MIHAN INDIA LTD. versus GMR AIRPORTS LTD. & ORS

MIHAN INDIA LTD.

GMR AIRPORTS LTD. & ORS.

(Civil Appeal No. 3699 of 2022)

MAY 09, 2022

[VINEET SARAN AND J. K. MAHESHWARI, JJ.]

Tenders: Annulling of bidding process – Justification of – Asper instructions of the Government of India, for upgradation,modernization, operation and maintenance of the NagpurInternational Airport, appellant company-MIL invited tenders fromprivate parties – Respondents-GAL was the highest bidder – Duringnegotiations regarding the offered revenue share, GAL agreed forthe revised revenue share – Thereafter, MIL, accepted the proposaland selected GAL as highest bidder – However, even on completionof formalities, the Concession Agreement was not executed so as toenable GAL to implement the project – Request made by GAL toMIL but the said letter was neither responded nor any steps weretaken to execute the Concession Agreement – MIL then annulledthe bidding process and also informed GAL to take back the bidsecurity submitted towards bid and thereafter, re-tendering the bid– Challenged to, by GAL and GNAIL – High Court quashed andset-aside the action of MIL in annulling the bidding as arbitrary,unreasonable and unfair – On appeal, held: Letter dated 07.03.2019endorsing GAL as selected bidder would amount to Letter ofAcceptance-LoA in terms of the Request for Proposal-RFP and,would be treated as concluded contract – GAL has qualified thetest of responsiveness and on making offer of highest revenue, itwas declared selected bidder – LoA has been acknowledged andsigned on duplicate copy and returned to Authority within the periodas specified – GAL being selected as highest bidder, acquired thestatus of concessionaire – It was only the Concession Agreementrequired to be executed and there was no fault on the part of theGAL in complying with the provisions of RFP – Thus, after proposalof highest revenue share, on issuing the letter of acceptance andalso as reflected by conduct, it has become concluded contract –Letter for annulment of binding process is arbitrary and not inconformity to the terms of RFQ/RFP by following the procedure –

CDEFGH523

AMerely having the power of rejection of bids doesn’t entitleauthorities to exercise the said power arbitrarily – Public law remedyhas rightly been availed, invoking the jurisdiction of the High Courtu/Art. 226 – It cannot be said that GAL has limited right only to askfor specific performance – Furthermore, UoI and AAI were notnecessary parties and without joining them, the relief as granted byBthe High Court does not warrants interference – Necessary parties– Public law remedy – Constitution of India – Art. 14, 226 –AirportsAuthority of India Act, 1994 – S. 12A.

Government contracts – Tenets of law – Explanation of – Held:In government contracts, if granted by the government bodies, it isCexpected to uphold fairness, equality and rule of law while dealingwith contractual matters - Right to equality u/Art.14 abhorsarbitrariness - Transparent bidding process is favoured by the Courtto ensure that constitutional requirements are satisfied - State to actin fair and reasonable manner unless public interest demandsDotherwise – It is expedient that the degree of compromise of anyprivate legitimate interest must correspond proportionately to thepublic interest – Using ground of public interest or loss to thetreasury cannot undo the work already undertaken by the authority.

Dismissing the appeals, the CourtE

HELD: 1.1 Letter dated 07.03.2019 is Letter ofAcceptance-LoA after selecting the GAL as highest bidder andit acquired the status of concessionaire. It was only theConcession Agreement required to be executed and there wasno fault on the part of the GAL in complying with the provisionsFof Request for Proposal-RFP. The conduct of appellant MIL alsoindicates that concession agreement is required to be executedby concessionaire (GAL). Thus, after proposal of highest revenueshare on issuing the letter of acceptance and also as reflected byconduct, it has become concluded contract. When the steps forexecution of the Concession Agreement had not been taken afterGLoA for quite sometime, request was made by GAL on25.02.2020 for execution of 26 the Concession Agreement beingConcessionaire, but no heed was paid. [Para 24 and 25][541-A-

1.2 As per RFP, it is clear that MIL floated tender forupgradation, modernization, operation and maintenance of NagpurAirport. Apparently, the primary impression which can be gatheredfrom the objection raised in the meeting held on 30.08.2019 andthe meeting of PMIC dated 14.10.2019 indicates the prospectiverevenue gain but it does not indicate the investment in up-gradation and modernization of the Nagpur Airport for whichplanning and designing of world class international airport, notonly for the passengers but also for the cargo transport in thename of MIHAN is required. As per the RFP and the ConcessionAgreement, all the investment for design, up-gradation, operationand maintenance has to be borne out by the private player andnot by MIL. After issuance of LoA by the internal correspondenceof MoCA and GoM on the note of AAI, the financial viabilityrelying upon the report of E&Y has been considered. If therewas any issue regarding financial viability, it was the duty of theGoM, AAI or MoCA to call GAL, to whom the right has accruedand has to pay the revenue share as proposed and agreed to byMIL, for justification. Otherwise, taking decision on the saidbasis behind the back of GAL was violative of Article 14 of theConstitution of India and also against the principles of naturaljustice. [Para 38][553-E-H]

1.3 It is clear that Section 12A applies in the case of leaseby the authority and no such lease under sub-section (1) shall bemade without previous approval of the Central Government. Inthe present case, no lease is required to be executed in favour ofGAL or GNIAL. The pretext taken on the basis of Section 12Aof AAI Act in case of annulment of bidding process by the AAIand the GoI primarily appears to be fallacious. On the basis ofthe material on record, it is clear that the appellants were awareof the procedure which is being adopted. After completion of thebidding process, GAL was declared as selected bidder onoffering highest revenue share and on issuance of LoA, it hasbeen declared as concessionaire and at the stage of executionof Concession Agreement, all these formalities are not relevantand it amounts to arbitrary exercise of the power by the authoritieswhich is not permissible under law. Merely having the power ofrejection of bids does not entitle authorities to exercise the saidpower arbitrarily. While discussing the applicability of Clauses

A2.16.1, 3.3.1 and 3.3.5, it is made clear that in pre-bid procedureprior to acceptance, the bidding process may be annulledotherwise after issuance of LoA, the annulment cannot be done.The authorities further acted arbitrarily relying upon the GoM’sletter dated 16.03.2020 in reference to PMIC’s meeting dated14.10.2019 in which re-tendering was directed. Re-tendering wasBnot possible without ignoring the bid already accepted. Therefore,the order of annulment has been directed applying Clause 2.16.1arbitrarily. In the present case, the selection of the bidder wascomplete. Thereafter, LoA was issued as per Clause 3.3.5 and byissuance of draft of Concession Agreement, it has been declaredCas concessionaire. At that stage, Clause 2.16.1 for annulmentof the bidding process would not apply. It appears to us that asper the objections raised in the Meeting dated 30.08.2019 heldby MoCA, clause (iv) in paragraph 5 persuaded the MIL andGoM to pass the order of re-tendering. [Para 41, 42, 43, 44][557-A-D; 559-B-C, E-F]D

1.4 It is apparent that in government contracts, if grantedby the government bodies, it is expected to uphold fairness,equality and rule of law while dealing with contractual matters.Right to equality under Article 14 of the Constitution of Indiaabhors arbitrariness. The transparent bidding process is favouredEby the Court to ensure that constitutional requirements aresatisfied. It is said that the constitutional guarantee as providedunder Article 14 of the Constitution of India demands the Stateto act in fair and reasonable manner unless public interestdemands otherwise. It is expedient that the degree of compromise

Fof any private legitimate interest must correspond proportionatelyto the public interest. It is specified that using ground of publicinterest or loss to the treasury cannot undo the work alreadyundertaken by the authority. [Para 46][560-F-H; 561-A]

1.5 After issuing the LoA in terms of Clause 3.3.5 of RFPGand declaring GAL as concessionaire as per Clause 3.3.6, issuingletter of annulment of bidding process on the basis of the meetingof PMIC on 14.10.2019, which directed for re-tendering of thebid, is completely an arbitrary exercise of power, contrary to the

provisions of RFP and violative of Article 14 of the Constitutionof India. [Para 47][561-B]

1.6 The findings as recorded by the High Court in theimpugned judgment are in consonance with the above reasonings.The impugned judgment passed by the High Court is based onthe sound reasonings and true analysis of facts, which do notwarrant interreference by this Court. [Para 48][561-C-D]

1.7 The authorities have acted arbitrarily in violation ofArticle 14 of the Constitution of India. In such situation, thepublic law remedy has rightly been availed, invoking thejurisdiction of the High Court under Article 226 of the Constitutionof India. The findings recorded by the High Court to entertainthe petition are just and proper and those findings are accepted.In the facts of the instant case, the argument advanced by theappellants to compel GAL to take the remedy of specificperformance under the provisions of Specific Relief Act is herebyrepelled. [Para 49][561-D-F]1.8 In pursuance to the decision taken by the Cabinet, thesecond JV is required to be selected through competitive bidding.In the present case, global tenders were invited and competitivebidding process was followed. The procedure of issuance of LoAis completely fair procedure as prescribed in RFP. As per thedecision taken by MoCA, AAI and MADC, MIL is the authorityto complete the bidding process and PMIC, acting on behalf ofGoM was supervising the entire process. The annulment hasbeen directed in reference to the letter dated 16.3.2020 forretendering of bid. Therefore, in issuing the annulment letter,there is no role of UoI and AAI. The serious objection has beenraised regarding the grant of relief as prayed in Clause (b) by theHigh Court. In this regard, the court examined the said reliefand direction, as issued by the High Court in terms of the Cabinetdecision dated 11.2.2009, the Court is satisfied that UoI and AAIare not adversely affected after issuing the direction to selectthe second JV by competitive bidding. Except to produce thefirst approval of the Cabinet dated 11.02.2009, letters dated02.08.2019, 20.08.2019 and 30.08.2019, nothing new has been

Abrought before us to show what serious prejudice has been causedto them due to non-joinder by the Writ Court. The objectionregarding non-joinder raised by the appellants is bereft of anymerit and the High Court has rightly rejected the same. Thefindings recorded by the High Court allowing the Writ Petitionare in accordance to law. Those findings do not suffer from anyBillegality, warranting interreference by this Court in exercise ofthe power under Article 136 of the Constitution of India. [Para51 and 52][561-G-H; 562-A-D]

Union of India and Others v. Dinesh Engineering Corpn.and Another (2001) 8 SCC 491; Vice-Chairman &CManaging director, City and Industrial DevelopmentCorporation of Maharashtra Ltd. and Another v. ShishirRealty Private Limited and Ors. Civil Appeal No. 3956-57 of 2017 – relied on .

Case Law Reference

D(2001) 8 SCC 491relied onPara 42

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3699

of 2022.

From the Judgment and Order dated 18.08.2021 of the High CourtEof Judicature at Bombay, Nagpur Bench, Nagpur in Writ Petition No.1723 of 2020.

With

Civil Appeal Nos. 3701, 3702 and 3700 of 2022F K. M. Natraj, Ms. Aishwarya Bhati, ASGs, Dushyant Dave,Shyam Divan, Sr. Advs., Rahul Bhangde, Satyajit A. Desai, SiddharthGautam, Himanshu Sharma, Ms. Neha Sangwan, Satya Kam Sharma,Mrs. Anagha S. Desai, Nikhilesh Ramachandran, Vinayak Sharma,Shubham Seth, Ms. Mrinal Chaudhry, Vibhu Shanker Mishra, ShaileshMadiyal, Rajat Nair, Ms. B. L. N. Shivani, Nitin Pavuluri, Ms. KirtiGKhangarot, Ms. Manisha Chava, Shivika Mehra, Rustam Singh Chauhan,Raj Bahadur Yadav, Amrish Kumar, Sachin Patil, Rahul Chitnis, AadityaA. Pande, Geo Joseph, Ms. Shwetal Shepal, Advs. for the Appellant.

Dr. Abhishek Manu Singhvi, Maninder Singh, Parag P. Tripathi,Sr. Advs., Mahesh Agarwal, Milanka Chaudhury, M. S. Ananth,H

Ms. Naina Dubey, Nishant Rao, Ms. Harshita Agarwal, Ms. Swet Shikha,Srinivasan, Amit Bhandari, E. C. Agrawala, Pranav Saigal, Prabhas Bajaj,Advs. for the Respondents.

The following Judgment of the Court was passed:

J U M N T

Leave granted.

2. These four appeals have been filed challenging the judgmentdated 18.08.2021 of the Nagpur Bench of the Bombay High Courtwhereby the Writ Petition of the respondent No. 1- GMR Airports Limited(for short ‘GAL’) and GMR Nagpur International Airport Limited (forshort ‘GNIAL’) filed against MIHAN India Limited (for short ‘MIL’)and Government of Maharashtra (for short ‘GoM’) has been allowed.The High Court set-aside the impugned communication of annulling thebidding process and directed to take further necessary steps as per prayerclause (b) of the Writ Petition.3. The appeal arising out of Special Leave Petition (C) No.15556of 2021 has been filed by MIL (which was the respondent no.1 beforethe High Court) and appeal arising out of Special Leave Petition (C)No.16737 of 2021 has been filed by the GoM (which was the respondentNo.2 before the High Court). The other two appeals arising out of DiaryNo.23479 of 2021 and Diary No.23477 of 2021 have been filed by theAirports Authority of India (for short ‘AAI’) and Union of India (forshort ‘UoI’) respectively, which were not the party before the HighCourt and hence applications for permission to file the special leavepetitions have been filed, which are granted in both the special leavepetitions.

4. Since, the order under challenge in all the appeals is the sameand the facts in the said appeals are common, however Special LeavePetition No.15556 of 2021 titled MIHAN India Limited versus GMRAirports Limited & Ors. is being treated as the lead petition.

5. Briefly, the facts relevant for the purpose of the appeals arethat the Nagpur International Airport (for short ‘Nagpur Airport’) wasbeing run by the AAI. On the initiative of GoM to develop multi-modalinternational passenger and cargo hub airport at Nagpur, for brevity sakereferred as ‘MIHAN’, in coordination with Government of India (forshort ‘GoI’), Ministry of Civil Aviation (for short ‘MoCA’), AAI and

AIndian Air Force through Ministry of Defence has prepared the reportfor MIHAN project. On 18.12.2006, GoI through MoCA and AAI onone side; and GoM and Maharashtra Airport Development Company(for short ‘MADC’) on the other side, entered into Memorandum ofUnderstanding (for short ‘MoU’) for the purpose of establishing JointVenture Company (for short ‘JVC’) and transferring the Airport to theBsaid JVC to develop it into MIHAN. As per the said MoU, MADC shallhave 51% of the equity and AAI 49% equity of the JVC. Pursuant tothe MoU, the AAI and MADC entered into Joint Venture Agreement(for short ‘JVA’) on 22.02.2009 for the purpose of incorporating JVC,which is known as MIL. As per the terms and conditions of the MoUCdated 18.12.2006 and the JVA dated 22.02.2009, MIL took over theAirport from AAI on 07.08.2009.

6. As per the instructions of GoI, it was thereafter, decided thatfor the upgradation, modernization, operation and maintenance of theAirport (subsequently named as Dr. Babasaheb Ambedkar InternationalDAirport, Nagpur) global tenders were to be called by MIL by invitingbids from private parties as per the Request for Qualification (for short‘RFQ’) for selection of private developers, through public privateparticipation (for short ‘PPP’) on Design, Build, Finance, Operate andTransfer (DBFOT) basis. On 11.12.2017, GoM constituted High-Powered Project Monitoring and Implementation Committee (for shortE‘PMIC’) consisting of eleven Members, being officers of GoM, GoI,MADC and AAI and the Chief Secretary of the GoM would be itsChairman to look after the MIHAN project on behalf of GoM. TheRequest for Proposal (for short ‘RFP’) was prepared by MIL andapproved by PMIC in its meeting held on 24.01.2018. In response, sixFbidders were shortlisted, but, only five of them were approved for thenext stage i.e. for issuance of RFP which was sent vide email dated01.03.2018. On the final date for submission of bids i.e. 28.09.2018,MIL had received only two bids out of which the bid submitted by GALproposing revenue share of 5.76% was found to be the highest.Thereafter, MIL asked GAL for discussion and negotiations on 05.03.2019Gbefore PMIC regarding the offered revenue share. During discussion,GAL agreed for the revised revenue share of 14.49%. The said revisedrevenue share was communicated by GAL through letter dated06.03.2019 with request to declare it as the selected bidder and toissue the letter of award (for short “LoA”).H7. Thereafter MIL issued the letter dated 07.03.2019 acceptingthe revised proposal. GAL accepted the letter dated 07.03.2019 andacknowledged the same by letter dated 12.03.2019 and communicatedthe same through duly signed duplicate copy of the letter dated07.03.2019.

8. Even on completing the said formalities, the ConcessionAgreement was not executed for long time, however on 25.02.2020,request was made by GAL to MIL for execution of ConcessionAgreement so as to enable GAL to implement the MIHAN project. Thesaid letter was neither responded nor any steps were taken to executethe Concession Agreement in favour of GAL and GNIAL (being theSPV incorporated for implementing the MIHAN project). Thus, GALand GNIAL both filed Writ Petition No.1343 of 2020 before the NagpurBench of the Bombay High Court seeking direction to the MIL andGoM to take all necessary and consequential steps pursuant to the letterdated 07.03.2019 and to sign the Concession Agreement. On 11.03.2020,the High Court issued the notice and listed the case on 18.03.2020 forhearing. The notices were served on MIL and GoM by GAL on thesame day and, through court bailiff on 16.03.2020. Immediately onreceiving the notice, on the same day i.e. 16.03.2020, GoM issued thedirection to MIL for retendering. Pursuant thereto, MIL annulled thebidding process vide communication dated 19.03.2020. MIL also informedGAL to take back the bid security submitted towards bid. Thereafter,through email dated 04.05.2020 MIL informed GAL that since the bankguarantee towards bid security expired on 30.04.2020 and because oflockdown due to Covid-19, the same may be treated as cancelled andfully discharged and may be taken back.

9. GAL and GNIAL challenged the communication dated19.03.2020 annulling the bidding process after issuance of LoA by filinganother Petition before the Nagpur Bench of the Bombay High Courtbeing Writ Petition No. 1723 of 2020. In the said Writ Petition, therespondents have prayed for appropriate directions to quash the letter ofannulment dated 19.03.2020 and enforcement of letter dated 07.03.2019with further directions as per prayer clause (b) reproduced as under:

b. Issue writ or any other appropriate writ, direction or orderdirecting the Respondents, to comply with the RFP conditions inits letter and spirit and undertake necessary and consequentialsteps in furtherance thereto and the Letter of Award dated

532SUPREME COURT REPORTS

[2022] 19 S.C.R.

A07.03.2019, including but not limited to the execution of theConcession Agreement in favour of the Petitioner No. 2 and otherancillary documents;

10. By filing the response, MIL has not disputed the formation ofJVC, execution of MOU, handing over of Nagpur Airport by AAI toBMIL on behalf of JVC, preparation of RFP by State Government,completing of tender process including offer made by the GAL of 5.76%revenue share. It is admitted that in front of PMIC, meeting was heldon 05.03.2019 at Mumbai for negotiation in which enhancement of therevenue share to 14.49% in place of 5.76% was offered by GAL andGAL requested for issuance of LoA through communication datedC06.03.2019. The appellant-MIL took stand before the High Court thatthe communication dated 07.03.2019 was merely an intimation regardingacceptance of revised bid subject to the approval of GoI for alienation ofland of AAI in favour of the GAL as per the Concession Agreement andfor formation of SPV. Placing reliance on Clause 3.3.5 it is said thatDLoA is different than communication. It is said in furtherance of theletter dated 07.03.2019, AAI initiated the process. On the proposal ofAAI, the GoI through MoCA asked some explanations through the letterdated 20.08.2019. In the meeting held by MoCA on 30.08.2019, MILand AAI have not submitted the explanation as asked and prayed fortime to submit the same through PMIC. It was said that those explanationsEwere required to prepare the note for Cabinet approval, otherwise forwant of explanations, approval of Cabinet was not possible. It is saidthat GoI through MoCA was necessary party which is not joined in theWrit Petition. Due to non-joinder of necessary party, the Writ Petition isnot maintainable and may be dismissed. It is also stated that under the

Finstructions of GoM, the order of annulling the bidding process waspassed. On acceptance of the refund of the bid security, the GAL isestopped from challenging the order of annulling the bid process as theletter dated 07.03.2019 was conditional and the GoI has not given anyapproval, therefore no vested right accrued to GAL to question the order

annulling bidding process. It is also submitted that MIL earned profit ofGRs. 49 crores during the financial year 2018-19 and has estimated grossprofit of Rs. 64 crores during the financial year 2019-20 and the offer ofgross revenue share made by GAL of Rs. 15 crores is extremely low,which may not be in public interest and shall cause huge financial lossto the public exchequer. Therefore, the action has rightly been taken byHthe authorities.

11. GoM has filed separate reply on an affidavit of CS-cum-CFO, MIL, not in the capacity of the officer of GoM. In the said reply, itwas urged that GoM is accepting the reply filed by MIL and the standand contentions as taken therein. It was urged that MIL for implementationof MIHAN project is using the resources of respondent No. 2 (GoM)and AAI. By the outcome of acceptance of subject tender, the landbelonging to AAI and MADC was required to be handed over to theconcessionaire. In such circumstances, the active involvement of GoM,AAI and MoCA is imperative. Emphasising the importance of bid andits decision having long term impact, it is said that the revenue paid bythe concessionaire shall be distributed amongst shareholders and theoffer was found to be low in comparison to the profit earned in the year2018-19. Thus, the bid has rightly been cancelled by annulling the biddingprocess. Thus, with the said objections, the Writ Petition filed before theHigh Court was resisted by the GoM and MIL.12. The Nagpur Bench of the Bombay High Court, by impugnedjudgment dated 18.08.2021, allowed the Writ Petition and held that: (i)the letter dated 07.03.2019 is LoA; (ii) plea taken by MIL that theletter dated 07.03.2019 is mere communication of bid acceptance isnot correct. In fact, it has led to concluded contract between the parties;(iii) the action of MIL in annulling the bidding process by letter dated19.03.2020 is arbitrary, unreasonable and unfair, therefore quashed and

set-aside; (iv) in this case there are no such disputed questions of factsas would shut out the writ jurisdiction of the High Court and (v) this casedoes not involve mere enforcement of contractual obligations simplicitor,but involves an issue of enforcement of public law arising out ofcontractual obligations. Resultantly, the High Court gave direction totake further step to implement the prayer as made in clause (b) of theprayer clause of the Writ Petition.

13. Being aggrieved, the present four Civil Appeals have beenfiled, as described above by MIL, GoM, UoI and AAI.

14. We have heard Mr. Dushyant Dave, learned senior counselfor MIL, Mr. Shyam Divan, learned senior counsel for GoM, Mr. K.M.Natraj, learned ASG for AAI, Mr. Shailesh Madiyal, learned counsel forUoI and Dr. Abhishek Manu Singhvi, Mr. Maninder Singh and Mr. ParagP. Tripathi, learned senior counsels for the respondents at length andhave perused the record.

A15. After hearing the arguments as advanced and on perusal ofthe material available on record, the issues which arise for considerationin these appeals are as follows:

1) Whether the letter dated 07.03.2019 endorsing GAL as aselected bidder and on communication by GAL on duplicateBcopy to MIL on 12.03.2019 would amount to LoA in terms ofClause 3.3.5 of RFP and, would it be treated as concludedcontract?

2) Whether the communication dated 19.03.2020 for annulmentof bidding process is arbitrary and not in conformity to theCterms of RFQ/RFP by following the procedure so prescribed?

3) In the facts and circumstances of the case, GAL being asuccessful bidder has limited right only to ask for specificperformance, and being non-statutory contract, remedy underArticle 226 of Constitution of India cannot be availed ?

4) Whether in the facts and circumstances of the case, UoI andAAI were necessary parties and without joining them, the reliefas granted by the High Court warrants interference in thespecial leave petitions under Article 136 of the Constitution ofIndia?

E16. All the aforesaid questions are inter-related and theconsequential answer would depend upon the conclusion that rightexercised to annul the bidding process by the authorities is in conformityto the touchstone of Article 14 of the Constitution of India. Therefore, allthe questions are commonly dealt with in succeeding paragraphs. WhileFdealing with all the aforesaid questions, the background and certain factswhich are on record are required to be traced at the cost of repetition.

17. In the present case, it is not in dispute that Nagpur Airportwas being run by the AAI. On the initiative of GoM, MIHAN projectwas approved in coordination with GoI, MoCA, AAI and Indian AirForce through Ministry of Defence. Based on techno-Economic feasibilityGstudy (in short “TEFS”) of MIHAN project and report prepared by L&TRamboll Consulting Engineer Limited, MoU was signed on 18.12.2006between GoI through MoCA and AAI on the one side and GoM andMADC on the other side and decided to form JVC to whom the NagpurAirport would be transferred for development maintenance and operationHas per MIHAN project. After signing the MOU, note was prepared on

07.02.2009 by MoCA for the purpose of transfer of Nagpur Airport tothe joint venture company comprised of AAI and MADC. The said notewas approved by the Cabinet in its meeting held on 11.02.2009. Thenote as approved has been placed for ready reference during hearing,its contents are relevant, therefore reproduced as thus:

“The Cabinet considered the note dated 07.02.2009 from theMinistry of Civil Aviation (Nagar Vimanan Mantralaya) andapproved the proposals contained in paragraph 6 with the followingdirections:

(i) the valuation of the assets of the respective partners, be carriedout within one month and any dispute in the matter be put to aCommittee of Secretaries for final decision;

(ii) irrespective of the assets brought in by the Joint Venture (JV)partners, the equity structure will be 49:51 between AAI andMADC;

(iii) assets of the JV partners will not be the assets of the JV andwould form the basis for determining the revenue share ofrespective partner;

(iv) assets placed at the disposal of second JV, as and when it isformed, will continue to be the assets of the respective partners;

(v) the proposal for formation of the second JV be brought upbefore the Cabinet at an appropriate time; and

(vi) partners for the second JV be selected through competitivebidding.”

The said decision of the Cabinet was communicated by MoCAvide letter dated 18.2.2009 to the Chairman, AAI with copy to GoMincluding the Ministry of Defence.

18. In terms of the MoU and approval of the Cabinet, JVA wasentered on 22.02.2009 incorporating the first JVC, known as MIL. Asper the MOU and the JVA, MIL took over the Nagpur Airport fromAAI on 07.08.2009. As per the approval of the Cabinet, the valuation ofassets of the respective partners was to be carried out by Committeeof Secretaries for final decision. MADC and AAI would be the partnersof 51:49% shares respectively. The assets which belonged to AAI andMADC would not be the assets of JVC. The bifurcation 51:49% is only

Afor determination of the revenue share of respective partners. Even onformation of JVC, the assets would continue to be the assets of respectivepartners. The partners for the second JVC shall be selected throughcompetitive bidding and the proposal for formation of second JVC bebrought up before the Cabinet at an appropriate time.

B19. In view of the said decisions and to act there upon, MILprepared RFQ dated 12.05.2016 for upgradation, modernization, operationand maintenance of the Airport through PPP mode on DBFOT basisemphasizing the importance of MIHAN project and specifying that theMIL shall be authority for implementation of the MIHAN project. Theparticulars of the Nagpur Airport, details about the project, eligibility forCthe bidders, scope of work, who may participate in bidding process andalso specifying the selected bidder were incorporated in RFQ. On perusalof the cabinet decision and MoU, it is quite apparent that MIL was thefirst JVC incorporated to act on behalf of AAI and MADC who arebanking upon the authority of MoCA and GoM. As explained above,DPMIC is high powered committee constituted by GoM and held itsmeeting on 24.01.2018. MIL presented the RFP for approval which wasapproved with certain changes and published on 01.03.2018 with theintent to carry out and complete the bidding process.20. On the basis of the said RFQ and RFP, bids were invited byEthe MIL and the GAL submitted its bid on 28.09.2018. The bid submittedby the GAL at revenue share payable @ 5.76% was the highest. ButMIL was not satisfied by the said offer, however invited GAL fornegotiation before PMIC on 05.03.2019. During negotiation, the GALgave the offer of 14.49% revenue share in place of 5.76%. After suchnegotiation, request was made by GAL to MIL on 06.03.2019 forFissuance of LoA at the earliest. MIL, vide communications dated07.03.2019 in reference to the RFP dated 01.03.2018 and the bid submittedby GAL dated 28.09.2018 and revised financial offer dated 06.03.2019,accepted the proposal and selected GAL as highest bidder. In the saidcommunication MIL informed that the Competent Authority has acceptedGthe revised bid with clarification that the said acceptance is subject tofurther approval of GoI for alienation of land owned by AAI in favour ofthe second party and formation of SPV for the project (‘Approval’)means second JV. By the said letter, GAL was called upon to submit theconsent for revised bid on the duplicate copy within 7 days, on failureMIL would have the right to revoke the acceptance, otherwise to followH

the consequences as stated in the letter. The GAL submitted acceptanceafter signing on the duplicate copy of letter to the MIL on 12.03.2019within the time so prescribed.

21. As the tenders were invited in pursuance of RFP, however tounderstand the procedure for selection of bid and its acceptance orrejection and to issue LoA to declare the selected bidder asconcessionaire, relevant clauses are required to be seen. As per Clause1.2.6 (b) of RFP, it is clear that the bidder, who is offering the highestrevenue share at the time of the evaluation of the bids, would be thehighest bidder subject to the provisions of Clause 2.16.1 of RFP. Thesaid Clause 2.16 deals with rejection of bids and Clause 3.3 deals withselection of bidder. All the aforesaid Clauses of RFP are relevant howeverreproduced as thus:

CHAPTER -1:

Highest Bidder:

1.2.6 (a) Bids are invited for the Project on the basis of theRevenue Share payable to the Authority in terms of the ConcessionAgreement.

(b) In this RFP, the term “Highest Bidder” shall mean the Bidderwho is offering the highest Revenue Share. The concession periodand other terms are pre-determined, as indicated in the draftConcession Agreement and the percentage revenue share shallconstitute the sole criteria for evaluation of Bids. Subject to theprovisions of Clause 2.16, the Project will be awarded to the HighestBidder.

CHAPTER -2

2.16: Rejection of Bids:

2.16.1 Notwithstanding anything contained in this RFP, theAuthority reserves the right to reject any Bid and to annul theBidding Process and reject all Bids at any time without any liabilityor any obligation for such acceptance, rejection or annulment andwithout assigning any reasons therefor. In the event that theAuthority rejects or annuls all the bids, it may, in its discretion,invite all eligible Bidders to submit fresh Bids hereunder.

ABC

2.16.2: The authority reserves the right not to proceed with theBidding Process at any time, without notice or liability, and toreject any Bid without assigning any reasons.

CHAPTER-3

3.3.1.: Subject to the provisions of Clause 2.16.1, the Bidder whoseBid is adjudged as responsive in terms of Clause 3.2.1 and, whoquotes the highest Revenue Share offered to the Authority shallordinarily be declared as the selected Bidder (the “SelectedBidder”). In the event that the Authority rejects or annuls all theBids, it may, in its discretion, invite all eligible Bidders to submitfresh Bids hereunder.

3.3.5 : After selection, Letter of Award (the “LOA”) shall beissued, in duplicate, by the Authority to the Selected Bidder andthe Selected Bidder shall, within 7 (seven) days of the receipt ofthe LOA, sign and return the duplicate copy of the LOA inDacknowledgement thereof. After acknowledgement of the LOAas aforesaid by the Selected Bidder, the Selected Bidder will berequired to submit the Performance Security within the time periodprescribed in the LOA/Concession Agreement. In the event theduplicate copy of the LOA duly signed by the Selected Bidder isnot received by the stipulated date or the Selected Bidder fails toEprovide the Performance Security within the stipulated date, theAuthority may, unless it consents to extension of time for submissionthereof, appropriate the Bid Security of such Bidder as damageson account of failure of the Selected Bidder to acknowledge theLOA or submission of Performance Security as the case may be,Fand the next eligible Bidder may be considered.

The said Clauses are required to be looked with the intent to knowthe scheme of RFP, its applicability and object. Chapter 1, in which thehighest bidder has been defined, deals with the incorporation of the project,description of bidding process, schedule of bidding process and pre-bidconference. As per the definition of highest bidder in Clause 1.2.6, it isclear that if any bid is invited for project, it shall be on the basis of thehighest revenue share payable to the Authority in terms of ConcessionAgreement and the sole criteria would be percentage revenue shareand, on the said basis highest bidder of the project may be declared,subject to the rejection of bid as per Clause 2.16.

20. Chapter 2 of RFP deals with the general terms of bidding,change in composition of the Consortium, change in ownership, cost ofbidding, site visit and verification of information, verification anddisqualification, contents of RFP, clarifications, amendment of RFP,preparation and submission of bids including format and signing of bid,sealing and marking of bids, due date of bid, late bids, contents of the bid,modifications/substation/withdrawal of bids, rejection of bids, validity ofbids, confidentiality, correspondence with the bidder, bid security etc.The abovesaid are the instructions to bidders in general. As per Clause2.16.1, the Authority reserves the right to reject any bid and to annul thebidding process and reject all bids at any time without any liability or anyobligation for such acceptance, rejection or annulment and withoutassigning any reason therefor. In case the Authority rejects or annuls allthe bids, it has the discretion to invite all eligible bidders to submit freshbids hereunder. literal construction of the said Clause would mean thatthe Authority have right to annul the bidding process, reject all bidswithout having any obligation for such acceptance, rejection or annulment,that too without assigning any reason. As per later part of the Clause, onrejection or annulment of the bids, the Authority may in its discretioninvite all eligible bidders to submit the fresh bids. Thus annulment ofbidding process, rejection of all bids is without any obligation foracceptance. It clarifies that prior to acceptance, annulment, rejectionmay be done without assigning any reason as per Clause 2.16.2.22. Chapter 3 deals with evaluation of bids on its opening, test ofresponsiveness, selection of bidder, contacts during bid evaluation, bidparameter. Under Clause 3.3.1, subject to the provision of Clause 2.16.1means if the bid is not rejected or annulled and whose bid is adjudged asresponsive as per Clause 3.2.1 ({a} to {i}) would be responsive withhighest revenue share and the said bidder shall ordinarily be declared asa selected bidder. Thus, in the event, the bid is not rejected, the procedurefor selection of the bidder under Clause 3.3.1 shall be observed. If thebidder quotes highest revenue share and its bid is adjudged as responsiveshall be declared as the selected bidder under Clause 3.3.1. In absenceof the contingencies as specified in Clauses 3.3.2 to 3.3.4, the procedurecontemplated on selection of highest bidder as per Clause 3.3.5 is to befollowed. As per said clause, after selection, LoA is required to be issuedin duplicate by the Authority to the selected bidder who shall, withinseven days of the receipt, sign it on duplicate copy and return the same.Thereafter the highest bidder is required to furnish the performance

Asecurity within the time so prescribed in LoA/Concession Agreement.In case, acknowledgement of LoA within the time stipulated has notbeen made by highest bidder, the next eligible highest bidder may becalled and considered. As per Clause 3.3.6, on receiving theacknowledgment of the LoA by the selected bidder, it shall cause theConcessionaire to execute the Concession Agreement within 60 days ofBaward of LoA as prescribed in Clause 1.3 at serial No. 11. It is alsoclarified that the selected bidder shall not be invited to cause any default,modification of amendment in the Concession Agreement, so executed.Thus, as per the scheme of RFP, if the highest bidder has qualified thetest of responsiveness without any order of rejection or annulment andChas offered highest revenue share, he be declared as selected bidderand in terms of Clause 3.3.5, LoA be issued which shall be acknowledgedand after signing duplicate copy shall be returned within specified time.Thereafter, the concessionaire is required to execute the ConcessionAgreement. In the present case, the GAL has qualified the test ofresponsiveness and on making offer of highest revenue, it was declaredDselected bidder. LoA has been issued vide letter dated 07.03.2019 whichhas been acknowledged and signed on duplicate copy and returned toAuthority on 12.03.2019, within the period as specified. The bid securityof Rs. 16.85 crores deposited by the GAL was also extended from timeto time under instructions of MIL. Thus, GAL has become concessionaireEas per Clause 3.3.6 of RFP and cause the execution of ConcessionAgreement as per Clause 1.3.

23. Thereafter, MIL through Shri Kumar Ranjan Thakur sent anemail on 20.03.2019 attaching the draft Concession Agreement. He hasshared the final version of the draft Concession Agreement in MS WordFformat. Thereafter on behalf of MIL, Shri M.A. Abid Ruhi sent acommunication on 29.05.2019 with request to amend the draftConcession Agreement in “track change mode” only which wouldenable him to identify the changes carried out by GAL. GALcommunicated the draft Concession Agreement after making thechanges. Thereafter, no communication was made on behalf of MIL. InGthe meantime, the GAL requested MIL to provide space in old terminalbuilding vide communication dated 26.07.2019. The said request wasaccepted vide communication dated 16.08.2019 and space to run theoffice was provided. Thereafter GAL on 24.08.2019 requested forincorporation of company namely; GNIAL to run the MIHAN projectHon its behalf, which remained unresponded.24. As per the above discussion, we do not have any hesitationto hold that letter dated 07.03.2019 is LoA after selecting the GAL asa highest bidder and it acquired the status of concessionaire. It was onlythe Concession Agreement required to be executed and there was nofault on the part of the GAL in complying with the provisions of RFP.The conduct of appellant MIL also indicates that concession agreementis required to be executed by concessionaire (GAL). Thus, after proposalof highest revenue share on issuing the letter of acceptance and also asreflected by conduct, it has become concluded contract.

25. When the steps for execution of the Concession Agreementhad not been taken after LoA for quite sometime, request was madeby GAL on 25.02.2020 for execution of the Concession Agreement beingConcessionaire, but no heed was paid. Then Writ Petition No. 1343 of2020 was filed praying the following reliefs:

a)Issue writ of mandamus or any other appropriate writ,direction or order directing the respondents to undertakenecessary and consequential steps in furtherance of the Letterof Award dated 07.03.2019 including but not limited toexecution of the Concession Agreement in favour of thepetitioner No. 2 and other ancillary documents;

b)Pass an ex-parte ad interim order directing the respondentsnot to undertake any coercive steps that shall be detrimentalto the interests and rights of the petitioners in the said projectand public at large.”

26. On issuing notice by High Court vide order dated 11.03.2020,the matter was kept for final disposal on 18.03.2020. The copy of thesaid notice was served on MIL and GoM on 11.03.2020 and also throughBailiff of the Court on 16.03.2020. On receiving the said notice, GoM on16.03.2019 directed MIL to carry out the tender process afresh inreference to the PMIC letter dated 14.10.2019. In pursuance, letter dated19.03.2020 was issued by MIL for annulling the bidding process in termsof Clause 2.16.1. It is relevant that fresh tender process as directed byPMIC cannot be possible without taking decision after selection of thebidder and issuing of LoA. Therefore, the MIL issued the order ofannulling the bidding process without any direction for fresh tenderprocess. The validity of the said letter dated 19.03.2020 was questionedin Writ Petition No. 1723 of 2020 before the Nagpur Bench of the BombayHigh Court which was allowed by the impugned order.

A27. Now to justify the reasoning of the High Court, the materialwhich has been brought by filing the counter affidavit, which formed thebasis of annulling the bidding process is required to be referred. Fromthe material, it is revealed that after communication of the ConcessionAgreement and proposing amendments to be carried in Track ChangeMode, AAI put up note sheet to the GoI on 26.07.2019 in which theBentire background regarding execution of the MoU dated 18.12.2006between GoI through MoCA and GoM through MADC for developmentof MIHAN project is re-stated; formation of JVC; JV agreement dated27.02.2009; admission of transfer of the airport to MIL; determinationof the shares of the partners of the JVC; steps taken for inviting the bidsCand quoting the details of negotiation to increase the revenue share asapproved by AAI Board, present status of land at Nagpur Airport, werementioned. However, in the said note sheet, it was prayed to GoI toaccord approval for long term lease of land to MIL for 30 years from theeffective date of commencement of operation by second JVC/Concessionaire (i.e. GNIAL for GMR Airport Ltd) and ratification ofDpossession of demised land and operation of Nagpur Airport by MILfrom 06.08.2009 till the date of commencement of operation by the secondJVC/Concessionaire. request was further made that for formation ofsecond JV i.e. Special Purpose Vehicle (SPV) (i.e. GNIAL for GMRAirports Ltd) for upgradation, modernization, operation and maintenanceEof Nagpur Airport, the license of AAI Land admeasuring 897 acresapprox. for period of 30 years from the date of commencement ofoperation by the second JVC/Concessionaire may be sent. The draft ofCabinet Note was attached for perusal and to seek approval of the GoI.On the said note, the MoCA sought certain clarifications from theChairman, AAI by letter dated 02.08.2019. The said letter is relevant,Ftherefore reproduced as thus:

“AV-21018/2/2019-AAI-MOCA

Government of India Ministry of Civil AviationB-Block, Rajiv Gandhi Bhawan,Safdarjung Airport, New Delhi.

Dated: 2[nd] August, 2019

The Chairman,Airports Authority of India,Rajiv Gandhi Bhawan,Safdarjung Airport, New Delhi.

Subject:Execution of Lease Deed between AAI and JointVenture Company (JVC) MIHAN India Ltd. (MIL) for leasingof Nagpur Airport Land

AND

Approval of formation of the Second JV i.e. “Special PurposeVehicle (SPV) for the concession” for upgradation, modernization,operation and maintenance of Babasaheb Ambedkar InternationalAirport, Nagpur.

Sir,

I am directed to refer to AAI’s UO Note No. AV-21012/63/2003-LM/Vol.IV/369, dated 26.07.2019 on the subjectmentioned above and to say that the following details/clarificationmay be provided urgently to this Ministry for processing the matterfurther:-

(a)While granting permission to form JV at Nagpur betweenMADC and AAI, Ministry vide letter dated 18.02.2009 hadconveyed that the proposal of formation of the second JVwould be brought up before the Central Government at anappropriate time. Further, during the PPP process for Delhi& Mumbai airports in the first phase and six other airports inthe second phase, AAI had taken prior approval of the UnionCabinet before initiating bidding process to privateconcessionaires. However, in the instant case, it is not clearas to why AAI did not seek prior approval of the Cabinetbefore initiating any bidding process for MIHAN Project.

(b)Since the Nagpur airport is proposed to be developed throughPPP, it may be clarified as to whether all the guidelines issuedby Department of Economic Affairs and PPPAC (PublicPrivate Partnership Appraisal Committee) in this regard havebeen followed.

A(c)What was the basis for increasing revenue share quoted bythe highest bidder from 5.76% to 14.49% and basis of thenegotiations held between MIL and GMR?

(d)Copies of the bid and transaction documents may be sharedfor examination.B

(e)Land ownership at Nagpur Airport is also not clear from theabove proposal. Therefore, AAI may inform the exactquantum of land in their ownership at present.

(f)There is land dispute between AAI and IAF w.r.t. 288.74acres of land at Nagpur Airport which has not been sortedCout yet. Without concrete details the proposal is difficult toprocess for the Cabinet approval. Also, it needs to be clearlystated that demised land measuring 897 acres proposed tobe licensed to second JV/SPV does not overlap with thedisputed land of 288.74 acres which is in possession of IAFDat Nagpur Airport.

(g)A coloured map showing clear demarcation of land belongingto AAI, MIL and the land proposed to be given to GMR atNagpur Airport has not been provided.

(h)It is not clear from the proposal as to what the revenue shareEbetween AAI and MADC is at present and what will be theshare between them after formation of second Joint Venture.

2.AAI is requested to kindly furnish clarifications/informationin respect of the above mentioned observations to this Ministryat the earliest.F

Yours faithfully,

(V R Hegde)Director”

28. It appears that some correspondence has been made in responseto the said letter vide letter No. AV/21012/63/2003-LM-Vol 656 dated08/09.08.2019 to AAI, which is not on record. In continuation, the MoCA,vide letter dated 20.08.2019, has reported some deficiencies in paragraph2 of the letter which is reproduced as under:H

“No. AV-21018/2/2019-AAI(AD)

Government of India Ministry of Civil Aviation

B-Block, R.G. Bhawan,

Safdarjung Airport, New Delhi.BDated 20[th] August, 2019

The Chairman,

Airports Authority of India,

Rajiv Gandhi Bhawan,

New Delhi.

Subject:Execution of Lease Deed between AAI and JointVenture (JVC) MIHAN India Ltd. (MIL) for leasing of NagpurDAirport Land.

AND

Approval for formation of the Second JV i.e. ‘Special PurposeVehicle (SPV) for the concession’ for upgradation modernization,operation and maintenance of Babasaheb Ambedkar InternationalAirport, Nagpur.

Sir,

I am directed to refer to AAI’s UO Note No. AV-21012/01/2016-LM/155, dated 26.07.2019 and No. AV-21012/63/2003-LM/Vol.656 dated 08/09.08.2019 on the subject mentioned above.

2. The proposal of AAI has been examined and variousdeficiencies have been observed which need to be addressed forpreparing the Note for the Cabinet. Major observations are asunder:-

(i) While granting the approval in the meeting held on 07.02.2009,Union Cabinet had decided that the developer will be selectedthrough competitive bidding for highest revenue share as perstandard methodology for development of airports, using thestandard bidding documents and procedures, including PFQ, RFP

Aand concession agreements, approved by the Government of India.This decision was conveyed to AAI, Government of Maharashtraand MADC vide letter dated 18.02.2009.

It may be clarified whether the Model documents issued by theerstwhile Planning Commission (standard document adopted byBPPPAC) have been adopted in the tendering process of Nagpurairport. If not, the deviating statement may be furnished.

(ii) Whether there was provision in the Transaction document fornegotiation in the bidding parameter? What were the terms ofnegotiation in the Revenue share from 5.14% to 14.49%? WhetherCother bidders also given the option of negotiating the revenue share?(iii) What are the benefits that will accrue to AAI on transfer ofthe Airport land to private developer? What will be the return onthe investment made by AAI for development of airport so far?

(iv) The Equity Ratio between AAI and MADC in MIL is 49.51.DWhereas the current proposal provides for revenue sharingbetween AAI and MADC in the ratio of (45:55) of Gross Revenueof MIL. AAI may provide the justification for the deviation.

(v) What are the salient features of the bidding process viz. Stagesof bidding, qualification criteria, basis of the deciding the concessionEperiod, no. of bids received etc.?

3. AAI is requested to kindly furnish clarification/reply on theabove observation to this Ministry urgently.

Yours faithfully,

Krishna Kr. Singh

Section Officer”

In furtherance, meeting was held on 30.08.2019 under theGChairmanship of the Secretary (Civil Aviation), MoCA wherein inparagraph 5, the clarifications with regard to the letter dated 20.08.2019were sought for. The Minutes of the Meeting are reproduced as thus:

“Minutes of the meeting held on 30.08.2019 under theChairmanship of Secretary, Civil Aviation in Rajiv Gandhi

Bhavan, New Delhi to discuss the issues relating toleasing of Nagpur Airport under PPP.

meeting was held on 30.08.2019 with the officers/representatives of State Government of Maharashtra to takeforward the issues related to leasing out of Nagpur Airport to aprivate concessionaire under Public Private Partnership (PPP).

2. List of participants attached.

3. Secretary, Civil Aviation welcomed the participants andrequested Principal Secretary, Govt. of Maharashtra to elaboratethe details of the bidding process followed in respect of leasing ofNagpur airport. detailed presentation was made by Governmentof Maharashtra (copy enclosed).

4. During the presentation, it was informed that Joint VentureCompany (JVC) between Airports Authority of India (AAI) andMaharashtra Airport Development Company Ltd (MADC) wasformed in 2009 to upgrade the Nagpur airport. The JVC so formedwas named as Multi Modal International Passenger and CargoHub Airport at Nagpur India Limited (MIL) wherein AAI holds49% equity and MADC hold remaining 51%. It was furtherinformed that MIL is operating the Nagpur airport since 2009 andearned profit of approximately Rs. 49 crores for the year 2018-19. Thereafter, the detailed procedure followed for inviting tenderto select concessionaire was explained by officials of Govt. ofMaharashtra.

5. After the presentation, Secretary, Civil Aviation requestedMADC officials to clarify the following specific issues related:

(i) Clause 2.2.1(c) of RFQ stipulates that the concessionaireshall be selected based on the sole criteria of highest revenueshare quoted, negotiation with highest bidder on revenue share(increased from 5.76% to 14.49%). Post bid negotiation needs tobe justified.

(ii) There were frequent changes in the eligibility criteria w.r.t.airport experience from the period of RFQ to bid opening date.The grounds for the same may be stated with cogent reasons.

(iii) Since the bid document has undergone frequent changes andthere are deviation from the standard documents, detailed

Adeviation statement vis-à-vis approved document along withjustification needs to be provided.

(iv) The airport is presently being operated successfully by thegovernment undertaking and earning profit of Rs. 49 cr. for the2019 and will continue to earn profits with an estimated trafficBgrowth of more than 20%. Therefore, the revenue share offeredby the concessionaire will result to profit of just Rs. 15 crore tothe Government undertaking. Whether it is justified to lease outthe airport, which is earning profit of Rs. 50 cr. per annum, tothe private concessionaire at profit of Rs. 15 crores (even if thepotential revenue generation from the land parcel to theCconcessionaire is not considered).

6. Secretary stated that for leasing of assets including land ofAAI to private party, approval of the Union Cabinet is required.Therefore, he requested the representative of Government ofMaharashtra to send detailed justification for each of the aboveDobservations along with the views of the State Government forplacing the same before the Union Cabinet.

5.6 Principal Secretary, Govt. of Maharashtra has informed thatsince the bid process was carried out under overall supervision ofPMIC, the replies to above queries will be sent to GoI with theEapproval of the PMIC.

6. Meeting ended with vote of thanks to the Chair.”

29. The counter-affidavit filed before the High Court by MIL orGoM did not give any explanation to the letters dated 20.08.2019 andF30.08.2019, though it was incumbent upon them to submit their explanation.They have taken pretext in meeting that the response be sent afterdiscussion with PMIC. The record further reveals that meeting ofPMIC was held on 14.10.2019, wherein retendering was directed. Therecord note of discussions of the said meeting is reproduced as under:

Project Monitoring and Implementation Committee (PMIC) for Up-Ggradation and Modernization of Dr. Babasaheb AmbedkarInternational Airport, Nagpur on DBFOT basis under PPP (the

“Project”)

14[th] October 2019

Record Note of Discussions

The 9[th] meeting of the Project Monitoring and ImplementationCommittee (PMIC) on the captioned project, chaired byHonourable Chief Secretary, Government of Maharashtra washeld on 14[th] October 2019 at 4:30 p.m. at the Chief SecretaryOffice, Mantralaya, Mumbai. The agenda for the meeting was todiscuss the justification/response to MoCA’s observations as perits letter dated 30 August 2019.

The Vice Chairman & Managing Director, MADC / Chairmanand Managing Director, MIHAN India Limited welcomed thecommittee members and provided opening remarks. Then herequested the Transaction Advisors (TA), Ernst & Young LLP, topresent the justification/response to MoCA’s observations.

TA presented to the committee members the responses to thefollowing observations raised by MoCA as per its letter dated 30[th]August 2019.

1. Justification on post bid negotiation

2. Changes in the eligibility criteria at the RFQ and RFP stage

3. Deviations from the standard document

4. Considering the current financials of MIL, justification to leaseout the airport.

TA also presented the financial analysis with respect to justificationto lease out the Nagpur airport. Basis the analysis, TA brought tonotice of PMIC that the Net Present Value of the Revenue Sharebeing offered by the Highest Bidder is not commensurate withthe profit that MIL would earn following the AERA philosophyfor tariff determination in the coming 30 years.

Based on the above discussions and deliberations, PMIC directedto re-tender the bid for the Project.

The meeting ended with vote of thanks to the Chair and with arequest to CMD, MIL to keep the members informed about thedevelopments in this regard, from time to time.

Minutes of the meeting held on 30.08.2019 under the Chairmanshipof Secretary, Civil Aviation in Rajiv Gandhi Bhavan, New Delhito discuss the issues relating to leasing of Nagpur Airport underPPP.

A30. In the facts of the case, the objections raised vide letters dated02.08.2019, 20.08.2019 and in meeting of MoCA dated 30.08.2019 andin record note of discussion by PMIC in its meeting dated 14.10.2019are required to be analysed with the intent that while issuing the directionof re-tendering, the order of annulling the bidding process is how far just,reasonable and equitable. In fact such letter is against the various clausesBof RFP. In this regard as explained above, for the purpose of transfer ofthe Nagpur Airport to JVC comprising of AAI and MADC, the Cabinetnote was put on 07.02.2009 by MoCA which was approved with certaindirections. The Cabinet permitted to select the second JV throughcompetitive bidding and proposal for formation of second JV be broughtCbefore the Cabinet at an appropriate time. Therefore, on submitting thebid and on declaring GAL as selected bidder after issuance of LoA, asper the Cabinet decision, the second Cabinet note is required to be putup after selection of the partner by the competitive bidding for theformation of the second JV. It is to be observed that if procedure ofcompetitive bidding was fair merely on the pretext of the Cabinet approval,Dinterference by the authorities would not be permissible.

31. MoCA held its meeting on 30.08.2019. Admittedly, the saidmeeting is on the note of AAI dated 26.07.2019 to which the objectionwas submitted vide letter date 02.08.2019 and the response by AAI on08/09.08.2019 (not available on record but referred to in the letter ofEMoCA dated 20.08.2019) have been considered. How far thoseobjections may be relevant are required to be considered to test theaction of the authorities for annulling the bidding process and to knowwhether the said action was not arbitrary. In the meeting on 30.08.2019,presentation was made by MADC to which Secretary, MoCA furtherFasked for clarifications.

32. The first clarification sought was that the criteria for selectionof the bidder shall be based on the highest revenue share quoted. Afternegotiation by PMIC, the revenue share quoted as 5.76% was increasedto 14.49%. However, what was the justification for post-bid negotiation.GFrom the material available on record, neither PMIC which representsGoM nor MIL has filed any material to clarify the same. But, in the non-controverted facts, it cannot be lost sight that GAL was called by GoMand MIL for negotiation to fetch more revenue share in public interest.They were successful to get 14.49% revenue share in place of 5.76%.Thus, how far such an action is required to be questioned by MoCA. InH

our view, after negotiation if more revenue share has been earned byMIL or GoM, such an act is just, fair and reasonable. It cannot be said tobe arbitrary and clarification on para 5(i) of minutes of Meeting dated30.8.2019 sought by MoCA was unreasonable in terms of RFP. Nomaterial has been brought before the High Court or even before thisCourt to justify such objection.

33. The second clarification/objection raised was regardingfrequent changes in the eligibility criteria with respect to airport experiencefrom the period of RFQ to bid opening date for which reasons weresought by the MoCA. It is to be noted here that RFQ was prepared priorto the bidding process. After floating the tender, five bidders wereshortlisted, who were issued the RFP dated 01.03.2018. Out of the fivebidders, two submitted the final bids. So, if any changes were made inthe RFQ prior to floating the tender, it was for all the bidders. How canit affect the bid submitted by selected bidder in terms of RFQ. There isno justification either before the High Court or before this Court to saythat such an action would be arbitrary. Nothing is brought on record tosuggest that MIL or GoM has favoured the GAL for oblique reasons. Insuch circumstances, the second objection/clarification as raised in themeeting dated 30.08.2019 is wholly unjust, particularly after issuance ofthe LoA.

34. The third objection/clarification was sought regarding frequentchanges in the bid document. It is said that there was deviation fromthe standard document (model Request for Qualification for PPP Projectsand model Request for Proposal for PPP Projects). The statement ofjustification for deviation was asked from MIL and GoM. The standarddocument (Model Request for Qualification for PPP Projects and ModelRequest for Proposal for PPP Projects, for short “model RFQ andRFP”) is merely model to be followed. On the basis of said modelRFQ and RFP, the authority inviting the tenders for particular projectis required to prepare RFQ and RFP. In the present case, the RFQ andRFP were prepared by MIL and approved by PMIC considering thenature of the project. Therefore, the clarification sought by MoCAregarding deviation from model RFQ and RFP or in bid documentbased on the model RFQ and RFP cannot be said to be justifiable. Itappears the objection has been raised analysing the terms of RFQ andRFP issued by the department on the basis of which the bidding processwas completed. In our view, the said objection/clarification is suffering

Afrom the vice of arbitrariness and without any justification. In view ofthe discussion made above regarding objections/clarifications of MoCAin para 5 (i to iii) in the proceedings 30.8.2019 are arbitrary, unreasonableand without any justification, submitted by the authorities even beforethis Court. Therefore, all these queries are violative of Article 14 of theConstitution of India.B

35. The fourth objection/clarification sought was regarding theprofit of Rs. 49 crores earned in the year (2018-19) and the prospectiveprofit to be earned for the succeeding year i.e. 2019-20 due to estimatedtraffic growth of 20%. In this regard justification was sought as to howthe offer made by the concessionaire which will result into lesser profitCof Rs. 15 crores as against the profit of Rs. 50 crores which the airportis currently earning is just. PMIC in its meeting held on 14.10.2019considered this issue along with other three issues as discussed above.In the said meeting, there is no deliberation regarding the three issuesand the issue of financial viability of MIL on leasing out the Airport. InDour view, there would be no lease of the airport in favour of GAL. Infact, the lease would be in favour of MIL by AAI and MADC which isits first JV formulated to carry out their work. Therefore, it is completelya mis-statement of fact. It is clarified that after acceptance of the bid,GAL and GNIAL would be licensee for implementation of the MIHANproject.E36. For dealing the fourth objection of the meeting dated 30.08.2019of MoCA and 14.10.2019 of PMIC, the Court knows its limitation and isreluctant to interfere because they are not expert to analyse the financialviability, but the Court can see the justification of the issue in matterwhere after following the procedure established by law, LoA was issuedFin favour of GAL. Awaiting long, when the Concession Agreement wasnot executed, GAL knocked the door of the Court and thereafter theorder of annulling of the bidding process has been passed, which is quashedby the High Court. In such circumstances, we have to examine whetherthe defence taken by the authorities is just and reasonable or suffersGfrom vice of arbitrariness on the pretext of loss to public exchequer.

37. The objection/clarification in para 5(iv) of the letter dated30.08.2019 has been discussed by PMIC in its meeting dated 14.10.2019,wherein it perused the analysis of Transaction Advisors Ernst & Young(for short “E&Y”) and observed that the offer of highest revenue share

made by the selected bidder is not commensurate with the profit thatMIL would earn following the AERA philosophy for tariff determinationin the coming 30 years. The PMIC for the said reason directed to re-tender the bid for the MIHAN project. In the said context, the factualaspect of the report of E&Y is required to be referred. The report ofE&Y discusses about the financial snapshot in case the development istaken by the private concessionaire, on the basis of which it is clear thatthe net present value of cash flows if MIL undertakes investment of Rs.1683 crores would be Rs. - 473 crores and if revenue share of 14.49%is given, then its value would go to Rs. + 472 crores. It is clarified that incase it is privatized, MIL is not required to take any burden of CAPEXas it would be done by the private sector. It is further put in the note thata private player operating will make MIL an asset light organization andthat also it will earn revenue share from the private player which in thenet present value is more and implementation, operational efficiency ofthe private sector can be capitalized. Therefore, it is clear that as per thesaid report without any investment made by AAI, MIL will get the revenueof Rs. 15 crores per annum.

38. As per RFP, it is clear that MIL floated tender for up-gradation, modernization, operation and maintenance of Nagpur Airport.Apparently, the primary impression which can be gathered from theobjection raised in the meeting held on 30.08.2019 and the meeting ofPMIC dated 14.10.2019 indicates the prospective revenue gain but itdoes not indicate the investment in up-gradation and modernization ofthe Nagpur Airport for which planning and designing of world classinternational airport, not only for the passengers but also for the cargotransport in the name of MIHAN is required. As per the RFP and theConcession Agreement, all the investment for design, up-gradation,operation and maintenance has to be borne out by the private player andnot by MIL. It is pertinent to note here that after issuance of LoA by theinternal correspondence of MoCA and GoM on the note of AAI, thefinancial viability relying upon the report of E&Y has been considered.If there was any issue regarding financial viability, it was the duty of theGoM, AAI or MoCA to call GAL, to whom the right has accrued andhas to pay the revenue share as proposed and agreed to by MIL, forjustification. Otherwise, taking decision on the said basis behind theback of GAL was violative of Article 14 of the Constitution of India andalso against the principles of natural justice.

A39. Further, in paragraph 6 of the minutes of the Meeting held on30.08.2019, the Secretary, MoCA said that for leasing of assets includingleasing of land of AAI to private party, approval of Union Cabinet isrequired. On perusal of the record, it is not out of place to mention herethat the lease of the land is not required to be executed in favour ofGAL. It is only the license which is required to be given by ConcessionBAgreement. Prior to executing the agreement, the recourse, as taken, isnot fair and just. As per the terms of Clauses 3.1.1. and 10.2.2 of theConcession Agreement, it is clear that the GAL would be the licensee.For ready reference, the relevant Clauses are reproduced as thus:

“3.1.1 Subject to and in accordance with the provisions of thisAgreement, GoI Approval, Applicable Laws and the ApplicablePermits, the Authority hereby grants to the Concessionaire, theconcession set forth herein including the exclusive right, licenseand authority to develop, finance, operate and maintain the Airport(“Concession”) for an initial period of 30 (thirty) years commencingfrom the COD, and the Concessionaire hereby accepts theConcession and agrees to implement the Project subject to and inaccordance with the terms and conditions set forth herein.

Provided that in the event the Concessionaire shall have dischargedits obligations under this Agreement without any material breachEthereof for period of 27 (twenty seven) years from the COD,and intimate the Authority about its interest and request forrenewing/extending the term of this Concession by another periodof 30 (thirty) years. While making such request, the Concessionaireshall submit confirmation that it is agreeable to participate in theinternational competitive bidding process for the determination ofFthe Premium for an additional period of 30 (thirty) years, in theform and manner, as may be prescribed by the Authority, at suchtime, and in any such case of international competitive bidding:(a) the Concessionaire shall have right to match the highest bid,if its bid is within 05.00% of the highest bid that may be offered atGthat time in accordance with the terms and conditions of the biddingdocuments issued at such time, and (b) the Affiliate (s) of theConcessionaire shall not be qualified, either directly or indirectly,participating in any such bidding process. Provided further that, inthe event the Airport is not expanded by the Concessionaire inaccordance with the provisions of this Agreement or the

Concessionaire has been in default of the provisions of thisAgreement, then the Authority shall not be under any obligation toextent the Concession Period under this Clause 3.1.1. Any materialbreach shall for the purposes hereof mean Suspension orcumulative levy of Damages by the Authority exceeding sumequivalent to 10% (ten percent) of the Performance Security.Along with the notice for extension of the Concession Period, theConcessionaire shall submit the following documents:

(a)a certificate confirming that there has been no materialdefault by the Concessionaire under this Agreement(including compliance of provisions relating to any of theKey Performance Indicators), resulting in the accrual ofa right in favour of the Authority to identify any suchevent as Concessionaire’s Default;

(b)a certificate confirming from Airports Council Internationalor any other equivalent agency of similar internationalrepute confirming that the Airport has been within top 20(twenty) percentile of all airports in its category in theworld, for continuous period of preceding 5 (five) yearsas on the date of such application; and

(c)an undertaking that the Concessionaire shall continue tocomply with the terms and conditions of the Agreementin its full form and effect for the remainder of theConcession Period.

Provided further that, in the event the Airport is not expanded bythe Concessionaire in accordance with the provisions of thisAgreement or the Concessionaire has been in default of theprovisions of this Agreement, then, the Authority shall not be underany obligation to extend the Concession Period under this Clause3.1.1.

In any event, at all times, any decision concerning the extensionof the Concession Period will solely vest with the Authority.

10.2.2 In consideration of the Concession Fees, and RevenueShare, this Agreement and the covenants and warranties on thepart of the Concessionaire herein contained, the Authority, inaccordance with the terms and conditions set forth herein, shallgrant to the Concessionaire commencing from the COD, license

Arights in respect of all the land (along with any buildings,constructions or immovable assets, if any, thereon) comprisingthe Site which is described, delineated and shown in Schedule Ahereto as the Site, free of any Encumbrances, to develop, operateand maintain the Site, together with all and singular rights, liberties,privileges, easements and appurtenances whatsoever to the saidBSite, hereditaments or premises or any part thereof belonging toor in any way appurtenant thereto or enjoyed therewith, for thepurposes permitted under this Agreement, and for no other purposewhatsoever, for the Concession Period.”

40. In view of the aforesaid, it is clear that no lease is going to beCexecuted in favour of GAL or GNIAL. It is only license right in respectof all the lands along with any buildings, constructions or immovableassets and other movables specified in the schedules of concessionagreement is required to be conferred upon GAL or GNIAL. In the saidcontext, the argument advanced, relying upon Section 12A of the AirportsDAuthority of India Act, 1994 (for short “AAI Act”) requires consideration.Section 12A is reproduced as thus:

“12A-Lease by the authority (1) Notwithstanding anythingcontained in this Act, the Authority may, in the public interest or inthe interest of better management of airports, make lease of theEpremises of an airport (including buildings and structures thereonand appertaining thereto) to carry out some of its functions undersection 12 as the Authority may deem fit:

Provided that such lease shall not affect the functions ofthe Authority under Section 12 which relates to air traffic serviceFor watch and ward at airports and civil enclaves.(2) No lease under sub-section (1) shall be made without theprevious approval of the Central Government.

(3) Any money, payable by the lessee in terms of the lease madeunder sub-section (1) shall form part of the fund of the AuthorityGand shall be credited thereto as if such money is the receipt of theAuthority for all purposes of Section 24.

(4) The lessee, who has been assigned any function of the Authorityunder sub-section (1) shall have all the powers of the Authoritynecessary for the performance of such function in terms of theHlease.”

41. On perusal thereto, it is clear that Section 12A applies in thecase of lease by the authority and no such lease under sub-section (1)shall be made without previous approval of the Central Government. Inthe present case, no lease is required to be executed in favour of GALor GNIAL. The pretext taken on the basis of Section 12A of AAI Act ina case of annulment of bidding process by the AAI and the GoI primarilyappears to be fallacious.

42. Now, as per the material available and discussed hereinabove,it is clear that the appellants were aware of the procedure which isbeing adopted. After completion of the bidding process, GAL was declaredas selected bidder on offering highest revenue share and on issuanceof LoA, it has been declared as concessionaire and at the stage ofexecution of Concession Agreement, all these formalities are not relevantand it amounts to arbitrary exercise of the power by the authorities whichis not permissible under law. The said approach is fortified with the viewtaken in the judgment of this Court in Union of India and others vs.Dinesh Engineering Corpn. and another (2001) 8 SCC 491, whereinwhile dealing with the rejection of bid of the respondent therein byRailways in tender floated for procurement of certain items of spareparts for use in GE governors, this Court has held that power to rejectbids cannot be exercised arbitrarily merely because Railways has thepower to do so. Any arbitrary exercise of power to reject bids has beenheld violative of Article 14. Paragraphs 15 and 16 of the aforesaidjudgment are relevant and reproduced thus:

“15. Coming to the second question involved in these appeals,namely, the rejection of the tender of the writ petitioner, it wasargued on behalf of the appellants that the Railways under clause16 of the Guidelines was entitled to reject any tender offer withoutassigning any reasons and it also has the power to accept or notto accept the lowest offer. We do not dispute this power providedthe same is exercised within the realm of the object for which thisclause is incorporated. This does not give an arbitrary power tothe Railways to reject the bid offered by party merely becauseit has that power. This is power which can be exercised on theexistence of certain conditions which in the opinion of the Railwaysare not in the interest of the Railways to accept the offer. Nosuch ground has been taken when the writ petitioner’s tenderwas rejected. Therefore, we agree with the High Court that it is

not open to the Railways to rely upon this clause in the Guidelinesto reject any or every offer that may be made by the writ petitionerwhile responding to tender that may be called for supply ofspare parts by the Railways. Mr. Iyer, learned senior counselappearing for the EDC, drew our attention to judgment of thisCourt in Sterling Computers Ltd. etc. v. M/s. M & N PublicationsLtd. (1993 1 SCC 445) which has held: (SCC p. 455, para 12)

“Under some special circumstances discretion has to beconceded to the authorities who have to enter into contractgiving them liberty to assess the overall situation for purposeof taking decision as to whom the contract be awarded andat what terms. If the decisions have been taken in bona fidemanner although not strictly following the norms laid down bythe courts, such decisions are upheld on the principle laid downby Justice Holmes, that courts while judging the constitutionalvalidity of executive decisions must grant certain measure offreedom of “play in the joints” to the executive.”16. But then as has been held by this Court in the very samejudgment that public authority even in contractual matters shouldnot have unfettered discretion and in contracts having commercialelement even though some extra discretion is to be conceded insuch authorities, they are bound to follow the norms recognisedby courts while dealing with public property. This requirement isnecessary to avoid unreasonable and arbitrary decisions beingtaken by public authorities whose actions are amenable to judicialreview. Therefore, merely because the authority has certain elbowroom available for use of discretion in accepting offer in contracts,the same will have to be done within the four corners of therequirements of law especially Article 14of the Constitution. Inthe instant case, we have noticed that apart from rejecting theoffer of the writ petitioner arbitrarily, the writ petitioner has nowbeen virtually debarred from competing with the EDC in the supplyof spare parts to be used in the governors by the Railways, eversince the year 1992, and during all this while we are told theRailways are making purchases without any tender on proprietarybasis only from the EDC which, in our opinion, is in flagrant violationof the constitutional mandate of Article 14. We are also of theopinion that the so-called policy of the Board creating monopoly

of EDC suffers from the vice of non- application of mind, hence,it has to be quashed as has been done by the High Court.”

43. Bare perusal of the above stated case-law in light of the factsof the instant case makes it clear that merely having the power of rejectionof bids does not entitle authorities to exercise the said power arbitrarily.While discussing the applicability of Clauses 2.16.1, 3.3.1 and 3.3.5, it ismade clear that in pre-bid procedure prior to acceptance, the biddingprocess may be annulled otherwise after issuance of LoA, the annulmentcannot be done. The authorities further acted arbitrarily relying upon theGoM’s letter dated 16.03.2020 in reference to PMIC’s meeting dated14.10.2019 in which re-tendering was directed. Re-tendering was notpossible without ignoring the bid already accepted. Therefore, the orderof annulment has been directed applying Clause 2.16.1 arbitrarily.

44. As discussed hereinabove, while explaining the scope ofChapters 1, 2 and 3 of RFP, it is clear that Chapter 2 deals with thebidding instructions which are general in nature. Clause 2.16 deals withthe rejection of bid which is situation prior to acceptance of the bid.After Chapter 2, in Chapter 3 evaluation of bid starts. While evaluatingthose bids in Clause 3.3.1, if the provision of Clause 2.16.1 has not beeninvoked and the bidder whose bid has been adjudged as responsive interms of the Clause 3.3.1 and who offered the highest revenue sharewould be selected bidder. In the present case, the selection of thebidder was complete. Thereafter, LoA was issued as per Clause 3.3.5and by issuance of draft of Concession Agreement, it has been declaredas concessionaire. At that stage, Clause 2.16.1 for annulment of thebidding process would not apply. It appears to us that as per the objectionsraised in the Meeting dated 30.08.2019 held by MoCA, clause (iv) inparagraph 5 persuaded the MIL and GoM to pass the order of re-tendering.

45. In this regard, 3-Judge Bench judgment of this Court in thecase of Vice-Chairman & Managing director, City and IndustrialDevelopment Corporation of Maharashtra Ltd. and Another vs.Shishir Realty Private Limited and Ors. [Civil Appeal No. 3956-57of 2017] is relevant, paras 67 to 70 are reproduced as thus:

“67. Before we state the conclusions, this Court would like toreiterate certain well- established tenets of law pertaining toGovernment contracts. When we speak of Government contracts,

Aconstitutional factors are also in play. Governmental bodies beingpublic authorities are expected to uphold fairness, equality andrule of law even while dealing with contractual matters. It is asettled principle that right to equality under Article 14abhorsarbitrariness. Public authorities have to ensure that no bias,favouritism or arbitrariness are shown during the bidding process.BA transparent bidding process is much favoured by this Court toensure that constitutional requirements are satisfied.

68. Fairness and the good faith standard ingrained in the contractsentered into by public authorities mandates such public authoritiesto conduct themselves in non--arbitrary manner during theCperformance of their contractual obligations.

69. The constitutional guarantee against arbitrariness as providedunder Article 14, demands the State to act in fair and reasonablemanner unless public interest demands otherwise. However, thedegree of compromise of any private legitimate interest mustDcorrespond proportionately to the public interest, so claimed.

70. At this juncture, it is pertinent to remember that, by merelyusing grounds of public interest or loss to the treasury, the successorpublic authority cannot undo the work undertaken by the previousauthority. Such claim must be proven using material facts,Eevidence and figures. If it were otherwise, then there will remainno sanctity in the words and undertaking of the Government.Businessmen will be hesitant to enter Government contract ormake any investment in furtherance of the same. Such practiceis counter-productive to the economy and the business environmentFin general.

46. In view of the above, it is apparent that in government contracts,if granted by the government bodies, it is expected to uphold fairness,equality and rule of law while dealing with contractual matters. Right toequality under Article 14 of the Constitution of India abhors arbitrariness.GThe transparent bidding process is favoured by the Court to ensure thatconstitutional requirements are satisfied. It is said that the constitutionalguarantee as provided under Article 14 of the Constitution of Indiademands the State to act in fair and reasonable manner unless publicinterest demands otherwise. It is expedient that the degree of compromiseof any private legitimate interest must correspond proportionately to the

public interest. It is specified that using ground of public interest orloss to the treasury cannot undo the work already undertaken by theauthority.

47. Analysing the facts of this case in the light of the judgments inDinesh Engineering (Supra) and Shishir Realty (Supra), after issuingthe LoA in terms of Clause 3.3.5 of RFP and declaring GAL asconcessionaire as per Clause 3.3.6, issuing letter of annulment of biddingprocess on the basis of the meeting of PMIC on 14.10.2019, whichdirected for re-tendering of the bid, is completely an arbitrary exerciseof power, contrary to the provisions of RFP and violative of Article 14 ofthe Constitution of India.

48. In view of the discussion made hereinabove, we are of theconsidered opinion that the findings as recorded by the High Court in theimpugned judgment are in consonance with the above reasonings. Theimpugned judgment passed by the High Court is based on the soundreasonings and true analysis of facts, which do not warrant interreferenceby this Court.

49. In the facts of the present case and the findings so recordedhereinabove, it is clear that the authorities have acted arbitrarily in violationof Article 14 of the Constitution of India. In such situation, the publiclaw remedy has rightly been availed, invoking the jurisdiction of the HighCourt under Article 226 of the Constitution of India. The findings recordedby the High Court to entertain the petition in paragraph 95 are just andproper and we are in full agreement to those findings. In the facts of thepresent case, the argument advanced by the appellants to compel GALto take the remedy of specific performance under the provisions ofSpecific Relief Act is hereby repelled.

50. Learned counsel on behalf of the UoI and AAI havevehemently argued that without joining them as party to the proceedings,the Writ Petition was not entertainable and the relief as directed, couldnot have been allowed.

51. From the above, it is clear that in pursuance to the decisiontaken by the Cabinet, the second JV is required to be selected throughcompetitive bidding. In the present case, global tenders were invited andcompetitive bidding process was followed. The procedure of issuanceof LoA is completely fair procedure as prescribed in RFP. As per thedecision taken by MoCA, AAI and MADC, MIL is the authority to

Acomplete the bidding process and PMIC, acting on behalf of GoM wassupervising the entire process. The annulment has been directed inreference to the letter dated 16.3.2020 for re-tendering of bid. Therefore,in issuing the annulment letter, there is no role of UoI and AAI. Theserious objection has been raised regarding the grant of relief as prayedin Clause (b) by the High Court. In this regard, if we examine the saidBrelief and direction, as issued by the High Court in terms of the Cabinetdecision dated 11.2.2009, we are satisfied that UoI and AAI are notadversely affected after issuing the direction to select the second JV bycompetitive bidding. More so as discussed, except to produce the firstapproval of the Cabinet dated 11.02.2009, letters dated 02.08.2019,C20.08.2019 and 30.08.2019, nothing new has been brought before us toshow what serious prejudice has been caused to them due to non-joinderby the Writ Court. In absence thereto, we are of the considered opinionthat the objection regarding non-joinder raised by the appellants is bereftof any merit and the High Court has rightly rejected the same.

D52. In view of the discussion made hereinabove, we are of theconsidered opinion that the findings recorded by the High Court allowingthe Writ Petition are in accordance to law. Those findings do not sufferfrom any illegality, warranting interreference by this Court in exercise ofthe power under Article 136 of the Constitution of India. All these appealsare hereby dismissed. Parties to bear their own costs.

Nidhi Jain(Assisted by : Bodhi Ramteke, LCRA)

Appeals dismissed.