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Airport Authority of India vs Centre for Aviation Policy, Safety & Research (CAPSR) & Others

Civil Appeal · 2022 INSC 1047Decided 30 Sept 2022
Civil Appeal Nos. 6615-6616 of 2022
M.R. Shah · Krishna Murari

Background

The Airport Authority of India (AAI) floated tenders for ground handling services at various categories of airports, including a fresh RFP for Group 'D1' airports in 2020 with eligibility conditions on regional clustering, past experience with scheduled flights, and a minimum annual turnover. Centre for Aviation Policy, Safety & Research (CAPSR), an NGO representing existing ground handling agencies, challenged these conditions before the Delhi High Court as arbitrary and discriminatory. The High Court struck down the region-wise clustering, the scheduled-flight experience requirement, and the turnover criterion, prompting AAI to appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that CAPSR, being a non-profit NGO not itself a participant or aggrieved bidder, and the writ petition not being in the nature of Public Interest Litigation, had no locus standi to challenge the tender conditions. On merits too, the Court found the tender conditions were not arbitrary, discriminatory or mala fide, reiterating settled law that the terms of an invitation to tender fall within the commercial domain of the tendering authority and are not open to judicial review absent proof of arbitrariness, malice or bias. The Court also rejected the argument based on MSME procurement orders, holding that provision of ground handling services (akin to a license) is different from procurement of goods and services. The High Court's judgment was set aside and the writ petition dismissed; the appeals were allowed with no order as to costs.

Lesson Learnt

Courts exercise very limited judicial review over the terms and conditions of government tenders: interference is warranted only where conditions are shown to be arbitrary, discriminatory or mala fide, not merely because a different formulation might have been fairer; and a non-aggrieved NGO cannot ordinarily maintain a writ petition challenging tender terms unless it is a genuine public interest litigation.

Official source (sci.gov.in)View Judgment (PDF)

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