5/7/24, 2:55 PM Tata Cellular vs Union Of India on 26 July, 1994

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Tata Cellular vs Union Of India on 26 July, 1994

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6.It requires to be noted, at this stage, that a Selection Committee also described as Apex/High-Powered Committee
comprising the Principal Secretary to the Prime Minister and three other Secretaries to the Government of India had been set
up by the Minister for final evaluation of the bid.

7.Mr B.R. Nair, a Member (Budget) of Telecom Commission came to be appointed as Member (Services) on 29-5-1992. It
appears the Selection Committee met a number of times and discussed the matter with the Minister. He submitted an interim
report on 16-7-1992. During this time the Committee not only de novo exercised but also modified the short-list prepared by
the Technical Evaluation Committee and approved 14 companies. The Selection Committee also met the representatives of
equipment manufacturers for the selection of the licensees. On 20-7-1992, the revised financial bid and the short-list
approved by the Telecom Commission were put up before the Minister for approval. On 24-7-1992, further meetings of the
Selection Committee were held and the financial bid document was revised. On 28-7-1992, the Selection Committee
submitted its final report. Two bidders, namely, M/s Ashok Leyland Ltd. and M/s Vam Organics Ltd. were dropped from the
short-list of 16 bidders. On 29- 7-1992, Mr Nair was appointed as Director General of Telecommunications. He was
authorised to exercise all powers of Telecom Authority under Section 3 of the Telegraph Act. The Minister approved the
issue of financial bids with modification to the short-listed companies as recommended by the Selection Committee on 29-7-
1992. The approval took place on 30-7-1992.

42. Arguing on behalf of Sterling Cellular Mr K. Parasaran, learned counsel submits that the technical competency and
capacity to execute the contract by this respondent with its joint venture partner is not in doubt. Sterling Cellular was short-
listed by Technical Evaluation Committee itself. It was amongst the 12 tenderer short-listed in the first list. The joint venture
collaborator of Sterling, namely, Cellular Communication is a reputed international company having large-scale operation in
U.S.A. As regards the foreign exchange inflow and outflow it is submitted that Sterling Cellular has projected its stand that
the foreign exchange inflow will be from foreign tourists and business travelers visiting the city of Delhi. The expression
"international roaming" has been used in relation to such foreign tourists and business travellers. Internationally, cellular
phones are used by two categories of persons, (1) subscribers residing in the city who would use the phone on a permanent
basis, (2) the tourists and business travellers visiting the city who would use the phone on a temporary basis. Inasmuch as
the foreign tourists and foreign business travellers make the payment in foreign currency it will be a source of foreign
exchange. What is required under the tender condition is the projection of foreign exchange inflow and outflow relating to the
cellular phone contract. This means inflow in foreign exchange as a result of the operation of cellular phone system. Hence,
the bearing from tourists and business travellers is a very relevant consideration. Like this respondent, Hutchison Max
selected for the Bombay city also projected for the foreign exchange openings by the use of cellular phone by tourists and
business travellers. The argument that the foreign tourists and business travellers are not likely to use cellular telephone is not
correct since the calls made through the cellular telephones are not only cheaper but also available as a 24 hours' companion.
That, of course, is a greater facility. In the note made by the Minister it has been mentioned that the respondent has
undertaken to be bound by conditions contained in the tender documents to the effect that the entire foreign exchange
requirement shall be met by the foreign collaborator. In fact, the foreign collaborator has also confirmed this.

49. Whatever it may be, Indian Telecom cannot take the point of bias. It took the chance and benefit of being short-listed
despite the knowledge of Mr Nair's involvement. Equally, Tata Cellular did not raise the allegation of bias in the High Court.
In fact, it opposed the plea of bias.

50. No doubt, this respondent dropped McCaw as a foreign collaborator. That does not amount to change where one out of
two or three collaborators is dropped. This foreign collaborator was required as Condition No. 7 only in financial bid
documents not in tender documents. This respondent submitted financial bid on 17-8-1992 showing only two of the
collaborators. McCaw was not shown as that was already dropped out. Therefore, the High Court rightly held that McCaw
was not taken into consideration in awarding marks for foreign partners' experience. The object of the first stage was not to
allot the franchise but to short-list the parties.

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

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5/7/24, 2:55 PM Tata Cellular vs Union Of India on 26 July, 1994

"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.

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