ORDER
B. Sudershan Reddy, J.
PART-1
INTRODUCTION:
The Government of Andhra Pradesh authorised the Andhra Pradesh Technology Services Limited (APTS - a Public Sector Company fully owned by the Government of Andhra Pradesh) (for short 'APTS'), to take up the Andhra Pradesh Broadband Network Project through a public private partnership, whereby investment in such a network would essentially be made by the private sector. The APTS, accordingly initiated a two-stage process, first inviting companies/consortia to express their interest in response to Request for Expression of Interest (RFEI) and then to file proposals in response to the Request for Proposals (RFP).
2. Accordingly, the APTS invited companies/consortia to finance, design, build and operate a new Broadband network in the State of Andhra Pradesh, either by themselves or through setting up of a Joint Venture (JV) with APTS, in which APTS would hold a minor part of the equity. It was made clear that Andhra Pradesh Broadband Project would essentially be in the private sector. The equity participation of the APTS on behalf of the State Government is limited to a maximum of Rs. 25-00 crores. The Government agreed to provide free Right of Way permissions, wherever such permissions are within the purview of the State Government. It was further indicated that to the extent feasible the bandwidth requirements of the Government of Andhra Pradesh were proposed to be sourced from the Andhra Pradesh Broadband Network.
3. Before we proceed further, it is just and necessary to note that the Ministry of Communications and Information Technology, Government of India, has finalized the Broadband Policy 2004, to accelerate the growth of the Broadband services. The policy defines Broadband connectivity at present as:
'An 'always- on' data connection that is able to support interactive service including Internet access and has the capability of the minimum download speed of 256 kilo bits per second (kbps) to an individual subscriber from the Point Of Presence (POP) of the service provider intending to provide Broadband service where multiple such individual Broadband connection are aggregated and the subscriber is able to access these interactive services including the Internet through this POP. The interactive services will exclude any services for which a separate licence is specifically required, for example, real-time voice transmission, except to the extent that it is presently permitted under ISP licence with Internet Telephony.'
4. The Broadband policy of the Government of India has recognised the potential of ubiquitous Broadband services in growth of Gross Domestic Product (GDP) and enhancement in the quality of life. The policy has indicated the role of the facilitators, such as, State Governments and self-Governments as an important one to carry the advantage of the Broadband services to the users particularly in the rural areas. The policy also recognises that the Broadband service can reach the urban and the rural area consumers if the services are offered at affordable and easy terms.
5. The State Government as a policy measure decided to take the benefits of information technology and communication to the rural areas. Having recognised that if the Broadband services are made available in the rural areas at a tariff that a rural citizen can offer, it may result in rapid growth of the number of users of Broadband Services which may result in creating more employment opportunities, the Government took several policy decisions for establishment of Broadband Networks and accelerating the spread of affordable Broadband services throughout the State, especially in the rural areas.
6. The State Government as early as in the year 1999 established an integrated communication network - A.P. State Wide Area Network (for short 'APSWAN') for meeting its needs for converged data, voice and video communication, to give a fillip to various e-governance initiatives and to enable delivery of convenient citizen services. APSWAN was implemented with connectivity limited to 2 Mbps to District Headquarters using this network. The project came to an end in September 2004, but was extended by one year. It was decided to replace the existing APSWAN with a new generation network that connects not just the State and the District Headquarters but also takes such connectivity to the Mandal Headquarters and the villages. The need for such a new network may provide an opportunity for the State Government to catalyze the creation of public Broadband network that would not only connect the Government offices but would also offer affordable Broadband services to the citizens, businesses, agriculture, health and educational institutions.
7. The Government of Andhra Pradesh announced its policy of allowing free Right of Way (ROW) to telecom service providers in the State with a view to encourage the telecom players in the State, such as, BSNL, Tata Teleservices, Bharathi and Reliance, to lay thousands of kilometres of Optic Fibre Cable in the State and to extend telecom infrastructure and services to many areas in the State.
8. It was in pursuance of the general All India Policy and, in particular, to fulfill the felt needs of Andhra Pradesh that the Government of Andhra Pradesh, decided to catalyze the establishment of a Broadband Network in the State. After arriving at the architecture and technologies for implementation of the proposed A.P. Broadband Network, the Government explored as to whether any existing projects would be able to meet the requirements and accordingly approached the A.P. TRANSCO and its proposed Joint Venture Partners viz., M/s. Power Grid Corporation of India Limited and M/s. Online Media Solutions Limited for exploring the possibility of getting the services from the proposed joint venture companies subject to technical feasibility. The A.P. TRANSCO, M/s. Power Grid Corporation of India Limited and M/s. Online Media Solutions Limited, though planned to form a joint venture company to establish an optic fibre network in the State, the same did not materialize as per the original time schedule for the project. Then it was decided that in case the proposed joint venture company of the A.P. TRANSCO was not formed even by 31-1-2004, the A.P. TRANSCO would give Right of Way to a company chosen to undertake the project by the State Government. Even by this deadline of 31-1-2004, the A.P. TRANSCO Joint Venture Company was still not formed and the financial closure for the project had not taken place.
9. It is at that stage, the State Government decided to take up the A.P. Broadband Network project with the help of the APTS; it was decided that the project would have the following key objectives:
(a) To establish a primarily fibre-optic based broadband infrastructure with a 10 Gigabit (1 Gigabit is around 1000 Megabits) backbone connecting the State Headquarters to each of the district headquarters, a 1 Gigabit backbone to each Mandal Headquarters and a 100 Megabit/50 Megabit connectivity to each of the villages;
(b) To achieve broadband connectivity (2 Mbps or more, always on connectivity) for all Government offices, local bodies and Government institutions, thereby creating powerful networks in each sector, such as Government departments, educational institutions as also all hospitals, PHCs, and other institutions which provide health and medical services;
(c) Enable all department to provide convenient citizen services through e-Seva centres, Rajiv Internet Village kiosks and web-based online services;
(d) To facilitate citizens even in villages to get broadband services at very low, affordable rates;
(e) Enable IP (Internet Protocol) telephony in the Government offices that would serve as an intercom across the Government and would bring down the expenditure incurred by the Government offices on telecommunications; and
(f) Attract IT enabled Services (ITES) sector to outsource IT jobs from foreign countries and major cities to small towns and villages, thereby generating employment for educated skilled persons in the rural areas.
10. That is how the APTS initiated the process to take up the A.P. Broadband Network Project through a public private partnership. APTS itself is a technology company with considerable expertise in information technology as well as communications. Its claim of expertise to evaluate proposals for complex communication networks including Broadband networks is not put in issue.
11. The project proposed by the APTS had received good response from a large number of companies and consortia. That altogether 36 companies initially expressed their interest but only 8 companies/consortia submitted their responses to the 'Request for Proposals' that includes the 4th respondent, M/s. Aksh Broadband Limited -consortium with partners.
12. The companies/consortia that submitted proposals were invited to make presentations of the technical part of their proposals on 18-10-2004 and 19-10-2004. The Project Implementation Committee that was specially constituted consisting of experts with decades of experience in R&D; and Industry in Telecommunications undertook technical evaluation based on evaluation criteria defined in the 'Request for Proposals', with parameters such as coverage of Network, business history, overall strength and viability of the partnerships proposed etc.
13. Three companies/consortia, the 4th respondent, M/s. Universal Broadband Networks Limited and M/s. Reliance Infocomm Limited, were considered to be technically qualified for the project.
14. The the financial aspects of the technically qualified companies were evaluated and considered in the presence of their respective representatives on 19-10-2004. The Project Implementation Committee having fixed the evaluation criteria based on the project objectives and parameters spelt out in the Request for Proposal met on 16-12-2004 to evaluate the financial aspects.
15. The consortium led by the 4th respondent proposed to set up a Broadband Network throughout the State of Andhra Pradesh with the following salient features:
'The network will cover the State Headquarters, all District Headquarters, Mandal Headquarters and villages within 18 months from the proposed shart of implementation, which is currently proposed to start from April 2005. One district would be covered fully, with connectivity upto villages, within the first five months from commencement of project implementation. This kind of coverage would make it a unique network connecting all the villages in the State and with a strong rural focus. The project outlay is Rs. 395.00 crores, which would be largely met through private sector equity and debt. The proposed Optic Fibre Network would be set up with a backbone of 10 Gigabits from the State Headquarter to each of the District Headquarters and 1 GB from District Head Quarters to each of the Mandal Headquarters. The network will further have Optic Fibre cable upto each village on which, a bandwidth of 100 MB would initially be made available to each village.'
16. The services proposed to be provided by the joint ventures include direct optic fibre connectivity of 100 Mbps to 40,000 offices of the Government at the State, District, Mandal and the village levels. In essence, it would connect almost all the offices of all the departments throughout the State right upto the village level.
17. The Project Implementation Committee based on the scores obtained in technical and financial evaluations, selected the 4th respondent, which was the highest scorer in the technical as well as financial evaluation. The Government of Andhra Pradesh having carefully considered the recommendations of the Committee, directed the 2nd respondent to go ahead with the implementation of the Broadband Network through the joint venture with the selected consortium vide its letter, dated 6-1-2005. Accordingly, the 2nd respondent issued a letter of intent (LOI), dated 20-1-2005, to the selected consortium to take up implementation of the project by forming a joint venture company.
18. This decision is assailed in this writ petition purported to have been filed in public interest by a practising Advocate who also claims to be an active social worker.
19. The averments made in the affidavit filed in support of the writ petition are essentially based on the reports that appeared in various news items in the daily newspapers both in English and Telugu Languages. The writ petitioner does not claim any particular technical knowledge or know-how in the information technology or telecommunications as such.
20. In the reply affidavit, it is stated that the petitioner procured the information from the newspapers as well as the information available in the websites.
Submissions:
21. Sri K. G. Kannabiran, learned senior counsel, appearing on behalf of the petitioner, submitted that the entire decision making process of grant of letter of intent in favour of the 4th respondent is vitiated, since the whole selection process has been completed in a hurried manner on 18th and 19th October, 2004; the decision, which requires critical evaluation of a very complicated proposal could not have been evaluated within such a short span of time. The conditions like earnest money deposit or at least performance guarantee was not insisted and collected from the successful bidder even while awarding a project of such huge magnitude. No qualifications or preconditions, as such, were prescribed in the request for Proposal to ensure that the successful bidder has the capacity and resources to successfully complete the work. The procedure adopted is a clear violation of Article 14 of the Constitution of India. The Right of Way has been provided freely without any charge contrary to the Government's own decision in G.O.Ms.No. 5, dated 11 -2-2000. The respondents did not insist for production of Bank Guarantee for an amount calculated at the rate of Rs. 25/-per running metre. The project has not been approved by the Finance Department and in fact the Finance Department expressed its reservation about the project. The Request for Proposal does not prescribe any outlay of equity participation nor specify eligibility conditions and technical requirements etc., thereby provided unfettered and unguided discretion to select the company/consortia of one's own choice. The Request for Proposal does not disclose the approximate cost of the project, valuing the intended infrastructure and cost of the operations.
22. Learned Advocate General, appearing on behalf of the State, inter alia, submitted that respondents 1 and 2 followed transparent procedure in the matter ofentrusting the project to the 4th respondent. It is not one of those ordinary contracts where the bids are invited through notice inviting tenders by duly stipulating the conditions, such as, earnest money deposit etc., but the proposal is of inviting the private investment with equity participation of the Government, limited to Rs. 25.00 crores only. Decisions were not taken in hurried manner as is evident from two-stage process that commenced as early as on 21-8-2004 and concluded in the month of December, 2004. Evaluation of Project bids was conducted as per the parametres spelt out in advance in the Request for Proposal and the project objectives. The A.P. Broadband Project was approved by the Cabinet in its meeting held on 3-1-2005 and permitted the 2nd respondent to proceed with the project in public private partnership. The Finance Department did not raise any objection, whatsoever, at any stage, and it did not object for selection of the consortium lead by the 4th respondent.
23. Sri Soli J Sorabjee, learned senior counsel, appearing on behalf of the 4th respondent, inter alia, contended that the writ petition is not a genuine public interest litigation and deserves to be dismissed at the threshold. Various allegations made in the writ petition are made on the basis of unspecified newspaper reports, which cannot be taken into consideration in the absence of any proper verification disclosing the source of knowledge. The Newspaper reports per se did not constitute legally acceptable evidence. The petitioner has no locus standi, particularly in the present case, as the effected parties have not challenged the impugned decision. The Government's decision in relation to the project is basically and essentially an economic policy decision, which cannot be interfered with by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India. It was submitted that the petitioner made false and reckless allegations in the writ petition about the credentials of the 4th respondent without any basis whatsoever and the writ petition itself would reveal that the petitioner indulged in some sort of speculative litigation and the same can never be characterised as the writ petition filed in public interest.
24. Sri Challa Sitaramaiah, learned senior counsel, appearing on behalf of the 2nd respondent, submitted that the 2nd respondent devised a comprehensive, transparent and accountable procedure for evaluating the responses received from the companies/consortia and accordingly the responses were evaluated with the assistance of a team consisting of highly qualified technical experts in the subject. The decision-making process is in no manner vitiated on any count. Implementation of the project will give an enormous boost to tele-education, tele-medicine, tele-agriculture, e-governance, web based communications and entertainment. The Government intends to reach the urban and village consumers by providing these services at a price, which even a villager, can afford, which may ultimately bring down the expenditure of the Government on telecommunications. The project undertaken is not a profit making venture. The project is to provide the services at an affordable cost without the State investing its scarce resources into the project. Such a major, comprehensive and complex economic policy decision cannot be judicially reviewed on the basis of vague and indefinite allegations made in the writ petition by the writ petitioner who has neither any specialized knowledge nor interest in the subject matter.
25. Sri D. Prakash Reddy, learned senior counsel, appearing on behalf of the 5th respondent submitted that the petitioner has wrongly assumed that free Right of Way privilege is bestowed upon the respondents 4 to 9 by the State. This assumption displays a lack of consistence between the petitioner's contentions in the writ affidavit and the relief sought in the prayer. That according to the proclaimed policy, the permission is to be given free of any charge subject to the licensee producing a bank guarantee for an amount calculated at the rate of Rs. 25/- per running metre from which the 4th respondent is not exempted. Having chosen not to challenge G.O. Ms.No. 5, dated 11-2-2000, which provides for free Right of Way subject to furnishing of a bank guarantee, the writ petitioner cannot allege the Right of Way, which has been given at free of cost to the respondents is resulting in enormous loss to the State ex-chequer. Lack of understanding of larger issues involved in the project and the undue haste in which the writ petition was filed is with a sole purpose of stalling the project and the same is liable to be rejected in limine.
26. It was further contended that the State, by accepting the offer of consortium led by the 4th respondent, gained in terms of enhanced coverage at lesser cost compared to the rate offered by the A.P. TRANSCO Joint Venture which has offered 10 Mbps connectivity to 200 offices in twin cities at a tariff of Rs. 1.20 lakhs per annum per office, whereas the 4th respondent company/ consortia has offered to provide 200 Mbps connectivity at a lower tariff of Rs. 3,150/- per annum per office covering 40,000 offices through out the State.
27. It was further submitted that public interest litigants must in clear terms state the details about their concern and commitment in the subject matter of the debate proposed to be espoused and should clearly indicate their interest and in the absence of the same, the writ petition has to be dismissed summarily. The essential pre-requisite for filing a Public Interest Litigation is thorough research to un-earth the true state of affairs which has been completely overlooked in the present case which itself is a ground for dismissal of the writ petition.
27-A. The questions that fall for consideration are;
(1) Whether the policy and the terms in Request for Expression of Interest and Request for Proposal suffers from any constitutional infirmities? Whether the procedure adopted is not a transparent and accountable one?
(2) Whether the grant of Letter of Intent to the 4th respondent company/ consortia is vitiated for any reason whatsoever?
PART - II
Question 1:
Whether the policy and the terms in Request for Expression of Interest and Request for Proposal suffers from any constitutional infirmities? Whether the procedure adopted is not a transparent and accountable one?
28. The project in comparison to the usual governmental contracts is unique by itself, which is basically and essentially aimed at providing utility services to the people in the rural areas at affordable prices in the public private sector. The usual conditions stipulated in the notice inviting tenders are obviously not applicable having regard to the nature of the project to be implemented basically in the private sector. The Request for Expression of Interest issued by the 2nd respondent itself makes it clear as to the nature of the request inviting private companies/consortia to participate in the competitive process for effective and innovative proposals to finance, design, build and operate a new broadband Network Project in the State of Andhra Pradesh. The principal objective of the project is to provide high quality, affordable and equitable Broadband access for citizens, businesses and the Government entities. Investments in the Project will essentially be made by the private sector with the Government willing to participate with equity/funding support as a partner to reduce the risks for establishing the Broadband Network in the State. The interested parties were accordingly requested to respond to the Request for Expression of Interest as per the schedule. The terms and conditions are made known with a two-stage selection process viz., Request for Expression of Interest and Request for Proposal, which are integrally intertwined with pre-qualifications and fixed time schedule commencing from 21-8-2004. The Rules and regulations were notified in advance for the benefit of intending participants. The requirements of pre-qualifications to receive Request for Proposal, inter alia, declares that the Department has a preference for service and/or network providers that are able to demonstrate in-depth experience in the provisions of broadband capacity. This demonstration must include revenues for this service for each of the last three years, the aggregate bandwidth currently provided, and the number of Full-Time Employees currently employed in the delivery. All revenue, bandwidth and employment figures must show separately those attributable to services delivered internationally. The Bidders with demonstrable capability in developing broadband networks and delivering e-services alone are to be considered for receipt of the Request for Proposal. This capability must be demonstrated in response to the Request for Expression of Interest, which must include technical, financial and business capability for such development.
29. The financial commitment of the Government is limited to Rs. 25-00 crores only out of the total project outlay of Rs. 395-00 crores. The criteria for evaluation of bids are specifically and clearly mentioned and communicated in advance and made known to all the concerned. Evaluation of submissions will be based on the capacity to complete the project and sustain services over long time. Overall evaluation of proposals includes an assessment of the strength and the viability of any partnership proposed by the respondents. The said key criteria contain agreed weights assigned to them and the bids have to be evaluated on their relative position basing on the responses received for each criterion. The resulted scores form the basis for finalising the successful bidders. The department as part of its evaluation of proposals reserve to itself the right to inspect any property; interview any personnel or any bidder or other person; and make any other enquiries in Order to verify the information contained in the bidders' proposals or as otherwise it sees fit. By submitting the proposal, each bidder authorised the department to seek and obtain from any person or organisation any information about the bidder's trading history, credit worthiness, experience or any other information, which the department considers necessary to evaluate the bidder's proposal. The rules and regulations, inter alia, provide for the liability and the penalties.
Parameters of Judicial Review of terms of Contract:
30. It is settled law that the principles of judicial review would as well apply to the exercises of contractual powers by the Government and its instrumentalities in Order to prevent arbitrariness or favouritism. But a caution is administered by the Supreme Court in more than one decision as to inherent limitations in exercise of that power of judicial review. The principles laid down in Article 14 of the Constitution of India have to be kept in view while accepting or refusing any contract. The right to choose cannot be considered to be an arbitrary power. In Tata Cellular v. Union of lndia, (1994) 6 SCC 651 the Supreme Court after referring to its earlier authoritative pronouncements deduced the following principles and laid down the parameters of the judicial review as under:
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible,
(4) The term of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
31. In Directorate of Education and Ors. v. Educomp Datamatics Ltd. and Ors., : AIR2004SC1962 the Supreme Court held:
'.............. the courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and Order change in them unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice.........' '............the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. The Government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an. administrative body in an administrative sphere.............. The Courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical.............'
32. In Air India Ltd., v. Cochin International Airport Ltd., : [2000]1SCR505 the Supreme Court observed:
'.........The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. .............. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review the court can examine the decision-making process and interfere if it is found vitiated by mala fides. unreasonableness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point............ Only when it comes to a conclusion that overwhelming public interest requires interference , the court should intervene.'
33. The petitioner in the instant case did not even allege that the Request for Expression of Interest, the Request for Proposal and the rules and regulations were tailor-made to suit the convenience of any particular individual company/ consortia. In such view of the matter, it is not possible to hold that the terms and conditions that were duly notified to all the intending participants suffer from any arbitrariness or unreasonableness as alleged by the petitioner. The unsuccessful companies/ consortia who participated in the process are not before the Court making any complaint about the notified terms and conditions. It is not for this Court to suggest that some other terms and conditions other than the stipulated one would have been more appropriate and better suited for an effective implementation of the project.
34. Be it noted, the Request for Proposal specifically stipulated and provided various conditions, which are universally applicable to all the bidders. The Project is being implemented in public-private partnership where the private sector is required to invest Rs. 370-00 crores while the Government will have the equity participation of Rs. 25.00 crores only. The company/consortia selected for the purpose is required to make investment of its monies and implement the project and it is for that reason the usual conditions like earnest money deposit and furnishing of bank guarantees are not insisted upon and made part of the project.
35. It is true that the discretion of the Government has been held to be not unlimited in that the Government cannot give largess in its arbitrary discretion or at its sweet will or on such terms as it chooses in its absolute discretion. 'There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess.' The Government is not free to act as it likes in granting largess such as awarding a contract or selling or leasing out its property. 'Whatever be its activity, the Government is still the Government and is, subject to restraints inherent in its position in a democratic society. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.'
36. In Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir, : [1980]3SCR1338 , it was stated:
'The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some directive principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or Section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to these considerations only illustratively, for there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the court would have to decide whether the action of the Government is reasonable and in public interest. But one basic principle which must guide the court in arriving at its determination on this question is that there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material. The court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the court would not strike down Governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied, it would be the plainest duty of the court under the Constitution to invalidate the governmental action.'
'The argument of the petitioners was that at the auctions held in December 1978, January 1979 and April 1979, the price of resin realised was as much as Rs. 484, Rs. 520 and Rs. 700 per quintal respectively and when the market price was so high, it was improper and contrary to public interest on the part of the State to sell resin to the second respondents at the rate of Rs. 320/- per quintal under the impugned Order. This argument, plausible though it may seem, is fallacious because it does not take into account the policy of the State not to allow export of resin outside its territories but to allot it only for use in factories set up within the State. It is obvious that, in view of this policy, no resin would be auctioned by the State and there would be no question of sale of resin in the open market and in this situation, it would be totally irrelevant to import the concept of market price with reference to which the adequacy of the price charged by the State to the second respondents could be judged. If the State was simply selling resin, there can be no doubt that the State must endeavour to obtain the highest price subject, of course, to any other overriding considerations of public interest and in that event, its action in giving resin to a private individual at a lesser price would be arbitrary and contrary to public interest. But, where the State has as a matter of policy, stopped selling resin to outsiders and decided to allot it only to industries set up within the State for the purpose of encouraging industrialization, there can be no scope for complain that the State is giving resin at a lesser price than that which could be obtained in the open market. The yardstick of price in the open market would be wholly inept, because in view of the State policy, there would be no question of any resin being sold in the open market. The object of the State in such a case is not to earn revenue from sale of resin, but to promote the setting up of industries within the State.'
' If the State were giving tapping contract simplicitor there can be no doubt that the State would have to auction or invite tenders for securing the highest price, subject, of course, to any other relevant overriding considerations of public weal of interest, but in a case like this where the State is allocating resources such as water, power, raw materials etc., for the purpose of encouraging setting up of industries within the State, we do not think the State is bound to advertise and tell the people that it wants a particular industry to be set up within the State and invite those interested to come up with proposals for the purpose. The State may choose to do so, if it thinks fit and in a given situation, it may even turn out to be advantageous for the State to do so, but if any private party comes before the State and offers to set up an industry, the State would not be committing breach of any constitutional or legal obligation if it negotiates with such party and agrees to provide resources and other facilities for the purpose of setting up the industry.'
37. The observations of the Supreme Court in the light of the facts therein appear to be fully justify the action of the State in the present case in not inviting the tenders with the usual conditions by following the usual procedure duly incorporating the well-known conditions as to the requirement of earnest money deposit, bank guarantee etc.
38. In pursuing the socio economic objectives, the State is not bound to invite and adopt the standard practice of inviting tenders. Even in the matter of disposing of State-owned or public-owned properties, the Courts consistently took the view that it is not an invariable Rule that the State owned or public owned properties be disposed of only in public auction by inviting tenders.
39. In Sachidanand Pandey and Anr. v. State of West Bengal, (1987) 2 SCC 295 Justice Chinnappa Reddy speaking for the Court reiterated:
'On a consideration of the relevant cases cited at the bar the following propositions may be taken as well established: State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the Rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism.'
40. Applying these tests, we find it impossible to hold that the Government in this case did not act with probity in not inviting the tenders with the usual conditions but following the two-stage process.
41. The comprehensive procedure, in our considered opinion, is not only transparent | but also ensures the accountability of those involved in the decision-making process.
Judicial Review of the Economic Policy Decision:
42. We are required to bear in mind, the Government's decision in relation to the project is basically and essentially an economic policy decision. Similar policy decisions known as 'Contractualisation' have played a major part in the radical transformation of the public sector over the past decade. Contractualisation is defined as the process whereby the public service functions are performed increasingly by 'private firms or semi-autonomous state or voluntary bodies in contractual relationships with public purchasing agencies........... where bureaucratic monopolies once provided services directly, Government purchasers now act on behalf of consumers in selecting providers in competitive quasi-markets for an expanding range of health, community, education, local Government and other public services. Contractualistion implies the replacement of bureaucratic by quasi-market forms of provision, but its future in the long terms is uncertain.' (See: [1999] Public Law Summer (c) Sweet & Maxwell and Contributors, pg.304)
A word about Quasi-Market:
'The interesting feature of quasi-markets as a form of organisation is their combination of Government direction with elements of market discipline, and the resulting potential for avoiding some of the deficiencies of both bureaucracies and markets.......... the key institutional innovation of quasi-markets is the combination of competition between providers and free access for service consumers at the point of delivery...........' (See: [1999] Public Law Summer (c) Sweet & Maxwell and Contributors, pg.306)
43. There are inherent limitations in exercise of judicial review of economic policy decision. It is very well settled and needs no restatement at our hands that economic policy decisions taken by the State in perceived public interest cannot be overruled by this Court because some aspects are not sufficiently taken care of or certain safeguards are not incorporated or there are inadequacies in the policy. Such a course is impermissible unless the same is found to be unconstitutional.
44. In Balco Employees' Union (Regd.) v. Union of India, (2000) 2 SCC 333 the Supreme Court after an elaborate consideration of the case law and after review of its earlier decision, authoritatively held:
'......... It is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. 'Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical'............. The Courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to 'trial and error' as long as both trial and error are bona fide and within limits of authority.'
45. The Supreme Court approvingly referred the following passage in its previous decision in State of Punjab v. Ram Labhaya Bagga, 7. (1998) 4 SCC 177 in which it ruled as follows:
'..............So far as questioning the validity of governmental policy is concerned in our view it is not normally within the domain of any court, to weigh the pros and cons of the policy or to scrutinize it and test and degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling it, based on howsoever sound and good reasoning, except where it is arbitrary or violative of any constitutional, statutory or any other provision of law........'
46. In Balco Employees' Union's case (6 supra) it is further stated, 'the policies of the Government ought not to remain static. 'With the change in economic climate, the wisdom and the manner for the Government to run commercial ventures may require reconsideration. What may have been in the public interest at a point of time may no longer be so.'
47. In the instant case, the Government has taken a policy decision to take up the project through a public private partnership where the investment essentially be made by the private sector. All the major industries hitherto till recent times were part of the public sector; albeit in various guises, and stayed that way until privatisation in 1990s. Inherent in the idea of nationalization was that the industries should be run in the 'public interest'. One of the things that seemed to have implied was a promise of universal access to utility services, enshrined in obligations to supply contained in legislation, supported by elements of cross-subsidy for the domestic consumers. This was but one part of a wider consensus about how the country should be run, what might loosely be termed a 'constitutional consensus', although not expressed in these terms. Since 1991, the successive Governments aimed to breakaway from that consensus and that involved the privatisation of many public utility industries. One of the ideas behind privatisation was that utility services should be treated as commodities in the same way as any other goods or services. This was linked with an attempt to introduce commercialization and market forces into almost all areas of public policy. The policy of privatisation of the Broadband came about in part because the Government was unable or unwilling to find the funds to modernize the telecommunications network.
48. It is not open for us to sit in appeal over such major policy decisions and tinker with the same. The Supreme Court, in no uncertain terms, has sounded a note of caution by indicating that policy decision is in the domain of the executive authority of the State and the Court should not embark on the unchartered ocean of public policy and question the efficacy or otherwise of such policy so long the same does not offend any provision of the statute or the Constitution of India. 'The supremacy of each of the three organs of the State i.e., legislature, executive and judiciary in their respective fields of operation needs to be emphasised. The power of judicial review of the executive and legislative action must be kept within the bounds of constitutional scheme so that there may not be any occasion to entertain misgivings about the role of judiciary in outstepping its limit by unwarranted judicial activism being very often talked of in these days. The democratic set-up to which the polity is so deeply committed cannot function properly unless each of the three organs appreciates the need for mutual respect and supremacy in their respective fields.' ( See: M.P. Oil Extraction v. State of M.P., : (1997)7SCC592
49. In the instant case, it is neither pleaded nor demonstrated as to how the impugned policy decision offends any provisions of the statute or the Constitution of India.
50. For the aforesaid reasons, we hold that the impugned policy decision and the procedure followed do not suffer from any Constitutional infirmities requiring our interference.
PART-III
Question 2:
Whether the grant of Letter of Intent to the 4th respondent company/consortia is vitiated for any reason whatsoever?
51. A fair and transparent procedure was evolved and published widely for the benefit of all the consumers. The Request for Proposal for A.P. Broadband Project Network published by the 2nd respondent consists of the following contents:-
TABLE OF CONTENTS
1.0 Introduction & Background
1.1 The Request for Proposal
1.2 The A.P. Broadband Project
2.0 Overview of Requirements
2.1 Technical Overview
2.2 Business Overview
2.3 Bidder Qualification Overview
3.0 Detailed Requirements
3.1 Technical Requirements
(T1-T43)
3.2 Business Requirements (B1-B7)
4.0 Submission Requirements (S1-S22)
4.1 Proposal Format
5.0 Evaluation of Bids
6.0 Timelines
6.1 Tendering Process
6.2 Project Related Important Dates
7.0 Contractual & Legal Requirements
Appendix I - Definitions & Abbreviations
Appendix II - Current Network (APSWAN) Details
Appendix III - Applications implemented on the Existing Network
Appendix IV - Service Level Agreement (Indicative for Govt.)
52. The record discloses that the commercial bids were opened on 19-10-2004 and evaluation was completed on 16-12-2004. The letter of intent was given to the best bidder on 20-1-2005. Altogether 36 companies have expressed their interest but only 8 companies among them have submitted their responses. One of the 8 companies was M/s. Online Media Solutions Limited with the A.P. TRANSCO and M/s. Power Grid Corporation of India Limited as partners.
53. A team consisting of highly qualified technical experts in the field has been constituted for the specific purpose of evaluating the offers and proposals received and all the proposals have been subjected to critical scrutiny and assessment by the Experts Committee in accordance with the norms declared much prior to the commencement of the evaluation of the responses.
54. The Experts Committee having considered the responses, found only 3 companies out of 8 companies were to be technically qualified. On critical evaluation with reference to the criteria and the evaluation procedure, the Committee found the offer of the 4th respondent company/ consortia to be the best and most suited. The consideration was with reference to the prescribed standards. An opportunity was provided to the parties to participate in the process of evaluation. No mala fides are suggested against the Experts Committee. We have no reason to doubt their capacity to evaluate the responses for arriving at a proper and just conclusion. It is not brought to our notice that any rules or regulations prescribing procedures, which were notified in advance for evaluating the proposals, have been violated by the 2nd respondent in selecting the 4th respondent company/ consortia for issuing letter of intent.
55. The decision by the 2nd respondent was not one of those mysterious decisions taken in the shrouded secrecy of chambers. It appears to have been taken openly with the active assistance of the Committee constituted for the specific purpose without any attempt at secrecy. The records reveal that the department had applied its mind to the relevant considerations. Decision was not taken in a hurried manner as contended by the petitioner. This is a case where discussions had necessarily to stretch over a considerable period of time and several factors were taken into consideration and weighed properly.
56. What is Procedure?
'Procedures are the means by which standards of fair treatment are applied in legal processes; procedures are instrumental to fair treatment and the claim for any particular procedure is contingent on its serving that end.' (See: Galligan Due Process and Fair Procedures (Oxford, Clarendon Press, 1996).
57. Procedural devices, such as, giving the parties a right to be heard, are a way of letting the parties participate, in the decision process. Procedural devices can also be extended to the giving of reasons and the basing of decisions on some evidence. Each one of the participants has been treated fairly as is evident from the record made available for our perusal. The contention that no procedure has been prescribed and, much less, followed is totally untenable and unsustainable.
58. For all the aforesaid reasons, we find the decision of respondents 1 and 2 to issue Letter of Intent to the 4th respondent, does not suffer from any arbitrariness and it is not vitiated for any reason whatsoever.
59. Whether the Right of Way was given to the 4th respondent company/consortia at free of cost contrary to the orders issued in G.O.Ms. No. 5, dated 11-2-2000?
60. The submission is totally devoid of any merit. The Government of India issued guidelines permitting laying of optical fibre cables along the National Highways and according to the policy the permission is to be given free of any charge and subject to, inter alia, the licensee producing bank guarantee for an amount calculated at the rate of Rs. 25/- per running metre. The Government of Andhra Pradesh vide its policy decision in G.O.Ms.No. 5, dated 11-2-2000, declared its policy of according general permission to the agencies desiring of laying optical fibre cable along the roads belonging to the State in the R & B, Panchayati Raj, Municipal Administration and Urban Development and Forest Department at free of cost. The policy of the Government is in conformity with the guidelines issued by the Government of India on the subject of permitting laying of optical fibre cables along the National Highways. Detailed guidelines are issued by the State Government prescribing procedure for submitting applications to the authorities concerned for issue of permission for using the Right of Way for laying optical fibre cable along the National Highways and the roads belonging to the State. Many private operators like Tata Teleservices, Bharathi, Reliance including BSNL have laid optical fibre cable network through out the State and availed the benefit of free Right of Way. No special privilege, as such, has been conferred upon the 4th respondent company/consortia. The petitioner appears to be labouring under a mistaken impression, as if, the requirement of furnishing bank guarantee for an amount calculated at the rate of Rs. 25/- per running metre has been dispensed with in the case of the 4th respondent/consortia. Bank guarantee is required to be furnished only at the stage when the applicants approach the authorities concerned for free Right of Way over a specified and definite area. The amount calculated at the rate of Rs. 25/- per running metre has nothing to do with the free Right of Way. The insistence for furnishing the bank guarantee is obviously with a view to ensure that proper repair work is undertaken after laying the optical fibre cable along the roads. The question of furnishing bank guarantee to a tune of Rs. 25-00 crores as contended by the petitioner, at this stage, does not arise.
61. Yet another submission was that the respondents 1 and 2 have disregarded the advice of the Finance Department while awarding the project to the 4th respondent. This allegation is denied in the counter-affidavit filed by the Government in specific and clear terms for which there is no rejoinder from the petitioner. We accordingly reject the contention.
62. The petitioner, however, contended that the project under no circumstances could have been awarded to the 4th respondent company/consortia, since it failed to successfully execute the Broadband Project in Rajasthan. The averments made in the affidavit filed in support of the writ petition are specifically denied by all the respondents in their counter-affidavits and there is no rebuttal though the writ petitioner has filed a brief rejoinder dealing with other aspects raised in the counter-affidavits. In the counter-affidavit filed by the 2nd respondent, it is , inter alia, stated that the 4th respondent has executed a 'Gram Doot' project in Rajasthan and gained a unique experience of establishing an optic fibre network right up to the village level; that no other company/consortia has such experience in taking optic fibre networks directly to the villages. 'It was felt by the Project Implementation Committee that the experience of the 4th respondent company/ consortia in having executed such project in Rajasthan would give it a deeper understanding of the complexities and the success factors for the A.P. Broadband Project, which is primarily being set up to provide affordable Broadband Services in the rural areas.' The petitioner in the rejoinder filed by him did not controvert the statement made by the 2nd respondent in its affidavit about the credentials of the 4th respondent company/consortia about its ability of successful completion of Gram Doot Project.'
63. The assertion of the 4th respondent that it has successfully executed the Rural convergence network on fibre connecting 407 Gram Panchayats in Jaipur District under the banner of 'Gram Doot', a unique model delivering e - governance, internet, CATV, VOIP Telephone etc., is not disputed by the petitioner.
64. In the circumstances, we find no merit in the contention that the 4th respondent company/consortia is not equipped to undertake the project.
65. It was further contended that the Government by choosing the A.P. TRANSCO and its Joint Venture Company could have saved enormous amounts and the respondents for no reason refused to give preference to the A.P. TRANSCO and its Joint Venture Company. The petitioner furnished a comparative table as to how the entrustment of work to the A.P. TRANSCO and its joint Venture Company would have been advantageous to the State.
66. We cannot undertake a comparative assessment as suggested by the petitioner and weigh the pros and cons as to whether the entrustment of the project to the A.P. TRANSCO and its Joint Venture Company, would have been more advantageous, inasmuch as, any such exercise by this Court would amount to exercising an appellate jurisdiction, which it does not have, over the economic policy decision of the Government.
67. It is evident from the record that at the first instance, the 2nd respondent approached the A.P. TRANSCO and its Joint Venture partners before inviting the Request for Expression of Interest and Request for Proposal from the interested companies/consortia, but the same did not materialize and the A.P. TRANSCO could not move forward as per the original time schedule. In fact, time was extended by 31 -1 -2004 enabling the A.P. TRANSCO and its Joint Venture partner to form a Joint Venture but they failed to do so even by that date and the financial closure for the project was also not achieved. It was under those circumstances, the State Government directed the 2nd respondent to take further steps for implementation of the project.
68. Be it as it may, we have no reason to disbelieve the statement made by the respondents 1 and 2 that by accepting the offer of consortium led by the 4th respondent, the State gained in terms of enhanced coverage at lesser cost compared to the rate offered by the A.P. TRANSCO Joint Venture. The A.P. TRANSCO Joint Venture has offered 10 mbps connectivity to 200 offices in twin cities at a tariff of Rs. 1.20 lakhs per annum per office, whereas the 4th respondent company/consortia has offered to provide 100 mbps connectivity at a lower tariff of Rs. 3,150/- per annum per office covering 40,000 offices throughout the State. These facts speak for themselves.
69. No case is made out by the petitioner that the decision to entrust the project work to the 4th respondent is in any way capricious, arbitrary or illegal.
PART - IV
Locus standi:
70. Sri Soli J Sorabjee, learned senior counsel, submitted that the requirement of locus standi of a party to litigation is mandatory to maintain public law remedies. The submission was that the petitioner has no locus standi to maintain the writ petition since in the present case; the affected parties have not challenged the impugned decision granting the letter of intent to the 4th respondent company/consortia. The other companies/consortia having participated in the evaluation bids, have accepted the decision of letter of intent in favour of the 4th respondent company/consortia; Consequently, it is not open to the petitioner to challenge the impugned decision or action, in view of the judgment of the Supreme Court in S.P. Gupta v. Union of India, 1981 (Supp)SCC 87 wherein it is ruled that 'if the person or specific class or group of persons who are primarily injured as a result of such act or omission, do not wish to claim any relief and accept such act or omission willingly and without protest, the member of the public who complains of a secondary public injury cannot maintain the action..............'
71. We find substantial force in the contention made by the learned senior counsel, more particularly, in the absence of any allegations in the writ petition that all the companies who submitted their response were colluding with each other and have formed themselves into a cartel to gain monopoly over the project. It is not even alleged that the decision to grant letter of intent is vitiated by any mala fides on the part of the respondents 1 and 2.
72. The affidavit does not disclose any effort made by the petitioner to obtain and collect data and information for filing this Public Interest Litigation. Liberalising the Rule relating to standing is the no licence granted to one and all for filing cases of their choice in the name of Public Interest Litigation.
73. In S.P. Anand v. H.D. Deve Gowda, : AIR1997SC272 the Supreme Court observed:
'............that on issues of constitutional law, litigants who can lay no claim to have expert knowledge in that field should refrain from filing petitions, which if we may say so, are often drafted in a casual and cavalier fashion giving an extempore appearance not having had even a second look........ it is of utmost importance that those who invoke this Court's jurisdiction seeking a waiver of the locus standi Rule must exercise restraint in moving the Court by not plunging in areas wherein they are not well-versed. Such a litigant must not succumb to spasmodic sentiments and behave like a knight-errant roaming at will in pursuit of issues providing publicity. He must remember that as a person seeking to espouse a public cause, he owes it to the public as well as to the Court that he does not rush to Court without undertaking a research, even if he is qualified or competent to raise the issue. Besides, it must be remembered that a good cause can be lost if petitions are filed on behalf-baked information without proper research or by persons who are not qualified and competent to raise such issues as the rejection of such a petition may affect third party rights.'
74. The petitioner, in the instant case, does not claim any specialized knowledge in the field of information technology and telecommunications nor the affidavit discloses any special interest of the petitioner in the subject matter.
75. The allegations made in the writ petition are mainly on the basis of unspecified newspaper reports without any proper verification. Newspaper reports per se do not constitute legally acceptable evidence.
76. The Supreme Court in Dr. B. Singh v. Union of India and Ors., : AIR2004SC1923 observed:
'...........the petitioner nowhere has stated that he has any personal knowledge of the allegations made against Respondent 3. He does not even aver that he made any effort to find out whether the allegations have any basis. He only refers to the representation of Ram Sarup and some paper cuttings of news items. He has not indicated as to whether he was aware of the authenticity or otherwise of the news items. It is too much to attribute authenticity or credibility to any information or fact merely because it found publication in a newspaper a journal or magazine or any other form of communication, as though it is gospel truth. It needs no reiteration that newspaper reports per se do not constitute legally acceptable evidence.'
77. In this case, it may not be necessary to further dilate on the issue, since we have critically examined the decision - making process and found the decision to be fair.
Conclusion:
78. The decision is neither arbitrary nor unreasonable. On the other hand, we find the decision to be rational, transparent and in conformity with the prior published procedural requirements.
79. Viewed from any angle, we find no merit in this writ petition. The Writ Petition fails and the same shall accordingly stand dismissed without any order as to costs.