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Issues Involved
1. Validity and legality of the supplemental agreement. 2. Compliance with Article 14 of the Constitution. 3. Maintainability of the writ application on grounds of delay and laches. Summary Validity and Legality of the Supplemental Agreement The dispute pertains to the publication of telephone directories by Mahanagar Telephone Nigam Limited (MTNL). MTNL entered into an agreement with United India Periodicals Pvt. Ltd. (UIP) for publishing directories, which UIP failed to execute timely. Consequently, a supplemental agreement was signed on 26th September 1991, involving UIP, United Database (India) Pvt. Ltd. (UDI), and Sterling Computers Ltd. (Sterling). The High Court deemed this supplemental agreement as a fresh contract rather than an extension of the original agreement, tainted with malice aimed at unjust enrichment of UIP/UDI/Sterling. Compliance with Article 14 of the Constitution The High Court found that the supplemental agreement was not in line with Article 14 of the Constitution, which mandates non-arbitrariness in state actions. The Supreme Court upheld this view, stating that public authorities must follow norms and procedures recognized by the courts. The supplemental agreement was executed without inviting tenders, thus violating the principles of fairness and transparency. The Court emphasized that public authorities must exercise powers only for public good and follow relevant considerations, not irrelevant ones. Maintainability of the Writ Application on Grounds of Delay and Laches The appellants argued that the writ application was filed with delay, as the supplemental agreement was signed on 26th September 1991, and the writ petition was filed on 9th May 1992. The petitioners contended that they became aware of the details of the supplemental agreement only in April 1992. The Court found this explanation credible and did not reject the writ petition on the grounds of delay and laches. Conclusion The Supreme Court affirmed the High Court's judgment, holding that the supplemental agreement was void as it violated Article 14 of the Constitution by not following the necessary procedure of inviting tenders. The Court directed MTNL to take steps to publish the directories for Delhi and Bombay promptly to avoid further public inconvenience. The appeals were dismissed with no order as to costs. The Court also noted the importance of timely judicial review in contractual matters to prevent delays and escalating costs.
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