Summary
The Airports Authority of India invited tenders for ground handling at smaller airports. A non-profit aviation advocacy body challenged three conditions: clustering 49 Group D-1 airports into four regions, counting only experience with scheduled flights, and a minimum turnover (cut during the case from Rs. 30 crore to Rs. 18 crore). The Delhi High Court struck them down. The Supreme Court reversed. The NGO was not an aggrieved party, no ground handling agency had objected, and the petition was not a PIL, so it failed for want of locus standi. On the merits, tender terms are for the tendering authority and can be reviewed only if arbitrary, discriminatory, mala fide or biased. AAI had justified each condition, and the MSME procurement orders did not govern this concession.
Issues
- Whether a non-profit research and advocacy organisation, not itself a bidder and not suing in public interest, had locus standi to challenge tender conditions under Article 226.
- Whether the regional clustering of airports, the scheduled-flight experience criterion and the turnover threshold in AAI's ground handling tenders were open to interference as arbitrary or discriminatory.
- Whether the MSME procurement orders of 2012 and 2018 governed the tender.
Provisions considered
- Article 226, Constitution of IndiaJudicial review of tender conditions is available only to an aggrieved party and only where the terms are arbitrary, discriminatory, mala fide or tailored to favour someone. The High Court went beyond these limits. (¶¶ 5, 6, 7, 10)
- Article 14, Constitution of IndiaFairness and non-arbitrariness are the test. The State must have a free hand in setting tender terms, and courts may not substitute terms they consider fairer or wiser (Michigan Rubber, Maa Binda Express Carrier). (¶¶ 7, 9)
- Clause 3, Public Procurement Policy for Micro and Small Enterprises Order, 2012 (and 2018 amendment)The orders concern procurement of goods and services. Selecting ground handling agencies under a licence-type concession is different, and in any event the orders remain subject to the other tender conditions. (¶¶ 3.8, 3.9, 11)
Held
- The original writ petitioner was an NGO and not an aggrieved party. None of the ground handling agencies that took part, or could have taken part, challenged the conditions, and the petition was not a PIL. The High Court should have dismissed it for want of locus standi. (¶¶ 5, 10)
- Tender terms are within the domain of the tendering authority, being in the realm of contract. Courts interfere only if the terms are arbitrary, discriminatory, mala fide or actuated by bias, and greater latitude is due to the State in framing conditions. (¶¶ 6, 7)
- AAI had explained the regional clustering, the requirement of 36 months' experience in the past seven years in core services for scheduled flights, and the turnover criterion. None was shown to be arbitrary, mala fide or biased, and fixing eligibility was for AAI. (¶¶ 8, 9, 10)
- The MSME procurement orders did not displace the tender conditions, because selecting ground handling agencies is not procurement of goods and services of the kind those orders address. (¶ 11)
Result
Appeals allowed. The High Court's judgment and its order refusing review were set aside, and the writ petition was dismissed. No costs.