide_ , the question is whether it would be open for this Court to consider whether such rounding off was permissible or not. A W.P.(C).No.28812/18 6 ## Division Bench of this Court in **T.P.Constructions** case (supra) has at paragraph 15 stated as follows:- “ The principles in regard to the scope of judicial review of administrative decisions and exercise of powers in awarding contracts are well settled. The modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal over administrative decisions but merely reviews the manner in which the decision was made. Administrative decisions have to be tested by the application of the principles of reasonableness, arbitrariness and mala fides. 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. The court can certainly examine whether 'decision making process' was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether the choice or decision is made 'lawfully' and not to check whether the choice or decision is 'sound'. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. A court, before interfering in tender or contractual matters in exercise of power of judicial review, would examine whether the process adopted or decision made by the authority is mala fide or intended to favour someone or whether it is so arbitrary and irrational that no responsible authority acting reasonably and in accordance with the relevant law could have adopted or made it. A mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision making process or the decision. Exercise of the power of judicial review would be called for if the approach is arbitrary or mala fide or the procedure adopted is meant to favour one. But, where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible (See Tata Cellular v. Union of India (AIR 1996 SC 11), Sterling W.P.(C).No.28812/18 7 Computers Limited v. M & N Publications Limited (AIR 1996 SC 51), Jagdish Mandal v. State of Orissa ((2007) 14 SCC 517), Montecarlo Ltd. v. NTPC Ltd. (2016 (4) KLT 2081 (SC) = AIR 2016 SC 4946) and Afcons Infrastructure Ltd v. Nagpur Metro Rail Corporation (2016 (4) KLT 6 (SC) = AIR 2016 SC 4305)).” 8. On a consideration of the pleadings and the materials on record, I am of the opinion that the power exercised by the 1[st] respondent in the instant case cannot be said to be arbitrary or unreasonable. The petitioner also has no case that the 4[th] respondent was preferred for the award of franchise due to any extraneous considerations. 9. In the above view of the matter, I am of the opinion that the power exercised by the 1[st] respondent in awarding franchise in respect of three territories instead of the permissible 2.5 would squarely comes within the element of 'play at the joints' available to tendering authorities in the matters of award of contract. The - writ petition, therefore, fails and the same is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj W.P.(C).No.28812/18 8 ## **APPENDIX** ## **PETITIONER'S EXHIBITS** **EXHIBIT P1** **TRUE COPY OF APPLICATION FORMAT OF EXPRESSION OF INTEREST WITH RESPECT OF KAYAMKULAM TERRITORY VIDE GM (S&m)CM/PV/KRL/1-113/EOI-S7D POLICY 2018/2017-19/30 DATED 31.05.2018 WITH RESPECT TO SECTION 2 OF SECTION 'B'.** **EXHIBIT P2** **TRUE COPY OF CM SALES DISTRIBUTION POLICY 2018.** **EXHIBIT P3** **TRUE COPY OF CLARIFICATION OF CM SALES AND DISTRIBUTION POLICY 2018 DATED 21.12.2017.** **EXHIBIT P4 TRUE COPY OF CALL LETTER FOR INTERVIEW DATED 25.07.2018.** ## **True Copy** **PS to Judge**