Sharma Transports, Bangalore vs Airport Authority Of India And ...
2001 Latest Caselaw 805 Bom

JUDGMENT

H.L. Gokhale, J.

1. Heard Mr. Hegde in support of his submission. Rule. Rule is made returnable forthwith. Mr. Samdani appeared for respondent No. 1 and Mr. Thorat appeared for respondent No. 2. Both of them waive service of the Rule. Both of them have filed their replies; rejoinder is also filed and the matter is heard finally at the admission stage.

2. The petitioner herein is in the business of conducting tours and runs the transport business for that purpose also. Respondent No. 1 is Airport Authority of India and the grievance in this petition is about the Notice inviting the tenders issued by the first respondent on 28th May, 2001. It was published in Newspapers on 2nd June, 2001. It is the submission of the petitioner that Clause 3(a) of this Notice is bad in law and is repugnant to the purpose which is sought to be attained. The Notice invited tenders from transporters who would provide luxurious coach service from Chatrapati Shivaji International Airport Mumbai, to southern States of India and condition No. 3(a) of this Notice required fulfilment of the criteria that 'the participant has a three years experience of managing of similar business and should be approved by the Department of Tourism, Government of India and International Air Transport Association'. Prayer (a) seeks that this clause be directed to be cancelled. It is stated in this petition that this clause is not related to the purpose to be achieved and particularly the requirement of approval of International Air Transport Association (IATA) is not necessary for this facility of running the coaches to the southern States. It is stated in paragraph 3 specifically that IATA has no concern whatsoever with other modes of transport and definitely excludes road and/or surface transport. It is also stated in the petition that IATA exclusively deals with business of issuing air tickets. It is alleged in the petition that advertisement was aimed at eliminating competitive bidders particularly to favour respondent No. 2 M/s Akbar Travels of India. The petitioner is not having the IATA approval and hence the Commercial Department of the respondent No. 1 refused to issue the tender form to the petitioner. Thereupon the petitioner brought to the notice of the respondent No. 1 that in a similar contract in Delhi the condition of IATA approval was not existing. It was therefore, requested in the letter dated 16th June, 2001 that the condition of IATA approval be dropped in the interest of fair competition as this condition is irrelevant to this tender. This letter was written by the petitioner before coming to the Court. Inasmuch as the letter did not meet with a proper response, this petition was filed on 15th June, 2001.

3. When this petition came up earlier before the Bench of Mr. A.P. Shah and Mr. S.A. Bobade, JJ., on 29th June, 2001, ad-interim injunction was granted restraining the first respondent from awarding the suit contract and that has been running since then.

4. In view of the above grievance of the petitioner that similar condition was dropped in Delhi, we specifically directed respondent No. 1 to explain the position on affidavit and they have admitted that although similar condition did exist at International Airport at New Delhi when similar tender was floated in February 2000, since there was no response to the advertisement, the condition was dropped in May, 2000. It is also relevant to note that as far as the present tender in Mumbai is concerned, there was only one bidder i.e. respondent No. 2. It is also material to note that at the time when this matter was pending in this Court, the Commercial Manual of the first respondent published in August, 2001, has become available and it is significant to note that now in this Manual the above referred condition is dropped. Thus, so far as this particular category viz. Inter-State A/C Coach Service is concerned, the requirement at page 58 of this Manual is as follows :--

INTER-STATE 05 A/C COACH SERVICE Firm/individual who fulfils the conditions of :

Six months

Group 'A' & 'B'

i)

2 years experience of running similar kind of business.

ii)

should have valid All India/Inter-State Tourist Permit.

iii)

Should possess minimum 5 A/C coaches not older than 3 years with sitting capacity of 35 to 39 duly registered in the name of the tenderer.

Group 'C' &'D'

i)

One year experience of running similar kind of business.

ii)

Should have valid All India/lnier-State Tourist Permit.

iii)

Should possess minimum 2 A/C coaches not older than 3 years with sitting capacity of the tenderer. (RC book is to be verified)

  (RC book is to be verified)  

5. Mr. Hegde the learned counsel appearing for the petitioner therefore, submits that thus the fact remains that at another equally important International Airport of the respondent No. 1, they did not insist on this condition and fresh bids were subsequently invited in May 2000 and now in August 2001 the respondent No. 1 has itself dropped this condition of IATA. He submits that this itself establishes the fact that this condition is not that relevant as is sought to be made out by the respondent No. 1 as well as by the respondent No. 2 for the purpose to be achieved. Mr. Hegade therefore, submits that it is clearly accepted that the same is a totally irrational requirement. He has pointed that the monthly amount promised by the respondent No. 2 was Rs. 1,80,000/-, whereas he was prepared to give a bid of Rs. 7 lakhs per month. He has also brought to our notice that in connection with the tender floated in Delhi the offices and residences of a number of officers of first respondent were raided including that of one Shri G. U. Parate, Deputy General Manager (Commercial) and Mr. Parate has accepted this fact in his reply though he has denied that anything incriminating was found in respect of the complaint, at his residence. In any event what Mr. Hegde states, is that all these facts are such which required this tender Notice to be interfered with and it ought to be set aside.

6. Mr. Hegde has pointed out that in the new Manual, when there is single tenderer, it is the requirement in Clause 3.3 read with 3.4 that when purchase of tender documents is by single party, the facility be re-tendered. This is the principle which the first respondent ought to have followed even when the Manual was at the stage of preparation. This is a basic principle and first respondent did not require it to be incorporated in any manual.

7. Mr. Samdani the learned counsel appearing for the respondent No. 1 submitted that in Delhi when the bids were invited there was not a single bidder whereas in the present case, there was one bidder i.e. respondent No. 2. He has also stated that at the time of inviting this tender i.e. on 28th May, 2001 this IATA requirement was found necessary by the first respondent and that is how it was there in the advertisement. If that was the requirement in the advertisement and if the petitioner was not fulfilling it, he has to suffer. Mr. Samdani further submitted that technical bid was on 18th June, 2001 and it is at this stage that this petition has been filed and therefore, the petitioner ought not to have allowed to stop the process of finalizing the tender. In his submission, IATA requirements were justified as they were existing since about 1998 and that is why they were there in the particular advertisement. Mr. Samdani relied upon the judgment of the Apex Court in the matter of Tata Cellular v. Union of India, reported in (1994) 6 Supreme Court Cases 651, and particularly paragraphs 46, 70, 73 and 94 thereof. His submission is that the scope of judicial review in such matters is limited even at the stage of pre-contract and therefore, at this stage, the Court should not interfere with the matter like this. He submitted that unless it is established that the authority concerned has acted with patent irrationality or against the interest of the State, there should not be any interference.

8. Mr. Samdani further relied upon the judgment of the Apex Court in the matter of Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors. , and particularly para No. 24 thereof wherein the Court has referred the earlier judgment in the matter of Ramniklal N. Bhutta v. State of Maharashtra, , and the Court has observed that while granting stay, the Court should arrive at a proper balancing of competing interests and grant a slay only when there is an overwhelming public interest in granting it, as against the public detriment which may be caused by granting a stay. The said paragraph states that Court must also take into account the costs involved in staying the project and whether the public would stand to benefit by incurring such cost.

9. Mr. Thorat the learned counsel appearing for the respondent No. 2 submitted that the requirement of IATA approval in the instant case was there when the prior tender was issued in the year 1998 and the respondent No. 2 was the successful bidder. The condition was not challenged by any one at that time. He pointed out that there were two bidders at that time i.e. respondent No. 2 and one Calicut Travels and thereafter only the respondent No. 2 was awarded the contract. In his submission, if the same condition is retained in the impugned notice, there was nothing wrong on the part of the respondent No. 1. He further submitted that this condition was justified also from point of view of providing a composite facility to the travellers coming from outside India and they will get their bookings to visit the particular places in the States right at the place of booking air tickets and would not be inconvenienced. In his submission, this petition ought not to be entertained on the ground of delay and for that he has supported the submission of Mr. Samdani. He also drew our attention to the certificates of appreciation given by different eminent travellers.

10. Mr. Thorat then relied upon the decision of a Division Bench of this Court in the matter of Gammon India Ltd. and Ors. v. Brihanmumbai Municipal Corporation, reported in 2001(1) Mh.L.J. 103 and particularly paragraph 18 thereof. In that paragraph, the Division Bench has referred to the judgment of the Supreme Court in the matter of Raunaq International Ltd. (supra) and has recorded that in the matter before the division bench mala fides had not been alleged. Nor was there any allegation of any collateral motive in awarding the contract to the respondent No. 4. The only ground of challenge in that matter was that the tender submitted by the petitioners had been held to be non-responsive by the expert body. In the absence of any allegation of malice, and in view of the reasons given by the expert body, the Court held that there was no justification for interference. The Court accepted the submission that the special knowledge at the expert committee plays a decisive role in deciding which is the highest offer.

11. Having recorded the statements by the petitioner as well as by the respondents, in our view, it is very clear that the particular condition which is included in Clause 3(a) of the impugned Tender Notice dated 28th May, 2001 was dropped by the respondent No. 1 one year early when there were no bidders in Delhi. It is also clear that from August 2001 this very condition is no longer found necessary by the first respondent. Yet they are insisting that the said condition is justified one and ought to be protected and the defence is that as against Delhi, there was one bidder here in Mumbai and that is a distinguishing factor between what was happened in Delhi and what is happening in Mumbai. Inasmuch as there was only one single bidder in Mumbai and when it was specifically pointed out to the respondent No. 1 by the petitioner vide letter dated 6th June, 2001 drawing their attention that in Delhi similar condition was dropped, surely the respondent No. 1 ought to have considered what was in the interest of the first respondent Authority. If such a condition was necessary, respondent No. 1 could have gone for re-advertising in Delhi while insisting on retaining that very condition. They chose to drop it. In Mumbai, however, on the ground that there was one bidder, they have decided to maintain it. Now it is material to note that in the reply filed by Mr. Parate, Deputy General Manager (Commercial), there is no explanation whatsoever as to why in the new Manual prepared by the first respondent, this condition has been dropped. If the condition was necessary surely they could have retained in the new Manual as on 1st August 2001. This fact itself goes against first respondent. Surely the first respondent knew as to what were the requirements of international passengers. Yet, if that condition was still being dropped in the very contemporaneous manual, surely, the petitioner cannot be faulted in insisting that respondent No. 1 ought to reconsider their stand, This is because there is no justifiable nexus between IATA approval and the surface transport by buses. This Manual is published on 1st August, 2001 and when the affidavit was being filed by Mr. Parate in October 2001, he could have in all fairness, stated that in view of the change in policy the first respondent was not insisting on that condition. The deletion of IATA approval from the manual goes to prove the submission of the petitioners that the condition has no relevance with the purpose of the advertisement viz; providing surface transport.

12. It is material to note that for years together, law has been laid down in this country starting from Ramanna Shetty v. The International Airport Authority of India and Ors. , that in such matters, all Governmental actions have to be in conformity with principles which meet the test of reason and relevance. If the impugned condition is no longer relevant from 1st August, 2001, then in that case, the contract has to be awarded thereafter in accordance with the new manual. The condition was waived in May 2000 in Delhi. The respondent No. 1 therefore, should have considered the submission of the petitioner which was made to them through representation dated 6th June, 2001 to waive the condition in Mumbai also.

13. The authorities relied upon by the respondents do not carry their case any further. The Judgment in Tata Cellular does say that whether decision or action of the State is vitiated by arbitrariness, unfairness, illegality, irrationality, is something which Court can certainly look into. In para 70 thereof which was read out by Mr. Samdani, the Apex Court has in terms held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. The Judgment in Tata Cellular has been referred to and explained in Common Cause v. Union of India, . In para 43, thereof, the Apex Court observed :

"Government decisions regarding award of contracts are also open to judicial review and if the decision making process is shown to be vitiated by arbitrariness, unfairness, illegality and irrationality, then the Court can strike down the decision making process as also the award of contract based on such decision. This was so laid down by this Court in Tata Cellular v. Union of India, ".

The present case also shows that condition insisted is not relevant and has no rational nexus to the purpose to be achieved, it has to be certainly interfered with. Paragraph 24 of the Judgment in Raunaq International Ltd. (supra) is essentially with respect to balancing competing interest and to see to it that the organization does not suffer. In the facts of the present case what respondent No. 1 was doing was infact, something which would be against the interest of the respondent No. 1. Again, the facts in the matter before the Division Bench of this Court in Gammon India, were quite different. That was the matter wherein an expert body had taken the decision to award the tender which was under challenge. There were no allegations of any collateral motive for awarding the contract. In the instant case, there are clear allegations of mala fides and the impugned decision is not one taken by any specialised expert body. It is clearly stated that there was only one bidder and for that bidder the condition was being insisted upon. We cannot go into the mindset of the persons concerned but we can certainly say that the decision of respondent No. 1 in favour of respondent No. 2 in these facts, does not inspire confidence. We therefore, say that the decision to insist upon the particular condition was not justified and the impugned condition was having no relevance to the object to be achieved.

14. We therefore, set aside this condition No. 3 (a) to the extent of requirement of approval of International Airport Transport Association for the purpose of this particular surface transport contract. It will be open for the first respondent to issue/invite fresh tenders, of course, by following the new Manual. Rule made absolute in the above terms without any costs.

15. Mr. Thorat the learned counsel for the respondent No. 2 prays for stay of this judgment. We enquired from Mr. Samdani as to how much time the respondent No. 1 is likely to take to issue fresh advertisement (if the first respondent decides to accept this judgment) he stated that it will take not less than four weeks. This period is sufficient for the respondent No. 2 to challenge this judgment if this judgment is not accepted by them. Respondent No. 2 has been operating transport service for the respondent No. 1 in the meanwhile. They shall continue to operate the same until decision is taken either way. We direct respondent No. 1 to issue fresh advertisement within a period of three months from today in the event they decide to accept this Judgment and unless the judgment is stayed by the Apex Court.

Parties to act on the ordinary copy of this judgment duly authenticated by the Associate of this Court.

Issuance of certified copy of this judgment is expedited.