Summary
The Court upheld quashing of the annulment of the Nagpur airport bidding process. Under the particular RFP, the accepted and acknowledged award letter created a concluded contract; the general pre-acceptance annulment clause could not then be invoked. The asserted financial and approval objections did not justify the arbitrary reversal. Public-law review was available despite the contractual setting.
Issues
- Whether the accepted award letter constituted a concluded contract under the RFP.
- Whether the subsequent annulment was lawful and non-arbitrary.
- Whether writ relief was available and non-joinder of the Union and AAI required interference.
Provisions considered
- Articles 14 and 226, Constitution of IndiaApplied the requirement of non-arbitrary State action and upheld writ jurisdiction over the public-law element of this contractual decision. (¶¶ 38, 42-49)
- Section 12A, Airports Authority of India Act, 1994Rejected the lease-approval objection as a justification for annulment because the concessionaire was to receive a licence under the arrangements considered. (¶ 39-41)
Held
- The 7 March 2019 letter, acknowledged by the bidder within the stipulated period, was an award letter under clause 3.3.5. The RFP procedure and subsequent conduct established a concluded contract, with execution of the concession agreement remaining. This conclusion rested on the actual tender documents and compliance, not highest-bidder status alone. (¶ 20-24)
- Clauses 2.16.1 and 2.16.2 governed rejection or annulment before acceptance under this RFP. Once the bid had been accepted and the bidder became concessionaire, those clauses could not justify undoing the completed selection in the manner attempted. The mere existence of a rejection power did not authorise arbitrary exercise. (¶¶ 21, 22, 42-44, 47)
- The financial objection ignored the private developer’s capital-investment burden and the transaction adviser’s analysis. If further financial justification was needed after rights had accrued, taking the adverse decision behind the selected bidder’s back was unjustified. The Court scrutinised the decision’s fairness without substituting itself as the financial expert. (¶ 35-38)
- The arrangements contemplated licence rights for the concessionaire rather than the asserted direct airport lease. Section 12A’s prior approval requirement for leases did not support the annulment on that premise. The Cabinet decision’s contemplated sequence likewise did not justify arbitrary interruption of the completed bidding process. (¶¶ 17-19, 30, 39-41)
- Article 226 relief was appropriate because the established arbitrariness raised a public-law issue; the bidder could not be confined to a specific-performance suit on these facts. Non-joinder of the Union and AAI did not warrant reversal where their role and the relief showed no demonstrated serious prejudice. (¶ 49-52)
Result
All four appeals dismissed; the High Court’s quashing of annulment and direction for consequential steps toward the concession agreement were upheld. Parties to bear their own costs.