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MIHAN India Ltd. vs. GMR Airports Ltd. & Ors.

Civil Appeal · 2022 INSC 534Decided 9 May 2022
Civil Appeal No. 3699 of 2022
Vineet Saran · J.K. Maheshwari

Background

The Government of Maharashtra, in coordination with the Union Government, planned to develop Nagpur airport into a major multi-modal international hub ("MIHAN") through a joint venture selected by competitive global bidding, run by MIHAN India Ltd. (MIL) with the Government of Maharashtra supervising. GMR Airports Ltd. (GAL) participated in this bidding process, but the authorities later annulled the process and sought to re-tender it. GAL challenged the annulment before the Nagpur Bench of the Bombay High Court, which ruled in GAL's favour, directing the authorities to proceed with the earlier bidding process rather than start a fresh one. MIL, the State Government, the Airports Authority of India and the Union of India all appealed to the Supreme Court.

Decision Breakdown

The Supreme Court dismissed all four appeals and upheld the High Court's decision. It found that the authorities had acted arbitrarily, in violation of Article 14 (the constitutional guarantee of equality/non-arbitrariness), in annulling a bidding process that had followed a fair and transparent procedure, and that the High Court was right to intervene under its writ jurisdiction rather than leaving GAL to a civil suit for specific performance. The Court also rejected the argument that the writ petition was not maintainable because the Union of India and the Airports Authority had not been made parties, finding they were not adversely affected by the relief granted and had shown no real prejudice from their non-joinder.

Lesson Learnt

Government authorities running a public tender cannot arbitrarily scrap a fair, transparent bidding process midway. Courts will step in under their writ (public law) jurisdiction to correct such arbitrary state action, and a party need not always be shown to have suffered financial loss to succeed: unconstitutional arbitrariness in government decision-making is itself enough grounds for relief.

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

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