Airport Developers Pvt. Ltd. Vs. Airports Authority of India & Ors  Insc
749 (7 November 2006)
Pasayat Judgement Arijit Pasayat, J.
in this appeal is to the judgment of a Division Bench of the Delhi High Court.
Decision taken by a group of Ministers in a matter of joint venture partnership
as a part of the privatization policy of the Government of India was assailed
before the High Court.
to the appellant, the project has to be grounded because of several major defects
which would render the projects take off disastrous. The respondents on
the other hand contend that minor technical flaws, if any, have been rectified
before the ultimate decision was taken and the project has been rightly held to
be in a fit condition to take off.
key players in this dispute are M/s Reliance Airports Developers Pvt. Ltd. (in
short RAL), Airports Authority of India (in short AAI),
Government of India (in short GOI), GMR Infrastructures Ltd. (in
short GMR), GVK Industries Ltd. (in short GVK).
facts sans unnecessary details are as follows:
part of the GOIs avowed policy of privatization of strategic national
assets, the first step appears to be privatization of two airports i.e. Mumbai
and Delhi on a joint venture basis. In March,
2003 AAI initiated process to consider modernization of Delhi and Mumbai Airports on the basis of an earlier decision
taken on January 12,
2000 by the Union
Cabinet relating to re-structuring of airports of AAI through long term leasing
route. On 11.9.2003 the GOI approved restructuring of airports of Mumbai and
Delhi through joint venture (shortly called JV) route and constituted
Empowered Group of Ministers (in short EGOM) to decide the detailed
modalities including design parameters, bid evaluation criteria etc. based on
which JV partners were to be selected. It was required to submit the final
proposal for Governments approval. An Inter Ministerial Group (in short
IMG) was set up to assist EGOM for re-structuring of two airports.
The same was set up under the Chairmanship of Additional
Secretary-cum-Financial Adviser of Ministry of Civil Aviation. Subsequently, on
15.6.2004, EGOM was re-constituted under the Chairmanship of Minister of Defence.
On 12.10.2004 IMG was re-constituted under the Chairmanship of Secretary,
Ministry of Civil Aviation. On the basis of recommendations made by IMG, EGOM
approved appointment of Global Technical Adviser, Legal Consultant and
Financial Consultant (called GTA, LC & FC in short respectively). They were
Airport Planning Ply Ltd., Amarchand, Mangaldas & Suresh A. Shroff &
Co. and ABN AMRO Asia Corporate Finance (I) Pvt. Ltd (in short Airplan, AMSC
and ABN AMRO respectively). The Consultants prepared the Invitation To
Register An Expression of Interest (shortly called ITREOI) and
the same was endorsed by IMG.
EGOM approved the same. On 17.2.2004, ITREOI was issued for the two airports.
Request for proposal was routed by AAI and the bidders were invited to bid on
certain basis and pattern. The tendering process involved two tiers; i.e. an
Expression Cum Request for Qualification (in short ECRQ) and a
Request for Proposal (in short RFP). At the RFP stage, evaluation was
carried out in four stages. The first two stages involved verification in the
nature of mandatory norms. The third stage was technical evaluation stage and
the final stage was financial evaluation stage. On 15.2.2005, EGOM finalized
and approved key principles of RFP and draft transaction documents. The RFP
documents were issued on 1.4.2005.
changes to the draft transaction documents were approved by EGOM. Before such
approval, RFP documents of the two airports were forwarded to the bidders. On
30.8.2005 final transaction documents were forwarded to the bidders.
deadline for submissions of bids was fixed as 14.9.2005.
were in fact six bidders for Delhi and five
bidders for Mumbai. On 19.9.2005, a meeting of IMG was held relating to
methodology for evaluation of offers and evaluation criteria in RFP documents.
IMG decided that bid evaluation on all parameters shall be carried out by a
composite team of GTA, LC and FC. IMG also decided to set up a review committee
to review the evaluation carried out by GTA, LC and FC. The same was also described
as an Evaluation Committee (in short EC).
technical bids were opened on 22.9.2005. On 10.10.2005 Government Review
Committee (in short GRC) was constituted to undertake an independent
review of evaluation report of bids of two airports and re-structuring process
prepared by the Evaluation Committee/Advisers. The Consultants submitted their
evaluation report. GRC held its meeting on 23.11.2005 and 24.11.2005 to review
the Consultants Evaluation Reports. GRC endorsed the views expressed in the
Consultants Evaluation Reports. Certain queries were raised by members of
the GRC and the Consultants clarified the position so far as the queries are
concerned. In the Evaluation Report a list of evaluation criteria where a
different approach has been adopted by the Consultants was indicated. On
1.12.2005, GRC submitted its report to IMG. In the meeting of IMG held on
2.12.2005 reports of Consultants and GRC were placed. Consultants made a
representation to the IMG. The majority members felt that the terms of the RFP
had been adhered to and there had been sufficient transparency in the process.
It is to be noted that one of the members who was the member of the Planning
Commission had recorded his personal opinion. Majority of the members of the
Committee felt that if the entire bid process was transparent and GRC was
satisfied with the process it would not be necessary to go by the advise of the
member of the Planning Commission and the final decision should be left to the
EGOM. The matter was placed before the EGOM on 5.12.2005. EGOM directed IMG to
undertake an independent review of the Consultants evaluation with
GRCs assistance and give a clear recommendation to EGOM. It was noted that
the bid documents could be made available to the IMG and they could seek
clarification from the Consultants.
felt that there was no need for change in the evaluation criteria as stipulated
in the RFP documents. It was stipulated that IMG would not undertake any fresh
evaluation or allocate marks for any of the criteria and finally the mandate of
IMG will be restricted to ascertain as to whether it is in agreement or
otherwise with the assessment/findings and allocation of marks across various
criteria in respect of various bids. IMG was required to complete the exercise
in two weeks. On 6.12.2005 a meeting of the IMG was held. Bid documents were
shown to the members of the IMG. Another meeting was held on 9.12.2005 and the
Consultants were directed to re-work the marks matrix by strict adherence to
RFP norms. On four days i.e. 12th, 13th, 14th and 16th December, 2005 meeting of IMG was held. In the meeting queries were
raised by IMG members as to whether evaluation was consistent with the RFP
evaluation criteria and the answers given by the Consultants. On 20.12.2005 RAL
wrote to the Chairman, EGOM criticizing the SKYTRAX Report and denying that
Consultants acted in an improper/biased manner or that the technical evaluation
conducted by the Consultants was flawed. RAL wrote another letter on the same
day to the EGOM pointing out its alliance with international players.
21.12.2005 EGOM met to consider the views of the IMG. It decided that a
Committee of Secretaries (in short COS) should be set up to advise
the EGOM on all issues relating to the restructuring and modernization of the
two airports. The COS was required to consider and
recommend the selection of appropriate JV bidders for executing the works
related thereto. The COS was set up by order dated
21.12.2005 to assist the EGOM. It met and decided to set up two members
Committee consisting of Mr. Sreedharan & Mr. Sevadasan (hereinafter
described as Sreedharan Committee or Group of Eminent Technical
Experts (in short GETE) to recommend to the COS on the overall
validation of the evaluation process including calibration of the qualifying
cut off and sensitivity analysis. GETE was accordingly appointed to review the
Consultants Evaluation Report (in short CER) on 27.12.2005. RAL
wrote to the Ministry of Civil Aviation (in short MCA) asking that
copies of its letters dated 20.12.2005 be forwarded to the GETE.
AMRO wrote a letter regarding clarification sought by MCA on determination of
bids attached to the criteria used in the technical prequalification of bidders
for the two airports. GETE submitted its report on 7.1.2006. A meeting of the COS was held on 9.1.2006. On 12.1.2006 a meeting of EGOM
was held where GETEs report was considered.
felt that the GETE had apparently done the evaluation of all the bidders as is
evident from the conclusion drawn about status of the other bidders in para 4.8
of its report.
details of revaluation were available about the other bidders, as have been
provided in respect of RAL. EGOM therefore decided that in order to reach a
definite conclusion, GETE was to be requested to do a similar revaluation
exercise in respect of other bidders.
report of GETE was submitted on 17.1.2006. On 23.1.2006 RAL Airport Operator
wrote to the GOI asserting that it had the requisite qualification. On
24.1.2006 meeting of EGOM was held and several decisions were taken.
28.1.2006 RAL wrote to GOI asking it to adhere to the RFP norms. On 30.1.2006
AAI wrote to the bidders informing them that the final bids were to be opened
on January 31, 2006.
31.1.2006 Executive Director of AAI informed RAL that GMR would be given a
choice of the two airports and whichever airport it chooses, it would be
required to match the higher financial bid. On that day itself, RAL wrote to
the AAI alleging change of procedure and protesting against the same. Later on,
the financial bids were opened that day.
report was submitted by the Committee opening the financial bids. RAL again
wrote to the members of the EGOM alleging illegalities in consideration of the
bids. On the next day again RAL wrote to the members of the EGOM regarding the
events that had transpired during the opening of bids. AAI wrote to RAL setting
out the procedure followed while opening and evaluating the financial bids.
Petition was filed by RAL before the Delhi High Court on 2.2.2006. On 4.2.2006
GOI informed GMR and GVK that they have been selected as successful bidders for
undertaking the restructuring and modernization of the Delhi and Mumbai airports respectively
and required them to furnish enhanced bid bonds guarantees for Rs.500 crores.
GMR and GVK furnished their bid bonds guarantees of Rs.500 crores each on
6.2.2006 and 8.2.2006.
1.3.2006 Special Purpose Vehicle (in short SPV) was formed for Delhi while on the next day SPV was
formed for the Mumbai airport. On 4.4.2006 Operations Management and
Development Agreement (in short OMDA) was signed by the concerned parties.
At this stage, it would be appropriate to take note of what has been described
as OMDA. Shareholders agreement with GMR and GVK was signed. Consequently 26%
shares in SPV were allotted to AAI and 74% shares allotted to GMR. Similarly,
26% shares in SPV were allotted to AAI and 74% shares allotted to GVK.
impugned order, RALs writ petition before the Delhi High Court was
dismissed by order dated 21.4.2006.
primary stand of the appellant is that the EGOM/ GOI should have accepted the
recommendations of the EC and should not have asked the GETE to make further
submitted that GETE did not examine the queries relating to GMR as raised by
the IMG and the reduction of technical qualification from 80% to 50% was
also submitted that the appointment of GETE itself was illegal and
unauthorized. The High Court proceeded on the basis as if EGOM had absolute
discretion in the matter of choosing the modalities. It is also submitted that
the uniform pattern of assessment has not been done and while reducing the
marks so far as the appellant is concerned, similar procedure has not been adopted
so far as GMR and GVK are concerned. In the initial assessment, only the GMR
and the appellant had crossed the bench mark. If in respect of one airport GMR
was given the option of matching the financial bid of the appellant, in respect
of the other airport similar option should have been given to the appellant who
was at the relevant point of time and even now willing to match the financial
bid of GVK. There was no justification for reduction of standard from 80% to
50%, particularly when at all stages EGOM had emphasized that there shall not
be any compromise with quality. The argument that any bidder who had crossed
the mandatory requirement stage would be competent to execute the contract is
completely erroneous since in that case there was no need to fix the high bench
mark of 80%. Appellant had scored over 80% on the development side and fell
short of merely 6% less than 80% on the management side. The award of contract
to the third ranked bidder i.e. GVK who had scored only 59% on the development
side and whose bid had been adversely commented upon by all committees is
against public interest.
bench mark of 80% had been approved by the EGOM. The EC expressly recommended
against lowering the bench mark and the EGOM in its meeting on 5.12.2005 had
also wanted the bench mark to remain at 80%. GETE had also not recommended
lowering of the bench mark.
constitution of GETE was without jurisdiction as it was outside the RFP.
Allegations made by the respondents in the arguments that EC was biased are not
noted above, GETE was not competent to deal with the issues relating to
airports and, therefore, it was not a competent body to express any view.
GETEs evaluation of appellants bid was wrong and it should not have
interfered with ECs evaluation. Different weightages were justified in
case for criteria 1.2.2 and 1.2.3 and also in respect of criteria 3.1.1 and
3.1.2. GETEs view as regards non aeronautical revenue being less than 40%
is not correct. Its view about the lack of experience of operating in a
non-OECD country is also erroneous. The marking system for absorption of AAI
employees as done in the case of the appellant has been wrongly interfered
has contended that EC has given marks on the basis of RFP parameters. According
to it, the parameters were fixed by the GOI or the EC. The question is not of
allotting marks, the real issue is whether right parameters have been applied.
It has been emphasized that the other Committees consisted of mainly bureaucrats
or persons with inadequate technical knowledge, only the EC was an expert body
and, therefore, its view had to be given primacy.
had qualified in both the bids. Appellant has contended that the option of
choosing one of the airports should not have been given to GMR but it should
have been allotted the Mumbai airport because of its superior quality of bid in
respect of the said airport. By giving option to choose one of the airports,
the fate of the appellant was sealed because in the other, it had fallen below
the bench mark. Though in one case, appellants bid was above the bench
mark and its bid was the best amongst those who were below the bench mark in
respect of the other airport, it has not been able to get any of the airports.
the specific mandate GETE had not examined the queries qua the other bidders.
Objective criteria assessment which was the foundation for GETEs decision
has no basis.
fact GETE itself had indicated that the assessment was subjective in totality.
By making an artificial distinction between the subjective and objective
queries, the real essence has been lost and unacceptable yardsticks have been
applied. Queries made by members of the Review Committee, comments of the EC, comments
of the Planning Commissions representatives and the various queries raised
by IMG have been either lightly brushed aside or not considered by the GETE.
The decision for lowering of technical standard was arbitrary. EGOM should have
examined the conflicting reports given by the experts. Since no reason has been
given by EGOM to adopt the report of the GETE by giving its preference over the
report of EC, same cannot be maintained. Report of GETE was not independently
examined. By reducing the bench mark, the zone of consideration was enlarged
and it was against public interest. Since different yardsticks have been
adopted and a partisan approach has been adopted, the decision is clearly
unsustainable and is amenable to judicial review. Selective examination by GETE
is not bona fide though no personal allegation of mala fide is made against the
members of GETE. Adoption of technical criteria for one airport and financial
criteria for the other is not in accordance with law.
response, learned counsel for the GMR, GVK, Union of India and the AAI have
submitted that the appellant is trying to enlarge the scope of judicial review.
It is not a case of non existence of power. It essentially relates to exercise
of power. The appellant is trying to contend that the report of EC was sacrosanct
and GETEs report was not to be accepted. GETE has formed its view as to
how the allotment of marks made by EC was clearly not in line with the
prescription made in the RFP. Marks have been allotted by EC on irrational
basis and even marks had been awarded when no marks were to be awarded. Even
the EC while commenting upon the weaknesses of the airport development plan of
GMR itself had said that the weaknesses would be sorted out at the stage when
the master plan is drawn up. It is pointed out that EC on whose evaluation
appellant has led great stress found only one flaw with the plan given by GVK
i.e. lack of re-use of existing facilities and the high cost limits to assess
it as medium. This is really a non- factor, according to learned counsel for
GVK, because plan envisages fresh creation of assets at Mumbai airport whose
existing buildings are out-dated. It is characterized as a lack of reuse as
well as involving high costs. It is pointed out that GVKs development plan
took note of much larger amount of fresh development of assets considering that
the existing buildings are out-dated. It has also considered that large sum of
money for rehabilitation of the slum dwellers is required as they would have to
be re-housed if a realistic plan for expansion of facilities and runways was to
be drawn up. The development in each of the phases of the 20 years of projected
development was also a relevant factor. There was departure by EC from the
norms in various cases without good reasons. Where there is such departure it
shows arbitrariness. This is a case which relates to judicial review of the
exercise of power and not the existence of power.
pointed out that the basic fallacy in the argument of the appellant is its
stress on EC being the only advisor to assist the EGOM in arriving at a
decision. It is submitted that as rightly observed by the High Court, it was a
part of multi- tier decision making process and appointment of GETE is a part
of the process. It is pointed out that though the appellant has challenged the
constitution of GETE, it, in uncertain terms, asked the GETE to assess the
materials placed before it by the appellant.
EGOM has given reasons for the appointment of GETE.
was not designated in the RFP as an external expert agency on whose evaluation
the Government was obliged to act. In fact at the first stage itself GRC was
constituted to review the evaluation done by EC. The report of EC had no
binding effect on the IMG much less the EGOM.
AAI required permission from the Cabinet for privatization of airports. The
ultimate decision making authority was EGOM. However, since the decision making
process involved inputs from series of in house committees, this
creation of GETE is in fact a part of in house mechanism. This itself
is clear from the fact that several Committees were constituted like EC, GRC,
IMG and COS. In view of the existence of
various tiers in the decision making process, EGOM who has delegated the power
of Cabinet did not exceed the powers by setting up the committees. If the
appellants submission is accepted, even the GRC, IMG and COS being not the
committees mentioned specifically in the RFP, their constitution would be
vulnerable. This is certainly not a case of the appellant and these were not
external agencies. These committees form part of the in-house
mechanism for evaluation of the bids.
reports were to be used as inputs in the final decision making process and thus
imparted a great deal of transparency. Judicial review cannot involve evaluation
of the comparative merits.
also been emphasized that the various discussions in the Committees established
beyond doubt that the Union of India wanted a transparent process to be adopted
considering the fact that this was a first case of private JV. It enabled the
EGOM to take note of various view points and take the final decision. These
discussions strengthened the decision making process and did not weaken it as
contended by the appellant. It has also been submitted that the conduct of the
appellant is itself contrary to the norms fixed by the RFP. Though it was
specifically indicated that there shall not be any contract with the
authorities connected with the decision making process, several times appellant
wrote letters relating to matters which were under consideration. It baffles
one as to how the appellant had knowledge as to what had transpired in the
meetings. It was conveniently mentioned that the source of appellants
knowledge was newspapers reports. The appellant therefore has clearly
violated the norms fixed by RFP and on that score alone, its bid should have
been kept out of consideration. A person who seeks relief on equitable ground
should have clean conduct and surreptitious methods adopted by it cannot be
condoned and this, according to learned counsel for the respondents, is an
additional factor to dismiss the appeal filed by the appellant.
appears that whatever has been discussed in the various meetings apparently
found its way outside. Who was responsible for the leak is not very clear but
it is not a very healthy trend. The meetings were highly confidential and
sensitive in nature dealing with global tenders.
clauses of RFP which have relevance read as follows:
Purpose of this RFP The purpose of this Document is to:
Provide an overview of the process for Stage 2 of the restructuring and
modernization of Mumbai Airport Transaction;
Specify the terms and procedures governing the transaction process for
selecting Joint Venture Partners and for the Joint Venture Company (JVC) to be
incorporated for the Airport;
Specify the requirements for the preparation and lodgement of binding offers
and Outline the approach that will be used in evaluating Binding Offers.
used in this RFP are defined in the Glossary section of this RFP.
Other Documentation and Information In addition to this RFP, Pre Qualified
Bidders (PQB) will be issued the following documentation and material:
An Information Memorandum for the Airport;
Draft Transaction Documents for the Airport (open for discussions before finalising
the terms and conditions);
Specialist Reports and AAI data substantially in CD ROM form with some
documents in hard copy form for the Airport.
may choose to update, vary or add to all or some of this information (including
this RFP) at any time during the Transaction process.
separate document will be provided to PQB outlining the times, dates and venues
of their scheduled meetings with the AAI, the Airport management team and
parties of the GTT, as relevant and necessary.
Confidentiality PQB receiving this RFP must have completed and returned the
required, duly executed Confidentiality Deed.
are reminded that information provided in this RFP and the accompanying documentation
package is covered by the terms of the Confidentiality Deed and the Disclaimer
set out herein. PQB are also reminded that they are not to make any public
statements about the Transaction process or their participation in it.
The Transaction AAI is offering a long term Operations, Management and
Development Agreement to suitably qualified, experienced and resourced parties
to design, construct, operate, maintain, upgrade, modernize, finance, manage
and develop the Airport. The Successful Bidder will participate in a Joint
Venture Company with the AAI (and other GOI public sector entities) and such
JVC shall be awarded the right to operate, manage and develop the Airport.
overview of the indicative Transaction structure is set out in Appendix G.
key features of the Transaction are as follows:
Operations, Management and Development Agreement will be for an initial period
of 30 years with the JVC having the right to extend this by a further 30 years,
in accordance with the terms and conditions of the Transaction Documents.
Successful Bidder will have an initial 74% equity interest and AAI, along with
other GOI Public Sector Entities, will have 26% equity interest in the JVC.
AAI will endeavor to contribute (without any binding commitment) equity funds
in cash in proportion to its equity share to assist the JVC in funding working
capital and major developments upto a cap of Rs.5000 million (Rupees five
thousand million) for the Airport.
AAIs intention to maintain 26% equity share capital in the JVC.
If AAI along with other GOI Public Sector Entities does not wish to contribute
to further equity calls, the JV Partners will contribute the additional equity
and the equity interest, of AAI and other GOI Public Sector Entities will be
correspondingly reduced but the voting rights with regard to reserved board and
shareholder matters (as contained in the Shareholders Agreement) will be
preserved in the manner set forth in the Shareholders Agreement.
JVC will have an Employee Arrangement for a period of three years whereby AAI
employees (other than those pertaining to ATC and CNS departments) posted at
the Airport on Effective Date continue to provide their services at the
Airport. Further the JVC will be required, during the three years period to
make offers of employment in order to absorb a minimum of 40% (or such higher
percentage as committed by the Bidder) of the existing AAI employees working at
the Airport excepting those engaged in Communication Navigation Surveillance
(CNS), Air Traffic Management (ATM), Security, as reduced for retirements,
resignations, transfers and death. Employment offers can be made at any time
during this Employee Arrangement Period but in no event later than three (3)
months prior to the end date of the Employee Arrangement Period. At the end of
this Employee Arrangement Period those employees who do not take up the
employment offers or who are not made such an employment offer will return to
the services of AAI. Additional weightage is provided in the evaluation process
to Bidders who commit to make offers of employment in order to absorb more than
the minimum level of 40%. There will be a financial penalty, as set out in the
OMDA, for any shortfall between the 40% or such higher nominated percentage and
the result actually achieved.
Due to the public and economic importance of the Airport a State Support
Agreement will be entered into between the JVC and GOI. The State Support
Agreement will address matters such as principles of economic regulation,
approvals, assistance with licensing and coordination with government agencies.
Under the State Support Agreement, the JVC for a specific Airport will have a
Right of First Refusal (ROFR) with regard to the second airport in the
vicinity (except in the case of a proposed new airport in/for Pune) on the
basis of a competitive bidding process, in which the JVC can also participate.
In the event, the JVC is not the successful bidder, the JVC will have the ROFR
by matching the first ranked bid in terms of the selection criteria for the
second airport, provided the JVC has satisfactory performance without any
material default at the time of exercising the ROFR.
the endeavour of the AAI/GOI that a State Government Support Agreement will be
entered into with the State Government of Maharashtra wherein the said State
Government will provide assistance on a best endeavour basis on dealing with
encroachments, reservation of land for settlement of encroachments and
assistance in making land available if required for aeronautical purposes,
surface land transport access to the Airport, expediting applicable clearances
and the provisions, where applicable, of essential utility services. However,
bidders should note that the exact form of the State Government Support
Agreement and contents thereof will be decided upon receipt of feedback from
the said State Government. Upon receipt of feedback from the said State
Government and finalization of form and contents of the State Government
Support Agreement, the same will be provided to Pre-Qualified Bidders.
JVC for the Airport will have a lease over the land and assets (with certain
exclusions which are not limited only to carve out assets listed in the
schedule to the Lease Deed) of the Airport for the tenure of the OMDA.
JVC will enter into separate MOUs with various agencies such as Customs,
immigration, Health and Plant and Animal Quarantine to deal with issues
relating to space, performance standards, facilitation/coordination mechanism.
JVC will be required to prepare a Master Plan for the development, expansion
and modernization of the Airport, covering a time period of 20 years as well as
the ultimate vision of the Airport at full aeronautical development and to
submit this for approval of MCA within the stipulated time frame as outlined in
the Transaction Documents. The Master Plan has to be consistent with the
Initial Development Plan submitted as part of the Binding Offer. Thereafter,
the JVC will be required to update the Master Plan every ten years (or upon
occurrence of certain traffic trigger events or as and when circumstances
warrant). In addition, each major development requires the preparation and
approval of a Major Development Plan setting out the proposed details of the development.
Airport, in recognition of its natural monopoly position, will be subjected to
economic regulatory measures. The regulatory authority or the GOI (until such
regulatory authority is in place) will set a price cap for aeronautical charges
and will be entitled to impose other standards.
the tenure of the OMDA, the Joint Venture Company will pay both a nominal lease
rental and a fee (consisting of an upfront fee of Rs.1,500 million (Rupees one
thousand five hundred million) and an annual fee expressed as a percentage of
gross revenue of the Airport) for the right to operate, manage and develop the
Airport. The fee will be calculated annually in advance on projected revenue,
paid monthly and with an adjustment at the end of each quarter to reflect any
difference between actual and projected revenue. Revenue for this purpose shall
mean all pre-tax gross revenue of JVC, excluding the following:
made by JVC, if any, for the activities undertaken by Relevant Authorities;
Insurance proceeds except insurance indemnification for loss of revenue;
amount that accrues to JVC from sale of any capital assets or items,
Payments and/or monies collected by JVC for and on behalf of any governmental
authorities under applicable law. It is clarified that annual fee payable to
AAI and Employee Arrangement costs payable to AAI shall not be deducted from
GOVERNMENT OBJECTIVES, REQUIREMENTS AND REGULATION
Key Strategic Objectives Key strategic objectives of the GOI are:
class development and expansion:
world class phased development and expansion such that the JVC meets its
commitments through the timely provision of high quality airport
infrastructure, on both the airside and landside, to meet growing demand; and
World class airport management:
the creation of world class airport management team and systems through the
selection of serious, committed Successful Bidders with suitable operational
expertise, managerial and financial capability, Financial commitment and the
commitment to provide quality airport services, in order to transform the
present Airport into world class international airport.
Other Transaction Objectives In addition to the key strategic objectives, other
Transaction objective include:
completion end certainty of Transactions, with minimal residual risks.
financial consideration for the right to operate, manage and develop the
transition of operations from AAI to JVC.
regulation- achieving economic regulation of aeronautical assets that is fair,
commercially and economically appropriate, transparent, predictable, consistent
and stable while protecting the interests of users and ensuring that the
Airports are operated and developed in accordance with world standards;
and equitable treatment of AAI employees, including preservation of accrued
of ownership between Mumbai and Delhi Airports, to enhance competition, encourage
innovation and allow competitive benchmarking, and Ensure satisfaction on the
part of passengers and airlines by the provision of quality services and the
provision of State-of-the-art facilities.
GOIs key strategic and other Transaction objectives will provide the means
of establishing the bid evaluation criteria.
Management and Development Requirements Reflecting the focus on the strategic
objectives, Bidders will be required to present as part of their Binding Offer
a fully detailed Business Plan and Initial Development Plan, as well as a
Transition Plan and certain other documents. These documents will be an
important element in the selection of the Successful Bidder for the Airport.
Scope of work
The scope of work for the FINANCIAL CONSULTANT shall consist of the following:
of the traffic, financial, commercial and operational data pertaining to the
Organizing Road Shows in India and/or abroad, if required;
Preparation of the Request for Expression of interest (RFEOI), Request for
Proposal (RFP), draft concession agreement, draft Joint venture agreement and
all other necessary project documentation.
the pre-qualification criteria, technical and financial evaluation criteria
which will include formulation and analysis of various options along with the
recommended approach in respect of the same;
Evaluation of Expressions of Interests and Technical and Financial proposals
Organizing and managing interactions and communications with the potential
Negotiation assistance together with other advisors to AAI in successfully
concluding the transaction;
Work closely with AAI on overall coordination and management of various aspects
of the transaction;
other work as may be required for the successful completion of the transaction,
Glossary Words and phrases used in the document have the meaning set out below.
Airports Authority of India Airport Operator - The Entity in the Consortium submitting the
Binding Offer who has been identified as such by the Bidder and who is assessed
for the necessary qualifications for operating, managing and developing a major
international airport which seeks to provide airport management services to the
Joint Venture Company.
Consultant ABN AMRO Asia Corporate Finance (I) Pvt. or Ltd.
being the financial adviser to the ABN AMRO Transaction.
Airline(s) Means a Foreign Entity that provides air transport services.
Global The technical adviser, to AAI advising Technical Adviser or on the
technical aspects in relation to Airplan this Transaction, being Airport
Planning Ply Ltd. (Airplan).
Development The Development Plan submitted by the Plan Bidder(s) an part of
their Offer which sets out plans over a calmed period for the development of
the Airport to meet traffic growth as per the terms hereof.
The Invitation to Register an Expression of interest document issued by AAI in
relation to the Transaction.
Consultant or The legal adviser to the Transaction, AMSS being Amarchand & Mangaldas
& Suresh A.Shroff & Co.
5. EVALUATION OF STAGE 2 OFFERS
Overview of Evaluation Process This section sets out the approach that will be
applied by the AAI and its advisers when evaluating Offers.
Guidance in relation to the relative importance of each of the criteria and
certain tender requirements are set out below.
approach to be followed will be undertaken in four phases as set out in summary
form in the figure below:
Explanation Any Bidder not meeting the Phase 1 Assessment of ? mandatory Mandatory
Requirement requirement will have its Offer removed from further consideration.
Debt and equity
as Phase 2 Assessment of specified at Financial Commitment Appendix A is
evaluated and Offers not meeting the requirement are excluded from further
Technical Pre- All remaining Phase 3 Qualifications offers are
Capability, assessed on Commitment and value add technical
criteria and Capability, Commitment only those and value add assessed with
technical pre- qualification on each of the two criteria of 80% or more proceed
to Phase 4
Phase 4 Assessment of Financial
offer of the Consideration Bidder with highest Financial consideration for the
Airport is selected as Successful Bidder
Mandatory Requirement The Mandatory Requirements for Stage 2 Offers are as
Requirements for Stage 2 Offers Confirmation of acceptance of final
Transaction Documents Confirmation that the Networth criteria of the
Bidder as per the requirement in the ITREOI document continues to be fulfilled
No Consortium member or Group Entity of a Consortium member or nominated
Airport Operator is participating in more than one Consortium bidding for the
same Airport Consortium has an Airport Operator who has relevant and
significant experience of operating, managing and developing airports.
Confirm that the Offer is capable of acceptance anytime during the Bid Period
Confirm that the offer commits the Offeror to the mandatory capital
projects and/the Initial Development Plan is in accord with the Development
Principles and the Traffic Forecast (It is to be noted that Traffic Forecasts
are only the Base level forecast) Equity Ownership in the Joint Venture
Company by a Scheduled Airline and their Group Entities does not exceed l0% and
there is no participation by any airline that is a Foreign Entity and their
Group Entities, subject to the exemption of group Entities that are existing
FDI in the JVC does not exceed 49% Minimum equity ownership by Indian
Entities (other than AAI/GOI public sector entities) in the JVC is 25%
Provision of suitable probity and security statements Lodgement of Offer
that incorporates all the material required as set out in Appendices A to E,
inclusive, in this Document Submission of Bid Bond.
Assessment of Technical Pre-Qualification The Technical pre-qualification is
based on two global pre-qualification criteria Management Capability,
Commitment and Value Add Development Capability, Commitment and Value Add
Each of these is assessed in terms of a set of pre- qualification criteria and
supporting pre-qualification factors that are detailed in the Section 5.6.
purpose of the Technical Pre Qualification phase is to ensure that only those
Bidders that can address the GOIs strategic objectives are evaluated at
the final phase of the evaluation process and that only Bidders satisfying the
benchmark of 80% under the technical pre qualification requirements are allowed
into the final phase of Evaluation.
scoring system will be applied based on the assessment of the evaluation terms
of the Offer against the Technical pre-qualification criteria. Each of the two
global pre-qualification criteria is assessed out of a possible 100 marks. The
assessment is on an absolute basis not relative as between the Offers. Hence
there is no predetermined number of Offers that will be considered in the final
Technical Pre-Qualification Criteria and Factors This section sets out the
pre-qualification criteria and pre- qualification factors that will be used to
assess each of the two global pre-qualification factors.
Pre- Pre-Qualification Criteria Qualification factors Criteria Weighting Global
Technical Pre- (A) Management Capability, Qualification Commitment and Value
Experience of 25 Each of the following to be the nominated supported by
documents case Airport Operator studies and relevant statistics (PAX and cargo
statistics for each airport nominated) Number, scale and geographic diversity
of airports operated and managed by the airport operators with substantial
domestic, international and cargo operations including specific role of the
airport operator in respect of each of these operations Experience in operating
global or regional hub airports, including achieving improved connectivity.
record in route and traffic development and in managing relations with airlines
and other key stakeholders.
level of service quality performance achieved at major airports managed by the
Airport Operator and trends over the last 5 years.
if any, with operating a multi-airport system.
performance of commercial operations at major Airports managed by airport
Operators, covering retail, property and other commercial operations, focusing
on airport where non-aeronautical revenue is 40% or more of total revenue.
in turning around and improving aeronautical and non- aeronautical operations
in operating and developing airports in non- OECD countries and a track record
in improved performance.
in proactive environmental monitoring, evaluation, planning and implementation
of environmental systems and improvements.
Experience of 12.5 Commercial/retail the other Prime experience Members
(separately Experience with major identifying and property development
evaluating Indian Experience with major and non-Indian Prime infrastructure
Member experience on developments. an equal weight Experience with handling HR
basis). issues in ownership change situations.
Commitment of 12.5 Level of equity commitment airport operator Performance
based nature of the Airport Operator Agreement Experience and level of
management resources committed to the transaction in each area of airport
Traffic and route development and marketing 7 Aeronautical operations 7 Cargo
handling 7 Slot management 7 Terminal operations 7 Airport Retail operations 7
Airport Property operations 7 Environmental Management (b)Commitment by 12.5
Experience and level of other Prime Members management resources committed
(separately by the other Prime Members in identifying and non-aeronautical
operations and evaluating Indian development Prime Members.
Variations to the RFP AAI/GOI reserves the right, in its absolute discretion
and at any stage, to cancel, add to or amend the information, terms, procedures
and protocols set out in the RFP. PQB and Consortium member will have no claim
against AAI with respect to the exercise, or failure to exercise, such rights.
Other AAI rights:
reserves the right in its absolute discretion without liability and at any
stage during the Transaction process, to:
to, or remove parties from any shortlist of PQBs or Bidders;
Require additional information from any PQB or Bidders;
Vary its tender requirements;
Terminate further participation in the Transaction process for any PQB or
Change the structure and timing of the Transaction process; Accept or
reject any Offer at any time for any reason;
Not provide PQBs or Bidders any reasons for any actions or decisions it may
take including in respect of the exercise by the AAI of any or all of the above
mentioned rights; and Take such other action as it considers, in its
absolute discretion, appropriate in relation to the Transaction process for the
xx xx xx
APPENDIX A (Information to be included in offer) xx xx xx A.7
Relevant Management Experience and Expertise xx xx xx
addition, please provide information on any experience that the airport
operator has with turning around the performance of under performing airports
and in the operation, management, development of major airports in developing
countries and handling human resource management issues in ownership change situation,
xx xx xx
A.11. Initial Development Plan The Initial Development Plan must be prepared in
conformity with the Airport Development Planning Principles set out in the
Transaction Document, shall incorporate the mandatory capital projects as set
out in the Transaction Documents and shall use the base Traffic Forecasts
prepared by SH&E. Where the PQB has a strong view that an alternative
traffic forecast is significantly more likely to occur, it can indicate the
implications for the timing of the implementation of the development plan.
Offer should provide the following information in the Initial Development Plan:
long-term airport development vision for year 20 and the ultimate vision for
the Airport showing the following:
full configuration of the Airport identifying all aeronautical facilities and
their operating capacity and all commercial development areas and their
Information on traffic, passenger and cargo flows, both landside and airside.
The development path for the Airport leading up to its long-term vision in year
20, shown in five (5) yearly stages for each functional area, namely airfield,
apron, passenger terminals, cargo terminals, car parks, city side access roads
and commercial area together with capital expenditure estimates. The
development path should show the linkage of the development to traffic
projections, with the indicated trigger points for both the commencement of the
development and its completion.
outline of how the development path can be flexibly adjusted to accommodate
both lower and higher traffic flows than the base projection used for Airport
Set out how it is planned to fully maintain aeronautical operation during the development
Explain how key stakeholders will be involved during both the planning and
implementation stages, including the preparation of the Master Plan,
identifying issues that will need to be addressed and the approach to each
any constraints that will negatively impact on the Development Plan, explain
the extent of the impact and any mitigating strategy proposed.
challenge by the appellant is to the constitution of GETE and the scope for its
constitution. It is to be noted that the ultimate authority to take the
decision in the matter was EGOM. It was within the powers of EGOM to decide as
to what inputs it can take note of and the source of these inputs. Therefore,
the necessity for taking views of various committees constituted appears to be
a step in the right direction. This was a step which appears to have been taken
for making the whole decision making process transparent. There was no question
of having the view of one Committee in preference to another. EC was a
Committee constituted as a part of the decision making process like other
Committees vis. GRC, COS and IMG.
multi tier system in the decision making process the authority empowered to
take a decision can accept the view expressed by one committee in preference to
another for plausible reasons. It is not bound to accept the view of any
committee. These committees, it needs no emphasis, are constituted to assist
the decision making authority in arriving at the proper decision. It is a
matter of discretion of the authority to modify the norms. It is not a case of
exercising the discretion, certain parameters are to be followed.
said Lord Mansfield in R. V Wilkes (1770 (4) Burr 2527, when applied to a
court of justice, means sound discretion guided by law. It must be governed by
rule, not by humour; it must not be arbitrary, vague and fanciful but legal and
regular. (See Craies Statute Law, 6th Edn.
and Ramji Dayawala & Sons (P) Ltd. v. Invest Import (1981 (1) SCC 80).
undoubtedly means judicial discretion and not whim, caprice or fancy of a
Judge. (See Dhurandhar Prasad Singh v. Jai
Prakash University and Ors. (2001 (6) SCC 534). Lord Halsbury in Sharp v.
Wakefield (1891 AC 173) considered the word discretion with reference
to its exercise and held: Discretion means when it is said that
something is to be done within the discretion of the authorities that something
is to be done according to the rules of reason and justice, not according to
private opinion: (Rooke case (1598) 5 Co. Rep. 99b, 100a) according to law, and
not humour. It is to be, not arbitrary, vague, and fanciful but legal and
regular. And it must be exercised within the limit, to which an honest man
competent to the discharge of his office ought to continue himself. (See Kumaon
Mandal Vikas Nigam Ltd. v. Girja Shankar Pant and Ors. (2001 (1) SCC 182).
when applied to a court of justice, means sound discretion guided by law. It
must be governed by rule, not by humour; it must not be arbitrary, vague and
fanciful but legal and regular.
the word, discretion literally means and denotes an uncontrolled power of
disposal yet in law, the meaning given to this word appears to be a power
decide within the limits allowed by positive rules of law as to the
punishments, remedies or costs. This would mean that even if a person has a
discretion to do something the said discretion has to be exercised within the
limit allowed by positive rules of law. The literal meaning of the word
discretion therefore, unmistakably avoids untrammeled or uncontrolled
choice and more positively pointed out at there being a positive control of
some judicial principles.
in general, is the discernment of what is right and proper. It denotes
knowledge and prudence, that discernment which enables a person to judge
critically of what is correct and proper united with caution; nice discernment,
and judgment directed by circumspection:
judgment; soundness of judgment; a science or understanding to discern between
falsity and truth, between wrong and right, between shadow and substance,
between equity and colourable glosses and pretences, and not to do according to
the will and private -affections of persons.
discretion standing single and unsupported by circumstances signifies
exercise of judgment, skill or wisdom as distinguished from folly, unthinking
or haste; evidently therefore a discretion cannot be arbitrary but must be a
result of judicial thinking. The word in itself implies vigilant circumspection
and care: therefore, where the Legislature concedes discretion it also imposes
a heavy responsibility.
discretion of a Judge is the law of tyrants; it is always unknown. It is
different in different men. It is casual, and depends upon .constitution,
temper, passion. In the best it is often times caprice; in the worst it is
every vice, folly, and passion to which human nature is liable, said Lord
Camden, L.C.J., in Hindson and Kersey, (1680) 8 How St Tr 57.
certain latitude or liberty accorded by statute or rules to a Judge as
distinguished from a ministerial or administrative official, in adjudicating on
matters brought before him. It is judicial discretion. It limits and regulates
the exercise of the discretion, and prevents it from being wholly absolute,
capricious, or exempt from review.
discretion is usually given on matters of procedure or punishment, or costs of
administration rather than with reference to vested substantive rights. The
matters which should regulate the exercise of discretion have been stated by
eminent Judges in somewhat different forms of words but with substantial
identity. When a statute gives a Judge a discretion, what is meant is a
judicial discretion, regulated according to the known rules of law, and not the
mere whim or caprice of the person to whom it is given on the assumption that
he is discreet (Per Willes J. in Lee v. Budge Railway Co., (1871) LR 6 CP 576
and in Morgan v. Morgan, 1869 LR 1 P & M 644).
ADVANCED LAW LEXICON BY P. RAMANATHA AIYAR, it has been stated as
Power of the Court or arbitrators to decide as they think fit. The word
discretion connotes necessarily an act of a judicial character, and,
as used with reference to discretion exercised judicially, it implies the
absence of a hard-and-fast rule, and it requires an actual exercise of judgment
and a consideration of the facts and circumstances which are necessary to make
a sound, fair and just determination, and a knowledge of the facts upon which
the discretion may properly operate. [Corpus Juris Secundum, Vol. 27, page 289
as referred in Aero Traders Pvt. Ltd. v. Ravinder Kumar Suri, VI (2004) SLT
428, 430, para 6] A discretion, said Lord WRENBURY, does
not empower a man to do what he likes merely because he is minded to do so, he
must in the exercise of his discretion do not what he likes but what he ought.
In other words, he must, by the use of his reason, ascertain and follow the
course which reason dictates. (Roberts v. Hopwood, 1925 AC 578). This
approach to construction has two consequences the statutory discretion must be
truly exercised, and when exercised it must be exercised reasonably. (MAXWELL).
said Lord MANSFIELD in R. v. Wilkes, (1770) 98 ER 327), when applied to a
Court of justice, means sound discretion guided by law. It must be governed by
rule, not by humour, it must not be arbitrary, vague, and fanciful but legal
and regular. (See Craies on Statute Law, 6th Edn. P.273) Discretion
means when it is said that something is to be done within the discretion of the
authorities that that something is to be done according to the rules of reason
and justice, not according to private opinion:
case according to law, and not humour. It is to be not arbitrary, vague and
fanciful, but legal and regular.
HALSBURY LC in Susannah Sharp v. Wakefield, (1891) AC 173 at p. 179 referred to in Siben Kumar Mondal v. Hindustan
Petroleum Corporation Ltd, (AIR 1995 Cal 327, 333-335). (See also Aero Traders
Pvt. Ltd. v. Ravindra Kumar Suri, VI (2004) SLT 428, 430, para 6; Man Mal
Sharma v. Bikaner Sahkari Upbhokta Bhandar, (AIR 1999 Raj 13, 18) and Rekha Bhasin
v. Union of India, (AIR 1998 Del 314, 322.) Discretion, Lord MANSFIELD stated in
classic terms in, John Wilkes case, (1970) 4 Hurr 2528, must be a sound
one governed by law and guided by rule, not by humour; Lord DENNING put it
eloquently in Breem v. Amalgamated Engineering Union, (1971) 1 All ER 1148,
that in a Government of Laws there is nothing like unfettered
discretion immune from judicial reviewability. Courts stand between the
executive and the subject alert, to see that discretionary power is not
exceeded or misused. Discretion is a science of understanding to discern between
right or wrong, between shadow and substance, between equity and colourable
glosses and pretences and not to do according to ones wills and private
affections. Lord BRIGHTMAN elegantly observed in the case of, Chief Constable
of North Sales Police v. Evans, (1982) 3 All ER 141 that:
review, as the words imply is not an appeal from a decision, but a review of
the matter in which the decision was made. The judge, even when he is
free, is still not wholly free.
not to innovate at pleasure. He is not a knight-errant roaming at will in
pursuit of his own ideal of beauty or of goodness. He is to draw his
inspiration from consecrated principles. He is not to yield to spasmodic
sentiment, to vague and unregulated benevolence. He is to exercise a discretion
informed by tradition, methodized by analogy, disciplined by system, and
subordinated to the primodial necessity of order in the social life.
Wide enough in all conscience is the field of discretion that remains.
BENJAMIN CARDOZE in The Nature of Judicial Process.
in general, is the discernment of what is right and proper. it denotes
knowledge and prudence, that discernment which enables a person to judge
critically of what is correct and proper united with caution; nice discernment,
and judgment directed by circumspection;
judgment; soundness of judgment; a science or understanding to discern between
falsity and truth, between wrong and right, between shadow and substance,
between equity and colourable glosses and pretences, and not to do according to
the will and private affections of person. When it is said that something is to
be done within the discretion of the authorities, that something is to be done
according to the rules of reason and justice, not according to private opinion;
according to law and not humour. It is to be not arbitrary, vague, and
fanciful, but legal and regular. And it must be exercised within the limit, to
which an honest man, competent to the discharge of his office ought to confine
himself (Per Lord HALSBURY, L C. in Sharp v. Wakefield. (1891) Appeal Cases 173.
word discretion standing single and unsupported by circumstances
signifies exercise of judgment, skill or wisdom as distinguished from folly,
unthinking or haste; evidently therefore a discretion cannot he arbitrary but
must be a result of judicial thinking. The word in itself implies vigilant
circumspection and care; therefore, where the Legislature concedes discretion
it also imposes a heavy responsibility. (See National Insurance Co. Ltd. v. Keshav
Bahadur, AIR 2004 SC 1581, 1584, para 10).
discretion of a Judge is the law of tyrants; it is always unknown. It is
different in different men. It is casual and depends upon constitution.,
temper, passion. In the best it is often times caprice : in the worst it is
every vice, folly, and passion to which human nature is liable, said Lord
CAMDEN. L. C.J., in Hindson and Kersey, (1680) 8 How St Tr 57; as cited in
National Insurance Corporation Ltd. v. Keshav Bahadur, AIR 2004 SC 1581, 1584, para
11 and Kumaron Mandal Vikas Nigam Ltd. v. Girja Shanker Pant, (2001) 1 SCC
power to decide within the limits allowed by positive rules of law as to
punishments, remedies or costs and generally to regulate matters of procedure
and administration; discernment of what is right and proper [See Article
136(1), Constitution) Discretion is governed by rule and it must not
be arbitrary, vague and fanciful. (See Jaisinghani v. Union of India, AIR 1967
SC 1427, 1434).
any thing is left to any person, Judge or magistrate to be done according to
his discretion, the law intends it must be done with sound discretion, and
according to law, (Tomlin). In its ordinary meaning, the word signifies
unrestrained exercise of choice or will; freedom to act according to ones
own judgment; unrestrained exercise of will; the liberty of power of acting
without other control than ones own judgment. But, when applied to public
functionaries, it means a power or right conferred upon them by law, of acting
officially in certain circumstances according to the dictates of their own
judgment and conscience, uncontrolled by the judgment or conscience of others.
Discretion is to discern between right and wrong; and therefore whoever hath
power to act at discretion, is bound by the rule of reason and law. (2 Inst.
56, 298; Tomlin) DISCRETION, in general, is the discernment of what is right
and proper. It denotes knowledge and prudence, that discernment which enables a
person to judge critically of what is correct and proper united with caution;
nice discernment, and judgment directed by circumspection;
judgment; soundness of judgment; a science or understanding to discern between
falsity and truth, between wrong and right, between shadow and substance,
between equity and colourable glasses and pretences, and not to do according to
the will and private affections of persons.
very word discretion standing single and unsupported by circumstances
signifies exercise of judgment, skill or wisdom as distinguished from folly,
unthinking or haste; evidently therefore discretion cannot be arbitrary but
must be a result of judicial thinking. (33 Bom 334).
word discretion in itself implies vigilant circumspection and care;
therefore where the legislature concedes wide discretion it also imposes a
heavy responsibility. (AIR 1933 Sind 49) There may be several degrees of
Discretion, discretio generalis, discretio legalis, discretio specialis,- Discretio
generalis is required of every one in everything that he is to do, or attempt
Legalis discretio, is that which Sir E Coke meaneth and setteth forth
in Rookes and Keighleys cases and this is merely to administer
justice according to the prescribed rules of the law.
third discretion is where the laws have given no certain rule .... and herein
discretion is the absolute judge of the cause, and gives the rule. (Callis.
112. 113) DISCRETION, FREE AND UNQUALIFIED, The free and unqualified
discretion to refuse or grant licences, which is given to justices by the
Beer Dealers Retail Licences is absolute as well as regards the renewal of an
old, as the grant of a new, licence. (R. v. Kay, 52 LJMC 90).
Judicial is a certain latitude or liberty accorded by statute or rules to a
judge as distinguished from a ministerial or administrative official, in
adjudicating on matters brought before him, The use of the word
judicial limits and regulates the exercise of the discretion, and
prevents it from being wholly absolute, capricious, or exempt from review. But
the presence of the word discretion permits the judge to consider as
a judge, what are vaguely termed, all the circumstances of the case and the
purpose for which he is invested with the considerations of convenience or
utility or saving of expense rather than on considerations of strict law or
discretion is usually given on matters of procedure or punishment, or costs of
administration rather than with reference to vested substantive rights. The
matters which should regulate the exercise of discretion have been stated by
eminent judges in somewhat different forms of words but with substantial
identity. When a statute gives a judge a discretion, what is meant is a
judicial discretion, regulated according to the known rules of law, and not the
mere whim or caprice of the person to whom it is given on the assumption that
he is discreet (Lee v. Bude Railway Co., (1871) LR 6 CP 576, 580, WILLES, J.;
and see Morgan v. Morgan, 1869, LR 1 P & M 644, 647). That discretion,
like other judicial discretions, must be exercised according to common sense
and according to justice, and if there is a miscarriage in the exercise of it,
it will be reviewed; but still it is a discretion, and for my own part I think
that when a tribunal is invested by Act of Parliament, or by rules, with a
discretion, without any indication in the Act or rules of the grounds on which
the discretion is to be exercised, it is a mistake to lay down any rules with a
view of indicating the particular grooves on which the discretion would run,
for if the Act or rules did not fetter the discretion of the judge, why should
the Court do so? Gardner v. Jay, (1885) 29 Ch D 50 at 58,
per BOWEN, L.J.) (See also 5 Cal 259) Discretion
of Court. Ability to discern by the right line of law, and not by the
crooked cord of private opinion, which the vulgar call discretion; freedom
to act according to the judgment of the Court, or according to the rules of
equity, and the nature of circumstances; judicial discretion regulated
according to known rules of law; legal discretion, and not personal discretion
sound discretion guided by fixed legal principles.
instant case, though the High Court seems to have noted that the EGOM has
absolute discretion, it has really not held that the discretion was unfettered.
In fact it has on facts found that the discretion was properly exercised to
make some variations in the terms of RFP.
to the constitution of GETE, no mala fides are alleged against the members. It
is only the method of evaluation done by GETE which is challenged apart from
contending that GETE should not have been constituted. About the constitution
of GETE, as noted above, the stand is clearly untenable. So far as evaluation
of the marks as done by EC is concerned, GETE has given reasons for altering
the marks allotted which ultimately led to the non qualification of the
appellant. There were four identified areas where it was noted that the
ECs approach in the evaluation exercise was inconsistent with the terms of
in its order dated 27.12.2005 constituting GETE, stipulated as follows:
Group would particularly look into and present its recommendations before the COS on:
Overall validation of the evaluation process, including calibration of the
qualification and sensitivity analysis.
sensitivity analysis will cover the impact of inter-se weightages of sub-
criteria as well as scoring.
issues raised by the Members of the Inter Ministerial Group about the
overall assessment of transparency and fairness of the evaluation process,
including steps required, if any, to achieve a transparent and fair outcome.
Suggestions for improving the selection process for Joint Venture Partner in
the future. Essentially there were four instances of rewriting of
priorities and weightages as contained in the RFP and valuation was then made
by the EC on the basis of these re- written priorities and weightages. These
were as follows;
Change in priority in the matter of absorption of staff,
Changing the weightage ascribed to property development by merging the marks
for infrastructure development and property development,
Changing of the weightage ascribed to non- aeronautical development by failing
to consider aeronautical revenue of 40% as a threshold less than
which would not get any marks, and (iv) Changing the weightage of experience in
respect of a non-OECD airport by treatment of a OECD airport on par with
regards (i), the EC divided the marks between 3.1.1 and 3.1.2 unequally, and
also awarded marks for the extent of absorption proposed from a baseline of
Zero instead of a baseline of 40% which was the mandatory absorption criteria.
RFP accorded a priority to a higher absorption of existing staff by the new
company. The EC proceeded to modify this priority. It opined that the overall
approach was more important than absorption, and gave marks accordingly. So far
concerned, the EC again altered the weightages accorded in the RFP, which
considered experience in property development as valuable as
infrastructure development and thereby put each of them as a
sub-head. According to EC, the former was not as important as the latter and
thus gave 1.6 marks for the former (1.2.2) and 4.7 marks for the latter
consequence of (iii) above, EC gave marks to the appellant who had projected
less than 40% non-aeronautical revenue- whereas the RFP clearly gave a weightage
to aeronautical revenue beyond 40%. As rightly contended by the respondents, if
a project has a high revenue share given to the government, then aeronautical
revenue being regulated, the incomes would flow from non-aeronautical revenues.
generation of such non-aeronautical revenues would involve a larger capital
investment in property development.
gave less marks to GVK because it had a high capital outlay projected (as
compared to the appellant),
not regard experience in property development as having the same priority as
infrastructure development, and
marks to the appellant for its non-aeronautical revenue, although its projected
revenue was less than 40%.
consequence of (iv) above, EC gave marks to the appellant for Mexico Airport
which is admittedly an OECD Airport - on the spacious reasoning that it is
virtually like a non-OECD Airport since Mexico is like a developing country.
portions of GETEs reports read as follows:
REPORT DATED 7.1.2006 xx xx xx xx 2.1. The Group of Eminent Technical
Experts (GETE) had their first meeting and deliberations on Friday, 30th
December, 2005The presentation was basically for explaining the contents of the
Request for Proposal (RFP), the approach adopted by the EC in evaluating the
technical bids and the views expressed by Inter Ministerial Group (IMG) on the
EC evaluation. The EC explained that the weightage marks for the two criteria
and sub-criteria were already indicated in the RFP for the information of
bidders. Splitting up these marks to the different sub-factors of sub-criteria
was done by the E.C. based on the mandate given to them by the I.M.G. On query
from the GETE, they formed that after the technical bids were opened certain
clarifications were invited from bidders mainly to sort out discrepancies in
their submittals and not for eliciting additional Information or submission of
additional documents. E.C. stated that the assignment of marks for technical
evaluation was done strictly based on the submittals of the tenderers.
GETE again met on 2 January when only Shri Sanjay Narayan and Dr. Sihag were
present. The Consultants were not invited to this meeting. In this meeting Shri
Sanjay Narayan handed over to the GETE a copy of the Note prepared for the
Committee of Secretaries (COS) dated 23rd December, 2005 together with all Annexures
which also contained details of marks assigned (both original and revised) to
the Consortiums A to E in The Annexure IX and Appendix- II to Annexure XII to
the Note. In this meeting, the GETE enquired at what stage the apportionment of
marks to the sub-factors was done by the EC and whether after assigning these
marks, the same had the approval of the I.M.G. The GETE also wanted to know
whether after assigning the marks to the sub-factors, the same were kept in a
sealed cover to obviate the possibility of any changes or alterations to these
marks during evaluation stage. The GETE also enquired whether a formal Tender
Committee was appointed for the technical and financial evaluation of the bids and
whether the Airport Authority of India, as the owner, was associated in the
technical evaluation. It was informed to the GETE that there was no Tender
Committee per se and the assignment of marks to the sub-factors was done
entirely by the EC. (The Global Consultants) and at no stage Airport Authority
of India was associated in assessing and assigning the marks. The GETE was
informed that the E.C. had taken about one and a half months to complete this
exercise, scrutinizing about 40,000 pages of submissions.
The GETE again met on 4th
January, 2006 when
ABN- AMROs letter dated 3rd January, 2006
in reply to queries raised was handed over to the GETE (Annexure- B.). From
this letter it appears inter-se weightage and marks to the sub-factors were
finalized prior to assigning scores on the offers, but there was no categorical
assertion that this was finalized before the exercise was started and kept
seated. We are only pointing out that since these inter-se weightages were not
approved by the Government and kept sealed, the possibility of these being
changed during the course of evaluation cannot be ruled out.
With all the papers made available to the GETE, the need for seeking further
clarification from the EC was not felt. Therefore, they were not invited for
any further clarification by the GETE.
Scrutiny of the evaluation procedure adopted by EC.:
We (GETE) did not call for the technical bid papers nor perused the same. We
also did not make any attempt for a fresh technical evaluation of the bids by
assigning marks to the sub-criteria and sub-factors.
attempt was to assess whether the E.C. had assigned weightages and marks in a
logical and transparent manner to the sub-factors and whether there has been
any bias in favour of or against any of the bidders while assigning marks. For
this we relied upon the RFP and the mark sheets attached to the Note prepared
for the Committee of Secretaries.
While examining the assignments of marks to the various bidders we kept in mind
the issues raised by the members of the Inter Ministerial Group but we were not
solely guided by their views. We also examined in a dispassionate way whether
there was any flaw or bias in the exercise of subjectiveness while assigning
marks to the different consortiums. Our observations in this matter are briefly
given as under- 3.1.3 The Global Consultants prepared ITREOI in January, 2004
which was approved by the IMG in February, 2004 but the appointment of the
Global Consultants was approved by EGOM in April, 2004. Thus the Consultants
started working even before their appointment was approved.
From the report of the Govt. Review Committee, it is seen that the Evaluation
Committee (E.C.) has stated that their evaluation was not based merely on the
submittals but they relied upon some published statistics, information
available within their setup and their own perception and understanding of
various aspects of Evaluation (Please refer GRCs) report on their meeting
dated 23rd/24th November, 2005). This is not in conformity to RFP.
xx xx xx
There are 8 sub-criterions in the criteria no. 4.1.1 out of which 4 have
further sub-factors. Similarly there are 11 sub-criterions in the criteria
4.1.2 out of which 8 have further sub-factors.
Through allocation of weightage to different sub- criterions were indicated in
RFP, weightage to different sub-factors were not indicated but was assigned
later by EC based on IMG directions. EC has not confirmed explicitly whether
these weightages were assigned before or after opening of bids. Certain
anomalies have been observed in the allocation of the weightages. While equal weightage
has been allocated to most of the sub- factors; un-equal allocation has been
done in two cases (1.2.2 /1.2.3 & 3.1.1/3.1.2). The justification given by
EC that these sub-factors are of different importance is not considered
satisfactory and convincing because such a logic can apply to many other
sub-factors as well. Since weightages of these sub- factors were not mentioned
in RFP and allocation of equal weightage has been done in majority of sub-
factors, we feel the same concept of equal weightage should have been adopted
for these two sub-factors also. By assigning different weightages there is room
to suspect that some of the bidders have been favoured.
In sub-factor 1.1.6, the assessment of performance of commercial operations of
major airports covering retail property and other commercial operations was to
be done focusing on Airports having non-aeronautical revenue of 40% or more of
total revenue. Though non- aeronautical earnings of bidder E are only
37%, but they have been given 75% marks. This is considered to be in
non-conformity of the RFP. The explanation of EC that wording of the Clause did
not make the 40% mandatory is not convincing. In any case, since the non-
aeronautical earnings of E was less than the threshold limit of 40%,
assigning a high score of 75% was not justified. This should have been of the
order of 40% to 50%.
sub-factor 1.1.8, the assessment of operating in non-OECD countries was to be
as per the RFP. Bidder E operating in Mexico, which, is an OECD country, has been awarded 75% marks,
which is not in conformity to RFP. The explanation given by EC to IMG that the
bidder has Airport development experience in other developing countries like Ecuador, Uruguay and Guatemala, is not considered convincing. Our
considered opinion is the track record in improved performance is
also to be judged only in the context of a non-OECD country.
awarding marks against this item is not considered in conformity to the item in
sub-factor 3.1.2 (proportion of AAI Staff targeted for absorption into JVC by
year 3), EC has awarded 50% marks for minimum 40% absorption and remaining 50%
on prorata basis between 40% to 100% absorption. Since RFP has stipulated 40%
absorption as minimum acceptable and additional weightage has been contemplated
for a higher proportion of absorption, we feel it is more reasonable and
rational to distribute full marks to 100% absorption.
moderation of marks for the above mentioned items is done, following reduction
in the score of bidder E will take place:
No. Item Mumbai Delhi
equal weightage is 1.1 1.1 given to sub-factors 1.2.2 & 1.2.3.
If equal weightage is 0.5 0.6 given to sub-factors 3.1.1 & 3.1.2.
If the marks of sub- 0.7 0.7 factor 1.1.6 given for non-aeronautical revenue
less than 40% are reduced from 75 % to 50%.
If score of sub-factor 2.1 2.1 1.1.8 given for experience in an OECD country,
marking system of 1.6 1.9 sub-factor 3.1.2 as modified keeping 0 for
40% absorption and 5 for 100% absorption.
(i) to (vi) 6.0 6.4 Resultant score of E 75.0 74.6 for criteria
the above, it is clear that the above moderation clearly disqualifies bidder
E in criteria 4.1.1.
Modernization exercise attempted above will not make any material difference in
the position of bidders A, C, D and F
who will remain still disqualified. In regard to bidder B he will
still be well above the qualifying marks of 80%. In fact his position would
improve marginally. Therefore, we have not attempted to moderate the marks of
the other bidders based on our observations of paras 4.3 to 4.6.
While scrutinizing the marks for criteria 4.1.2 we have the following
observations to make:- The GETE have not studied the development plan of this
bidder or any other bidder for that matter. We have also not discussed this
with the GTA (Air Plan). Considering the type of deficiencies in the
developmental plans pointed out by AAI, we feel the marking of bidder
E has been on a liberal side in regard to sub-criteria
6.5. This will also be the marks if we compare the marks scored by bidder
B vis-`-vis marks scored by bidder E in regard to Delhi
Airport as brought out under:- Maximum Score Score of B Score of
E Delhi 44.5 30.2 43.0 4.10. Admittedly bidder B has better
credentials, for airport development and such vast difference in marks scored
by bidder E over bidder B cannot be easily explained. We
feel that if the rational approach has been adopted bidder E who now
gets qualified by 0.3 marks for Mumbai and by 1.1 marks for Delhi would have been disqualified.
Since in any case in our view bidder E gets disqualified on the basis
of our assessment contained in Para-4.7 above, we are of the opinion that
qualifying bidder E technically is not correct.
REPORT OF GETE DATED 13th
JANUARY, 2006 xx xx
xx xx Based on the methodology adopted by GETE for moderating the marks of
bidder E, we have now moderated the scores of all other bidders as
well. Based on this exercise, the marks secured by the different bidders are
given in a tabulated form separately for Delhi and Mumbai Airports.
Table showing moderated scores of all the bidders in criteria A
(Management Capabilities) for Mumbai Airport Sl. Weightage A B C D E F No.
25.0 6.7 22.5 17.1 19.7 19.6 17.2
12.5 2.8 9.7 9.7 4.7 9.2 9.5
12.5 5.4 7.1 11.7 6.7 9.6 8.8
12.5 5.0 10.0 11.3 5.0 11.3 10.0
12.5 6.9 10.5 10.9 7.2 10.8 10.5
12.5 2.5 12.5 5.0 7.5 11.3 11.3 3.3& 12.5 6.3 12.5 7.5 6.3 9.4 8.8 3.4
Total 100 35.6 84.8 73.2 57.1 81.2 76.1 Score as per shift 35.5 84.7 73.1 57.0
81.0 76.0 Moderation due to
equal + -0.21 - -0.02 -1.09 - weightage is given 0.96 0.02 0.23 to sub-factor
1.2.2 and 1.2.3
If equal +1.8 -0.81 +0.3 -0.32 -0.49 - weightage is given 5 5 0.81 to
sub-factor 3.1.1 and 3.1.2
If the marks 0.0 0.0 0.0 0.0 -0.70 0.0 of sub-factor 1.1.6 given to E
for non- aeronautical revenue less than 40% are reduced from 75% to 50% -
others no change.
If score of 0.0 0.0 0.0 0.0 -2.1 0.0 sub-factor 1.1.8 given for experience in
OECD country to E is excluded - others no change.
marking 0.0 -1.98 - -3.13 -1.82 - system of sub- 0.17 1.98 factor 3.1.2 is
modified keeping 0 for 40% absorption and 5 for 100%
variation +2.8 -3.00 +0.1 -3.47 -6.20 - 1 6 3.02 Revised score 38.3 81.7 73.3
53.5 74.8 73.0 B- Table showing moderated scores of all the bidders in criteria
A (Management Capabilities) for Delhi Airport Sl. Weightage A B C D E
25.0 6.7 22.5 17.1 19.7 19.6
12.5 2.8 9.7 9.7 4.7 9.2
12.5 7.5 7.1 11.7 6.7 9.6
12.5 5.0 10.0 11.3 5.0 11.3
12.5 6.9 10.5 10.9 7.2 10.6
12.5 2.5 12.5 5.0 7.5 11.3
& 12.5 6.3 12.5 7.5 6.3 9.4 3.4 Total 100 37.7 84.8 73.2 57.1 81.0 Score as
per shift 37.6 84.7 73.1 57.0 80.9 Moderation due to
equal + -0.21 - -0.02 -1.09 weightage is given 0.96 0.02 to sub-factor 1.2.2
If equal +1.8 -0.81 +0.3 -0.32 -0.60 weightage is given 5 5 to sub-factor 3.1.1
If the marks 0.0 0.0 0.0 0.0 -0.70 of sub-factor 1.1.6 given to E for
non- aeronautical revenue less than 40% are reduced from 75% to 50% - others no
If score of 0.0 0.0 0.0 0.0 -2.1 sub-factor 1.1.8 given for experience in OECD
country to E is excluded - others no change.
marking 0.0 -1.98 - -3.13 -1.60 system of sub- 0.17 factor 3.1.2 is modified
keeping 0 for 40% absorption and 5 for 100% absorption.
variation +2.8 -3.00 +0.1 -3.47 -6.09 1 6 Revised score 40.4 81.7 73.3 53.5
74.8 As rightly pointed out by learned counsel for the respondents that if EC
felt that the priorities and weightages as indicated in the RFP were
inappropriate, it should have requested AAI/GOI to amend the RFP before the
bids were received. Interestingly, the modifications were resorted to after the
bids were opened. That is the principal reason for which EGOM appears to have
sought views of the COS and the COS was equally entitled to invite a group of experts to
examine the matter.
details relating to the marks allotted to the bids are as follows:
Delhi airport Sl. Name of Technical evaluation
Financia No. Bidder l Bid % Management Development capability capability Pre-
Post- Sridharan Sridharan 1 Reliance-ASA 80.9 74.8 81.0 45.99 (Bidder E) 2 GMR-Frapport
84.7 81.7 80.1 43.64 (Bidder B) 3 DS 73.1 73.3 70.5 40.15 Construction Munich Airport
(Bidder C) 4 Sterlite 57.0 53.5 61.9 37.04 Macquarie (Bidder D) 5 Essel TAV
37.6 40.4 41.4 Bid not (Bidder A) opened Mumbai Airport Sl. Name of Technical
evaluation Financia No. Bidder l Bid % Management Development capability capability
Pre- Post- Sridharan Sridharan 1 Reliance-ASA 81.0 74.8 80.2 21.33 (Bidder E) 2
GMR-Frapport 84.7 81.7 92.7 33.03 (Bidder B) 3 DS 73.1 73.3 54.7 28.12
Construction Munich Airport (Bidder C) 4 Sterlite 57.0 53.5 65.1 Bids not
Macquarie opened (Bidder D) 5 Essel TAV 35.5 38.3 29.4 Bids not (Bidder A)
opened 6 GVK-ACSA 76.0 73.0 59.3 38.70 (Bidder F) Learned counsel for the
respondents have emphasized that a curious feature of the four changes is that
at least three of them were in principle designed to enable the appellant to
get over the shortcomings in its bid. It is to be noted that the appellant had
no property development experience. It had projected less than 40% non
aeronautical revenue and had a partner from an OECD country.
GETEs report shows that even taking these four modifications led to some
of the bidders getting more marks.
and others did not cross the bench mark of 80% and even after exclusion of
these marks, GMR had more than 80% marks.
only the appellant who crossed the threshold of 80% on account of these four
variations and fell below 80% when the effect of these four variations was
from the RFP made by EC after opening the bids can reasonably raise a doubt
that EC knew that the modalities would benefit the appellant. In any event, it
is not necessary to go into the question whether EC was partial to the
appellant because that is nobodys case, though it has been submitted that
after opening the bids, EC made the variations and beneficiary was the appellant.
report shows that it enunciated the principle to carry out an exercise that
would be more in the nature of validation dealing with the four variations made
also noted that certain issues can be more satisfactorily addressed by process
of validation that would involve a re-allocation of marks, on the assessment
made by the EC of the bids albeit in a manner that would be consistent with the
RFP. It essentially was not an exercise of re-evaluation but of a re-allocation
consistent with RFP.
noted in GETEs first report, its attempt was to assess whether EC had
assigned weightages and marks in a logical and transparent manner to the
sub-factors and whether there had been any biased in favour of or against any
of the bidders while assigning marks, with reference to the RFP. While making
such examination, the issues raised by the members of IMG were kept in view,
but as stated in the report, GETE was not solely guided by their views.
the first report itself indicated the reasons as to why the evaluation process
containing the moderation exercise was not undertaken in respect of bidders, as
desired by EGOM GETE did so and submitted its second report.
GMR crossed the bench mark of 80% in respect of both the bids while others did
has been made by the appellant to the lowering of the bench mark. It is to be
noted that the appellant had come into the zone of consideration only because
of lowering of the bench mark as otherwise after the modifications were made by
GETE, it had not crossed the bench mark.
appellants stand that if none was found eligible on the basis of 80% bench
mark, there should have been a fresh bid, has been answered by the respondents.
It has been pointed out that the number of bidders was small. The bidders after
opening of the bid knew the merits and demerits of all the bids. There was an
urgency for early completion of the airports keeping in view the 2010
scope for judicial review of administrative actions has been considered by this
Court in various cases.
the points that falls for determination is the scope for judicial interference
in matters of administrative decisions. Administrative action is stated to be
referable to broad area of Governmental activities in which the repositories of
power may exercise every class of statutory function of executive,
quasi-legislative and quasi-judicial nature. It is trite law that exercise of
power, whether legislative or administrative, will be set aside if there is
manifest error in the exercise of such power or the exercise of the power is
manifestly arbitrary (See State of U.P. and Ors. v. Renusagar Power Co. and
Ors. (AIR 1988 SC 1737). At one time, the traditional view in England was that the executive was not
answerable where its action was attributable to the exercise of prerogative
power. Professor De Smith in his classical work Judicial Review of
Administrative Action 4th Edition at pages 285-287 states the legal
position in his own terse language that the relevant principles formulated by
the Courts may be broadly summarized as follows. The authority in which a
discretion is vested can be compelled to exercise that discretion, but not to
exercise it in any particular manner. In general, a discretion must be
exercised only by the authority to which it is committed. That authority must
genuinely address itself to the matter before it; it must not act under the
dictates of another body or disable itself from exercising a discretion in each
individual case. In the purported exercise of its discretion, it must not do
what it has been forbidden to do, nor must it do what it has not been
authorized to do. It must act in good faith, must have regard to all relevant
considerations and must not be influenced by irrelevant considerations, must
not seek to promote purposes alien to the letter or to the spirit of the
legislation that gives it power to act, and must not act arbitrarily or
capriciously. These several principles can conveniently be grouped in two main categories:
to exercise a discretion, and
or abuse of discretionary power.
two classes are not, however, mutually exclusive. Thus, discretion may be
improperly fettered because irrelevant considerations have been taken into account,
and where an authority hands over its discretion to another body it acts ultra vires.
present trend of judicial opinion is to restrict the doctrine of immunity from
judicial review to those class of cases which relate to deployment of troupes,
entering into international treaties, etc. The distinctive features of some of
these recent cases signify the willingness of the Courts to assert their power
to scrutinize the factual basis upon which discretionary powers have been
exercised. One can conveniently classify under three heads the grounds on which
administrative action is subject to control by judicial review. The first
ground is illegality the second irrationality, and the
third procedural impropriety.
principles were highlighted by Lord Diplock in Council of Civil Service Unions
v. Minister for the Civil Service (1984 (3) All.ER.935), (commonly known as
CCSU Case). If the power has been exercised on a non-consideration or non-
application of mind to relevant factors, the exercise of power will be regarded
as manifestly erroneous. If a power (whether legislative or administrative) is
exercised on the basis of facts which do not exist and which are patently
erroneous, such exercise of power will stand vitiated. (See Commissioner of Income-tax
v. Mahindra and Mahindra Ltd. (AIR 1984 SC 1182). The effect of several
decisions on the question of jurisdiction have been summed up by Grahame Aldous
and John Alder in their book Applications for Judicial Review, Law and
is a general presumption against ousting the jurisdiction of the Courts, so
that statutory provisions which purport to exclude judicial review are
construed restrictively. There are, however, certain areas of governmental
activity, national security being the paradig, which the Courts regard
themselves as incompetent to investigate, beyond an initial decision as to
whether the governments claim is bona fide.
this kind of non-justiciable area judicial review is not entirely excluded, but
very limited. It has also been said that powers conferred by the Royal
Prerogative are inherently unreviewable but since the speeches of the House of
Lords in council of Civil Service Unions v. Minister for the Civil Service this
is doubtful. Lords Diplock, Scaman and Roskili appeared to agree that there is
no general distinction between powers, based upon whether their source is
statutory or prerogative but that judicial review can be limited by the subject
matter of a particular power, in that case national security. May prerogative
powers are in fact concerned with sensitive, non-justiciable areas, for
example, foreign affairs, but some are reviewable in principle, including the
prerogatives relating to the civil service where national security is not
non-justiciable power is the Attorney Generals prerogative to decide
whether to institute legal proceedings on behalf of the public interest.
(Also see Padfield v. Minister of Agriculture, Fisheries and Food (LR (1968) AC
Court will be slow to interfere in such matters relating to administrative
functions unless decision is tainted by any vulnerability enumerated above;
like illegality, irrationality and procedural impropriety.
action falls within any of the categories has to be established. Mere assertion
in that regard would not be sufficient.
famous case commonly known as The Wednesburys case is treated as
the landmark so far as laying down various basic principles relating to
judicial review of administrative or statutory direction.
summarizing the substance of the principles laid down therein we shall refer to
the passage from the judgment of Lord Greene in Associated Provincial Picture
Houses Ltd. v. Wednesbury Corpn. (KB at p. 229: All ER p. 682). It reads as follows:
is true that discretion must be exercised reasonably. Now what does that mean?
Lawyers familiar with the phraseology used in relation to exercise of statutory
discretions often use the word unreasonable in a rather comprehensive
sense. It has frequently been used and is frequently used as a general
description of the things that must not be done. For instance, a person
entrusted with a discretion must, so to speak, direct himself properly in law.
He must call his own attention to the matters which he is bound to consider. He
must exclude from his consideration matters which are irrelevant to what he has
to consider. If he does not obey those rules, he may truly be said, and often
is said, to be acting unreasonably.
there may be something so absurd that no sensible person could even dream that
it lay within the powers the authority....In another, it is taking into
consideration extraneous matters.
unreasonable that it might almost be described as being done in bad faith; and
in fact, all these things run into one another. Lord Greene also observed
(KB p.230: All ER p.683) ....it must be proved to be unreasonable in the
sense that the court considers it to be a decision that no reasonable body can
come to. It is not what the court considers unreasonable. .... The effect of
the legislation is not to set up the court as an arbiter of the correctness of
one view over another. (emphasis supplied) Therefore, to arrive at a
decision on reasonableness the Court has to find out if the
administrator has left out relevant factors or taken into account irrelevant
decision of the administrator must have been within the four corners of the
law, and not one which no sensible person could have reasonably arrived at, having
regard to the above principles, and must have been a bona fide one.
decision could be one of many choices open to the authority but it was for that
authority to decide upon the choice and not for the Court to substitute its
principles of judicial review of administrative action were further summarized
in 1985 by Lord Diplock in CCSU case as illegality, procedural impropriety and
irrationality. He said more grounds could in future become available, including
the doctrine of proportionality which was a principle followed by certain other
members of the European
Lord Diplock observed in that case as follows:
review has I think, developed to a stage today when, without reiterating any
analysis of the steps by which the development has come about, one can
conveniently classify under three heads the grounds on which administrative
action is subject to control by judicial review. The first ground I would call
illegality, the second irrationality and the third
procedural impropriety. That is not to say that further development
on a case-by-case basis may not in course of time add further grounds.
in mind particularly the possible adoption in the future of the principle of
proportionality which is recognized in the administrative law of
several of our fellow members of the European Economic Community. Lord Diplock explained irrationality
irrationality I mean what can by now be succinctly referred to as Wednesbury
unreasonableness. It applies to a decision which is to outrageous in its
defiance of logic or of accepted moral standards that no sensible person who
had applied his mind to the question to be decided could have arrived at
it. In other words, to characterize a decision of the administrator as
irrational the Court has to hold, on material, that it is a decision
so outrageous as to be in total defiance of logic or moral standards.
Adoption of proportionality into administrative law was left for the
essence, the test is to see whether there is any infirmity in the decision
making process and not in the decision itself. (See Indian Railway Construction
Co.Ltd. v. Ajay Kumar (2003 (4) SCC 579) Wednesbury principles of
reasonableness to which reference has been made in almost all the decisions
referred to hereinabove is contained in Wednesburys case (supra). In that
case Lord Green MR has held that a decision of a public authority will be
liable to be quashed in judicial review proceeding where the court concludes
that the decision is such that no authority properly directing itself on the
relevant law and acting reasonably could have arrived it.
of judicial review in terms of Wednesbury is now considered to be
traditional in England in contrast to higher standards
under the common law of human rights.
Cooke in R v. Secretary of State for the Home Department, ex parte Daly, (2001)
3 All ER 433 observed:
I think that the day will come when it will be more widely recognized that the Wednesbury
case was an unfortunately retrogressive decision in English administrative law,
in so far as it suggested that there are degrees of unreasonableness and that
only a very extreme degree can bring an administrative decision within the
legitimate scope of judicial invalidation.
depth of judicial review and the deference due to administrative discretion
vary with the subject matter. It may well be, however, that the law can never
be satisfied in any administrative field merely by a finding that the decision
under review is not capricious or absurd. It is further observed that this
does not mean that there has been a shift to merits review. On the contrary,
the respective roles of judges and administrators are fundamentally distinct
and will remain so. To this extent the general tenor of the observations in R (Mahmood)
v. Secretary of State for the Home Dept. (2000)1 WLR 840 are correct. And Laws
L.J. (at 847 (para 18) rightly emphasized in Mahmoods case that the
intensity of review in a public law case will depend on the subject matter in
for emphasis) In Huang & Ors v. Secretary of State for the Home Department,
(2005) 3 All ER 435 it is observed:
depth of judicial review and the deference due to administrative discretion
vary with the subject matter. Can we find a principled approach to give this
proposition concrete effect in cases such as these appeals? In R (on the
application of ProLife Alliance) v BBC (2003 (2) All ER 977, Lord Hoffmann
Lords, although the word deference is now very popular in describing
the relationship between the judicial and the other branches of government, I
do not think that its overtones of servility, or perhaps gracious concession,
are appropriate to describe what is happening. In a society based upon the rule
of law and the separation of powers, it is necessary to decide which branch of
government has in any particular instance the decision-making power and what
the legal limits of that power are.
is a question of law and must therefore be decided by the courts. (underlined
for emphasis) Section 9 of the Judicial Review Procedure Act, 1996 (Canada) states that the Court may reject
an application for judicial review of a statutory power of decision, if there
is mere irregularity in form or a technical irregularity, or if the court feels
that there has been no miscarriage of justice.
5 of the US Code 41 also talks about judicial review of administrative
decisions regarding public contracts. It states that the courts would not
interfere in an award process unless it is shown to be manifestly fraudulent,
capricious and so grossly erroneous as to imply bad faith.
exercising power of judicial review courts should not proceed where if two
views are possible and one view has been taken. In such a case, in the absence
of mala fide taking one of the views cannot be a ground for judicial review. In
Asia Foundation & Construction Ltd. v. Trafalgar House Construction (I)
Ltd. and Ors. (1997(1) SCC 738) this Court observed as follows:
The Asian Development Bank came into existence under an Act called the Asian
Development Act, 1966, in pursuance of an international agreement to which India was a signatory. This new financial
institution was established for accelerating the economic development of Asia and the Far East. Under the Act the Bank and its officers have been granted certain
immunities, exemption and privileges. It is well known that it is difficult for
the country to go ahead with such high cost projects unless the financial
institutions like the World Bank or the Asian Development Bank grant loan or
subsidy, as the case may be. When such financial institutions grant such huge
loans they always insist that any project for which loan has been sanctioned must
be carried out in accordance with the specification and within the scheduled
time and the procedure for granting the award must be duly adhered to.
aforesaid premises on getting the evaluation bids of the appellant and
Respondent-1 together with the consultants opinion after the so-called
corrections made the conclusion of the Bank to the effect the lowest
evaluated substantially responsive bidder is consequently AFCONS cannot be
said to be either arbitrary or capricious or illegal requiring Courts
interference in the matter of an award of contract. There was some dispute
between the Bank on one hand and the consultant who was called upon to evaluate
on the other on the question whether there is any power of making any
correction to the bid documents after a specified period. The High Court in
construing certain clauses of the bid documents has come to the conclusion that
such a correction was permissible and, therefore, the Bank could not have
insisted upon granting the contract in favour of the appellant. We are of the
considered opinion that it was not within the permissible limits of
interference for a court of law, particularly when there has been no allegation
of malice or ulterior motive and particularly when the court has not found any mala
fides or favouritism in the grant of contract in favour of the appellant. In Tata
Cellular v. Union of India (1994 (6) SCC 651) , this Court has held that:
duty of the court is to confine itself to the question of legality.
concern should be:
Whether a decision-making authority exceeded its powers,
committed an error of law,
committed a breach of the rules of natural justice,
a decision which no reasonable tribunal would have reached or,
it is not for the Court to determine whether a particular policy or particular
decision taken in the fulfilment of that policy is fair. It is only concerned
with the manner in which those decisions have been taken. The extent of the
duty to act fairly will vary from case to case. Shortly put, the grounds upon
which an administrative action is subject to control by judicial review can be
classified as under:
Illegality: This means the decision-maker must understand correctly the law
that regulates his decision- making power and must give effect to it;
Irrationality, namely, Wednesbury unreasonableness.
above are only the broad grounds but it does not rule out addition of further
grounds in course of time.
Therefore, though the principle of judicial review cannot be denied so far as
exercise of contractual powers of government bodies are concerned, but it is
intended to prevent arbitrariness or favouritism and it is exercised in the
larger public interest or if it is brought to the notice of the court that in
the matter of award of a contract power has been exercised for any collateral
purpose. But on examining the facts and circumstances of the present case and
on going through the records we are of the considered opinion that none of the
criteria has been satisfied justifying Courts interference in the grant of
contract in favour of the appellant. We are not entering into the controversy
raised by Mr Parasaran, learned Senior Counsel that the High Court committed a
factual error in coming to the conclusion that Respondent-1 was the lowest
bidder and the alleged mistake committed by the consultant in the matter of bid
evaluation in not taking into account the customs duty and the contention of
Mr. Sorabjee, learned senior counsel that it has been conceded by all parties
concerned before the High Court that on corrections being made respondent-1 was
the lowest bidder. As in our view in the matter of a tender a lowest bidder may
not claim an enforceable right to get the contract though ordinarily the
authorities concerned should accept the lowest bid. Further we find from the
letter dated 12.7.1996 that Paradip Port Trust itself has come to the following
technical capability of any of the three bidders to undertake the works is not
in question. Two of the bids are very similar in price. If additional
commercial information which has now been provided by bidders through Paradip
Port Trust, had been available at the time of assessment, the outcome would
appear to favour the award to AFCONS.
This being the position, in our considered opinion, the High Court was not
justified in interfering with the award by going into different clauses of the
bid document and then coming to the conclusion that the terms provided for
modifications or corrections even after a specified date and further coming to
the conclusion that Respondent 1 being the lowest bidder there was no reason
for the Port Trust to award the contract in favour of the appellant. We cannot
lose sight of the fact of escalation of cost in such project on account of
delay and the time involved and further in a coordinated project like this, if
one component is not worked out the entire project gets delayed and the
enormous cost on that score if rebidding is done. The High Court has totally
lost sight of this fact while directing the rebidding. In our considered
opinion, the direction of rebidding in the facts and circumstances of the
present case instead of being in the public interest would be grossly
detrimental to the public interest.
also to be noted that there was no stand before the High Court that the
appellant wanted to match the bid.
if it is accepted for the sake of argument, that was so urged it would have no
attractive argument was advanced that as GMR has been allowed to match the
financial dealing of appellant for Mumbai airport, the same modality should
have been adopted for the other bidders. Though the argument is attractive, at
first flush, it cannot be accepted for the simple reason that when bench mark
is crossed, financial consideration is the determinative factor because of
to be noted that though emphasis was led that the constitution of Committees of
non technical persons could not have thrown much light on the ultimate
decision, yet it is to be noted that all the three Committees were part of the
government machinery. The issue was to assess correctness of the ECs
of different views and discussions in different meetings really lead to a
transparent process and transparency in the decision making process. In the
realms of contract, various choices were available. Comparison of the
respective merits, offers of choice and whether that choice has been properly
exercised are the deciding factors in the judicial review.
been rightly submitted by learned counsel for the Union of India, the RFP has
to be considered in the context of other documents like substantial document
OMDA, execution of the agreements culminating to the final master plan. Initial
development plan is nothing but a projection which has to be broadly in line
with OMDA. Undisputedly, OMDA is prepared by the GOI and AAI. One of the
documents in the transaction documents is OMDA.
to be noted that if no one was qualified, two alternatives were available
either to scrap or abandon the process and second to re-conduct the tenders. As
noted above, the practical compulsion which made the choice avoidable cannot be
termed as perverse or lacking rationality.
safety valve is the OMDA. The ranking becomes irrelevant after the bidders have
come to the arena and then finally the financial bid which determines the
to be noted that GETE wanted to know as to whether the variation for allotment
of marks in respect of the development side area was done before opening the
bids or after opening it. EC had given a very evasive answer stating that same
was done before allotting marks. GETEs job was not the evaluation but
verifying the evaluation process. GETEs examination was restricted to see
whether alignment with RFP was correctly done. GETE was not expected to give
fresh opinion and no evaluation was necessary.
introduces subjectivity. GETE has gone by objective standards. The criterion
adopted by GETE appears to be more rational. It proceeded with the idea that
more objectivity was necessary. So it has called the process to be validation
pointed out by learned counsel for the respondents that parameters for judicial
review are different in the matters of contract for normal case of tenders. In
case of commercial contracts the normal contractual matters are excluded. It is
pointed out that there is no overwhelming public interest involving such
matters. GETE had only touched the fallacious approach of EC to make the
process transparent. The view taken is a possible view supported by reasons and
there should not be any interference.
ultimate, the question would be whether in the process of selection the
Government had adopted transparent and fair process.
balancing several claims a rational approach is necessary and that is to be
formed in line with the scope of judicial interference.
to be noted that Clause 5.5. deals with a situation of the same bidder being
the highest bidder for both the airports. It proceeds on the basis that there
would be another eligible bidder for the other airport and on that basis the
procedure to be adopted has been prescribed. In such a situation the bidder who
would be successful i.e. the highest bidder would be asked to take the airport
when the difference between his bid and the next higher bid is greater. Such a
procedure could be followed where there is second valid bid at the final phase.
This procedure does not deal with a situation where there is only one bidder
with valid bids for both the airports. In such a situation he becomes the
highest bidder for both the airports and for that reason alone, the question of
evaluation of financial bid arises.
RFP was to consider at the final phase of evaluation there would be only one
bid for each of the airports. In that event, there would be no question of
finding out difference between the various bids or comparing bids. That left no
option with the EGOM but to either vary RFP or to award one of the airports to
GMR and to cancel the process for the second or cancel the entire process. The
latter course would not have been in larger public interest.
the EGOM exercised its option.
final analysis, what the EGOM has done is to accept the report of EC subject to
validation done by GETE.
extent of judicial review in a case of this nature where the texture cannot be
matched with one relating to award of contract, the observations of this Court
in Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors. (1999 (1) SCC
492) are relevant. It was observed as follows:
Hence before entertaining a writ 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
view was re-iterated in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson
(P) Ltd. and Anr. (2005 (6) SCC 138).
Queens Bench decision in R. v. Department of Constitutional Affairs (2006
All ER (D) 101) it was inter- alia held as follows:
is not every wandering from the precise paths of best practice that lends fuel
to a claim for judicial review. Same would be available only if public law
element is apparent which would arise only in a case of bribery,
corruption, implementation of unlawful policy and the like.
case of commercial contract, the aforesaid view about wandering was noted. In paras
50 and 51 it was noted as follows:
does not have the material or expertise in this context to second
guess the judgment of the panel. Furthermore, this process is even more
clearly in the realm of commercial judgment for the defendant, which judgment
cannot properly be the subject of Public Law challenge on the grounds advanced
in the evidence before me. It is to be noted that in respect of both the
appellant and the GETE wherever subjectivity criteria is involved, GETE has not
dealt with the same.
mandate of EGOM was to validate and not to invalidate. It was a process for
overall validation and calibration to apply the correct standard. It is the
texture of the tendered document which is of paramount importance.
changed the texture whereas GETE did not do it. It needs no emphasis that
uneven denomination breaks the integrity and textures.
in connection with a finding of fact is an aspect of mistake of law. Linked
with the question whether GETEs constitution was legal, other question is
whether the jurisdiction conferred on GETE has been properly exercised.
of the second question alone would be necessary since we have held that
constitution of GETE does not suffer from any infirmity. In R (Iran) v. Secretary of State (2005 EWCA Civ 982 at para
11) it was observed as follows:
is well known that perversity represents a very high hurdle. In Miftari
v. SSHD (2005 EWCA Civ 481) the whole court agreed that the word meant what it
said: it was a demanding concept. The majority of the court (Keene and Maurice
Kay LJJ) said that it embraced decisions that were irrational or unreasonable
in the Wednesbury sense (even if there was no wilful or conscious departure
from the rational), but it also included a finding of fact that was wholly
unsupported by the evidence, provided always that this was a finding as to a
material matter. Opinions may differ as to when it can be said that in the
public law domain, the entire proceeding before the appropriate
authority is illegal and without jurisdiction or the defect or infirmity in the
order goes to the root of the matter and makes it in law invalid or void. The
matter may have to be considered in the light of the provisions of the
particular statute in question and the fact-situation obtaining in each case.
It is difficult to visualise all situations hypothetically and provide an
answer. Be that as it may, the question that frequently arises for
consideration, is, in what situation/cases the non- compliance or error or
mistake, committed by the statutory authority or tribunal, makes the decision
rendered ultra vires or a nullity or one without jurisdiction? If the decision
is without jurisdiction, notwithstanding the provisions for obtaining reliefs
contained in the Act and the ouster clauses, the jurisdiction of the
ordinary court is not excluded. So, the matter assumes significance. Since the
landmark decision in Anisminic Ltd. v. Foreign Compensation Commission [(1969)
1 ALL E.R. 208], the legal world seems to have accepted that any
jurisdictional error as understood in the liberal or modern approach,
laid down therein, makes a decision ultra vires or a nullity or without
jurisdiction and the ouster clauses are construed restrictively, and
such provisions whatever their stringent language be, have been held, not to
prevent challenge on the ground that the decision is ultra vires and being a
complete nullity, it is not a decision within the meaning of the Act.
concept of jurisdiction has acquired new dimensions.
original or pure theory of jurisdiction means the authority to decide
and it is determinable at the commencement and not at the conclusion of the
enquiry. The said approach has been given a go-by in Anisminic case as we shall
see from the discussion hereinafter [see De Smith, Woolf and Jowell Judicial
Review of Administrative Action (1995 Edn.) p. 238; Halsburys Laws of
England (4th Edn.) p. 114, para 67, footnote (9)]. As Sir William Wade observes
in his book, Administrative Law (7th Edn.), 1994, at p. 299:
tribunal must not only have jurisdiction at the outset, but must retain it
unimpaired until it has discharged its task. The decision in Anisminic
case (supra) has been cited with approval in a number of cases by this
Court.(See: Union of India v. Tarachand Gupta & Bros. [(1971) 1 SCC 486],
A.R. Antulay v. R.S. Nayak (1988 (2) SCC 602), R.B. Shreeram Durga Prasad and Fatehchand
Nursing Das v. Settlement Commission (IT & WT) ( 1989 (1) SCC 628), N. Parthasarathy
v. Controller of Capital Issues (1991 (3) SCC 153), Associated Engineering Co.
v. Govt. of AP (1991 (4) SCC 93), Shiv Kumar Chadha v. Municipal Corpn. of Delhi (1993 (3) SCC 161). In M.L. Sethi
v. R.P. Kapur, (1972 (2) SCC 427) legal position after Anisminic case (supra)
was explained to the following effect:
The word jurisdiction is a verbal coat of many colours. Jurisdiction
originally seems to have had the meaning which Lord Reid ascribed to it in Anisminic
Ltd. v. Foreign Compensation Commission, namely, the entitlement to enter
upon the enquiry in question. If there was an entitlement to enter upon an
enquiry into the question, then any subsequent error could only be regarded as
an error within the jurisdiction. The best known formulation of this theory is
that made by Lord Darman in R. v. Bolton (1841) 1 QB
said that the question of jurisdiction is determinable at the commencement, not
at the conclusion of the enquiry. In Anisminic Ltd., Lord Reid said:
there are many cases where, although the tribunal had jurisdiction to enter on
the enquiry, it has done or failed to do something in the course of the enquiry
which is of such a nature that its decision is a nullity. It may have given its
decision in bad faith. It may have made a decision which it had no power to
make. It may have failed in the course of the enquiry to comply with the
requirements of natural justice.
in perfect good faith have misconstrued the provisions giving it power to act
so that it failed to deal with the question remitted to it and decided some
question which was not remitted to it. It may have refused to take into account
something which it was required to take into account. Or it may have based its
decision on some matter which, under the provisions setting it up, it had no
right to take into account. I do not intend this list to be exhaustive. In
the same case, Lord Pearce said:
of jurisdiction may arise in various ways. There may be an absence of those
formalities or things which are conditions precedent to the tribunal having any
jurisdiction to embark on an enquiry. Or the tribunal may at the end make an
order that it has no jurisdiction to make. Or in the intervening stage while
engaged on a proper enquiry, the tribunal may depart from the rules of natural
justice; or it may ask itself the wrong questions; or it may take into account
matters which it was not directed to take into account. Thereby it would step
outside its jurisdiction. It would turn into its enquiry into something not
directed by Parliament and fail to make the enquiry which Parliament did
direct. Any of these things would cause its purported decision to be a
nullity. The dicta of the majority of the House of Lords, in the above
case would show the extent to which lack and excess of
jurisdiction have been assimilated or, in other words, the extent to which we
have moved away from the traditional concept of jurisdiction. The
effect of the dicta in that case is to reduce the difference between
jurisdictional error and error of law within jurisdiction almost to vanishing
point. The practical effect of the decision is that any error of law can be
reckoned as jurisdictional. This comes perilously close to saying that there is
jurisdiction if the decision is right in law but none if it is wrong. Almost
any misconstruction of a statute can be represented as basing their
decision on a matter with which they have no right to deal, imposing
an unwarranted condition or addressing themselves to a wrong
question. The majority opinion in the case leaves a court or tribunal with
virtually no margin of legal error.
there is excess of jurisdiction or merely error within jurisdiction can be
determined only by construing the empowering statute, which will give little
guidance. It is really a question of how much latitude the court is prepared to
allow.... In the subsequent Constitution Bench decision in Hari Prasad Mulshanker
Trivedi v. V.B. Raju and Ors. (1974 (3) SCC 415), it was held as follows:
Though the dividing line between lack of jurisdiction or power and erroneous
exercise of it has become thin with the decision of the House of Lords in the Anisminic
case (i.e. Anisminic Ltd. v. Foreign Compensation Commission (1967) 2 All E.R.
986), we do not think that the distinction between the two has been completely
wiped out. We are aware of the difficulty in formulating an exhaustive rule to
tell when there is lack of power and when there is an erroneous exercise of it.
The difficulty has arisen because the word jurisdiction is an
expression which is used in a variety of senses and takes its colour from its
context, (see per Diplock, J. at p. 394 in the Anisminic case). Whereas the
pure theory of jurisdiction would reduce jurisdictional control to a
vanishing point, the adoption of a narrower meaning might result in a more
useful legal concept even though the formal structure of law may lose something
of its logical symmetry. At bottom the problem of defining the concept of
jurisdiction for purpose of judicial review has been one of public policy
rather than one of logic. [S.A.
Smith, Judicial Review of Administrative Action, 2nd Edn., p. 98. (1968 Edn)
The observation of the learned author, (S.A. De Smith) was continued in its 3rd
Edn. (1973) at p.98 and in its 4th Edn. (1980) at p. 112 of the book. The
observation aforesaid was based on the then prevailing academic opinion only as
is seen from the footnotes. It should be stated that the said observation is
omitted from the latest edition of the book De Smith, Woolf and Jowell Judicial
Review of Administrative Action 5th Edn. (1995) as is evident from p. 229;
probably due to later developments in the law and the academic opinion that has
emerged due to the change in the perspective.
1980, the decision in first Anisminics case came up for further
consideration before the House of Lords, Privy Council and other courts. The
three leading decisions of the House of Lords wherein Anisminic principle was
followed and explained, are the following: Re Racal Communications Ltd., (1980)
2 All E.R. 634; O Reilly v. Mackman (1982) 3 All. E.R. 1124; Re. v. Hull University
Visitor (1993) 1 All E.R. 97. It should be noted that Racal, in re case (supra)
the Anisminic principle was held to be inapplicable in the case of (superior)
court where the decision of the court is made final and conclusive by the
statute. (The superior court referred to in this decision is the High Court) [1981
AC 374 (383, 384, 386, 391). In the meanwhile, the House of Lords in CCSU case
(supra) enunciated three broad grounds for judicial review, as
legality, procedural propriety and rationality
and this decision had its impact on the development of the law in post-Anisminic
period. In the light of the above four important decisions of the House of
Lords, other decisions of the Court of appeal, Privy Council etc. and the later
academic opinion in the matter the entire case-law on the subject has been
reviewed in leading text books. In the latest edition of De Smith on Judicial
Review of Administrative Action-edited by Lord Woolf and Jowell, Q.C.
[Professor of Public Law, 5th Edn. 1995], in Chapter 5, titled as
Jurisdiction, Vires, Law and Fact (pp.223-294), there is exhaustive
analysis about the concept SJurisdiction and its ramifications. The
authors have discussed the pure theory of jurisdiction, the innovative decision
in Anisminic case, the development of the law in post-Anisminic period, the
scope of the finality clauses (exclusion of jurisdiction of courts)
in the statutes, and have laid down a few propositions at pp. 250-256 which
could be advanced on the subject. The authors have concluded the discussion
thus at p. 256:
Anisminic virtually every error of law is a jurisdictional error, and the only
place left for non-jurisdictional error is where the components of the decision
made by the inferior body included matters of fact and policy as well as law,
or where the error was evidential (concerning for example the burden of proof
or admission of evidence).
the most precise indication of jurisdictional error is that advanced by Lord Diplock
in Racal Communications, when he suggested that a tribunal is entitled to make
an error when the matter involves, as may do interrelated questions of law,
fact and degree. Thus it was for the county court judge in Pearlman to
decide whether the installation of central heating in a dwelling amounted to a
structural, alteration, extension or addition. This was a typical
question of mixed law, fact and degree which only a scholiast would think it
appropriate to dissect into two separate questions, one for decision by the
superior court, viz., the meaning of these words, a question which must entail
considerations of degree, and the other for decision by a county court viz.,
the application of words to the particular installation, a question which also
entails considerations of degree.
however, doubtful whether any test of jurisdictional error will prove
satisfactory. The distinction between jurisdictional and non-jurisdictional
error is ultimately based upon foundations of sand.
of the superstructure has already crumbled. What remains is likely quickly to
fall away as the courts rightly insist that all administrative action should
be, simply, lawful, whether or not jurisdictionally lawful. The
jurisdictional control exercised by superior courts over subordinate courts,
tribunals or other statutory bodies and the scope and content of such power has
been pithily stated in Halsburys Laws of England - 4th Edn. (Reissue),
1989 Vol. 1(1), p. 113 to the following effect:
inferior court or tribunal lacks jurisdiction if it has no power to enter upon
an enquiry into a matter at all; and it exceeds jurisdiction if it nevertheless
enters upon such an enquiry or, having jurisdiction in the first place, it
proceeds to arrogate an authority withheld from it by perpetrating a major
error of substance, form or procedure, or by making an order or taking action
outside its limited area of competence. Not every error committed by an
inferior court or tribunal or other body, however, goes to jurisdiction.
Jurisdiction to decide a matter imports a limited power to decide that matter
tribunal lacks jurisdiction if
is improperly constituted, or
proceedings have been improperly instituted, or
to decide has been delegated to it unlawfully, or
is without competence to deal with a matter by reason of the parties, the area
in which the issue arose, the nature of the subject-matter, the value of that
subject-matter, or the non- existence of any other pre-requisite of a valid
adjudication. Excess of jurisdiction is not materially distinguishable from
lack of jurisdiction and the expressions may be used interchangeably.
the jurisdiction of a tribunal is dependent on the existence of a particular
state of affairs, that state of affairs may be described as preliminary to, or
collateral to the merits of, the issue, or as jurisdictional. (p. 114).
is a presumption in construing statutes which confer jurisdiction or
discretionary powers on a body, that if that body makes an error of law while
purporting to act within that jurisdiction or in exercising those powers, its
decision or action will exceed the jurisdiction conferred and will be quashed.
The error must be one on which the decision or action depends. An error of law
going to jurisdiction may be committed by a body which fails to follow the
proper procedure required by law, which takes legally irrelevant considerations
into account, or which fails to take relevant considerations into account, or
which asks itself and answers the wrong question. (pp. 119-120) The presumption
that error of law goes to jurisdiction may be rebutted on the construction of a
particular statute, so that the relevant body will not exceed its jurisdiction
by going wrong in law.
the courts were more likely to find that errors of law were within
jurisdiction; but with the modern approach errors of law will be held to fall within
a bodys jurisdiction only in exceptional cases. The Court will generally
assume that their expertise in determining the principles of law applicable in
any case has not been excluded by Parliament.(p. 120).
of law include misinterpretation of a statute or any other legal document or a
rule of common law; asking oneself and answering the wrong question, taking
irrelevant considerations into account or failing to take relevant
considerations into account when purporting to apply the law to the facts;
admitting inadmissible evidence or rejecting admissible and relevant evidence;
a discretion on the basis of incorrect legal principles; giving reasons which
disclose faulty legal reasoning or which are inadequate to fulfil an express duty
to give reasons, and misdirecting oneself as to the burden of proof. (pp.121-
122) H.W.R. Wade and C.F. Forsyth in their book Administrative Law, 7th Edn.,
(1994) discuss the subject regarding the jurisdiction of superior courts over
subordinate courts and tribunals under the head Jurisdiction over Fact and
Law in Chapter 9, pp. 284-320.
decisions before Anisminic and those in the post - Anisminic period have been
discussed in detail. At pp. 319- 320, the authors give the Summary of Rules thus:
over fact and law: Summary At the end of a chapter which is top- heavy with
obsolescent material, it may be useful to summarise the position as shortly as
possible. The overall picture is of an expanding system struggling to free
itself from the trammels of classical doctrines laid down in the past. It is
not safe to say that the classical doctrines are wholly obsolete and that the
broad and simple principles of review, which clearly now commend themselves to
the judiciary, will entirely supplant them. A summary can therefore only state
the long-established rules together with and broader rules which have now
superseded them, much for the benefit of the law. Together they are as follows:
of fact Old rule : The court would quash only if the erroneous jurisdictional.
: The court will quash if an erroneous and decisive fact was –
on the basis of no evidence; or
misunderstood or ignored.
of law Old rule: The court would quash only if the error was-
the face of the record.
rule: The court will quash for any decisive error because all errors of law are
now jurisdictional. (emphasis supplied) The above position was highlighted
by this Court in Mafatlal Industries Ltd. and Ors. v. Union of India and Ors.
(1997 (5) SCC 536).
of respondents about appellants objectionable conduct needs consideration.
1.3 of RFP reads as follows:
Confidentiality- PQB receiving this RFP must have completed and returned the
required, duly executed Confidentiality Deed.
are reminded that information provided in this RFP and the accompanying
documentation package is covered by the terms of the Confidentiality Deed and
the Disclaimer set out herein. PQB are also reminded that they are not to make
any public statements about the Transaction process or their participation in
Para 6.13 speaks of the Contract
Points and in no uncertain terms provides as follows:
request for information or clarification of information must be directed
through the questions and answer process set out in Section 3.3 hereof.
and their advisers must not make contact with any employees of AAI or other GOI
agencies or airport customers except as arranged through ABN AMRO as part of
the Transaction process. Learned counsel for the appellant submitted that
the expression contract obviously means an illegal attempt for
bribery etc. and cannot stand on the way of submission of documents for consideration.
The plea is clearly untenable.
there is no penal clause for such breach it goes against a very concept of
fairness in the process and evaluation of bids. Whatever documents are to be
submitted are clearly stipulated. Any attempt to take advantage of any
newspaper report, clearly falls foul of the mandate that there shall not be any
contract with any person involved in the process of selection. It is unusual
that the RFP did not make such a contract is a factor for disqualification.
This is to be kept in view in future tenders.
inevitable conclusion is that the appeal is sans merit, deserves dismissal,
which we direct. Costs made easy.