CASE NO.: Appeal (crl.) 278 of 1997 PETITIONER: Vidyadharan RESPONDENT: State of Kerala DATE OF JUDGMENT: 14/11/2003 BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT JUDGMENT:

J U D G M E N T ARIJIT PASAYAT, J Appellant faced trial for alleged commission of offences punishable under Sections 354 and 448 of the Indian Penal Code, 1860 (for short the ' IPC ') and Section 3 (1) (xi) of the Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act , 1989 (for short the 'Act'). He was convicted and sentenced to undergo three months and six months custodial sentence for offences relatable to Section 448  and Section 3 (1)(xi) of the Act respectively. No separate sentence was imposed for the other offence. Aforesaid conviction and sentence was affirmed by <ORG>.

Prosecution case which led to the trial is essentially as follows: While the victim (PW-1) was alone in her house on 1.10.1992 at about 2 p.m. the accused entered into her house, went to the kitchen where she was cooking and attempted to catch hold of her hand, that when she attempted to escape from him by running to the front room and attempting to close the door, the accused followed her, opened the door forcibly and caught hold of and grasped her, when she made a hue and cry her brother PW-3 and other witnesses including PW-2 came there, and at that time the accused left PW-1 and pushed down PW-3 from the verandah and went along with his parents who came there hearing the hue and cry.

PW-1 lodged the first information report at the Kannamali Police Station on 2.10.1992 and a case was registered against the accused under Sections 448 and 354  and Section 3 (1)(xi) of the Act. The C.I. of Palluruthy took up the investigation and laid the charge sheet against the accused after completing the investigation.

During trial, nine witnesses were examined to further the prosecution version. One witness was examined to substantiate the plea of false implication raised by the accused. On consideration of the evidence on record, learned Sessions Judge, Ernakulam found the accused guilty and convicted him as aforesaid. According to learned Sessions Judge the offence punishable under Section 3 (1) (xi) of the Act is an aggravated form of an offence punishable under Section 354  and, therefore, no separate sentence for the latter offence is called for. Appeal before <ORG> did not bring in any relief to the appellant.

In support of the appeal, Mr. <NAME>, learned senior counsel submitted that the evidence on record clearly established that there was false implication. According to him, PW-3, the brother of PW-1 outraged modesty of the appellant's sister after trespassing into their house on 27.9.1992. The sister of the accused was examined as DW-1. She is an unmarried girl and hence the family members counselled her not to make any complaint about the incident to avoid publicity. Apprehending legal action against PW-3 a false case was made with the active support of a communal organisation against the appellant.

The prosecution version is that at about 2.00 p.m. on the date of occurrence i.e. 1.10.1992 accused entered into the kitchen of PW-1 and caught hold of her hands and tried to outrage her modesty. She is a married woman with children. The information was lodged at police station on the next date. This itself shows that there is unexplained delay in lodging the FIR and as the incident involving PW-3 took place on 27.9.1992, as a counter blast a false case was instituted. Additionally, it was submitted that the conviction under Section 3(1)(xi) of the Act is clearly unsustainable and learned Sessions Judge had no jurisdiction to try the offence.

Residually, it is submitted that the incident took place more than a decade back and the appellant has suffered custodial sentence for nearly 3 months and, therefore, after this long passage of time it would not be proper to send the accused back to custody.

We shall first deal with the plea about false implication. It is seen that though there were some delay in lodging the FIR, it is but natural in a traditional bound society to avoid embarrassment which is inevitable when reputation of a woman is concerned. Delay in every case cannot be a ground to arouse suspicion. It can only be so when the delay is unexplained. In the instant case the delay has been properly explained. Further, PW-2 is an independent witness and a neighbour of both the accused appellant and PW-1. There is no reason as to why he would falsely implicate the appellant. A charge under Section 354 is one which is very easy to make and is very difficult to rebut. It is not that art of enmity false implications are made. It would however be unusual in a conservation society that a woman would be used as a pawn to wreck vengeance. When a plea is taken about false implication, Courts have a duty to make deeper scrutiny of the evidence and decide acceptability or otherwise of the accusations. In the instant case, both the trial Court and <ORG> have done that. There is no scope for taking a different view.

In order to constitute the offence under Section 354 mere knowledge that the modesty of a woman is likely to be outraged is sufficient without any deliberate intention having such outraged alone for its object. There is no abstract conception of modesty that can apply to all cases. ( <CITATION> (AIR 1967 SC

63). A careful approach has to be adopted by the <ORG> while dealing with a case alleging outraged of modesty. The essential ingredients of the offence under Section 354  are as under:

(i) that the person assaulted must be a woman;

(ii) that the accused must have used criminal force on her, and

(iii)that the criminal force must have been used on the woman intending thereby to outrage her modesty.

Intention is not the sole criteria of the offence punishable under Section 354 , and it can be committed by a person assaulting or using criminal force to any woman, if he knows that by such act the modesty of the woman is likely to be affected. Knowledge and intention are essentially things of the mind and cannot be demonstrated like physical objects. The existence of intention or knowledge has to be culled out from various circumstances in which and upon whom the alleged offence is alleged to have been committed. A victim of molestation and indignation is in the same position as an injured witness and her witness should receive same weight. In the instant case after careful consideration of the evidence, the trial Court and <ORG> have found the accused guilty. As rightly observed by the <ORG> below Section 3 (1)(xi) of the Act which deals with assaults or use of force on any woman belonging to scheduled Caste or Scheduled Tribe with intent to or dishonour or outrage her modesty is an aggravated form of the offence under Section 354 . The only difference between Section 3 (1)(xi) and Section 354 is essentially the caste or the tribe to which the victim belongs. If she belongs to Scheduled Caste or Scheduled Tribe, Section 3 (1)(xi) applies. The other difference is that in Section 3 (1)(xi) dishonour of such victim is also made an offence. Section 448 provides for punishment relating to house trespass. In order to sustain the conviction under Section 448  it must be found that the intention of the accused was to commit an offence or to intimidate, insult or annoy the complainant. There must be unlawful entry and there must be proof of one or other of the intentions mentioned in Section 441 . In the case at hand evidence clearly establishes the commission of offence punishable under Section 448 .

That bring us to the most vital question as to legality of the trial involving offence punishable under Section 3(1)(xi) of the Act.

Pristine question to consider is whether the Special Judge could take cognizance of the offence straight away without the case being committed to him. If the Special court is <ORG>, the interdict contained in Section 193 of the Code of Criminal Procedure, 1973 (for short the 'Code') would stand in the way. It reads thus: "193. Cognizance of offences by Courts of Session- Except as otherwise expressly provided by this Code or by any other law for the time being in force, <ORG> shall take cognizance of any offence as a court of original jurisdiction unless the case has been committed to it by a Magistrate under this Code."

So the first aspect to be considered is whether <ORG> is <ORG>. Chapter II of the Code deals with "Constitution of Criminal Courts and Offices". Section which falls thereunder says that :

"there shall be, in every State, the following classes of criminal courts, namely:

(i) Courts of Sessions;"

The other classes of criminal courts enumerated thereunder are not relevant in this case and need not be extracted.

Section 14 of the Act Says that:

"for the purpose of providing for speedy trial, <ORG> shall, with the concurrence of the Chief Justice of <ORG>, by notification in the Official Gazette, specify for each district <ORG> to be a Special Court to try the offences under this Act."

So it is for trial of the offences under the Act that a particular Court of Session in each district is sought to be specified as <ORG>. Though the word 'trial' is not defined either in the Code or in the Act it is clearly distinguishable from inquiry. The word 'inquiry' is defined in Section 2(g) of the Code as 'every inquiry, other than a trial, conducted under this Code by a Magistrate or court'. So the trial is distinct from inquiry and inquiry must always be a forerunner to the trial. The Act contemplates only the trial to be conducted by <ORG>. The added reason for specifying <ORG> as <ORG> is to ensure speed for such trial. "<ORG>" is defined in the Act as "<ORG> specified as <ORG> in Section 14 " (vide Section 2(1)(d) .

Thus <ORG> is specified to conduct a trial and no other court can conduct the trial of offences under the Act. Why did <ORG> provide that only <ORG> can be specified as <ORG>? Evidently the legislature wanted <ORG> to be <ORG>. Hence the particular <ORG>, even after being specified as <ORG>, would continue to be essentially <ORG> and designation of it as <ORG> would not denude it of its character or even powers as <ORG>. The trial in such a Court can be conducted only in the manner provided in Chapter XVIII of the Code which contains a fascicules of provisions for 'trial before <ORG>".

Section 193 of the Code has to be understood in the aforesaid backdrop. The Section imposes an interdict on all Courts of Session against taking cognizance of any offence as a Court of original jurisdiction. It can take cognizance only if 'the case has been committed to it by a Magistrate', as provided in the Code . Two segments have been indicated in Section 193 as exceptions to the aforesaid interdict. One is, when the Code itself has provided differently in express language regarding taking of cognizance, and the second is when any other law has provided differently in express language regarding taking cognizance of offences under such law. The word 'expressly' which is employed in Section 193 denoting those exceptions is indicative of the legislative mandate that <ORG> can depart from the interdict contained in the Section only if it is provided differently in clear and unambiguous terms. In other words, unless it is positively and specifically provided differently <ORG> can take cognizance of any offence directly, without the case being committed to it by a Magistrate.

Neither in the Code nor in the Act is there any provision whatsoever, not even by implication, that the specified <ORG> (<ORG>) can take cognizance of the offence under the Act as a Court of original jurisdiction without the case being committed to it by a Magistrate. If that be so, there is no reason to think that the charge-sheet or a complaint can straight away be filed before such <ORG> for offences under the Act. It can be discerned from the hierarchical settings of criminal courts that the <ORG> is given a superior and special status. Hence we think that the legislature would have thoughtfully relieved the <ORG> from the work of performing all the preliminary formalities which Magistrates have to do until the case is committed to the <ORG>.

A reading of the concerned provisions makes it clear that subject to the provisions in other enactments all offences under other laws shall also be investigated, inquired into, tried and otherwise dealt with under the provisions of the Code . This means that if another enactment contains any provision which is contrary to the provisions of the Code , such other provision would apply in place of the particular provision of the Code . If there is no such contrary provision in other laws, then provisions of the Code would apply to the matters covered thereby. This aspect has been emphasized by a Constitution Bench of this Court in para 16 of the decision in <CITATION> (1984 (2) SCC 500). It reads thus"

" Section 4(2) provides for offences under other law which may be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code of Criminal Procedure but subject to any enactment for the time being in force regulating the manner or place of investigation, inquiring into, trying or otherwise dealing with such offences. In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt with according to the Code of Criminal Procedure. In other words, Code of Criminal Procedure is the parent statute which provides for investigation, inquiring into and trial of cases by criminal courts or various designations."

Section 5 of the Code cannot be brought in aid for supporting the view that <ORG> specified under the Act obviate the interdict contained in Section 193 of the Code so long as there is no provision in the Act empowering <ORG> to take cognizance of the offence as a Court of original jurisdiction. Section 5 of the Code reads thus:

"5.- Saving- Nothing contained in this Code shall, in the absence of a special provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force."

This Court in <CITATION> (1994 (3) SCC 440) on a reading of Section 5 in juxtaposition with Section 4(2) of the Code, held as follows:

"It only relates to the extent of application of the Code in the matter of territorial and other jurisdiction but does not nullify the effect of Section 4(2) . In short, the provisions of this Code would be applicable to the extent in the absence of any contrary provision in the special Act or any special provision excluding the jurisdiction or applicability of the Code ".

Hence, we have no doubt that <ORG> under this Act is essentially <ORG> and it can take cognizance of the offence when the case is committed to it by the Magistrate in accordance with the provisions of the Code . In other words, a complaint or a charge- sheet cannot straight away be laid down before <ORG> under the Act. We are re-iterating the view taken by this Court in <CITATION> . (2000 (2) SCC 504) in above terms with which we are in respectful agreement. <ORG> in the case at hand, undisputedly has acted as one of original jurisdiction, and the requirements of Section 193 of the Code were not met.

The inevitable conclusion is that the learned <ORG>, as the undisputed factual position goes to show, could not have convicted the appellant for the offence relatable to Section 3 (1) (xi) of the Act in the background of legal position noted supra. That is accordingly set aside. However, for the offence under Sections 354 and 448 , custodial sentence for the period already undergone which as the records reveal is about three months, would meet the ends of justice considering the background facts and the special features of the case. The appeal is accordingly disposed of.


CASE NO.: Appeal (civil) 3641 of 1998 PETITIONER: AIR INDIA RESPONDENT: <ORG>. DATE OF JUDGMENT: 31/01/2000 BENCH: G.T. NANAVATI & S.N. PHUKAN JUDGMENT:

JUDGMENT 2000 (1) SCR 505 with C.A. No. 3642 of 1998 The Judgment was delivered by <NAME>, J.

Both these appeals arise out of the judgment of Kerala High Court in Writ Appeal No. 462 of 1999. <ORG> (hereinafter referred to as '<ORG>') had filed that appeal against the decision of a learned Single Judge of that High Court in O.P. No. 25560 of 1998 whereby its said petition was dismissed, <ORG> had challenged the action of <ORG> (for brevity sake referred to as the '<ORG>') of awarding contract for ground handling services at the new Cochin Airport at Nedumbassery to <ORG> The learned single Judge held that the impugned action of <ORG> was neither arbitrary nor illegal. On appeal <ORG> of that Court held that the said action was violative of principles of natural justice, arbitrary and illegal

2. <ORG> is a public sector undertaking. Some other public sector undertakings and the State of Kerala are its shareholders. It has been established for setting up and maintaining a new International Airport at Cochin. For awarding a contract for ground handling facilities at the new Airport it invited offers by writing letters to some companies having experience of that type. The letter were written on 12-11-1997 to <ORG>; <ORG> and six others. Proposals were to be submitted by 31-12-1997. <ORG>, <ORG>, <ORG> of Dubai, <ORG> of Hong Kong and <ORG> - responded. Proposals of some of them contained alternative proposals also. On 13-7-1998 <ORG> again wrote to them to make their best offers on or before 28-7-1998. <ORG> submitted its proposal on 20-7-1998 <ORG> did so on 28-7-1998

3. The Committee constituted by <ORG> for evaluation of the offers met on 28-9-1998. It found that <ORG>, <ORG>, <ORG> and <ORG> were on par as regards technical competence, organizational capacity and past experience. It took note of the fact that <ORG> and <ORG> are Indian organisations, operate mainly in India and have better proven adaptability for operating in Indian conditions. Out of those two it recommended <ORG> for awarding the work. On 11-8-1998 <ORG> wrote a letter to <ORG> recommending <ORG> for awarding the contract on the ground that <ORG> is the national carrier and has better experience. Thereafter a meeting took place between the Managing Director of <ORG> and the Chief Minister of Kerala. That was followed by a letter dated 29-10-1998 by Mr. <NAME>, Managing Director of <ORG> to the Chief Minister of Kerala seeking an opportunity to make a more detailed presentation to the Board of <ORG> on the advantages <ORG> would derive if <ORG> was appointed bits exclusive handling agent. <ORG> met on 7-11-1998 and decided to have a detailed discussion with <ORG> before taking a final decision and informed it to give a presentation before the Board on 27-11-1998. Having come to know about this development <ORG> wrote a letter on 10-11-1998 to the Chief Minister of Kerala pointing out that their company is also an India company and they also have experience of over 30 years in ground handling work. It also took exception to the effort made by <ORG> to revise its offer on the ground that it was unethical and deserved to be condemned by the Board. It again wrote to the Chief Minister on 12-11-1998 against giving preference to a national carrier in view of the policy of liberalisation. On 23-11-1998 <ORG> wrote to <ORG> that it was extremely perturbed over the fact that <ORG> was given a further opportunity to make a presentation to the Board and requested it not to go back upon its earlier decision to give the contract to <ORG>. It also warned that not adhering to its earlier decision would be a retrograde step and shake the confidence of the people in fairness and impartiality of <ORG>. <ORG> gave the presentation and by its letter dated 1-12-1998, reaffirmed its proposal with some changes as discussed and requested <ORG> to accept it as it was better than the offer made by any other party. <ORG> again protested by its letter dated 7-12-1998 and informed <ORG> that to accept the revised offer of <ORG> and not to accept its offer would be unfair and unethical and violative of Limited Global Competitive Building Norms. On 12-12-1998 the first respondent awarded the contract to <ORG>

4. <ORG> filed a writ petition in <ORG> challenging that action of <ORG>. Its contention was that its offer was the highest and it had fulfilled all the conditions. The offer given by <ORG> did not come anywhere near their offer, yet the contract was given to <ORG> because of influence exerted by <ORG> and the Secretary of <ORG>. It was also challenged on the ground that <ORG> had not acted fairly and impartially as it had carried on negotiations with <ORG> behind the back of <ORG> and no opportunity was given to <ORG> to give a better offer. In the counter affidavit filed on behalf of <ORG> it was stated that this was not a case where tenders were invited. It was a project to be implemented by raising finances from various sources and, therefore, it was decided to invite offers from reputed agencies in order to decide best terms and conditions and then to award the contract to the best suited party in order to make the project viable and successful. It was further stated that individual offers were assessed considering the background and infrastructure of the companies, their financial capacity, expertise and future benefits likely accrue to <ORG>. While awarding the contract to <ORG> what had weighted with it was, apart from it selection by the evaluating Committee, that it is a public sector unit, the national carrier under <ORG> and that it had offered to support <ORG> in a big way by showing its willingness in equity participation It had also taken into consideration the fact that <ORG> was not a airline operator like <ORG> and its interest and expertise was limited to ground handling work alone. <ORG> had also offered to help in improving the revenue of <ORG> by increasing Air Traffic through the Cochin Airport. Thus, on a comparative analysis of the offers made by <ORG> and <ORG> it was found that the offer made by <ORG> was better and more beneficial to <ORG>. The petition was heard by a learned Single Judge of <ORG> who held that there was no illegality, arbitrariness or unreasonableness in the decision making process of <ORG> and the decision was taken bona fide after evaluating both the offers and on being satisfied that in the matter of experience, expertise, infrastructure and financial capacity the offer of <ORG> was superior and more beneficial. As regards the allegation of actual mala fides the learned single Judge held that the pleading in that behalf was very vague and scanty

5. The matter was then carried by <ORG> in appeal before the same <ORG>. The Division Bench held that it was a case of public tender. It also held that though the decision of evaluation committee was only recommendatory and not binding on <ORG> of <ORG>, the fact that the evaluation committee had considered all the relevant aspects and found <ORG> as the most competent party and yet no reasons were disclosed for explaining what prompted <ORG> to take a different view was clearly indicative of the fact that <ORG> was influenced in its decision making process by <ORG> and the Secretary of <ORG>. As regards the justification disclosed by <ORG> in its counter affidavit <ORG> held that it was "not impressed with the reasons given in the counter affidavit as it was well known that the reasons given in the counter affidavit cannot be accepted for what has happened at the time of acceptance of the offer"

. It was also of the view that if the other tenderers had also been invited for negotiations by <ORG> then possibly they would have given better offers and pointed out demerits of the offers made by the rival tenderers. It held that <ORG> was influenced by the threat to the effect that if <ORG> was not given the contract, the International Airport will be bereft of flights as <ORG> will not allow other flights to land there. It then held that the action of <ORG> in awarding contract to <ORG> was arbitrary, illegal and opposed to the principles of natural justice. It allowed the appeal, cancelled the contract in favour of <ORG> and directed <ORG> to re-consider the valid tenders once again and, if necessary, to call all those tenderers for negotiations before finalising the contract

6. Challenging this decision of <ORG>, <ORG> has filed Civil Appeal No. 3641 of 1999 and <ORG> has filed Civil Appeal No. 3642 of 1999. Mr. <NAME>, learned senior counsel appearing for <ORG> and Mr. <NAME>, learned senior counsel appearing for <ORG> contended that <ORG> has gone wrong in its conclusion as it adopted a wrong approach in a matter of this type. They submitted that <ORG> committed a grave error in considering this to be a case of public tender. They also submitted that the decision of <ORG> to award the contract to <ORG> was taken bona fide in the financial and overall interest of <ORG> and, therefore, <ORG> while exercising its power under Article 226 ought not to have interfered as no substantial amount of public interest was involved

7. The law relating to award of a contract by the <ORG>, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this <ORG> in <CITATION> 1979 (3) SCC 488 ), <CITATION> 1981 (1) SCC 568 ), <CITATION> . 1985 (1) SCC 260 = 1984 (2) SCALE 819), <CITATION> 1994 (6) SCC 651 = 1995 (1) Arb. LR 193), <CITATION> 1997 (1) SCC 134 = 1996 (8) SCALE 417), and <CITATION> . 1999 (1) SCC 492 = 1999 (1) Arb. LR 431 (SC). The award of a contract, whether it is by a private party or by a public body or the <ORG>, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The <ORG> 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. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the <ORG>, 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 amendable to judicial review, the <ORG> can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The <ORG>, 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 <ORG> 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. The <ORG> should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the <ORG> should intervene

8. In view of this settled legal position, Mr. <NAME>, learned senior counsel appearing for <ORG> rightly and fairly did not dispute that <ORG> was not bound to accept the highest offer or that it was entitled to enter into negotiations with <ORG>. What he contended was that <ORG> ought to have treated all the tenderers fairly. As <ORG> was given an opportunity to give a presentation and revise its offer it ought to have given a chance to <ORG> also to have its say with respect to the offer made by <ORG> and to match its offer with the offer of <ORG>. He submitted that the evaluation committee had recommended <ORG> for awarding the contract after considering all the relevant factors and, therefore, it was incumbent upon <ORG> to disclose why they different from the said recommendation and decided to accept the offer of <ORG>. He also submitted that the decision of <ORG> was vitiated because of the influence exercised by <ORG> and <ORG> and also because it took into consideration an irrelevant consideration that <ORG> is a public sector undertaking and a national carrier

9. What was emphasised by Mr. <NAME> and Mr. <NAME> is that <ORG> was incorporated to set up a new private International Airport. At all airports, permissions for operating aircraft, maintenance, licensing of crew and flying schedules of airlines is controlled by <ORG>. Applications for hangar space, landing and parking facilities and ground handling are made to and granted by <ORG>. This was the first attempt to privatise. Therefore, <ORG>, in order to make its project viable and successful, after taking into consideration various factors, decided to entrust the task to providing ground handling services for all airlines operating from the airport to one single agency. For achieving this purpose it invited offers by writing letters to eight reputed agencies to enable it to decide the best terms and conditions for awarding the contract and to select the best agency. They submitted that, for these reasons, it did not choose to adopt the public tender mode. In its counter affidavit filed in <ORG> this position was made clear. What was stated in the counter affidavit was as under "The object of inviting their offers was only to get terms and conditions of the respective companies for consideration by <ORG> of this respondent and to select that best suited to the interest of the respondent. Being a new project implemented by raising finance from various sources all efforts were made to make the project viable. Hence when Ext. R1(a) letter was sent inviting offers the paramount consideration was to get the best offer for the benefit of the 1st respondent. There was no minimum estimated amount or other conditions for acceptance and rejection like the usual tender procedure."

<ORG> was also of the view that if the offers were made only pursuant to the letter dated 12-11-1997 the respondents would have a good case. But in view of <ORG> decision to be fair and the <ORG>'s letter dated 13-7-1998 calling upon the tenderers to give the best offer before it took a final decision and informing them that the contract period would be 10 years and the subsequent letter dated 5-8-1998 requiring the tenderers to give a bank guarantee, <ORG> was bound to treat this case as a case of public tender and for that reason it was not open to it to say that it was free to accept that offer which was best suited to it. It is, however, not necessary to deal with this aspect more elaborately and point out how <ORG> view is wrong as it was not disputed by the learned counsel appearing for <ORG> that it was open to <ORG> not to accept the highest offer of <ORG> if it had good reasons to do so. It was at no point of time declared by <ORG> that it would accept the highest offer or accept the offer on a particular basis. All along it had made clear that it would accept that offer which was found to be the best in their interest

10. The only point that really falls for consideration is whether <ORG> had acted fairly after it had invited fresh offers by its letter dated 13-7-1998. It was forcefully submitted by Mr. <NAME> that after <ORG> had evaluated the proposals and recommended <ORG> for the Job it was unfair on the part of <ORG> to have permitted <ORG> to make a fresh presentation and revise its terms. Even while conceding that <ORG> had a right to enter into negotiations even at that stage, it was submitted that <ORG> also should have been invited for negotiations and informed about the revised terms of <ORG>. It was submitted that like <ORG>, <ORG> should have been given an opportunity to match the offer made by <ORG>. From the letter written by <ORG> to <ORG> on 13-7-1998 and similar letters written to others also, it appears that <ORG> had, in its meeting held on 29-6-1998, taken certain decisions and felt that in fairness all eligible agencies should be requested to give their best offers. <ORG> had submitted its offer on 20-7-1998 and stated therein that its offer was open for negotiations. <ORG> had submitted its offer on 28-7-1998. It was made on the basis of certain assumptions. <ORG> had in all received five offers. <ORG> constituted for evaluation of offers did not consider the offer of <ORG> as it had not submitted the required bank guarantee. The other four agendes, namely, <ORG>, <ORG>, <ORG> and <ORG>, were found on par as far as technical competence, organisational capacity and past experience was concerned. It, however, shortlisted <ORG> and <ORG> on the ground that they are Indian organisations, operate mainly in India and has better proven adaptability for operating in Indian conditions. It then recommended <ORG> for undertaking the ground handling services without giving any reason for its preference for <ORG>. While making the decision the Committee observed that it would be for <ORG> to consider whether any negotiation should be held with the qualified agendes. <ORG> had then met on 7-11-1998 and after taking note of the minutes of the high level Committee and taking note of the fact that <ORG> is a public sector undertaking and a national carrier, decided to have a detailed discussion with <ORG> before taking a final decision. It, therefore, invited the Managing Director of <ORG> for giving a presentation before the Board on 27-11-1998. It was also felt necessary to take a final decision in its next meeting to be held on 27-11-1998 as the matter was pending since long and it was necessary to solve the financial crunch of <ORG>. <ORG> had protested against giving of an opportunity to <ORG> to make a presentation by its letters dated 12-11-1998 and 23-11-1998 on the ground that what was being done by <ORG> was improper and in violation of global competitive bidding norms. In spite of the protest of <ORG> <ORG> of <ORG> permitted <ORG> to make a presentation for outlining in detail its ground handling capabilities, packages of services which it wished to offer and other relevant advantages including financial. <ORG> by its letter dated 1-12-1998 recapitulated the details of the offer which it had already made, and the subsequent presentation and discussion on 27-11-1998. The said letter discloses that some changes were made by <ORG> in its original offer to make it more acceptable to <ORG>. In that letter it was also indicated that it would try to enhance <ORG> and other <ORG>' - domestic and international operations through <ORG> and pointed out that only through maximisation of operations this new venture can be a profitable one at an early date. <ORG> again by its letter dated 7-12-1998 reiterated that its offer was the highest (most favourable to <ORG>) and that it would be unfair to accept the revised bid of <ORG>. In spite of the protests of <ORG>, <ORG>, by its letter dated 12-12-1998, informed <ORG> that <ORG> had decided to accept the revised offer of <ORG>

11. This narration of facts makes it clear that all along, after <ORG> had recommended <ORG> for awarding the contract, what <ORG> was contending was that <ORG> having accepted the limited global competitive bidding norms and having decided 28-7-1998 as the last date for inviting final offer, it was not open to it thereafter to negotiate with <ORG> behind the back of <ORG> and permit <ORG> to revise its offer. Even though <ORG> had written protest letters, it had not requested <ORG> to give it any opportunity to negotiate or to improve upon its offer. The decision of <ORG> was obviously not the final decision and certainly it was not binding on <ORG> who were the final authority to take the decision. <ORG>, at the meeting held on 7-11-1998, considered the proposals of <ORG> and <ORG> and appears to have taken a tentative decision to award the contract to <ORG> and, therefore, called it for negotiations with a view to have better terms and take the final decision. <ORG> did take the final decision on 27-11-1998 as <ORG> agreed to make its offer more beneficial to <ORG>. That becomes apparent from <ORG>'s letter dated 1-12-1998. <ORG> having taken tentative decision on 7-11-1998 there was no point in calling <ORG> thereafter for any negotiation. It may be recalled that <ORG> was recommended over <ORG> by <ORG> only because <ORG>'s financial rating was found higher. What is significant to note is that even <ORG> had in its minutes noted that financial rating cannot be the sole criterion for taking the final decision. Moreover, in a commercial transaction of such a complex nature a lot of balancing work has to be done while weighing all the relevant factors and the final decision has to be taken after taking an overall view of the transaction. It is true that even though <ORG> had called upon <ORG> to produce the minutes of the meeting of <ORG> held on 27-11-1998 the same was not made available to <ORG>. But that did not entitle <ORG> to draw any adverse inference. <ORG> had not called upon <ORG> to produce those minutes

12. As regards the merits of <ORG>'s proposal, it was contended by Mr. <NAME> that all the three offers of <ORG> were superior in terms of parameters laid down by <ORG> than <ORG> offer. He submitted that even after <ORG> unilaterally raised the license fee of <ORG> from 17 per cent to 20 per cent in the 10th year to match <ORG>'s offer and imposed a condition that <ORG> would not sub-contract, it did not become comparable with the offer of <ORG> as <ORG> did not offer to pay 2 per cent bonus in license fee. It was also submitted that <ORG> representation that it would be able to bring more traffic was illusory and for that reason also <ORG> proposal cannot be regarded as superior or even comparable with the proposal of <ORG>. We do not think that <ORG> did any wrong in taking into consideration the fact that <ORG> is an airline and being a national carrier would be in a position to bring more traffic of <ORG> and other domestic lines if it was awarded the contract. As regards the merits of the rival offers, we do not think it proper to look at only the financial aspect and hold that <ORG> did not accept <ORG>'s offer, even though it was better, because it wanted to favour <ORG> or that it had acted under the influence of <ORG> and <ORG>. In a commercial transaction of a complex nature what may appear to be better, on the face of it, may not be considered so when an overall view is taken. In such matters the <ORG> cannot substitute it's decision for the decision of the party awarding the contract. On the basis of the material placed on record we find that <ORG> bona fide believed that involving a public sector undertaking and a national carrier would, in the long run, prove to be more beneficial to <ORG> For all these reasons it is not possible to agree with the finding of the High <ORG> that <ORG> had acted arbitrarily and unreasonably and was also influenced by extraneous considerations during its decision making process

13. We, therefore, allow these two appeals, set aside the judgment of <ORG> of <ORG> in Writ Appeal No. 462 of 1999 and confirm the decision of the learned Single Judge in O.P. No. 25560 of 1998