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Civil Appeal Nos. 7230-31 of 1994. Case: New Horizons Limited and Anr. Vs Union of India (UOI) and Ors.. Supreme Court (India)

Judgment Cited in 49 Precedent Map Related
Vincent
Case NumberCivil Appeal Nos. 7230-31 of 1994
CounselFor the Appellant: Soli J. Sorabjee, Senior Adv., Manmohan Sarin and Pramod Dayal, Advs and For the Respondents: P. Chidambaram, C.S. Vaidyanathan, K.K. Venugopal, N.N. Goswami, Senior Advs, P.P. Singh, Atishi Dipankar, Parag Tripathi, Anil Katiyar and T.C. Sharma, Advs.
JudgesS. C. Agrawal and M. K. Mukherjee, JJ.
IssueConstitution of India - Articles 14, 226, 227; Company Law
Citation1997 (89) CompCas 849 (SC), 1995 (1) SCC 478, 1994 (Supp5) SCR 310
Judgement DateNovember 09, 1994
CourtSupreme Court (India)

Judgment:

S.C. Agrawal, J.

  1. Leave granted.

  2. In the past the telephone directory used to be printed by the Department at its own cost for the purpose of supplying the same to the telephone subscribers. It was an item of expenditure. Today, the telephone directory has become a source of revenue for the State. This has become possible by making it a medium for advertising by industrial and commercial concerns. A section in distinct 'Yellow Pages' devoted exclusively to advertisements is contained in the directory. The person who undertakes the printing of the directory procures the advertisements from private parties and collects the charges for the same. In return, he supplies a prescribed number of directories free of cost to the department and also pays to the department a certain amount by way of royalty. The contract for printing and publishing the telephone directory is normally awarded by inviting tenders and selecting the best offer from among the tenders which are so received. This practice has been in vogue for some time. In Sterling Computers Limited v. M&N Publications Limited and Anr. AIR1996SC51, this Court has dealt with the award of such a contract for printing and publishing of the telephone directories for Delhi and Bombay. The instant case relates to the telephone directory for Hyderabad.

  3. By an advertisement published in various newspapers on April 22, 1993 the Department of Telecommunications, Telecom District, Hyderabad invited sealed tenders from competent agencies for printing, binding and supply of specified number of telephone directories in English for three annual issues commencing from 1993. The tenderer was required to supply, free of cost, the telephone directories to General Manager, Hyderabad Telecommunications at the specified distribution points. The tenderer was also required to specify the royalty amount for each issue offered by him. It was mentioned that the successful tenderer will be permitted to procure on his own classified advertisements and cover page advertisement. In the said advertisement it was stated:

  4. The tenderer was required to remit a sum of Rs. 5,00,000 by way of non-refundable earnest money deposit. The terms and conditions and specifications etc., for the total job were contained in the tender document which was required to be obtained for the purpose of submitting the tender. The last date for submission of tender was May 14, 1993.

    In the notice containing the requirements to be fulfilled which was attached to the tender documents, it was stated:

    The successful tenderer will also submit copies of telephone directories printed and supplied by them to the telephone systems of capacity more than 50,000 lines as credentials of his past experience.

    The tenderer should intimate while submitting the tender the equipment and list of machines etc. alongwith the locations available with him which he would employ for carrying out this work, if selected. The tenderer also should forward a memorandum furnishing details of out-turn that can be given daily and the actual time required for the completion of the job after the input material is handed over to him.

  5. Five persons, including appellant No. 1, M/s. New Horizons Ltd. (for short 'NHL'), and M/s. M and N Publications Limited (respondent No. 4 herein) submitted their tenders. The tenders were opened on May 14, 1993 at 3.30 p.m. The royalty amount offered by the five tenderer was as under:

    ------------------------------------------------------------------- Name of Agreed amount offered (in lakhs) Tenderer 1993 1994 1995 issue issue issue ------------------------------------------------------------------- SESA SEAT INFORMATION 41 121 151 SYSTEMS LTD., Pune-1 M & N PUBLICATIONS 20 30 45 LTD., Bangalore-52 (respondent No-4 herein) NEW HORIZONS LTD., 39 129.30 291.60 NEW DELHI-1. (appellant No-1 herein) HYPER MEDIA INFORMATION 6 45 72 Services Pvt. Ltd., Bangalore-10 Kaljothi Process Pvt. 102 138 160 Ltd., Hyderabad-20 -------------------------------------------------------------------

  6. The offers were considered by the Tender Evaluation Committee. The offer of respondent No. 4 was accepted. The Assistant General Manager (OP), Department of Telecommunications, Telecom District, Hyderabad, by his latter dated August 3, 1993, informed NHL that its offer could not be considered. The said letter did not indicate the reason for non-consideration of the offer of the NHL. The appellants filed a writ petition in the Delhi High Court under Articles 226 and 227 of the Constitution of India seeking a writ, order or direction in the nature of certiorari for 'quashing the award of contract by respondent No.3 to respondent No.4 for the printing, binding and supply of telephone directories for Hyderabad and also a writ, order or direction in the nature of mandamus directing respondent No. 3 to accept the tender offer of the appellants. In the counter affidavit filed in reply to the said Writ Petition filed on behalf of respondents Nos. 1 to 3 the reason for non-consideration of the offer of NHL was disclosed. It was stated that the offer of NHL was not considered because the applicants did submit any evidence to show that they have in their name undertaken compiling, printing and supply of telephone directories for large telephone systems with the capacity of more than 50,000 lines. In this regard, it may be mentioned that in their tender offer NHL had mentioned that:

    (i) NHL is a joint venture company established by Thomson Press (India) Limited (TPI), Living Media (India) Limited (LMI), World Media Limited (WML) and Integrated Information Pvt. Ltd. (HPL), a wholly owned subsidiary of Singapore Telecom wherein 60% of shares are held by Mr. Arun Purie, TPI, LMI, WML and other companies in the same Groups and 40% of shares are held by IIPL:

    (ii) the joint venture has received approval of the Government of India and is currently in operation;

    (iii) NHL has been established as an information and database management company with expertise in database processing, publishing, sales/marketing and the dissemination of related information; and

    (iv) in addition to its projected strength, NHL has access to the benefit of the complete resources and strength of its parent/owning companies, each of which is a recognized market leader.

  7. An overview of each of the parent companies, namely, TPI, LMI, WML and IIPL also given in the tender offer,

  8. Regarding the expertise of TPI was stated that it has been established as a joint venture with Thomson International Canada in 1964 and is located at Faridabad, Haryana and has units at Okhla, Noida Export Zone and also has sales/co-ordination offices in Metropolitan towns in India, and in London and New York. It was stated that with over 125 Managers and 1255 skilled technicians/workers the press is equipped to handle the most exacting printing jobs and working with state of an technology, TPI produces both quality and volume and a detailed list of machines installed for printing, folding, cutting and binding and other equipment was enclosed and it was stated that the said equipment and skill would be available/utilized for all directory production work. It was stated that among the many diverse jobs that have been executed by TPI are printing of editions of India Today (Two languages and a total of 1.2 million copies per month), Computers Today, Business Today, Readers Digest, Span Magazine, Scientific Journals, Books (both hard and soft bound) for export and Telephone Directories for UDI, Sterling Computers, Sesa Seat, etc.

  9. With regard to LMI it was stated that as India Today Group it was first set up in 1962 and became LMI in 1988. LMI employs approximately 500 people in various disciplines viz., editorial, pre-press, production, sales and marketing. Its current activities include publishing (India Today, Business Today, Computer Today, Target, Journal of Applied Medicine, etc.), distribution (both in house magazines, Diaries and Time International), Music Today (producing and marketing a wide selection of India's best music) News track (the leading Video news magazine in Hindi and English) and Printing (four regional language editions with a print order of one million copies per month). A list of machines and equipment installed at its units at Delhi and at Maraimalai Nagar in Tamilnadu was also enclosed.

  10. As regards WML it was stated that it was established in 1944 in Lahore and moved its registered office to New Delhi in 1969. Its major activity was film financing, finance, marketing and publishing and now it also distributes LMI products and commissions articles/features for Business Today.

  11. With regard to IIPL it was mentioned that it is a wholly owned subsidiary of, Singapore Telecom established in 1967 to publish the Singapore Telephone Directory with Yellow Pages and a brochure which described the strength and developments achieved by Singapore Telecom and IIPL's position within the group was attached with tender offer. It was further stated that IIPL serves Singapore which has a tele-network offering subscribers up-to-date and efficient Telecom services and that IIPL has experience in international operations with special focus on the Asian regions and that IIPL experience and expertise would contribute actively to the systems and professional skills of the new joint venture. It was also mentioned that for the past 25 years the directory operation has evolved a continuously updated and responsive system specifically for quality directory management/publishing and many of the Managers involved with the joint venture company have been a part of IIPL since inception. With specific reference to the Indian venture, it was stated that IIPL will be providing its unique integrated directory management system alongwith the expertise of its Managers and that the Managers will be actively involved in the project both out of Singapore and resident in...

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