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Smart Summary

Factual and Procedural Background

The petitioner challenged the conditions imposed by an amendment to the tender/request for qualification-cum-request for proposal for ground handling concession at Chatrapati Shivaji International Airport, Mumbai. The petitioner represents Indian private ground service providers who have been providing ground handling services at various Indian airports, particularly metropolitan ones. The respondents include the Union of India, the operating agency at the airport, the Airports Authority of India, statutory authorities, and a prospective bidder who purchased the tender document. The petition was filed to contest three specific terms and conditions in the tender document that the petitioner alleged were unreasonable, unjust, and violative of Article 14 of the Constitution of India.

Legal Issues Presented

  1. Whether the conditions imposed in the tender—specifically the requirement of a Rs. 100 crore performance guarantee, a technical experience criterion of handling a minimum of 10 million passengers, and a turnover condition—are unreasonable, unjust, and discriminatory.
  2. Whether such conditions violate the constitutional mandate under Article 14 by lacking nexus with the object sought to be achieved.
  3. Whether the court can interfere in writ jurisdiction to test the reasonableness and necessity of tender conditions imposed by the authorities.

Arguments of the Parties

Petitioner's Arguments

  • The three terms and conditions imposed by the tender are unreasonable and unjust.
  • These conditions violate Article 14 of the Constitution as they lack nexus with the objective of the tender.
  • The performance guarantee of Rs. 100 crores, the technical experience criterion of handling at least 10 million passengers, and the turnover condition exclude domestic operators unfairly.
  • Similar conditions imposed in the past were not as unreasonable or discriminatory, and the current conditions effectively prevent local operators from participating.
  • The court should interfere in writ jurisdiction to strike down these conditions.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court acknowledged that it is not its role in writ jurisdiction to test the reason or necessity behind the terms and conditions imposed on bidders, nor to control their interpretation, unless the conditions are ex-facie unreasonable or make participation impossible. The court examined the challenged conditions and found them to have a clear nexus with the objective of ensuring efficient and expeditious ground handling services at the airport. The condition requiring handling at least 10 million passengers was deemed reasonable given the passenger traffic and the nature of services expected. The financial eligibility criteria, including a turnover of Rs. 75 crores and positive net worth, were justified to ensure financial stability and prevent service breakdowns. The performance guarantee of Rs. 100 crores was held to ensure quality and commitment from bidders. The court rejected the petitioner's comparative analysis and emphasized that it cannot substitute its own view for that of the authorities. The conditions were not found to be unfair, unjust, or unreasonable, and the court declined to interfere in the tender process.

Holding and Implications

The writ petition is dismissed.

The direct effect of this decision is the upholding of the tender conditions imposed by the authorities for the ground handling concession at Chatrapati Shivaji International Airport, Mumbai. The court’s decision reinforces the principle that judicial interference in tender conditions is limited and will only occur if conditions are manifestly unreasonable or discriminatory. No new precedent was established; rather, the decision affirms the settled legal position regarding judicial scrutiny of tender conditions in writ jurisdiction.

    Airport Services Providers Association And Anr. Petitioners v. Union Of India And Ors. S

    1. The petitioner before us has challenged by this petition the conditions imposed by the amendment to the tender/request for qualification-cum-request for proposal for ground handling concession at Chatrapati Shivaji International Airport, Mumbai.

    2. It is common ground that the petitioner before us seeks to represent the Indian private ground service providers. They say that the members of this first petitioner association have been providing efficient, timely and secure ground handling services to various domestic and international airlines and private airport operators at various Indian airports and particularly the metropolitan airports.

    3. The first respondent is the Union of India and the second respondent is the person operating, managing and administering agency at the Chatrapati Shivaji International Airport, Mumbai. The third respondent is the Airports Authority of India and the fourth and fifth respondents are the statutory authorities, whereas, the sixth respondent to this petition seeks to be appointed for it has purchased the tender document.

    4. The petitioners say that petitioner No. 1 is constrained to challenge the two stipulations although one of its members has purchased the tender form. The learned counsel appearing for the petitioners would submit that the three terms and conditions in this document are unreasonable, unjust and violative of Article 14 of the Constitution of India. These conditions have no nexus with the object sought to be achieved. His first argument is that the insistence on furnishing a performance guarantee of Rs. 100 crores and furnishing a technical experience criteria of handling minimum 10 million passengers and finally, the turnover condition is unreasonable because such conditions were imposed in the past, but at that time, they were not so unreasonable and discriminatory ruling out the participation of domestic operators. Now, the situation is no different from 2015-16. When such conditions are imposed, the local operators are out of the reckoning. It is in these circumstances, he would submit that we should interfere in writ jurisdiction.

    5. With his assistance, we have perused the writ petition and annexures thereto. We are mindful of the fact that in writ jurisdiction it is not for us to test the reason and necessity for inserting the terms and conditions to be imposed on the bidders nor are we controlling the interpretation of the same. It is too well settled to require any reference to the Hon'ble Supreme Court judgment that the terms and conditions of a tender are beyond judicial scrutiny unless such conditions make it impossible for a person to participate in the process. They ought to be of such nature as would make them ex-facie unreasonable and violative of the constitutional mandate. They ought to be demonstrated as tailor made for a particular bidder.

    6. On a perusal of the relevant terms and conditions and which are under challenge, we do not find this to be the position. The conditions are set out at page 53 of the paper book titled as “Eligibility Criteria And Nature of Bidder”. The bidder should have, during the year ended 31 March, 2017, handled as a ground handler, at least 10 million passengers in aggregate at international airports (which may be within or outside India). Given the passenger traffic and at the International Airport at Mumbai, where even domestic airlines have their operations, we do not think that this condition is unreasonable or having no nexus with the object sought to be achieved. The object obviously is to provide expeditious ground handling services at the airport. The nature of the services is also set out. Apart from giving the passengers assistance, cleanliness and hygiene, there are several duties, which are to be performed by these agencies. They should deploy adequate and sufficient number of manpower so that the services do not suffer. There could be a breakdown in the event the passenger traffic exceeds the limit, particularly during vacations and holidays. In these circumstances and to obtain most efficient services that such conditions are imposed.

    7. Secondly, the financial eligibility criteria, namely, turnover of Rs. 75 crores from the ground handling business and positive net worth are also conditions matching with the requirement of respondent nos. 1 to 3. It has always been noticed by them that in the event there is no financial stability, the service providers may withdraw their services abruptly or do not deploy requisite staff at the international airport, which is busy. It is, therefore, to meet a situation of breakdown and then to avoid proceeding for breaches and violations of the terms and conditions that such insistence on turnover of Rs. 75 crores. We do not think, in the backdrop and the magnitude of the services, which are required to be provided, such a condition can be termed as unreasonable.

    8. Finally, the condition that there should be furnished a performance guarantee of Rs. 100 crores would ensure that the best participates and then provide services of the requisite and required quality. The conditions, therefore, have a clear nexus with the object that is sought to be achieved. We cannot, by comparative analysis, as is sought to be undertaken by the petitioners, strike down these conditions. It has been noticed that competitive bidding is undertaken so that the services to the passengers do not fall below the international standards. In these circumstances, we do not see anything unreasonable, unfair or unjust in the terms and conditions. We are of the firm view that entertaining this petition would mean sitting in judgment over wisdom of the authorities in inserting these conditions and their necessity. That is not an exercise that we can undertake in writ jurisdiction. These conditions cannot be substituted only because another view is possible.

    9. As a result of the above discussion, the writ petition fails. It is dismissed, but without any order as to costs.

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    Airport Services Providers Association And Anr. Petitioners v. Union Of India And Ors. S
    (Jan 29, 2018)