STERLING COMPUTERS LIMITED ETC. versus M & N PUBLICATIONS LIMITED AND ORS.

Citation: [1993] 1 S.C.R. 81 · Decided: 12-01-1993 · Supreme Court of India · Bench: N.M. KASLIWAL · Disposal: Dismissed

Cited by 6 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

-( 
STERLING COMPUTERS LIMITED ETC. 
A 
l 
v. 
M & N PUBLICATIONS LIMITED AND ORS. 
JANUARY 12, 1993 
[N.M. KASLIWAL AND N.P. SINGH, JJ.) 
B 
Constitution of India : Articles 12, 14, 19, 32, 136, 226 and 298. 
Government contracts-:Tudiciai review-Court primarily concerned 
with infirmity in decision making process-Urgency of disposal by courts of c 
such matters-Necessity for. 
Telephone directorie..-Publication of-Contract termed 'supplementa! 
~ -< 
contract' grantetf--Held amounted to grant of fresh contract in garlJ of 'sup-
plemental contract'. 
D 
The three appeals arose out of disputes relating to the publication 
of telephone directories of MTNL a Government of India Undertaking. 
The MTNL introduced a new concept of "yellow pages" in telephone direc-
tories, and these yellow pages were to contain advertisement under dif-
.+-
ferent beadings. The contractor who was to be awarded the contract for E 
printing such directories was to collect the revenue from the advertise-
ments in the yellow pages as well as in the white pages of the telephone 
directory, supply the same free of cost to the MTNL for its subscribers, 
and pay royalty to the MTNL in connection with printing or such direc-
tories. 
F 
--- .....; 
Tenders for publication of the directories for Delhi and Bombay 
were invited. Tender of UIP - respondent No. 2 in the Writ Petition and 
appellant in one of the appeals (C.A.No. 91 of 1993) was accepted, and an 
agreement dated 14th March, 1987 was executed. UDI, respondent No. 3 
to the Writ Petition and appellant in one of the other appeals (CA No. 90. G 
of 1993) was a subsidiary of UIP. 
" 
Under the original agreement UIP was to pnblish directories every 
I 
year for a period of five years from 1987 to 1991 for Delhi and Bombay 
separately, pay an amoont of Rs. 20.16 crores as royalty to the MTNL, 
supply the directories free of cost to subscribers. UIP also furnished a H 
81 
82 
SUPREME COURT REPORTS 
[ 1993] 1 S.C.R. 
A 
performance guarantee for a sum of Rs. one crore, and was also to supply 
the same ·number of supplementary directories which were to be published 
six months after the publication of the annual issue, to be published in 
November/December every year. UIP was given the exclusive right for 
procurement of the advertisements in the yellow pages as well as strips, 
B bold the extra entries in the white pages, the rates to 'be fixed by the UIP 
for each issue of the directory, and such rates to be printed for general 
information. It was stipulated that ir UIP committed default or breach of 
the agreement or failed in the due performance thereof, the MTNL shall 
be entitled to recover from the UIP by way of compensation or liquidated 
damages and amount calculated at the rate of Rs. One lakb for every day 
C or part thereof for the delay beyond the stipulated date. The MTNL 
without pttjudice to other rights could by notice in writing determine the 
contract. 
UIP defaulted and committed breach of the agreement inasmuch as 
D directories for Delhi were published only for the years 1987 and 1988 and 
for Bombay only for the year 1987. For the year 1987, Delhi issue was 
published after a delay of seven months and Bombay issue afte~ six 
months, and the Delhi Issue of 1988 was published only in August, 1990, a 
delay of two years. There was no publication of the directories for Delhi 
for the years 1989, 1990 and 1991, and in respect of Bombay for the years 
E 1988, 1989, 1990 and 1991. 
A supplem~ntal agreement was entered on 26th September, 1991 
between UIP, UDI, MTNL and Sterling Computers Limited ·appellant in 
one of the appeals (C.A. No. 89 of 1993). Sterling by this agreement was 
F 
introduced to carry out the unexecuted po.rtion of the agreement with UIP. 
G 
By this supplemental agreement Sterling was to print and publish 13 main 
issues of Delhi and Bombay directories within a period of seven years 
includiug the year 1991 on payment of additioual royalty of only Rs. 10 
crores to the. MTNL over and above the royalty stipulated in the original 
agreement by the UIP. 
Under the agreement dated 14th March, 1987 the royalty which was 
payable was Rs. 20.16 crores for the period 1987 to 1991, but under the 
supplemental agreement Sterling was given the contract to publish 13 
main issues of the Delhi and Bombay directories upto 1997 and 1998, bnt 
H for the extended period it had to pay royalty only for an amount of Rs. 10 
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STERLING COMPUTERS v. M & N PUBLICATIONS 
83 
crore

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