Law Insider India

Legal News, Current Trends and Legal Insight | Supreme Court of India and High Courts

SC: Unless Arbitrary, Discriminatory or Malafide, Terms of Invitation to Tender Not Open to Judicial Scrutiny

3 min read
Judge gavel Law Insider

Priyanka Singh

Published on: October 3, 2022 at 19:49 IST

Setting aside an order by the Delhi High Court, the Supreme Court observed that the terms of the invitation to tender aren’t open to judicial scrutiny.

The Delhi High Court’s order had quashed the Airport Authority of India’s tender conditions to select Ground Handling Agencies (GHA) at the Group D airports.

The Apex Court bench consisting Justice MR Shah and Krishna Murari observed the order by Delhi High Court consisting of a grave error by entertaining the writ petition at the stance of a third party being an advocacy group named Centre for Aviation Policy, having no locus standi to the petition. [Airports Authority of India vs. Centre for Aviation Policy]

The Apex Court expressed displeasure and said that, In that view of the matter, it is not appreciable how respondent No.1 (CAPSR) – original writ petitioner being an NGO would have any locus standi to maintain the writ petition challenging the tender conditions in the respective RFPs. Respondent No.1 cannot be said to be an “aggrieved party.”

On the merits of the case, the Court observed that the tender conditions were to not be interfered by the High Court referring to the limited scope of judicial interference in the subject and clarified that,

“As per the settled position of law, the terms and conditions of the Invitation to Tender are within the domain of the tenderer/tender making authority and are not open to judicial scrutiny, unless they are arbitrary, discriminatory or mala fide.”

“As per the settled position of law, the terms of the Invitation to Tender are not open to judicial scrutiny, the same being in the realm of contract.”

“The Government/tenderer/tender making authority must have a free hand in setting the terms of the tender. “The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser, or logical.”

The Order and AAI –

The order by High Court of Delhi dated 14th July, 2021, was opposed by the AAI before the Supreme Court.

A writ petition was moved against the AAI in the Delhi High Court by an NGO, pleading to strike down the decision of AAI to carry out region-wise sub-categorization of the 49 airports falling under Group D-1 and imposed the condition of accepting only the previous work experience in respect of providing GHS to the scheduled aircrafts.

The High Court also titled the minimum Annual Turnover criteria of INR 18 Cr as discriminatory and arbitrary.

The apex court observed the Explanation by AAI before the High Court the rationale behind the conditions of clubbing of 49 airports, criteria of evaluation (36 months experience in the past 7 years) in providing 3 out of 7 Crores GHS and the financial Capacity – Annual Turnover of Rs. 30 Cr (changed to Rs. 18Cr) in any one out of the recent three financial years.

Here, the Supreme Court held nothing as arbitrary and/or malafide and/or actuated as contrary to the observations made by the High Court, and that, it was the AAI’s position to decide its own terms and eligibility criteria.