SELEX SISTEMI INTEGRATI Vs. UNION OF INDIA

JUDGEMENT

(1.) A Division Bench of this Court referred the following issue to be dwelled upon by the Full Bench: The question which thus arises for consideration is whether in the matter of scrutiny and award of tender, the fairness of procedure under Article 14 of the of the Constitution of India can be examined de hors the rights under Article 19(1)(g) of the Constitution of India to carry on the business and trade at the behest of a foreign company invoking the jurisdiction under Article 226 of the Constitution of India, especially keeping in view of the fact that the issue of fairness Tata Power Company Ltd. & Anr. v. Union of India, 2009 8 AD(DEL) 583 in treatment and absence of arbitrariness when involvedon the basis of Article 14 in tender matters is relatable to the doctrine that the State has to be fair in distribution of State largesse to its citizens.

(2.) WHEN the matter was placed before us on certain dates, there was debate as regards the said issue. Thereafter on 4th February, 2011, learned counsel for the parties fairly stated that they have no objection if the Full Bench addresses the controversy in entirety. Regard being had to the said concession, Mr. A.S. Chandhiok, learned Additional Solicitor General was requested to produce the relevant file. Thereafter, the matter was heard on merits of the lis but not with regard to the reference that was initially made.

(3.) IN response to the offer, the petitioner received the request for expression of interest for the Modernization of Air Field INfrastructure (MAFI) of IAF air fields from the Respondent No.2. IN response to the aforesaid invitation, the petitioner submitted its expression of interest vide letter dated 15th October, 2007. After the expression of interest submitted by various parties, though 8 bidders were shortlisted and were issued the RFP, yet only 6 submitted their proposal including the petitioner. The RFPs were issued to the shortlisted bidders pursuant to the provisions of the DPP-2006 (Defence Procurement Procedure). IN the RFP, it was specifically mentioned that the project would be executed on a turnkey basis as per para 45 of the DPP-2006, which includes Supply, INstallation, Testing INtegration and Commissioning (SITIC) of all equipments/sub-systems, etc. to ensure that the complete working system is made available at each airbase by the contractor at the end of the specified period. The RFP consisted of four parts. Each bidder interested in participating in the bid was required to comply with the act in terms of the provisions of each of the four parts. Under paragraph 2 of the RFP, it has been stipulated that the Government of INdia invites responses to the said request from Original Equipment Manufacturer (OEM) or Authorised Vendors or Government sponsored Export Agencies or System INtegrators or duly registered Joint Venture Company or Consortium of firms and companies subject to the condition that where the same equipment is offered by more than one of the above mentioned parties, preference would be given to OEM. Under Part-I of the RFP titled General Requirements, certain guidelines were postulated pertaining to the quality of supplies, the time frame for completion of the work, creation of training facilities, warranty of goods, conditions in the contract, maintenance of the goods, technical knowhow, trials, who can apply, comparison of offers, payment conditions, etc. As is vivid from para 37 of the RFP, a declaration has been made by the Government of INdia that all actions regarding procurement of equipment would be transparent and carried out as per established procedure. The supplier is required to accept the stipulated standard clauses regarding agents/agency commission, penalty for use of undue influence and integrity pact.