2022 (10) TMI 53 - SC - Indian Laws

Validity of decision to carry out region-wise sub-categorisation of the 49 airports falling under Group D-1 - validity of the stipulation that only previous work experience in respect of providing GHS to scheduled aircrafts shall be considered acceptable for the purpose of the impugned tender/RFP - whether the revised minimum Annual Turnover criteria of INR 18 crores as discriminatory and arbitrary? - HELD THAT - The respondent No.1 claiming to be a non-profit organisation carrying out research, advisory and advocacy in the field of civil aviation had filed a writ petition challenging the tender conditions in the respective RFPs. It is required to be noted that none of the GHAs who participated in the tender process and/or could have participated in the tender process have challenged the tender conditions. It is required to be noted that the writ petition before the High Court was not in the nature of Public Interest Litigation. In that view of the matter, it is not appreciable how respondent No.1 original writ petitioner being an NGO would have any locus standi to maintain the writ petition challenging the tender conditions in the respective RFPs. Respondent No.1 cannot be said to be an aggrieved party . Therefore, in the present case, the High Court has erred in entertaining the writ petition at the instance of respondent No.1, challenging the eligibility criteria/tender conditions mentioned in the respective RFPs. The High Court ought to have dismissed the writ petition on the ground of locus standi of respondent No.1 original writ petitioner to maintain the writ petition - Even otherwise, even on merits also, the High Court has erred in quashing and setting aside the eligibility criteria/tender conditions mentioned in the respective RFPs, while exercising the powers under Article 226 of the Constitution of India. The impugned judgment and order(s) passed by the High Court are unsustainable and the same deserve to be quashed and set aside and are accordingly hereby quashed and set aside - Appeal allowed.

Summary

Issues Involved:
1. Locus Standi of the original writ petitioner.
2. Judicial scrutiny of tender conditions.
3. Applicability of MSME orders of 2012 and 2018.

Issue-wise Detailed Analysis:

1. Locus Standi of the Original Writ Petitioner:
The Supreme Court examined whether the respondent, a non-profit organization, had the standing to challenge the tender conditions. The Court noted that the writ petition was not in the nature of Public Interest Litigation and that none of the Ground Handling Agencies (GHAs) who could have participated in the tender process challenged the tender conditions. The Court held that the respondent, being an NGO, had no locus standi to maintain the writ petition as it could not be considered an "aggrieved party." Consequently, the High Court erred in entertaining the writ petition on this ground.

2. Judicial Scrutiny of Tender Conditions:
The Supreme Court reiterated the settled position of law that terms and conditions of an Invitation to Tender are within the domain of the tender-making authority and are not open to judicial scrutiny unless they are arbitrary, discriminatory, or mala fide. The Court cited several precedents, including Maa Binda Express Carrier v. North-East Frontier Railway and Michigan Rubber (India) Ltd. v. State of Karnataka, to support this principle. The Court emphasized that the government and its instrumentalities must have a free hand in setting the terms of the tender. The rationale behind the respective conditions, such as clustering of airports, criteria for evaluation, and financial capacity, was explained by the AAI and found to be reasonable. The Court concluded that the High Court erred in quashing the eligibility criteria/tender conditions as they could not be said to be arbitrary, mala fide, or actuated by bias.

3. Applicability of MSME Orders of 2012 and 2018:
The Supreme Court addressed the High Court's reliance on MSME orders of 2012 and 2018. The Court clarified that these orders are applicable to the procurement of goods and services and not to the selection of Ground Handling Services (GHS) providers, which is akin to granting a license. The Court further noted that the MSME orders are subject to the fulfillment of other conditions of the tender documents. Therefore, the High Court should not have entertained the writ petition on this ground either.

Conclusion:
The Supreme Court quashed and set aside the impugned judgment and order(s) passed by the High Court, holding that the High Court had erred in entertaining the writ petition and in quashing the eligibility criteria/tender conditions. The writ petition filed before the High Court at the instance of the respondent was dismissed, and the appeals were allowed with no order as to costs.