Ramanbhai v. Ghasiram

Introduction “Share” is defined as a share of a company’s share capital, including securities, according to Section 84 of the Companies Act 2013. Shares are…

M/S. New Horizons Limited V. Union Of India And Others on 15 October 1993

Introduction and facts  First petitioner is a public limited company registered under the Companies Act, 1956, and the second petitioner is the Director of the first petitioner. A tender notice was published on 22 April, 1993 by the General Manager, Hyderabad Telecommunications inviting sealed tenders from competent agencies for printing, binding and supply of telephone directories in English for three annual issues starting from 1993. The notice said that the job involved “Compilation of given data into directory format, procurement of paper, printing, binding and delivery of the telephone directories to General Manager, Hyderabad Telecommunications free of cost at the specified distribution points. Besides this, the tenderer had to pay a royalty to General Manager, Hyderabad Telecommunications for each issue by clearly specifying the maximum royalty amount for each issue offered by him. The successful tenderer will be permitted to procure on his own classified advertisements and cover page advertisements”. Then the notice said that “The directory shall conform to the technical specifications given in the tender document. The tenderer should have experience in compiling, printing and supply of telephone directories to the large telephone systems with the capacity of more than 50,000 lines. The tenderer should substantiate this with documentary proof. He should also furnish credentials in this field”. For the total job could be obtained from the Directory Officer, Hyderabad Telecom on payment of certain charges, Tender was to be received up to 15 hours on 14 May, 1993 and to be opened on the same day after half an hour of closing time of receipt of tenders. The petitioners before us were not the parties to that petition. Arguments During hearing of this petition we were told that that petition was dismissed by the Andhra Pradesh High Court on 30 August 1993, but the petitioners contend that the challenge there was on a different ground. First petitioner says it was most suitable and competent party for award of the contract and particularly when it offered much higher amount of royalty than the fourth respondent. The balance 60% equity of the first petitioner is stated to be held by M/s. Thompson Press Limited; M/s. Living Media India Limited; Mr. Aroon Puric; World Media Limited and the other companies in the same group. The petitioners have described in detail the functioning of all the shareholders of the first petitioner claiming that they have rich experience in printing, publishing and marketing. The first petitioner is claimed to possess the management expertise, experience and know how in the printing of directories with yellow pages having available to it the infrastructure for marking and latest production facilities. By awarding the contract to the fourth respondent, the petitioners say, the exchequer has lost about Rs. 365 lakhs at the fourth respondent had offered royalty of Rs. 95 lakhs as against the royalty of Rs. 459.9 lakhs offered by the first petitioner. The petitioners have also complained that they were not informed of any reason for non-consideration of their tender. These facilities, the petitioners claimed, were available to them to execute the contract in question and that all these facts were clearly brought out in the tender documents submitted by the petitioners. The petitioners say that award of the contract to the fourth respondent has been based on extraneous considerations and this action of respondents 1 to 3 is violative of Article 14 of the Constitution. Mr Sarin, appearing for the petitioner, formulated three points : though the petitioners are not challenging the eligibility conditions as set out by the authorities, the authorities acted in an irrational, unreasonable and arbitrary fashion and also against the public interest in just only looking at the experience of the first petitioner itself; On a proper reading of the tender submitted by the first petitioner it had to be read “We the following companies, namely, Thompson Press, Living Media, Integrated Information Pte. Ltd. and World Media Limited and Aroon Purie poll their experience and their resources together in a joint venture in the name of the first petitioner”. The authorities should have lifted the corporate veil of the first petitioner though in view of the above submission it might not arise. Still in the alternative it was submitted that the first petitioner was in the nature of partnership of the aforesaid companies and the person; the question of public revenue and, thus, the public interest was involved and the tender of the first petitioner could not be rejected on hypertechnical pleas that the first petitioner itself had no experience. Respondents 1 to 3, i.e. the authorities, have denied the allegations of the petitioners and affirmed their action in awarding the tender to the fourth respondent. As a documentary proof of experience, they say, the petitioner gave the telephone directories of Bombay and Delhi 1992 Issues. The petitioners have themselves stated that M/s. Thompson Press and M/ s. Living Media had printed and bound these telephone directories for respective parties who had been awarded contract for Delhi and Bombay.…

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