Jammu & Kashmir High Court - Srinagar Bench
Airports Authority Of India Through Its ... vs M/S Saptagiri Restaurant Private ... on 11 March, 2025
Author: Vinod Chatterji Koul
Bench: Vinod Chatterji Koul
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
...
FAO no.13/2024
Reserved on: 19.02.2025
Pronounced on: 11.03.2025
1. Airports Authority of India through its Chairman, Rajiv Gandhi Bhawan
Safdarjung Airport, New Delhi-110001
2. Executive Engineer (Commercial) Airports Authority of India Rajiv
Gandhi Bhawan Safdarjung Airport, New Delhi-110001
3. Airport Director, Airports Authority of India, Srinagar International
Airport, Srinagar
4. Senior Manager (Commercial), Airports Authority of India, Srinagar
International Airport, Srinagar
.......Petitioner(s)
Through: Mr Mr Rajiv Shakdher, Sr. Advocate with Mr. Digvijay Rai, Advocate,
Mr. Faizan A Ganie, Advocate; Mr. Vikas Malik, Advocate;
Mr Mushtaq Ahmad Dar, Advocate
Versus
M/s Saptagiri Restaurant Private Limited through its Authorised Signatory
Akash Kumar Raj age 35 years having its Registered office at L-332
Mahipalpur Extension New Delhi 110037
......Respondent(s)
Through: Mr Danish Majid, Advocate
CORAM:
HON'BLE MR JUSTICE VINOD CHATTERJI KOUL, JUDGE
JUDGEMENT
1. Setting-aside of Order dated 8th April 2024 passed by Additional
District Judge (Fast Track) Budgam ("Trial Court" hereinafter) in a
civil suit titled M/s Saptagari Restaurant Private Limited v. Airport
Authority of India and others, allowing ad interim injunction
application of respondent (plaintiff before the Trial Court), making
threshold interim order dated 21st December 2023 absolute and keeping
Order no.CL-11047/3/2020-COMMERCIAL/238 dated 20th December
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2023 in abeyance till disposal of main suit. Setting-aside of Order dated
21st December 2023 passed by Trial Court is also being prayed for on
the grounds made mention of in instant appeal.
2. I have heard learned counsel for parties and considered the matter.
3. A civil suit has been filed by M/s Saptagiri Restaurant Private Limited
- respondent herein, against Airport Authority and its functionaries -
appellant herein before Trial Court. In its suit it is stated by plaintiff/
respondent that it is a registered company carrying on business of
managing restaurants and other related services for past 23 years,
having its registered office at L-332, Mahipalpur Extension, New Delhi
and has been running various food and beverages outlets, restaurants,
massage chair facility etc. in the airports all over the country for last
two decades. Plaintiff has also stated in his plaint that it is aggrieved of
Order no.CL-11047/3/2020-COMMERCIAL/238 dated 20th December
2023, issued by defendant no.2 (appellant no.2 herein), debarring
plaintiff from participating in any future tenders floated by Airport
Authority of India (AAI) for three years.
3.1. According to plaintiff/respondent, it participated in a tender process
initiated by defendant no.1 (appellant no.1 herein) in Chennai and
Amritsar, but defendant no.1 sought to debar plaintiff to participate in
tender process at Chennai and Amritsar, ostensibly on the ground that
an employee of plaintiff, namely, Karan Singh, Proprietor of M/s Syona
Spa, had availed benefits, like ESI PF, etcetera and also an airport-
employee-pass was issued to said Karan Singh by Bureau of Civil
Aviation Security in the name of M/s Saptagiri Restaurants Private
Limited. It was alleged that aforesaid Karan Singh had availed a loan
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from plaintiff and hence there was a conflict of interest as per the RFP
provisions contained in the notice inviting e-tenders and as a corollary
whereof in terms of letter dated 30th November 2022 an explanation
was called from plaintiff alleging therein that complaints were received
against plaintiff and one M/s Syona Spa regarding participation in
tender.
3.2. It is also the case of plaintiff/respondent before the Trial Court that
plaintiff immediately tendered a reply dated 5th December 2022,
contending that allegations were baseless and that upon taking into
consideration reply filed by plaintiff and after being satisfied that
allegations levelled in the complaint were baseless, defendant-AAI
proceeded to award tender to plaintiff insofar as tender floated in
respect of Amritsar was concerned. In the interregnum, defendant-AAI
initiated proceedings against plaintiff insofar as tender pertaining to
Chennai Airport is concerned and issued a show cause notice dated 5 th
June 2023 asking plaintiff to show cause as to why action should not be
taken against plaintiff on the ground of conflict of interest and material
misrepresentation.
3.3. It is further case of plaintiff before Trial Court that similar allegations
were levelled against plaintiff in show cause notice as were levelled
against it in Amritsar. Upon receipt of show cause notice dated 5th June
2023, plaintiff tendered its reply dated 14th June 2023 in which
allegations were strongly refuted and controverted.
3.4. Plaintiff has also averred in his plaint that an illegal order of debarring
it in participating in any tenders floated by defendant-AAI at Chennai
Airport was issued. Aggrieved whereof, plaintiff filed Writ Petition
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bearing no.23466 of 2023 before the High Court of Madras, assailing
the action of defendant-AAI debarring plaintiff. Upon consideration of
matter, the Madras High Court passed order dated 9th August 2023,
directing defendant not to do anything in pursuance of the proceedings
dated 26th July 2023 initiated by them and affect commercial activities
of plaintiff in any way and stayed the order dated 26 th July 2023, in
terms whereof, plaintiff was debarred qua Chennai Airport.
3.5. Subsequently, defendant no.1 issued a show cause notice to plaintiff
seeking reply with regard to issue of conflict of interest and plaintiff
responded to show cause notice, but defendant no.1 issued order dated
8th August 2023, debarring plaintiff from participating in any tender
floated by defendant no.1 at Amritsar Airport for three years,
ostensibly, on the ground of conflict of interest and material
misrepresentation. Aggrieved, plaintiff filed Civil Writ Petition
no.17635 of 2023 before the High Court of Punjab and Haryana at
Chandigarh. Plaintiff withdrew that petition with liberty to approach
Dispute Redressal Committee (DRC). Plaintiff, accordingly,
approached DRC.
3.6. It is also stated by plaintiff in his plaint that it upon acquaintance of the
fact that defendants have also started to act prejudicial to its rights,
debarring plaintiff to participate in Tender no.AAI/SXR/ COMML/
FnB /400/2023 titled "Short Term License to operate Food and
Beverages outlets (SHA F/F and Arrival at Srinagar International
Airport, Srinagar", it approached court of 1st Additional District Judge,
Budgam, with a Suit for Declaration, Perpetual and Mandatory
Injunction, for declaring defendants' action, debarring plaintiff from
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participating in tender floated by defendant no.1 in Srinagar in terms of
aforesaid tender notice, as illegal and arbitrary. The said Court vide ad
interim order dated 22nd August 2023, directed defendants to allow
plaintiff to participate in aforesaid tender and not to finalize the tender
without further orders of the court. Application for vacation of ad
interim order was filed by defendants. The said Court issued order dated
8th September 2023, directing defendant no.3 to open bids including
that of plaintiff and proceed in terms of relevant provisions of law
taking into consideration rules applicable and conclude process.
Against that order, appeal preferred by defendants was dismissed by a
Bench of this Court vide order dated 13th October 2023.
3.7. According to plaintiff, in the interregnum another show cause notice
dated 8th June 2023 was issued by defendants, which was replied by
him on 16th June 2023. However, defendants issued order dated 20th
December 2023, imposing prohibition on plaintiff for three years,
precluding plaintiff's participation in any forthcoming tenders
including the ones in Srinagar, floated by AAI. Plaintiff in his plaint,
sought quashing of order dated 20th December 2023, with a direction to
defendants to restrain from debarring plaintiff from participating in any
future tenders floated by AAI. Plaintiff also sought respondents to be
directed to allow plaintiff to participate in all future tenders floated by
AAI.
3.8. Trial Court vide its order dated 21st December 2023 kept in abeyance
defendant no.2's order dated 20th December 2023.
4. Appellants/defendants submitted their written statement and
objections.
Page 5
4.1. In their written statement, it is averred by appellants that AAI is a
statutory body constituted by an Act of Parliament viz. Airports
Authority of India Act, 1994 and is enshrined with the responsibility of
creating, upgrading, maintaining and managing civil aviation
infrastructure in the country.
4.2. It is also stated by appellants in their written statement that the suit filed
by respondent is liable to be dismissed as Trial Court lacks territorial
jurisdiction on account of the fact that show cause notices were issued
to plaintiff/respondent at its registered office at New Delhi. He replied
to show cause notices from the same address and order of debarment
was also served at its registered office at New Delhi. Besides,
plaintiff/respondent has no office at Srinagar as he is operating his
business from Delhi which is also reflected in the title of the case and
has been debarred from participation in tenders at AAI Airports by way
of debarment order falling outside the territorial jurisdiction of the Trial
Court and cannot be allowed to institute the suit in absence of any
specific cause of action against appellants at Srinagar.
4.3. Further submission of appellants in their written statement is that
respondent while taking recourse of earlier orders passed by Trial Court
in a pending suit which was upheld by the High Court on the pretext
that debarment orders issued at Chennai Airport stands already stayed
and same cannot be treated as debarment before the Trial Court, then
one fails to understand as to why respondent has not challenged order
dated 20th December 2023 before Madras High Court, where earlier
writ petition is already pending either by way of fresh writ petition or
initiating contempt proceedings against appellants and in spite of doing
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so why and under what circumstances plaintiff has chosen to file the
suit against debarment order before Trial Court that too without having
any cause of action or knowing the fact that Trial Court is not vested
with territorial jurisdiction.
4.4. It is also stated by appellants that debarment order has been passed in
accordance with law after examining the issue properly while giving
full opportunity of being heard to respondent. Respondent was debarred
by authorities at Chennai and Amritsar and was not allowed to
participate in tendering process floated by appellants at Srinagar
International Airport. Respondent has been found to have connection
with M/s Syona Spa and M/s Mahesh Enterprises Pvt. Ltd., having
strong understanding between Shri Bikram Singh and Shri Karan
Singh, which indicated that there is complete collusive bidding/bid
rigging practices by both entities in AAI tenders.
4.5. It is also averred by appellants that contentions raised by respondent
with respect to non-involvement of Shri Karan Singh in presence of his
termination prior to issuance of debarment order will not principally be
made basis for non-issuance of order as conflict of interest was found
very much in all tenders, description of which is given in debarment
order. All the procedures and norms have been followed.
4.6. The Trial Court has passed order dated 8 th August 2024, which is
impugned in this memo of appeal.
5. It is the case of appellants that Appellant -Airports Authority of India
is a Statutory Body constituted by the Act of Parliament, viz. The
Airports Authority of India Act, 1994.
Page 7
5.1. It is also stated by appellants/defendants that respondent/plaintiff has
been debarred by appellants from participating in future tenders/RFPs/
RFQs/NITs to be floated by AAI for a period of three years from the
date of issuance of order dated 20th December 2023. What is mentioned
in said order is worthwhile to be reproduced hereunder:
1. On perusal of the details of the participation of M/s Saptagiri Restaurant
Pvt. Ltd (SRPL) in following e-tenders (NIETs) of AAI viz. (i)
2022_AAI_124765_1 at Raipur Airport (ii) 2022_AAI_127866_1 at
Amritsar Airport (iii) 2022_AAI_127867_1 at Amritsar Airport (iv)
2022_AAI_131566_1 at Chennai Airport (v) 2022_AAI_131571_1 at
Chennai Airport (vi) 2022_AAI_122611_1 at Ranchi Airport and (vii)
2022_AAI_128964_1 at Pune Airports, the bidding pattern indicated in
the show-cause notice, examination of replies submitted to the show
cause Notice and personal hearing held on 30.11.2023 in the O/o
Member (HR) thereof, the following has emerged:
a. During the personal hearing on 21.11.2023, M/s Syona Spa,
represented by Shri Karan Singh, proprietor of M/s Syona Spa
mentioned that he has worked with M/s Mahesh Sunny Enterprises
Pvt. Ltd. for 18 to 19 years, and he does not know anyone in M/s
SRPL. He also mentioned that after debarment of M/s Syona Spa by
AAI, he is involved in Agriculture and Animal Husbandry activities
at his native place around Gurgaon, Haryana.
b. From the contents of the letter of M/s Syona Spa dated 12.04.2023
addressed to the Airport Director, Chennai, it is perceived that Shri
Karan Singh, the proprietor of M/s Syona Spa has indicated that he
was also in the services of M/s SRPL from 2015 till July/August
2022 but for reasons best known to M/s SRPL, his services were
dispensed with by M/s SRPL in
August, 2022. It is also indicated in the letter that he was granted a
personal loan by M/s SRPL. This letter also indicates that his
services are being continued in M/s Mahesh Sunny Enterprises Pvt.
Ltd. while he is still continuing as sole proprietor of M/s Syona Spa.
c. Further, it is observed from the records, that based on the request
from M/s Saptagiri Restaurants Pvt. Ltd., Shri Karan Singh was
issued Airport Entry Pass No.BOM20202044702 valid from
25.02.2020 to 16.08.2021 for entry into All Airports and All
Terminals. It was also seen from the records that a letter dated
06.05.2016 was issued by Shri Bikram Singh, Director of M/s SRPL
in which it was mentioned that M/s Syona Spa is a unit of M/s SRPL.
d. In view of the foregoing, it is deduced beyond any reasonable doubt
that Shri Karan Singh was also working for M/s SRPL and that M/s
Syona Spa is a unit of M/s SRPL.
e. During the personal hearing on 30.11.2023, M/s Saptagiri
Restaurants Pvt. Ltd (M/s SRPL) represented by Shri Bikram Singh
intimated that he has multiple businesses in the name of M/s SRPL,
M/s Mahesh Sunny Enterprises Pvt. Ltd., M/s Lovelin Enterprises,
M/s Roma Henay Security Services and M/s Roma Enterprises. He
added that his elder son Shri Satvik Gothwal and Shri Mohinder
Singh (maternal uncle of Shri Bikram Singh) are Directors of M/s
Mahesh Sunny Enterprises Pvt. Ltd and he along with his younger
son Shri Dhruv Gothwal are Directors of M/s SRPL which his
currently working at 16 AAI Airports as Master Concessionaires
and Standalone outlets. Further, when he was asked about the
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employment of Shri Karan Singh, he mentioned that Shri Karan
Singh was on the pay roll of M/s Mahesh Sunny Enterprises Pvt. Ltd
but his services are also utilized in M/s SRPL. He also added that he
had given a personal loan to Shri Karan Singh of M/s Syona Spa and
till date he has not received back the loan and Shri Karan Singh has
defaulted on the loan.
f. Shri Bikram Singh, Director, M/s SRPL in his letter dated
25.02.2023 (vide para 2) addressed to the Airport Director, Chennai
has mentioned that Shri Karan Singh was working as Sr. Manager
with his Company. The letter was signed by Shri Bikram Singh on
the letter head of M/s SRPL. Further, vide para 2 of the same letter
Shri Bikram Singh has mentioned that a personal loan was extended
to Shri Karan Singh in 2016 and that the same is still unpaid.
g. It was also seen that in the letter dated 06.05.2016 which was issued
by Shri Bikram Singh, Director of M/s SRPL it was mentioned that
M/s Syona Spa is a unit of M/s SRPL. This letter was issued on the
letter head of M/s SRPL and addressed to 'To whom it may
concern'. Further, it could be seen that the registered address of
Syona Spa (as per letter head as seen vide letter dated 19.06.2023)
is L 73 / L 322, 1st Floor, Saptagiri Hotel, Mahipalpur Extension,
NH-8, New Delhi - 110 037 and the registered address of M/s SRPL
(as per letter head as seen vide letter dated 16.06.2023) is L-322,
Mahipalpur Extension, New Delhi - 110 037 which indicates a
strong connect between both the Agencies.
h. From the above, it can be seen that there is a strong connection
between M/s SRPL, M/s Syona Spa and M/s Mahesh sunny
Enterprises Pvt. Ltd. and thereby strong understanding between Shri
Bikram Singh and Shri Karan Singh, as prudence says:
*******
i. As can be seen from table above that, while above tenders were
called by AAI from July, 2022 to October, 2022, M/s Syona Spa was
submitting their bids without any proper documents on the last day
of bid extended period; despite being a regular participant in AAI
tenders and well aware of the requirements in the tender process.
j. When M/s Syona Spa was asked about the reason for such
unsuccessful participation, the Agency replied that it could not
mobilize sufficient funds due to the non-cooperation of his
Financiers in time. This argument is very difficult to accept as the
tender process was spread across four months and seen tenders
involved.
2. In view of the forgoing, it can be comprehended that there is a long
history of association between M/s Syona Spa and M/s Saptagiri
Restaurant Pvt. Ltd that puts both the entities in position to have
access/influence over each other. Therefore, said indicated pattern
above leads to Collusive bidding/bid rigging practices by both entities
in the above AAI tenders.
3. Therefore, it is to inform that, M/s Saptagiri Restaurant Pvt. Ltd. has
violated Clause 9 (a) (vi) of General Information and Guidelines of e-
Tender document / NIT.
4. Thus, as per clause 9(b) of the General Information and Guidelines of
e-Tender document / NIT, M/s Saptagiri Restaurant Pvt. Ltd, with
registered address L 322, Mahipalpur Extension, New Delhi - 110037,
is hereby debarred from Participating in future
tenders/RFPs/RFQs/NITs floated by AAI along-with forfeiture of EMD
and performance security in the said tenders, for a period of (03) (Three)
years from the date of issuance of this letter.
5. This is issued without prejudice to any other rights or remedies that may
be available to Airports Authority of India as per NIET / Tender
document or any other law for the time being in force.
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6. Competent Authority of AAI has decided to restrain the agency "M/s
Saptagiri Restaurant Pt. Ltd. L 322, Mahipalpur Extension, New Delhi
- 110037" from participating in any future tenders for any work in AAI
in any name and style for three (03) years from the date of issuance of
this letter.
7. It is further notified that the above decision of AAI applied to all allied
firms / partners / subsidiaries / JV (if any) of M/s Saptagiri Restaurant
Pt. Ltd......
5.2. It is contention of appellants that issuance of debarment order had been
felt only when appellants found that respondent had indulged in
collusive bidding for tenders invited at Amritsar, Rajpur, Ranchi,
Chennai and Pune Airports inasmuch as respondent falls under Clause
9(a)(vi) of General Information and Guidelines of E-tender by taking
recourse of Clause 9(b) thereof. It has also been found by appellants
that there existed a long history of association between respondent and
M/s Sayona Spa which puts both entities in a position to have
access/influence over each other, leading to collusive bidding/bid
rigging practice in tenders invited by AAI.
5.3. According to appellants, the suit filed by respondent before the Trial
Court is not maintainable against a Statutory action taken/initiated by a
Statutory body and on a challenge under writ jurisdiction is available,
more particularly when there is presence of an Alternate Dispute
Mechanism Clause in the form of Mediation and Arbitration under the
Manual of Contract 2019, the civil suit could not be entertained.
5.4. Appellants' next contention is that respondent cannot avail multiple/
parallel remedies qua the same subject-matter before the Madras High
Court, Dispute Resolution Committee (DRC) at Amritsar, and
Declaration Suit before Trial Court and that statutory proceeding
cannot be challenged in a suit as remedy under Statute is to be availed.
When a consent was given by respondent before the High Court of
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Punjab and Haryana to appear before DRC qua its all grievances on the
subject-matter, any other proceedings before different forums became
infructuous and ought to be have withdrawn or dismissed.
6. Earlier, AAI through its Airport Director, Chennai Airport, issued
Debarment Order dated 26th July 2023, against respondent debarring it
for a period of three years. This Order of Debarment, challenged by
respondent in a writ petition, was stayed by the Madras High Court,
vide order dated 9th August 2023.
6.1. Respondent had also preferred a writ petition before Punjab and
Haryana High Court against order dated 8 th August 2023. There it was
on consensus that respondent withdrew its writ petition so as to
approach DRC at Amritsar Airport for redressal of its grievances.
If that being the position, respondent has opted a choice to
approach a particular forum for redressal of its grievances and as a
consequence of which all other proceedings become infructuous.
7. It is AAI's Main Office at Delhi, i.e., Corporate Headquarters, which
by virtue of order dated 20th December 2023, has debarred respondent
from participating in any future tenders with respect of any works in
AAI, in any name and style for a period of 03 years from 20th December
2023.
7.1. Against Debarment Order dated 20th December 2023, respondent
preferred to approach the Trial Court with a civil suit. The Trial Court
vide its order dated 21st December 2023, stayed Debarment Order.
7.2. Against Trial Court ad interim order dated 21st December 2023,
appellants had preferred an appeal, being FAO no.38/2023. A Bench of
this Court, however, without expressing any opinion on merits of the
Page 11
case, directed them to file objections to interim application with a
further direction to Trial Court to consider application/objections/
written statement, if any, to be filed by appellants and decide the
application/objections and pass appropriate orders in the interim
application after hearing both the parties.
7.3. The Trial Court by impugned order has made its ad interim order dated
21st December 2023 absolute. The result thereof is that Debarment
Order dated 20th December 2023 has been kept in abeyance by the Trial
Court till final disposal of main suit.
8. Learned counsel for appellants would contend that suit filed by
respondent before Trial Court is not maintainable against statutory
action taken by statutory body inasmuch as challenge thereto can be
thrown under writ jurisdiction. He has placed reliance on Ghulam
Abbas and other v. State of U.P. and others (1982) 1 SCC 71, in which
it was observed that a suit cannot be filed against orders which are
passed by statutory authorities under different Statutes and that if orders
of statutory authorities passed under respective Statutes have to be
challenged, then these can be only challenged under Article 227 and/or
under Article 226 of the Constitution of India and not by way of a civil
suit.
8.1. He further contends that in presence of an Alternate Dispute
Mechanism Clause in form of Mediation and Arbitration under the
Manual of Contract 2019, civil suit could not have been entertained by
Trial Court. In addition to that, existence of a provision of appeal
specifically mentioned qua subject matter, i.e., order of debarment
under Manual of Contract 2019, civil suit could not have been
Page 12
entertained. Respondent could not avail multiple parallel remedies on
same subject matter before Madras High Court, DRC at Amritsar and
Declaration suit before Trial Court. Once consent was given by
respondent before the Punjab and Haryana High Court to appear before
DRC, all other proceedings initiated by appellant before other fora
become infructuous and ought to have been withdrawn or dismissed.
8.2. It is being also averred that the Trial Court has erred to appreciate that
debarment of respondent was done in exercise of procedure laid down
in Clause 8.12.4 of Commercial Manual 2019 (Manual of Contract),
which provide for "steps to be taken for debarring an agency". And that
Trial Court also erred to appreciate that in paragraph 26, respondent
mentioned that procedure under Manual of Contract 2019 was followed
by appellants before debarring respondent-agency. Trial Court also did
not consider the fact that Manual of Contract is a self-contained manual,
which prescribed procedure of dispute mechanism.
8.3. It is being vehemently stated that Trial Court has not appreciated the
fact that respondent has approached it with unclean hands owing to the
fact that on an Identical Debarment Letter, issued in Chennai and
Amritsar, respondent had approached the High Courts under Article
226 of the Constitution, by stating therein that no appeal or revision lies
against action of respondents and therefore respondent was left with no
other alternative remedy except to invoke writ jurisdiction, whereas in
the present case, he has approached the Civil Court.
8.4. It is being stoutly argued that respondents, by taking three separate
recourses at the same time for identical and combining orders, has
attempted to pollute stream of justice and it is a well settled principle
Page 13
of law in Dalip Singh v. UP and others that litigants who attempt to
pollute the stream of justice are not entitled to any relief, interim or
final. Pursuing of parallel remedies in respect of same subject-matter
has been deprecated by the Supreme Court in Jai Singh v. Union of
India (1977) 1 SCC 1 : AIR 1977 SC 898.
8.5. Another resolute assertion made by learned counsel for appellants is
that Trial Court has not appreciated the fact that it lacks pecuniary,
territorial and subject-matter jurisdiction because of the fact that cause
of action to file suit before it emanated from Debarment Order passed
by AAI, Head Office at Delhi and respondent had no immediate
consequence herein at Srinagar. Reference in this regard is being made
to Section 20 of the Code of Civil Procedure, 1908, which prescribed
suits to be instituted where defendants reside or cause of action arises.
8.6. According to learned counsel, Trial Court has not considered the fact
that Section 33 of the Airports Authority of India Act, 1994, bars any
suit, prosecution or other legal proceedings against AAI. Besides,
Manual of Contract 2019 provides arbitration mechanism and in such
situation, respondent could have availed remedy under Arbitration and
Conciliation Act, 1996. That apart, Trial Court has failed to appreciate
that even otherwise the scheme of Specific Relief Act has not been
designed to prohibit public officer/authorities from performing its
functions under the Statutes.
8.7. Learned counsel has also stated that there is a conflict of interest
inasmuch as there is modus of respondent - M/s Saptagiri Restaurant
Private Limited and M/s Syona Spa that when any one of the regional
airports across the country invites bids for tender, respondent-SRPL
Page 14
first submits its bid and where there is only a single participant in the
bid, the last date for submission is extended, as a pattern, it is observed
that on the last date of the extended bid submission, M/s Syona Spa
submits its bid with incomplete documents and as a consequence of
which there is no further extension and respondent-SRPL is declared as
a successful bidder. Reference in this regard has been made by them to
the Table given in Debarment Order dated 20th December 2023, which
has already been reproduced herein above.
8.8. He would say that respondent and M/s Syona Spa, in a similar case, in
which Debarment Letters/Orders dated 26th July 2023 and 4th August
2023, issued by AAI with respect to Chennai Airport, filed writ
petitions, viz. WP Nos. 23446 & 26896 of 2023 titled as M/s Saptagiri
Restaurant and M/s Syona Spa v. the Chairman Airport Authority of
India and another, before the High Court of Judicature at Madras, which
were dismissed vide judgement dated 30th September 2024.
8.9. Learned counsel for petitioners has invited attention of this Court to a
writ petition, viz. CWP No.11390 of 2024 (O&M) titled as M/s
Saptagiri Restaurant Private Limited v. Airports Authority of India and
others, [2024:PHHC:171044-DB], in which respondent herein had
thrown to challenge orders dated 8th August 2023, by which respondent
was debarred from participating in future tenders/RFPs floated by
Airports Authority of India for a period of three years and licence
awarded to it for Wellness Centre/ Spa and Massage Chair Facility was
terminated. Besides, order dated 2nd May 2024, passed by DRC was
also assailed by respondent. The Division Bench of Punjab and Haryana
High Court has dismissed the said writ petition.
Page 15
9. Per contra, it is stated by counsel for respondent that impugned order
does not call for any interference as it has been passed by Trial Court
after considering rival contentions of both the parties. He would also
aver that instant appeal is not maintainable as it challenges two distinct
orders of the Trial Court. Appellants are stated to have raised certain
grounds for the first time in the appeal, which they did not plead in their
written statement before the Trial Court, which is impermissible under
law as parties are required to present all their grounds and defences at
the earliest stage of the proceedings and failure to do so precludes
appellants from introducing new grounds at appellate stage. According
to him, Debarment Order does not derive its authority from Airports
Authority of India Act, 1994, rather it is an administrative order issued
by appellant no.2, which infringes upon legal and legitimate rights of
respondent. The provisions of Manual of Contract 2019 cannot override
the provisions of the Code of Civil Procedure and Specific Relief Act.
In addition to this, provision in Manul of Contract, 2019, regarding
appeal against debarment is directory in nature.
9.1. It is being also stated that respondent is entitled to seek redress before
either Civil Court or before this Court and that allegation about parallel
proceedings is baseless as it was malicious actions of appellants which
necessitated respondent to take recourse to different forums across
Madras, Amritsar and Srinagar. Respondent's approach to various
courts was in response to separate orders issued by appellants,
blacklisting respondent.
9.2. He also avers that Trial Court while passing order dated 8 th April 2024
was satisfied that three cardinal principles for granting interim relief
Page 16
were in favour of respondent. Respondent demonstrated a strong prima
facie case indicating that action taken by appellant no.2 was legally
untenable and that balance of convenience clearly favoured respondent
as blacklisting and debarment would cause significant and irreparable
harm to its business and reputation. Respondent has established that it
would suffer irreparable harm if interim relief was not granted as
debarment order would prevent respondent from participating in future
tenders.
10.It is well settled principle of law that interim relief can always be
granted in aid of and as ancillary to the main relief available to a party
on final determination of his rights in a suit or any other proceeding.
Therefore, a court undoubtedly possesses the power to grant interim
relief during the pendency of the suit. Temporary injunctions are thus
injunctions issued during the pendency of proceedings. Order XXXIX
Rule 1 CPC provides that where in any suit it is proved by affidavit or
otherwise:
a) that any property in dispute in a suit is in danger of being wasted,
damaged or alienated by any party to the suit, or wrongfully sold in
execution of a decree, or
b) that the defendant threatens, or intends, to remove or dispose of his
property with a view to defrauding his creditors, the Court may by
order grant a temporary injunction to restrain such act, or make such
other order for the purpose of staying and preventing the wasting,
damaging, alienation, sale, removal or disposition of the property or
dispossession of the plaintiff, or otherwise causing injury to the
plaintiff in relation to any property in dispute in the suit as the Court
thinks fit, until the disposal of the suit or until further orders.
Page 17
c) That the defendant threatens to dispossess the plaintiff or otherwise
causes injury to the plaintiff in relation to any property in dispute in
the suit:
Provided that the Court before granting any injunction shall
invariably call upon the applicant to satisfy it by an affidavit or
otherwise that not suit of similar nature is pending in or has already
been decided by any court of competent jurisdiction.
10.1. In order to grant an order of injunction, the party who seeks for grant
of such injunction has to prove that he has made out a prima facie case
to go for trial, the balance of convenience is also in his favour and he
will suffer irreparable loss and injury if injunction is not granted. But it
is equally well-settled that when a party fails to prove prima facie case
to go for trial, question of considering the balance of convenience or
irreparable loss and injury to the party concerned would not be material
at all, that is to say, if that party fails to prove prima facie case to go for
trial, it is not open to the court to grant injunction in his favour even if
he has made out a case of balance of convenience being in his favour
and would suffer irreparable loss and injury if no injunction is granted.
10.2. The Supreme Court in Dalpat Kumar v. Prahlad Singh, AIR 1993 SC
276, emphasized the three essential conditions for the grant of a
temporary injunction: a prima facie case, balance of convenience, and
irreparable injury. The court held that these conditions must be satisfied
conjunctively.
10.3. In Morgan Stanley v. Kartic Das, (1994) 4 SCC 225, the Supreme Court
indicated the factors which should weigh with the court in grant of ex
parte injunction:
(i) whether irreparable or serious mischief will ensue to the plaintiff,
Page 18
(ii) whether the refusal of ex parte injunction would involve greater
injustice than the grant of it would involve.
(iii) the Court will also consider the time at which the plaintiff first
had notice of the act complained so that the making of improper
order against a party in his absence is prevented.
(iv) that the Court will consider whether the plaintiff had acquiesced
for sometime and in such circumstances it will not grant ex parte
injunction.
(v) the Court would expect a party applying for ex parte injunction
to show utmost good faith in making the application.
(vi) even if granted, the ex parte injunction would be for a limited
period of time.
(vii) general principles like prima facie case, balance of convenience
and irreparable loss would also be considered by the Court. The
purpose of Rule 3, Order XXXIX is to enable the opposite party
to show cause against issuance of such injunction and if
injunction issued without notice, to enable the opposite party to
file objections thereto and by this to prevent the petitioner to
retain undue advantage of the situation and abuse of the process
of law.
10.4. In Gujarat Bottling Co. Ltd. v. Coca Cola Co., AIR 1995 SC 2372 , the
Supreme Court recapitulated that the object of granting an interim
injunction is to protect plaintiff against injury by violation of his right
for which he could not be adequately compensated in damages. The
court also stressed the importance of maintaining the status quo until
the final disposal of the case.
10.5. The Supreme Court in Seema Arshad Zaheer v. Municipal Corporation
of Greater Mumbai, (2006) 5 SCC 282, has discussed the principles
governing the grant of temporary injunctions and highlighted that the
Page 19
power to grant injunction is a discretionary power and must be
exercised judiciously.
10.6. In the case of Zenit Mataplast P. Ltd. v. State of Maharashtra, (2009)
10 SCC 388, temporary injunction was sought against State of
Maharashtra to restrain them from taking coercive action. The Supreme
Court of India held that temporary injunctions should not be granted if
there is an adequate alternative remedy available to the plaintiff. The
court reinforced that all three prerequisites - prima facie case,
irreparable injury, and balance of convenience - must be satisfied.
10.7. In M. Gurudas v. Rasaranjan, AIR 2006 SC 3275 , the Supreme Court
reiterated the principles for granting temporary injunctions and
emphasized the importance of maintaining the status quo. The court
also clarified that the grant of a temporary injunction is a discretionary
power that must be exercised judiciously.
10.8. The Supreme Court in the case of Best Sellers Retail (India) Pvt. Ltd.
v. Aditya Birla Nuvo Ltd., (2012) 6 SCC 792 , discussed the principles
of balance of convenience and irreparable harm in depth. The Supreme
Court held that a temporary injunction should not be granted merely
because a prima facie case is established. The plaintiff must also
demonstrate that the balance of convenience is in their favour and that
they would suffer irreparable harm if the injunction is not granted.
11.One more important aspect of the matter is worthwhile to be deliberated
upon here. In addition to the present case, plaintiff/ respondent has filed
as many as five Civil Suits.
12.In its First Suit filed by respondent on 22nd August 2023, it sought
Declaration and Injunction before the Trial Court (Additional District
Page 20
Judge, Budgam) for processing the tender and considering the bid
submitted by respondent. In that case plaintiff's agency had been
disqualified in technical bid of short-term tender due to debarment by
Chennai and Amritsar Airports for a period of three years. In the said
suit, the Trial Court passed an order dated 22nd August 2023, directing
not to finalise tender without orders of the Trial Court. On 8 th
September 2023, Trial Court directed to process the tender and also to
consider the bid submitted by respondent.
12.1. Second suit was filed by respondent/plaintiff on 29th August 2023,
before the Trial Court for Declaration, seeking protection from vacation
from F&B Sites located at City Side of Terminal Building at Srinagar
Airport. In this suit, Trial Court vide order dated 29 th August 2023,
stayed the vacation order, which was issued on expiry of contract for
SHA/Arrival.
12.2. Third suit was filed on 4th September 2023 before the Trial Court by
plaintiff/respondent. In the said suit as well, vacation notice was issued
on expiry of contract for cityside. In the said suit, respondent sought
protection from vacation from sites at SHA & Arrival of the Terminal
Building at Srinagar Airport. In this case as well, the Trial Court vide
its order dated 4th September 2023 stayed vacation order subject to
enhanced licence fee.
12.3. Fourth suit was filed by respondent on 8th September 2023, again before
the Trial Court seeking participation and consideration of bids for Short
Term Tender for F&B Outlets in SHA and Arrival of the Terminal
Building at Srinagar Airport. The Trial Court again vide its Order dated
8th September 2023 directed to open bids including that of respondent
Page 21
12.4. Fifth suit was also filed by respondent on 9th December 2023, before
the Trial Court in which he sought declaration and perpetual injunction,
in which appellant was directed to allow respondent to continue to
occupy space allotted to it in terms of award letter dated 17 th October
2022.
12.5. Sixth suit was filed by respondent before the Trial Court, in which Trial
Court vide Order dated 24th February 2024 kept in abeyance
communication dated 5th January 2024 and schedule C of E-Tender
dated 28th October 2023 at serial no.1&2.
13.As noticed above, two writ petitions had been filed by respondent: one
before Madras High Court; and another before Punjab & Haryana High
Court. In both petitions as well, subject-matter of dispute is same and
similar as is in the case in hand. Thus, it would be apt to reproduce
certain portions of the judgements hereinafter as they squarely also
cover the instant case:
13.1. Excerpts of Judgement dated 30th September 2024, passed by Madras
High Court are as under:
"54. This Court gave its careful consideration to the submissions advanced
by the learned senior counsel appearing on either side and perused the
materials available on record as also the decisions relied on by the parties
in support of their respective contentions.
......
57. Two allegations have been levelled by the respondents against the
petitioner, viz., one pertaining to conflict of interest and the other pertaining
to material misrepresentation, which has led to the issuance of the impugned
orders.
........
61. It transpires that between 2015 and August, 2022, Karan Singh, the
Proprietor of Syona Spa was employed with SRPL and during the said
period of time, the said Karan Singh had received financial aid/loan from
SRPL. The said fact is neither disputed by SRPL nor by Karan Singh, the
proprietor of Syona Spa. It is the case of SRPL that there was no subsisting
loan to be repaid by Karan Singh when the bid was submitted as, as early
as during March, 2022, the loan stood repaid, whereas the bid was submitted
much later in point of time.
........
Page 22
63.... In the case on hand, there existed a relationship of employer-
employee between SRPL and Karan Singh, the Proprietor of Syona Spa,
which is admitted by the parties, which was between 2015 and August,
2022. Further, the said Karan Singh himself has admitted, in his writ
petition, to have been working with Mahesh Sunny Enterprises prior to
2014. It is the specific case of the respondent that one of the Director of
SRPL is a shareholder with Mahesh Sunny Enterprises, which is not
disputed by SRPL, but it is only submitted that the shareholding was less
than 10%. However, the nexus of the Director of SRPL with Mahesh Sunny
Enterprises as a shareholder clearly attracts clause 10 (vi) which clearly
shows that there is a common third party, who is linked between SRPL and
Karan Singh. In fact, the said individual cannot be brought within the ambit
of third party, but stands on a more advantageous position, which will have
a bearing on the tender process, as the said individual is in a controlling
position. Therefore, clause 10 (vi) would also stand squarely attracted.
64. When clauses 10 (iv) and 10 (vi) is squarely attracted and the same
having not disclosed in the bid submitted either by SRPL or by Syona Spa,
the allegation of conflict of interest, alleged by the respondents cannot be
said to be bereft of any material and, therefore, the respondents were within
their right to call for explanation by issuing show cause notice and act on
the same.
........
67. There could be no quarrel with the said fact that anterior in point of time
to the submission of the bid, a bidder would not be aware of the persons,
who would partake in the bid process and, therefore, non-mentioning of the
names of persons, who were associated with the bidder may not arise.
However, the present case stands on a totally different footing as projected
by the respondents while dealing with the explanation submitted to the show
cause notice issued by them.
68. There is no quarrel with the fact that SRPL had employed Karan Singh
on its rolls as its employee between 2015 and August, 2022. It is the claim
of SRPL that the bid was submitted six months after the ouster of Karan
Singh from the rolls of SRPL. However, it is the stand of Syona Spa that
its Proprietor Karan Singh was operating Syona Spa even prior to his
joining SRPL, as even when he was an employee under Mahesh Sunny
Enterprises, the said Karan Singh had stated that he was running Syona Spa.
It should not be lost sight of that the shareholder of Mahesh Sunny
Enterprises is a Director in SRPL.
69. In the aforesaid backdrop, this Court has to consider the case holistically
to see whether the allegations are made out. One of the Director of SRPL
was a shareholder in Mahesh Sunny Enterprises during the point of time
when Karan Singh of Syona Spa was working under Mahesh Sunny
Enterprises. The said Karan Singh, even during the said point of time, was
running Syona Spa, which is admitted by the said Karan Singh in the
affidavit. Even thereafter on his relieving from Mahesh Sunny Enterprises,
the said Karan Singh was operating Syona Spa. Therefore, SRPL cannot
feign ignorance about the avocation of Karan Singh apart from his
employment, as one of its Director is a shareholder in Mahesh Sunny
Enterprises. Thereafter, from 2015 to August, 2022, the said Karan Singh
was employed in SRPL even during which time, it is admitted, that the said
Karan Singh was running Syona Spa. ....
......
71. To find out the veracity of the said allegation, this Court ventured to
look into the materials placed before it, which reveals the following: -
i) The address of SRPL is L-322, Mahipalpur Extension, New Delhi 110
037, while that of Syona Spa is L-73/L322, 1st Floor, Mahipalpur
Extension, HI-8, New Delhi 110 037, which is in the very same area.
ii) Karan Singh, the Proprietor of Syona Spa was the erstwhile employee of
SRPL, who ceased to be an employee since August, 2022.
Page 23
iii) However, the said Karan Singh, the Proprietor of Syona Spa was running
the said Syona Spa even while he was employed in Mahesh Sunny
Enterprises and also continued to operate it even after his employment with
SRPL.
iv) The said Karan Singh had taken loan from SRPL, while he was an
employee with SRPL, which was alleged to have been repaid by him before
he left the services of SRPL.
v) One of the Director of SRPL was also a shareholder in Mahesh Sunny
Enterprises.
.......
74. Though it is the claim of SRPL that the stand of the respondents that
there is material discrepancy in the date on which the loan was settled
between Karan Singh and SRPL the said discrepancy would not be of any
consequence as by the time during which explanation was initially offered
and the explanation which was given to the show cause notice Karan Singh
had paid the loan and, therefore, the discrepancy is there, however, the said
stand is immaterial considering clause 10 (iv), which clearly spells out that
even any previous loan or existing loan given to any bidder or affiliate by
another bidder would constitute conflict of interest and in that backdrop, the
receipt of loan by Karan Singh even anterior in point of time to the bid, not
being spelt out in the bid, would definitely attract clause 9(a) (iv) and
invoking the same, if the respondents had rejected the bid of both the
petitioners, the same cannot be found fault with.
75. Further, it is to be pointed out that when the tender inviting authority
had properly appreciated the terms of the tender and the guidelines and had
come to the clear finding that there exists conflict of interest between SRPL
and Syona Spa, which stands fortified by the materials available on record,
the mere fact that on the day when the bid was submitted there was no
relationship between SRPL and Syona Spa and, therefore, SRPL would not
be aware of the persons, who had submitted the bid and had not given the
necessary details in the bid cannot be a ground to interfere with the order
passed by the 2nd respondent, when it is the specific case of the 2nd
respondent that not only there is infraction of clauses 9 (a)(i) and (v) and 10
(iv) and (vi), but there exists a modus between SRPL and Syone Spa through
Karan Singh in the bidding process, leading to rigging the bid and the modus
having been carried out in other tenders relating to other Airports, the stand
of SRPL that it would not be aware of the persons, who have submitted their
bids pales into insignificance.
76. Further, it is also to be pointed out that it is the specific case of the
respondents that for passing the impugned order of debarment and
cancellation of tender, that there exists a modus operandi between SRPL
and Syona Spa and that SRPL and Syona Spa, in a cartel formation, had
worked hand in glove with its clandestine operation by duping the
respondents and had secured may bids, which stand of the respondents
cannot also be totally negated as the discussion made above reveals a
sinister operation having been carried on by SRPL and Syona Spa and
further the complaint not being an anonymous complaint, but is a complaint,
which has been written by an individual, who is closely associated with the
higher echelons in the management of SRPL, which has even been admitted
by SRPL, the stand of SRPL that the said debarment is wholly arbitrary,
capricious, perverse and illegal does not merit acceptance.
79. Insofar as the stand of Syona Spa that it cannot be termed to be a bidder
as their bid was not even accepted and, therefore, their debarment would
not arise, is wholly misconceived. The floating of e-Tender is an invitation
to submit a bid by an entity, and Syona Spa having submitted its bid, would
fall within the ambit of bidder even in the literal sense of the word. Merely
because certain conditions prescribed therein had not been fulfilled would
not be a ground to hold that Syona Spa is not a bidder. The prescription of
additional conditions is only for the purpose of accepting the bid and mere
non-acceptance of the bid for other reasons would not deem the person, who
Page 24
had submitted the bid to be not a bidder. Giving any such restricted
meaning, as canvassed by the petitioner, would be wholly impermissible
and against the literal meaning of the term "bidder" and mere non-fulfilment
of the terms of the notice inviting e-Tender cannot take the bid submitted
by Syona Spa outside the realm of bid and the person, who had submitted
the bid from the realm of bidder, which would be an erroneous interpretation
of the term 'bidder'.
80. Further, as pointed out by the learned senior counsel for the respondents,
the term "bidder: is not defined in the notice inviting tender. Therefore,
referencing the term from Blacks' Law Dictionary 4th Edition, where
"bidder" is defined as "one who makes a bid", Syona having submitted its
bid, though it has come to be rejected for non-submission of certain
documents and monetary materials, would have to be construed as a bidder
and, therefore, Syona would have to be treated as a bidder for all purposes.
Therefore, the contention of Syona Spa that it is not a bidder in the absence
of payment of license fee is misconceived and the same deserves to be
dismissed.
81. Though decisions have been placed before this Court on behalf of the
petitioners to substantiate their contentions, the said decisions would not be
applicable to the facts of the present case, as they stand on a totally different
footing and the same cannot be pressed into service for adjudicating the
present issued.
82. For the reasons aforesaid, this Court does not find any infirmity with the
orders passed by the 2nd respondent and there being no merits in the present
writ petitions, the same are dismissed...."
13.2. Relevant portions of judgement dated 19th December 2024 is
reproduced as under: -
"37. It was held by the DRC that the debarment and annulment orders
passed by the Airport Director, Amritsar had been passed after taking
approval from the competent authority and, therefore, the same would be
considered as orders passed by the Airports Authority of India. The
submissions as regards the share holding in M/s Mahesh Sunny Enterprises
Private Limited was also noticed;
"Considering the above facts, the Committee (DRC) is of the view
that the debarment and annulment order passed by the Airport
Director, Amritsar Airport has been passed after taking approval
from the competent authority and thus the orders dated 08.06.2023
would be considered as orders passed Airports Authority of India,
therefore, the judgments quoted by M/s SRPL are different.
The other submission made by M/s SRPL is that its share- holding
in M/s Mahesh Sunny Enterprises Pvt. Ltd. was less than the cut off
as per the tender document. M/s SRPL has placed certain documents
on the file along-with its written submissions. The tender was issued
on 05.09.2022 and the last date for submission was 03.10.2022. It
has been observed that such documents regarding change in
shareholding pattern, gift deeds were not submitted by the party at
the time of show cause notice isued by AAI, Amritsar on
05.06.2023."
38. As regards the issue of Karan Singh being an employee of the petitioner
and M/s Mahesh Sunny Enterprises Private Limited as also the involvement
of M/s Syona Spa, respondent No.3 held as under:-
"OBSERVATIONS OF DRC:
1) The above submissions of Sh. Karan Singh read with his earlier
submission made on 12.04.2023 shows that he was an employee of
M/s Saptagiri Restaurant Pvt. Ltd. as well as M/s Mahesh Sunny
Enterprises Pvt. Ltd. and his services were dispensed with M/s
Page 25
SRPL in August, 2022 and was continuing with M/s Mahesh Sunny
Pvt. Ltd. but later on, the submissions were revised/changed by Sh.
Karan Singh in his letter dated 16.06.2023 stating that when he
resumed his office recently, came to know that his services have also
been discontinued by M/s Mahesh Sunny Enterprises Pvt. Ltd. prior
to August, 2022.
2) The above, submissions shows that Sh. Karan Singh was
misleading AAI by changing his submissions from time to time.
3) If the bid is visible in CPP e-tenders government portal, this
means the bidder has submitted both technical and financial bids as
mere submission of technical bid only will not close the bid process.
This means the party M/s Syona Spa has completed the entire bid
process on CPP portal only then the bid is visible to bid manager
after technical opening.
4) Funds equivalent to six months license fees along with 01 month
advance license fees are only required if the party comes as H1 i.e.
after award of license. The party has shown same intention for above
07 tenders (02 of instant tenders of Amritsar airport). Moreover,
there is an option to withdraw the bid in CPP portal and as per tender
conditions also which has not been exercised by M/s Syona Spa
depicting malafide/corrupt intentions of the party in the tender
processes. The beneficiary of such conduct of M/s Syona Spa is M/s
SRPL.
5) The fact that the services of Sh. Karan Singh were discontinued
by M/s SRPL and M/s Mahesh Sunny Enterprises Pvt. Ltd. but M/s
Syona Spa participated in all the tenders wherein M/s SRPL was
also one of the bidder during the period Mid July to October end
(2022) infers that both the bidders were having access to each other
information and reply to show causes are just an after thoughts.
39. As regards the share holding of Bikram Singh, etc. and the conflict of
interest issue, it was held as under:-
"OBSERVATIONS OF DRC:
1) No documentary evidence on shareholding of Sh. Bikram Singh
in M/s Mahesh Sunny Enterprises Pvt. Ltd. was submitted on the
date of reply of show cause was provided.
As per documents submitted by the party in the DRC process, it can
be seen that there has been major change in the distribution of shares
in M/s Mahesh Sunny Enterprises Pvt. Ltd. in respect of shares of
Sh. Bikram Singh. It is the responsibility of party /Director Sh.
Bikram Singh to have presented the documents related to Gift deed
at the time of show- cause notice. Mere submission of statement that
"it is a matter of record" cannot be taken into consideration as per
records submitted at later stage the party had a major change in
shareholding pattern in the months of May to July 2022.
2) Considering the fact that a mistake was done by official of M/s
Mahesh Sunny Enterprises Pvt. Ltd. in depositing EPF and ESI of
Sh. Karan Singh for near about 10 months i.e. from the month of
termination of services prior to August 2022 till the month of June
2023 cannot be considered a mere mistake but a pre-conceived after-
thought to come out of the grounds of conflict of interest.
.....
4) Also, only after submitting of tender fees, EMD, documents of
technical bid and financial bid BOQ (rate quote), the bid gets
completed and the system accepts the bids and then the further
process is carried out.
5) DRC has also observed that M/s Syona Spa has opted for similar
process in tenders for Raipur and Pune wherein M/s SRPL was also
one of the bidder. As the information regarding bidders become
visible on CPP portal instantly after opening of technical bids by bid
managers, the reason that M/s SRPL has not highlighted to AAI the
Page 26
malafide intentions of M/s Syona Spa to affect the bidding process
can be considered as the fact that both the bidders were working
closely in the bid processes having the access of each other's
information in respect to the bid submission.
The DRC has also observed that the address of all the three firms in
question is same i.e. L-322 MAHIPALPUR EXTENS, NEW
DELHI 110037. It has also come to light that the address of M/s
Syona SPA (L-73/L-322, Mahipalpur Extension, New Delhi) and
M/s Saptagiri Restaurant Pvt. Ltd. (L-322, Mahipalpur Extension,
New Delhi) are in the same premises. In this regard, the reference
has been taken into the account from the letter dated 06.05.2016
issued by M/s SRPL confirming the address L-73 and L-322, Ist
Floor, Hotel Saptagiri, Mahipalpur Extn. National Highway No.08,
New Delhi-110034 (unit of Satpagiri Restaurant Pvt. Ltd.)."
40. Finally it was concluded by respondent No.3-DRC as under:-
"Thus in the light of facts discussed above, it can be reasonably
inferred that M/s SRPL (one bidder) has relationship with M/s
Syona Spa (Sh. Karan Singh- Prop.) (another bidder) directly or
indirectly or through M/s Mahesh Sunny Enterprises Pvt. Ltd. (a
common third party) that puts either or both of tghem in a position
to have access to each other's information, or to influence the bid of
either or each other which means conflict of interest as per tender
conditions.
DRC is of the view that the documents submitted by the party were
created after participation in the tender and were presented before
this forum for the purpose of misleading and to obtain a favourable
order.
Thus, DRC comes to the conclusion that the orders dated 08.08.2023
passed by Airport Director, Amritsar Airport by which M/s SRPL
was debarred and license was annulled, would remain valid."
41. It is, therefore, clear that respondent No.3 examined the matter from all
angles after giving due opportunity of hearing to all stake holders and
thereafter passed the order under challenge." (emphasis supplied)
13.3. Perusal of aforesaid judgement speaks volumes and, therefore, need not
be reiterated or elaborated here because this Court at this moment deals
with ad interim injunction given by the Trial Court.
14.As has been said by the Supreme Court in S.G.Jaisinghani v. Union of
India and others, AIR 1967 SC 1427; and Haji T.M.Hassan Rawther v.
Keral Financial Corporation, AIR 1988 SC 157, that every action of the
State or its instrumentalities should not only be fair, legitimate and
aboveboard but should be without any affection or aversion. It should
neither be suggestive of discrimination nor even apparently give an
impression of bias, favouritism and nepotism. The decision should be
made by the application of known principle and rules and in general
Page 27
such decision should be predictable and the citizen should know where
he is, but if a decision is taken without any principle or without any
rule, it is unpredictable and such a decision is antithesis to the decision
taken in accordance with the rule of law
14.1. In essence and core, the action/order of the State or State
instrumentality would stand vitiated if it lacks bona fide as it would
only be a case of colourable exercise of power. The Rule of Law is the
foundation of a democratic society.
14.2. The Supreme Court in the case of I.R. Coelho (dead) by LRs v. State
of Tamil Nadu, AIR 2007 SC 861, held as under:-
"The State is to deny no one equality before the law ........
Economic growth and social equity are the two pillars of our
Constitution which are linked to the right of an individual (right
to equal opportunity), rather than in the abstract.......Equality,
rule of law, judicial review and separation of powers form parts
of the basic structure of the Constitution. Each of these concepts
are intimately connected. There can be no rule of law, if there is
no equality before the law. These would be meaningless if the
violation was not subject to the judicial review."
14.3. In Zenit Mataplast P. Ltd. (supra) it has been observed by the Supreme
Court that when a person approaches the court complaining against the
Statutory Authority alleging arbitrariness, bias or favouritism, the
court, being custodian of law, must examine the averments made in the
application to form a tentative opinion as to whether there is any
substance in those allegations. Such a course is also required to be
followed while deciding the application for interim relief. It was also
held by the Supreme Court that interim injunction should be granted by
the Court after considering all the pros and cons of the case in a given
set of facts involved therein on the risk and responsibility of the party
or, in case he loses the case, he cannot take any advantage of the same.
Page 28
14.4. In the case of Fertiliser Corporation Kamgar Union (Regd.0 Sindri and
others v. Union of India and others (1981) 1 SCC 568 , the Supreme
Court observed that if the Government acted fairly, though faltered in
wisdom, the court should not interfere. The Supreme Court observed:
"A pragmatic approach to social justice compels us to interpret
constitutional provisions, .... with a view to see that effective policing
of the corridors of power is carried out by the court until other
ombudsman arrangement.............. emerges............ The court cannot
usurp or abdicate, and the parameters of judicial review must be
clearly defined and never exceeded. If the Directorate of a
Government company has acted fairly, even if it has faltered in its
wisdom, the court cannot, as a super auditor, take the Board of
Directors to task. This function is limited to testing whether the
administrative action has been fair and free from the taint of
unreasonableness and has substantially complied with norms of
procedure set for it by rules of public administration."
14.5. Dealing with the interim orders, the Supreme Court observed in
Assistant Collector of Central Excise, Chandan Nagar, West Bengal v.
Dunlop India Ltd and others (1985) 2 SCR 190, that an interim order
should not be granted without considering balance of convenience, the
public interest involved and the financial impact of an interim order.
14.6. Similarly, in Ramniklal N. Bhutto and Anr: v. State of Maharashtra and
Ors., [1997] 1 SCC 134, the Supreme Court said that while granting a
stay the court should arrive at a proper balancing of competing interests
and grant a stay only when there is an overwhelming public interest in
granting it, as against the public detriment which may be caused by
granting a stay. Therefore, in granting an injunction or stay order
against the award of a contract by the Government or a Government
agency, the court has to satisfy itself that the public interest in holding
up the project far out-weighs the public interest in carrying it out within
a reasonable time. The court must also take into account the cost
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involved in staying the project and whether the public would stand to
benefit by incurring such cost.
14.7. In Colgate Palmolive (India) Ltd v. Hindustan Level Ltd. AIR 1999 SC
3105, The Supreme Court observed that the other considerations which
ought to weigh with the Court hearing the application or petition for the
grant of injunctions are as below :
(i) Extent of damages being an adequate remedy;
(ii) Protect the plaintiff's interest for violation of his rights though however
having regard to the injury that may be suffered by the defendants by reason
therefor ;
(iii) The court while dealing with the matter ought not to ignore the factum
of strength of one party's case being stronger than the others;
(iv) No fixed rules or notions ought to be had in the matter of grant of
injunction but on the facts and circumstances of each case- the relief being
kept flexible;
(v) The issue is to be looked from the point of view as to whether on refusal
of the injunction the plaintiff would suffer irreparable loss and injury
keeping in view the strength of the parties' case;
(vi) Balance of convenience or inconvenience ought to be considered as an
important requirement even if there is a serious question or prima facie case
in support of the grant;
(vii) Whether the grant or refusal of injunction will adversely affect the
interest of general public which can or cannot be compensated otherwise."
14.8. The case of Raunaq International Ltd. v. I.V.R. Contraction Ltd. and
others (1999) 1 SCC 492, deals with various aspects of the matter which
relate to the instant case as well, including courts to adopt restrain in
granting interim orders, where public interest is involved. It was said
that even when the State or a public body enters into a commercial
transaction, considerations which would prevail in its decision to award
the contract to a given party would be the same. However, because the
State or a public body or an agency of the State enters into such a
contract, there could be, in a given case, an element of public law or
public interest involved even in such a commercial transaction. The
Supreme Court proceeded to say that what are the elements of public
interest that public money would be expended for the purposes of the
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contract; that the goods or services which are being commissioned
could be for a public purpose, such as, construction of roads, public
buildings, power plants or other public utilities; that the public would
be directly interested in the timely fulfilment of the contract so that the
services become available to the public expeditiously; that the public
would also be interested in the quality of the work undertaken or goods
supplied by the tenderer; that the poor quality of work or goods can lead
to tremendous public hardship and substantial financial outlay either in
correcting mistakes or in rectifying defects or even at times in redoing
the entire work, thus involving larger outlays or public money and
delaying the availability of services, facilities or goods. Hence before
entertaining a petition and passing any interim orders in such petitions,
the court must carefully weigh conflicting public interests. Only when
it comes to a conclusion that there is an overwhelming public interest
in entertaining the petition, the court should intervene. The same
considerations must weigh with the court when interim orders are
passed in such petitions. The party at whose instance interim orders are
obtained has to be made accountable for the consequences of interim
order as interim order could delay the project, jettison finely worked
financial arrangements and escalate costs. Hence applicant asking for
interim orders, in appropriate cases should be asked to provide security
for any increase in cost as a result of such delay, or any damages
suffered by the opposite party in consequence of an interim order.
Otherwise, public detriment may outweigh public benefit in granting
such interim orders. Stay order or injunction order, if issued, must be
moulded to provide for restitution. The Supreme Court went to say that
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it was unfortunate that despite repeated observations made by it in a
number of cases, such petitions are being readily entertained by the
court without weighing the consequences. Therefore, when such a stay
order is obtained at the instance of a private party or even at the instance
of a body litigating in public interest, any interim order which stops the
project from proceeding further, must provide for reimbursement of
costs to public in case ultimately litigation started by such an individual
or body fails. The public must be compensated both for the delay in
implementation of the project and the cost escalation resulting from
such delay. Unless an adequate provision is made for this in the interim
order, the interim order may prove counterproductive.
15.Now adverting to case in hand. Appellants first issued show cause
notice on 21st February 2023 upon respondent asking that one, Mr
Karan Singh, proprietor of Syona Spa was an employee of respondent-
firm and also availed all benefits as an employee, like ESI, PF etc and
also an Airport Entry Pass was issued, which amounted to conflict of
interest as per RFP provisions in tender for Licence to operate Wellness
Centre/Spa and Massage Chair facility at Chennai Airport by the
Airport Director, Chennai Airport.
15.1. Another show cause notice dated 5th June was issued by Airport
Director, Chennai Airport, to respondent asserting conflict of interest
by stating that respondent-firm, which is owned by Mr. Bikram Singh,
who is also a shareholder of M/s Mahesh Sunny Enterprises Private
Limited and reiterated the contents of show cause notice dated 21 st
February 2023.
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15.2. Show cause notice was also issued by Airport Director, Amritsar
Airports on 5th June 2023, upon respondent contending conflict of
interest and that respondent-firm was owned by Mr. Bikram Singh, who
was also shareholder of M/s Mahesh sunny Enterprises Private Limited.
15.3. Show cause notice dated 8th June 2023 was also issued by ED (Comm)
averring therein collusive bidding/bid rigging by respondent-firm with
reference to tender issued at Amritsar, Raipur, Ranchi and Chennai
Airports.
15.4. It was on 26th July 2023 that Airport Director, Chennai, debarred
respondent-firm for having conflict of interest with another bidder, i.e.,
Syona Spa, as the conduct of respondent-firm was violative of clause
9(a)(ii) and 9(a)Iv) and Clause (b).
15.5. On 3rd August 2023, AAI issued NIET for short-term licence to operate
food and beverages outlets (SHA) F/F and arrival at Srinagar
International Airport, Srinagar.
15.6. On 8th August 2023, Airport Director, Amritsar Airport, debarred
respondent-firm for having conflict of interest with another bidder, i.e.,
Syona Spna, as the conduct of respondent-firm was violative of Clause
9(a) 9(b) and 9(c) of NIT for licence for Wellness Centre and Spa and
Massage Chair Facility inside Domestic SHA, Amritsar, Airport. As a
consequence of which, respondent preferred a number of writ petitions.
15.7. On 11th August 2023, AAI informed respondent that its bid with respect
to NIET dated 3rd August 2023 had been rejected due to debarment
action taken against it at Chennai and Amritsar Airports. Respondent
challenged debarment order dated 8th August 2023 before Punjab and
Haryana High Court which was, however, withdrawn by it seeking
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liberty to approach DRC under clause 29 of General Terms and
Conditions.
15.8. A civil suit that has been filed by respondent before the Trial court, an
order was granted therein holding respondent eligible for participation
in tendering process and also directing AAI to open the bids with
respect to short-term licence to operate food and beverages outlets
(SHA) F/F and Arrival at Srinagar International Airport. By virtue of
order dated 8th September 2023, the Trial Court allowed interim
application of respondent and dismissed the application filed by AAI
under Order 39 Rule 4 CPC. An appeal, being FAO no.24/2023
preferred by AAI was dismissed vide judgement dated 13 th October
2023, against which SLP (C) no.3376/2024 was filed before the
Supreme Court. Since respondent did not participate in the subsequent
tenders issued by AAI, as such, the said SLP was withdrawn and the
question of law was specifically kept open by the Supreme Court.
15.9. In another suit, being no.24/2023, by virtue of an ad interim order dated
1st November 2023, AAI was restrained from evicting respondent from
the allotted premises and allowing respondent to operate F&B outlets
at the airport.
15.10. In one more suit, bearing no.08/2023, vide order dated 1st November
2023, an interim order was granted and vacation of premises ordered
by AAI vide communication dated 25th August was stayed.
15.11. In another suit, bearing no.09/2023, the Trial Court vide order dated 9 th
December 2023, directed appellant-AAI to allow respondent to
continue to occupy the space allotted to it in terms of award letter dated
17th August 2022.
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15.12. ED (Comm) CHQ, New Delhi, issued a debarment order dated 20 th
December 2023, after taking notice of association between respondent
and M/s Syona Spa. Respondent challenged debarment order before
Trial Court. Ad interim order dated 21st December 2023 was granted in
favour of respondent, keeping in abeyance debarment order.
15.13. On 27th January 2024, DRC upheld debarment order dated 8 th August
2023, issued by Airport Director, Amritsar Airport.
15.14. On 8th April 2024, Trial Court has issued order impugned.
15.15. Respondent challenged DRC Order dated 27th January 2024 before
Punjab and Haryana High Court in WP(C) no.3041/2024, which was
disposed of directing DRC to pass a reasoned order.
15.16. DRC on 2nd May 2024 vide its Final Order upheld debarment order.
15.17. Against impugned order of Trial Court, the instant appeal was disposed
of by this Court on 22nd July 2024. However, review thereof was
sought, which was allowed by this Court vide order dated 11th October
2024 and appeal was restored to its original number.
15.18. LPA no.316/2024 was directed by respondent against revival order
dated 11th October 2024, which, however, was disposed of vide order
dated 23rd December 2024, with an observation by the Division Bench
of this Court that it did not find any reason to show any indulgence.
15.19. Against Debarment Orders, passed by Airports of Chennai and
Amritsar as also against Dispute Resolution Committee's (DRC) order,
writ petitions preferred by respondents have been dismissed by the
High Court of Punjab & Haryana, and High Court of Madras.
16.As has been made it clear herein above, that the object of ad interim
injunction is to protect plaintiff against injury by violation of his right
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for which he could not be adequately compensated in damages if the
case were resolved in his favour at the trial. The need for such
protection has, however, to be weighed against the corresponding need
of defendant to be protected against injury resulting from his having
been prevented from exercising his own legal rights for which he could
not be adequately compensated. The court must weigh one need against
another and determine where the balance of convenience lies. Gujarat
Bottling Co. Ltd. v. Coca Cola Co (1995) 5 SCC 545.
17.In the context of above settled position, impugned orders of Trial Court
warrant interference and are liable to be set-aside. Accordingly, both
the impugned orders are set-aside.
18. Disposed of.
19. Copy be sent down.
(Vinod Chatterji Koul)
Judge
Srinagar
11.03.2025
Ajaz Ahmad, Secretary
Whether approved for reporting? Yes/No.
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