On 30th September 2022, the Supreme Court in a division bench comprising of Justice M.R. Shah and Justice Krishna Murari observed that the Terms of Tender making authorities are not open to Judicial Scrutiny unless and until they are Arbitrary and discriminatory. (Airport Authority of India V. Centre for Aviation Policy, Safety & Research (CAPSR) & Others)
Facts of the case:
AAI floated a Request for Proposal (RFP) for concession of ground handling services at Group ‘A’, ‘B’, ‘C’ airports owned by it on 01.05.2018 and Group ‘D’ on 02.05.2018. AAI cancelled the tender earlier floated for Group ‘D’ airports and published a fresh RFP on 28.07.2020 for Group ‘D1’ airports. The respective RFPs contained the eligibility criteria which included the technical and financial qualifications. Respondent no.1, CAPSR, filed a writ petition before the HC of Delhi challenging the eligibility criteria and the RFPs with respect to Group ‘C’, ‘D1’ and ‘D2’ airports while saying that they are radical departure from the past and renders most of the extant Ground Handling Agencies (GHA) ineligible to participate in the tender process, especially those who have been providing Ground Handling Services (GHS) at the smaller airports of the country.
They added that the prescribed technical and financial qualifications have no corelation with the GHS and the same have been arbitrarily with a view to oust the existing GHS providers, who have been providing services for years, without any complaint. According to AAI, the objective of the tenders was not to oust small players but to exclude GHAs, who lacked expertise, infrastructure and used unskilled labour. They added that 36 months of experience in past 7 years of handling GHS for scheduled flights was reasonable. AAI challenged the locus of CAPSR and tried to justify the Annual Turnover criterion of Rs. 30 crores for Group ‘D1’ airports. But the HC set aside the RFPs and AAI’s decision to carry out region wise sub-categorisation of the 49 airports falling under Group D-1 and observed the Annual Turnover criteria to be discriminatory and arbitrary. Aggrieved by the same, AII preferred the present appeal.
Contentions of the Appellant:
The counsel for the appellants contented that the original writ petitioner before the High Court has no locus standi to maintain the writ petition. The MSME order of 2012 and MSME order of 2018 are not applicable in the present case. He contended that respondent claims to be a non-profit organisation carrying out independent research in the field of civil aviation. NGOs have no locus standi to maintain a writ petition challenging the tender conditions especially when the same is not in the nature of a PIL and the original writ petitioner is not the aggrieved party (Anand Sharadchandra Oka v. University of Mumbai).
He added that the clustering was done with the aim of promoting regional connectivity and avoiding the cumbersome administrative task of inviting and dealing with separate tenders for each of the 49 airports under Group ‘D1’ category The annual turnover was also set in view of the nature of the tender and the consequential financial strength. Moreover, while relying on the cases, Maa Binda Express Carrier v. North-East Frontier Railway, Directorate of Education v. Educomp Datamatics Limited, and Meerut Development Authority v. Assn. of Management Studies, setting of terms and conditions of invitation to tender are within the ambit of the decision of the tender making authority and as such are not open to judicial scrutiny unless they are arbitrary, discriminatory.
Contentions of the Respondents:
The counsel for the respondents submitted that all the members of respondent No.1 are GHAs and were to participate in the tender and authorities did not respond to the representations of the individual GHA members of respondent No.1, only thereafter a writ petition was preferred before the HC challenging tender. It is submitted that therefore it cannot be said that respondent No.1 – original writ petitioner had no locus standi to file the writ petition challenging the most arbitrary and illegal tender conditions. Since the turnover criteria to be eligible to bid was arbitrarily fixed as Rs. 30 crores, even as a consortium with two of its member GHAs, the said eligibility has impaired the fundamental rights of the respondent and its members who are MSMEs. It is submitted that there also respondent No.1 has locus to file the writ petition. Moreover, the AAI artificially introduced differentiation in technical eligibility criteria, specifying experience in providing GHS to scheduled airlines flights only even there is no differentiation between GHS provided to non-scheduled or scheduled airlines in the AAI (GHS) Regulations, 2018.
Observations and Judgement of the Court:
The Hon’ble court observed that the writ petition before the High Court was not in the nature of Public Interest Litigation hence, it is not appreciable how respondent No.1 – original writ petitioner being an NGO would have any locus standi. Moreover, the terms and conditions of the Invitation to Tender are within the domain of the tenderer/tender making authority and are not open to judicial scrutiny, unless they are arbitrary, discriminatory or mala fide. the terms of the Invitation to Tender are not open to judicial scrutiny, the same being in the realm of contract. The Government/tender making authority must have a free hand in setting the terms of the tender (Michigan Rubber (India) Ltd., Maa Binda Express Carrier (supra)). So far as the submission on behalf of the original writ petitioner on MSME orders of 2012 and 2018 is concerned, the same can always be subject to the fulfilment of other conditions of the tender documents. Even otherwise, selecting GHS for providing GHS cannot be equated with the procurement of any goods and services that form the crux of the MSME orders. Moreover, none of the tender conditions/eligibility criteria can be said to be arbitrary.
The Judgment of the HC was held unsustainable and the same was quashed and set aside by the Hon’ble court.
Case: Airport Authority of India V. Centre for Aviation Policy, Safety & Research (CAPSR) & Others
Citation: CIVIL APPEAL NOS. 6615-6616 OF 2022
Bench: Justice M.R. Shah and Justice Krishna Murari
Date: 30th September 2022
Read Judgment @Latestlaws.com
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