Holding

The Court held that GETE was validly constituted, its jurisdiction was properly exercised, and EGOM's exercise of discretion in modifying the RFP and accepting GETE's validation was lawful, leading to dismissal of the appeal.

Summary

Reliance Airport Developers Pvt. Ltd. (RAL) challenged the award of Delhi and Mumbai airport privatization contracts to GMR and GVK, alleging that the Empowered Group of Ministers (EGOM) improperly altered the Request for Proposal (RFP) criteria, lowered the technical qualification benchmark and relied on the report of a newly constituted Group of Eminent Technical Experts (GETE) whose constitution and jurisdiction were contested. The Supreme Court examined whether GETE was validly constituted, whether its exercise of jurisdiction in reviewing the Evaluation Committee's (EC) marks was lawful, and whether EGOM's discretion in modifying the RFP and accepting GETE's recommendations was exercised within legal limits. The Court held that the multi‑tiered decision‑making process allowed EGOM to consider views of various committees, that GETE was validly constituted and acted within its mandate, and that the variations made were not ultra vires or irrational. Consequently, the appeal was dismissed.

Issues considered

The legality of the constitution of the Group of Eminent Technical Experts (GETE).
Whether GETE exercised its jurisdiction properly in reviewing the Evaluation Committee's (EC) technical evaluation.
Whether the EGOM's discretion to modify RFP terms, lower the technical benchmark and rely on GETE's report was exercised lawfully and not ultra vires.
Whether the post‑bid modifications to weightages and priorities amounted to procedural impropriety, irrationality or arbitrariness.
Whether the appellant was entitled to a fresh bidding process or to match the higher financial bid.

Subjects

administrative lawjudicial reviewdiscretionprocurementbid evaluationprivatizationairport modernizationempowered group of ministersGETEtechnical pre‑qualificationpublic interest

Judgment

A RELIANCE AIRPORT DEVELOPERS PVT. LTD.
v.
. AIRPORTS AUTHORITY OF INDIA AND ORS.

NOVEMBER 7, 2006

B [ARIJIT PASAYAT AND S.H. KAPADIA, JJ.]

Administrative Law:

Administrative authority-Exercise ofdiscretion-Judicial review-Scope
C of-Privatization of airports of Delhi and Mumbai on joint venture basis-
Bids invited-Evaluation of bids-Constitution of Committee (ECJ-Approach
of EC in evaluation being inconsistent with terms of request for proposal
(RPF)-Another committee (GETE) constituted-Reports submitted-Two
bidders awarded contract of one airport each-One of unsuccessful bidders
D challenging constitution ofGETE-Held, necessity for taking views ofdifferent
committees was a step towards making the whole decision making process
transparent-In multi tier system in decision making process, authority
empowered to take decision can accept view expressed by one committee in
preference to another for plausible reasons-On facts, discretion properly
exercised-Challenge to constitution of GETE clearly untenable-GET£ has
E gone by objective standards-Criterion adopted by GETE more rational-
Ultimately, the authority concerned rightly exercised its discretion in larger
public interest-Privatization Po/icy-Contract-Government contract-
Evaluation of bids-Confidential and sensitives meetings-Need to maintain
secrecy.
F Words and Phrases:

Expressions 'contract' and 'discretion'-Connotation of

In furtherance of the privatization policy of the Government of India,
"Invitation To Register An Expression of Interest" was issued for
G privatization of two airports of Mumbai and Delhi on a joint venture basis.
The bidders were invited to bid on certain basis and pattern. The tendering
process involved two tiers, i.e., Expression-cum-Request for Qualification
and a Request for Proposal (RFP). At 01e RFP stage, evaluation was
carried out in four stages. The first two stages involved verification in the -- ·
H 398
- RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA

nature of mandatory norms. The third stage was technical evaluation
399

stage; and the final stage was financial evaluation stage. Before approval
A

of transaction document by Empowered Group of Ministers (EGOM), RFP
documents of two airports were forwarded to the bidders. Thereafter final
transaction documents were forwarded to the bidders. There were six
bidders for Delhi and five bidders for Mumbai. Bid evaluation was
entrusted to Global Tl!chnical Adviser, Legal Consultant and Financial B
Consultant (GT A, LC and FC) which was also described as Evaluation
Committee (EC). The technical bids were opened and a Government
Review Committee (GRC) was constituted to undertake an independent
review of evaluation report of bids of the two airports and restructuring
process prepared by the Evaluation Committee/Advisers. EC submitted C
their evaluation report. A Committee called as Group of Eminent
Technical Experts (GETE) was appointed to review the Consultants'
Evaluation Report. Accordingly, GETE submitted its reports. On
31.1.2006, Executive Director of AAI informed appellant RAL that GMR
would be given a choice of the two airports and whichever airport it
chooses it would be required to match the higher fi~ancial bid. RAL wrote D
to AAI alleging change of procedure and protesting against the same. It
also wrote to the members of the EGOM alleging illegalities in
consideration of the bids, and later filed a writ petition before the High
Court on 2.2.2006. On 4.2.2006 GOl informed GMR and GVK that they
were selected as successful bidders for undertaking the re-structuring and E
modernization_ of the Delhi and the Mumbai airports respectively. It was
contended for the petitioner that the EGOM/ GOI should have accepted
the recommendations of the EC and should not have asked the GETE to
make further examination. It is submitted that GETE did not examine the
queries relating to GMR as raised by the IMG and the reduction of
technical qualification from 80% to 50% was impermissible; that the F
appointment of GETE itself was illegal and unauthorized. On dismissal
of writ petition RA! filed the present appeal.

On the questions: Whether GETE's constitution was legal and
whether jurisdiction conferred on GETE has been properly exercised,
G
Dismissing the appeal, the Court

HELD: Per Pasayat, J

1.1. 'Discretion' means when it is said that something is to be done
H
400 SUPREME COURT REPORTS [2006]SUPP. 8 S.C.R.

A within the discretion of the authorities that something is to be done
according to the rules of reason and justice, not according to private
opinion: according to law, and not humour. It is to be not arbitrary, vague
and fanciful, but legal and regular. And it must be exercised within the
limit, to which an honest man, competent to the discharge of his office
B ought to continue himself. (432-G)

Ramji Dayawala & Sons (P) Ltd. v. Invest Import, (1981) l SCC 80;
.. Dhurandhar Prasad Singh v. Jai Prakash University and Ors., (2001) 6 SCC
534; Kumaon Manda/ Vikas Nigam Ltd. v. Girja Shankar Pant and Ors.,
(2001) 1 SCC 182; Siben Kumar Monda/ v. Hindustan Petroleum Corporation
C Ltd., AIR (1995) Cal 327; Man Mal Sharma v. Bikaner Sahkari Upbnokta
Bhandar, AIR (1999) Raj 13; Rekha Bhasin v. Union of India, AIR (1998)
Del 3!4; National Insurance Co. Ltd. v. Keshav Bahadur, AIR (2004) SC
1581; Kumaun Manda/ Vikas Nigam Ltd. v. Girja Shanker Pant, (2001( l SCC
182; Jaisinghani v. Union of India,, AIR (1967) SC 1427 and Commissioner
ofIncome-tax v. Mahindra and Mahindra Ltd., AIR (1984) SC 1182, referred
D to.
Breem v. Amalgamated Engineering Union, f 19711 1 All ER 1148; Chief
Constable of North Sales Police v. Evans, (1982) 3 All ER 141; Susannah
Sharp v. Wakefield, (1891) AC 173; Sharp v. Wakefield, (1891) Appeal Cases
173; Hindson and Kersey, (1680) 8 How St Tr 57; R. v. Kay, 52 LJMC 90;
E Lee v. Bude Railway Co., (1871) LR 6 CP 576; Morgan v. Morgan, 1869,
LR 1 P & M 644; and Gardner v. Jay, (1885) 29 Ch D 50; John Wilke 's
case, (1970) 4 Hurr 2528, Council of Civil Service Unions v. Minister for
the Civil Service, (1984) 3 All.ER.935; Sharp v. Wakefield, 1891 AC 173;
Lee v. Budge Railway Co., (1371) LR 6 .CP 57·6 and Morgan v. Morgan,.
p (1869) LR 1 P & M 644 and Roberts v. Hopwood, (1925) AC 578 and R v.
Wilkes, (1770) 98 ER 327, referred to.
1.2. The authority in which a discretion is vested can be compelled
to exercise that discretion, but not to exercise it in any particular manner.
(451-C)
G The principles can conveniently be grouped in two main categories:
(i) failure to exercise a discretion, and (ii) excess or abuse of discretionary
power. The two classes are not, however, mutually exclusive. Thus,
discretion may be improperly fettered because irrelevant considerations
have been taken into account, and where an authority hands over its
H discretion to another body it acts ultra vires. (45J.·E-F)
.... RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA 401

Padfieldv. Minister of Agriculture, Fisheries and Food LR, (1968) AC A
997, referred to.

1.3. One of the points that falls for determination is the scope for
judicial interference in matters of administrative decisions. Administrative
action is stated to be referable to broad area of Governmental activities
in which the repositories of power may exercise every class of statutory B
function of executive, quasi-legislative and quasi-judicial nature. It is trite
law that exercise of power, whether legislative or administrative, will be
set aside if there is manifest error in the exercise of such power or the
exercise of the power is manifestly arbitrary. In the realms of contract,
various choices are available. Comparison of the respective merits, offers C
of choice and whether that choice has been properly exercised are the
deciding factors in the judicial review. (450-H; 451-A-B; 460-D)

State of U.P. and.Ors. v. Renusagar Power Co. and Ors., AIR (1988)
SC 1737, relied on.
1.4. The Court will be slow to interfere in such matters relating to D
administrative functions unless decision is tainted by any vulnerability like
illegality, irrationality and procedural impropriety. Whether action falls
within any of the categories has to be established. Mere assertion in that
regard would not be sufficient. To arrive at a decision on "reasonableness"
the Court has to find out if the administrator has left out relevant factors E
or taken into account irrelevant factors. The decision of the administrator
must have been within the four corners of the law, and not one which no
sensible person could have reasonably arrived at, and must have been a
bona fide one. The decision could be one of many choices open to the
authority but it was for that authority to decide upon the choice and not
for the Court to substitute its view. To characterize a decision of the F
administrator as "irrational" the Court has to hold, on material, that it is
a decision "so outrageous" as to be in total defiance of logic or moral
~tandards. In essence, the test is to see whether there is any infirmity in
the decision making process and not in the decision itself.
(452-H; 453-A; 454-A, B, H; 455-A( G
Indian Railway Construction Co. Ltd. v. Ajay Kumar, (2003( 4 SCC 579
and Asia Foundation & Construction Ltd. v. Trafalgar House Construction
(!) Ltd. and Ors., [1997( 1 SCC 738, referred to.

Associated Provincial Picture Houses Ltd. v. Wednesbwy Corpn. KB
229: All ER 682; R. v. Secreta1J1 of State for the Home Department, ex parte H
402 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Daly, (2001) 3 All ER 433; R (Mahmood) v. secretary ofState for the Home
Dept., (2000)1 WLR 840 and Huang & Ors v. Secretary ofState for the Home
Department, (2005) 3 All ER 435, referred to.
2.1. In the instant case, though the High Court seems to have noted
that the EGOM has absolute discretion, it has really not held thati the
. l' . I ·~

B discretion was unfettered. In fact it has on facts found that the discretion
. . t -l ... Pj ~ t, ~

was properly exercised to make some variations in the terms of RFP.
. (4l7-E-FJ
. i' .' ~

2.2. In the multi tier system in the decision making process ~the
authority empowered to take a decision can accept the view expressed by
C one committee in preference to another for plausible reasons. It is not
bound to accept the view of any committee. These committeesfit.needs
no emphasis, are constituted to assist the decision making authority in
arriving at the proper decision. It is a matter ~f discretion of the authority
to rrodify the norms. It is nota case of absolute·di5cretion. While exercising
the discretion, certain parameters are to be followed. (432-C-DJ
D 2.3. It is to be noted that the ultimate authority to take the decision
in the matter was EGOM. It was within the powers of EGOM.to decide
as to what inputs it can take note of and the source of these inputs.
Therefore, the necessity for taking views ofvarious committees constituted
appears to be a step in the right direction. 'Fhis was a step which appears
E to have been taken for making the whoJe decision making process
transparent. There was no question of having the view of one Committee
a
in preference to another. EC was Committee constituted as a part of
the decision making process like other Committees viz. GRC, COS and
IMG. (432-A-BJ

F Craies Statute Law, 6th Edn. P. 273 and Corpus Jur.is Secundum, Vol
27, page 289 and "Advanced law Lexiconn by P. Ramanath Aiyar, referred
to.

2.4. Coming to the constitution of GETE, no malafides are alleged
G against the members. About the constitution ofGETE, the stand is clearly
untenable. (437-F)

3.1. So far as evaluation of the marks as done by EC is concerned,
GETE has given reasons for altering the marks allotted which ultimately
led to the non-qualification of the appellant. There were four identified
H areas where it was noted thi.it the EC's approach in the evaluation ex.ercise
RELi. AIRPORT DEVELOPERS PVT. LTD;v. AIRPORTS AUTH.QF INDIA 403

was inconsiste,llt with the terms of the RFP. Essentially there were four A
instances of rewriting of priorities and weightages as contained in the RFP
and valuation was then made by the EC on the basis of these re-written
priorities and weightages. (437-G; 438-D-E)
3.2. If EC felt that the priorities and weightages as indicated in the
RFP were inappropriate, it should have requested AAl/GOI to amend the B
RFP before the bids were received. Interestingly, the modifications were
resorted to after the bids were opened. That is the principal reason for
which·EGOM appears to have sought views of the COS and the COS was
equally entitled to invite a group of experts to examine the matter.
(447-G-H; 448-AI
3.3~ The GETE's report shows that even taking the said four C
modifications led to some of the bidders getting more marks. GVK and
others did not cross the bench inark of 80% and even after exclusion of
these marks, GMR had more than 80% marks. It was only the appellant
who crossed the threshold of80°/o on account of these four variations and
fell below 80°/o when the effect of these four variations was excluded. D
(449-E-F)
3.4. Departure from the RFP made by EC after opening the bids can
reasonably raise a doubt that EC knew that the modalities would benefit
the appellant. GETE's report shows that it enunciated the principle to
carry out an nercise that would be more in the nature of validation E
dealing with the four variations made by EC. GETE also noted that certain
issues can be more satisfactorily addressed by process of validation that
would involve a re-allocation of marks, on the assessment made by the
EC of the bids albeit in a manner that would be consistent with the RFP.
It essentially was not an exercise of re-evaluation but of a re-allocation
consistent with RFP. (449-G-H; 450-A-BJ F
3.5 As noted .in GETE's first report, its attempt was to assess whether
EC had assigned weightages and marks in a logical and transparent
manner to the sub-factors and whether there had been any bias in favour
of or against any of tlie bidders while assigning marks, with reference to
the RFP. While making such examination, the issues raised by the G
members of IMG were kept in view, but as stated in the report, GETE
was not solely guided by their views. Though the first report itself indicated
the reasons as to why the evaluation process containing the moderation
exercise was no.t undertaken in respect Of bidders, as desired by EGOM,
GETE did so and submitted its second report. Undisputedly, GMR crossed H
404 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A the bench mark of.80% in respect of bothrthc bids while others did not.
· (450-C-DJ
3.6. Weightage introduces subjectivity.' GETE h'as gone by objective
standards. The criterion adopted by GETE 'appears 'to· be nio're rational.
It proceeded with the idea that more objec~ivity was necessary. So it has
B called the process to be validation processd461~Bl "
4. Challenge has been made by the appellant to the lowering of the
bench mark. It is to be noted that the ap'pellant h·ad come into' the zone of
consideration only because of lowering" of the' bench mark as otherwise
after the modifications were made by GETE, it had riot cross'ed'the bench
C mark. (450-EJ

5. As regards the appellant's stand that if none was fourid eligible
on the basis of 80% bench mark, there should have·been :a fresh bid, it
has been· pointed out that the number of bidders was small. The bidders
after opening of the bid knew the merits and demerits of all the bids. There
D was an urgency for early completion of the airports keeping·in view the
2010 Commonwealth Games. (450-F-G) ·

6.1. There was no stand before the High rc~~ri'th~t the appellant
,.t1 J • l . '' J.
wanted to match the bid. Even if it is accepted foi the sake of argument,
that it was no urged, it would have no coriseqiience. The argument that
E as GMR has been atiowed to match the financfai 'dealing ~f appellant for
Mumbai airport, the same m~dality should ha~e been adopted for the
other bidders, cannot be accepted for the'si~ple reason that when bench
mark is crossed,• financial considerati~n
•
is the deter~inative
t . ' •
faci6r
• '
b~cause ·~

of revenue sharing. The safety valve is the OMDA. The ranking becomes
irrelevant after the bidders have co~e to the aren~ aitd then finaliy the
financial bid which determines'the ultimate bid f459~H; 460-A~B, d( ·.
1

F •

6.2. It is to be noted that if no one was qualified; two alternatives
were available either to scrap or abandon.the process and second·to·re~
conduct the tenders. The practical compulsion \Vhich made the. choice
G avoidable. cannot be termed as perverse or lacking rationality. (460-:-FJ , 1
1 I; ~ 'f ~ 1 1 • _ 1..
7.1. It is to be noted that Clause 5.5. deals with a situation of the
same
'
bidder being the highest bidder
'
for- both
•
the
.
airports.
"it• •
It proceeds
.. -

on the basis that there would be an~th.e~ eligible _bidder for th~ ot.~er
airport and on that basis t.he procedure to be adopte~ h~s ~een pre~c~ibed.
H In such a situation the bidder who would be successful i.e. the highest
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA 405

bidder would be asked to take the airport when the difference between A
his bid and the next higher bid is greater. Such a procedure could be
followed where there is second valid bid at the final phase. This procedure
does not deal with a situation where there is only one bidder with valid
bids for both the airports. In such a situation he becomes the highest bidder
for both the airports and for that reason alone, the question of evaluation B
of financial bid arises. [461-E-G)

7.2. If the RFP was to consider at the final phase of evaluation there
would be only one bid for each of the airports. In that event, there would
be no question of finding out difference between the various bids or
comparing bids. That left no option with the EGOM but to either vary C
RFP or to award one of the airports to GMR and to cancel the process
for the second or cancel the entire process. The latter course would not
have been in larger public interest. Therefore, the EGOM exercised its
option. (461-H; 462-A)

Raunaq International Ltd. v. /. V.R. Construction Ltd. and Ors., (1999) D
1 SCC 492 and Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson
(P) Ltd. and Anr., (2005) 6 SCC 138, referred to.

R. v. Department of Constitutional Affairs, (2006) All ER (D) 101,
referred to.
E
7.3. It is to be noted that in respect of both the appellant and the
GETE wherever subjectivity criterion is involved, GETE has not dealt with
the same. The mandate of EGOM was to validate and not to invalidate.
It was a process for overall validation and calibration to apply the correct
standard. It is the texture of the tendered document which is of paramount
importance. EC has changed the texture whereas GETE did not do it. H F
needs no emphasis that uneven denomination breaks the integrity and
textures. (462-H; 463-A-B)
7.4. Perverseness in connection with a finding of fact is an aspect of
mistake of law. In the "public law" domain, in order to examine whether
the entire proceeding before the appropriate authority is illegal and G'
without jurisdiction or the defect or infirmity in the order goes to the root
of the matter and makes it in law invalid or void, the matter may have to
be considered in the light of the provisions of the particular statute in
question and the fact-situation obtaining in each case. If the decision is
without jurisdiction, notwithstanding the provisions for obtaining reliefs H
406 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A contained in the Act and the "ouster clauses", the jurisdiction of the
ordinary court is not excluded. So, the matter assumes significance.
(463-C, F, G, HJ
Union of India v. Tarachand Gupta & Bros., [1971) I SCC 486; A.R.
Antulay v. R.S. Nayak, (1988] 2 SCC 602; R.B. Shreeram Durga Prasad and
B Fatehchand Nursing Das v. Settlement Commission (IT & WT), [1989) 1 SCC
628; N. Parthasarathy v. Controller of Capital Issues, (1991) 3 SCC 153;
Associated Engineering Co. v. Govt. of AP, (1991] 4 SCC 93; Shiy Kumar
Chadha v. Municipal Corpn. of Delhi, (1993) 3 SCC 161; ML. Sethi v. R.P.
Kapur, (1972) 2 SCC 427; Hari Prasad Mulshanker Trivedi v. V.B. Raju and
Ors., (1974) 3 SCC 415 and Mafatlal Industries Ltd. and Ors. v. Union of
C India and Ors., (1997) 5 SCC 536, referred to.
R (Iran) v. Secretary of State, (2005) EWCA Civ 982; Anisminic Ltd.
v. Foreign Compensation Commission, (1969) 1 ALL E.R. 208; O'Reilly v.
Mackman, (1982) 3 All. E.R. 1124; Re. v. Hull University Visitor, (19931 1
All E.R. 97 and Re: Racal Communications Ltd., (19801 2 All E.R. 634,
D referred to.

De Smith, Woolf and Jowell - Judicial Review of Administrative Action
(1995 Edn.) p. 238; Halsbury's Laws of England (4th Edn.) p. 114; Sir
William Wade, Administrative Law (7th Edn.), 1994 De Smith, Judicial Review
ofAdministrative Action-edited by Lord Woolf and Jowell, Q.C.; Professor of
E Public Law, 5th Edn. 1995 "Jurisdiction, Vires, Law and Fact" pp. 223; "The
Nature of Judicial Process' by Benjamin Cordozo, referred to.

Administrative Law, 7th Edn., (1994), by H. W.R. Wade and C.F. Forsyth,
referred to.
F 8. The plea of the appellant that the expression 'contact' obviously
means an illegal attempt for bribery etc. and cannot stand on the way of
submission of documents for consideration, is clearly untenable. Though,
there is no penal clause for such breach it goes against the very concept
of fairness in the process and evaluation of bids. Whatever documents are
G to be submitted are clearly stipulated. Any attempt to take advantage of
any newspaper report, clearly falls foul of the mandate that there shall
not be any contact with any person involved in the process of selection. It
is unusual that the RFP did not make such a contact is a factor for
disqualification. This is to be kept in view in future tenders.
(471-H; 472-A-BJ
H 9. It appears that whatever has been discussed in the various
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA 407

meetings apparently found its way outside. Who was responsible for the A
leak is not very clear but it is not a very healthy trend. The meetings were
highly confidential and sensitive in nature dealing with global tenders.
(416-Ff
Per Kapadia, J
1. In Order to see whether the EC had exceeded its authority in the B
assessment of technical pre-qualification, it has to be borne in mind that
in the scoring system objectivity has an important role to play, and
identification of factors (including sub-factors), allocation of marks to each
of these factors (including sub-factors) and giving of marks are three
distinct and different stages. Clause 5.4 dealt with assessment of technical C
, pre-qualification. Under that clause a scoring system was to be applied
based on the assessment of the Terms of the Offer against the Technical
pre-qualification criteria. It further stipulated that assessment shall be on
absolute basis and not relative as between the offers. Under the said
system, each factor had to be allocated certain marks. Objectivity had to
be provided in the allocation of marks (and not in giving of marks) to each I?
factor (including sub-factors). This was not done. It may be seen that RFP
required certain marks to be allocated for absorption of existing staff.
Greater the absorption, higher the marks to be given. In the present cas~,
the EC changed the factor, namely, "absorption of employees" to the
overall approach. This led to change in priority. Similarly, in the RFP, E,
the factor earmarked was "property development" which EC compared
to "infrastructure development", Experience in property development is
different from experience in infrastructure development. Similarly, RFP
had given weightage to aeronautical, revenues, revenue whereas in ·
allocation of marks, E.D. obliterated the difference between aeronautical
and non-aeronaut ical revenues. Thus, the objectivity which was the ~
underlying principle in clause 5.4 is completely lost either by expanding
the enumerated factors like aeronautical revenue, overall capability vis-
a-vis capacity to absorb existing work-force and comparison of property
development with infrastructure development or by allocating un-even
marks to sub-factors. EC had no business to expand or narrow down the
scope of any of the above factors as it was beyond its authority and G
contrary to the scoring system. (472-D-H; 473-A-B)

CIVIL APP ELLATE JURISDICTION : Civil Appeal No. 2515 of 2006 ..

From the Judgment and Order dated 21.4.2006 of High Court of Delhi H
408 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A at New Delhi, in W.P. (C) No. 1581/2006.

Mukul Rohtagi, Soli J. Sorabjee, Saurabh Kirpal, Mahesh Agrawal,
Manali Singhal, Nikhil Sakhardande, Rishi Agrawal and E.C. Agrawal For
the Appellant.

B Gopal Subramanium, A.S.G., Harish N. Salve, R.F.Nariman, L.
Nageshwar Rao, K. Parasaran, K.K. Venugopal, V.A. Mohta, Dr. A.M.
Singhvi, R.N. Karanjawala, Gopal Jain, Ramesh Singh, Ankur Chawla,
Meenakshi Grover, Ruby Singh Ahuja, Pragya Singh Baghel, Gayatri
Goswami, Akshay Babu, Manik Karanjawal!l> M.V. Kini, V.B. Joshi, T.S.
Murthy, Saket Singh, Siddharth Aggarwal, Senthil Jagadeesan, Atul Shanna,
C Munish Shanna.• Ravi Venna, Ashish Ahuja, Amit Sethi, Milanka Chaudhary,
Prashanto Sen, Haripriya, Vibhuti Kabra, Devansh A. Mohta, Sonam Shanna,
Nilankanta Nayak and M.A. Chinnasamy for the Respondents.

The Judgment of the Court was delivered by
D ARIJIT PASAYAT, J. Challenge in this appeal is to the judgment of
a Division Bench of the Delhi High Court. Decision taken by a group of
Ministers in a matter of joint venture partnership as a part of the privatization
policy of the Government of India was assailed before the High Court.

According to the appellant, the project has to be grounded because of
E
several major defects which would render the project, take off disastrous.
The.respondents on the other hand contend that minor technical flaws, if any,
have been rectified before the ultimate decision was taken and the project has
been rightly held to be in a fit condition to take off.

F The key players in this dispute are M/s Reliance Airports Developers
Pvt. Ltd. (in short 'RAL'); Airports Authority of India (in short 'AAI'),
Government of .India (in short 'GOI'), GMR Infrastructures Ltd. (in short
'GMR'), GVK Industries Ltd. (in short 'GVK').

Background facts sans unnecessary details are as follows:
G
As a part of the GOl'S avowed policy of privatization of strategic
national assets, the first step appears to be privatization of two airports i.e.
Mumbai and Delhi on a joint venture basis. In March, 2003 AAI initiated
process to consider modernization· of Delhi and Mumbai Airports on the
basis of an earlier decision taken on January 12, 2000 by the Union Cabinet
H relating to re-structuring of airports of AAI through long term leasing route.
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYA T, J.]409

On 11.9.2003 the GOI approved restructuring of airports of Mumbai and A
Delhi through joint venture (shortly called 'JV') route and constituted
Empowered Group of Ministers (in short 'EGOM') to decide the detailed
modalities including design parameters, bid evaluation criteria etc. based on
which JV partners were to be selected. It was required to submit the final
proposal for Governments approval. An Inter Ministerial Group (in short B
'IMG') was set up to assist EGOM for re-structuring of two airports. The
same was set up under the Chairmanship of Additional Secretary-cum-Financial
Adviser of Ministry of Civil Aviation. Subsequently, on 15.6.2004, EGOM
was ·re-constituted under the Chairmanship of Minister of Defence. On
12.10.2004 IMG was re-constituted under the Chairmanship of Secretary,
Ministry of Civil Aviation. On the basis of recommendations made by IMG, C
EGOM approved appointment of Global Technical Adviser, Legal Consultant
and Financial Consultant (called GTA, LC and FC in short respectively).
They were Airport Planning Ply Ltd., Amarchand, Mangaldas and Suresh A.
Shroff and Co. and ABN AMRO Asia Corporate Finance (I) Pvt. Ltd (in
short Airplan, AMSC and ABN AMRO respectively). The Consultants D
prepared thelnvitation To Register An Expression of Interest (shortly called
'ITREOI') and the same was endorsed by IMG. Subsequently, EGOM
approved the same. On 17.2.2004, ITREOI was issued for the two airports.
Request for proposal was routed by AAI and the bidders were invited to bid
on certain basis and pattern. The tendering process involved two tiers; i.e. an
Expression Cum Request for Qualification (in short 'ECRQ') and a Request E,
for Proposal (in short 'RFP'). At the RFP stage, evaluation was carried out
in four stages. The first two stages involved verification in the nature of
mandatory norms. The third stage was technical evaluation stage and the
final stage was financial evaluation stage. On 15.2.2005, EGOM finalized
and approved key principles of RFP and draft transaction documents. The F
RFP documents were issued on 1.4.2005.

Certain changes to the draft transaction documents were approved by
EGOM. Before such approval, RFP documents of the two airports were
forwarded to the bidders. On 30.8.2005 final transaction documents were
forwarded to the bidders. The deadline for submissions of bids was fixed as G
14.9.2005. There were in fact six bidders for Delhi and five bidders for
Mumbai. On 19.9.2005, a meeting of IMG was held relating to methodology
for evaluation of offers and evaluation criteria in RFP documents. IMG decided
that bid evaluation on all parameters shall be carried out by a composite team
of GTA, LC and FC. IMG also decided to set up a review committee to H
410 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A review the evaluation carried out by GTA, LC and FC. The same was also
described as an Evaluation Committee (in short 'EC').

The technical bids were opened on 22.9.2005. On 10.10.2005
Government Review Committee (in short 'GRC') was co11stituted to undertake
an independent review of evaluation report of bids of two airports and re-
B structuring process prepared by the Evaluation Committee/Advisers. The
Consultants submitted their evaluation report. GRC held its meeting on
23.11.2005 and 24.11.2005 to review the Consultants' Evaluation Rep0rts.
GRC endorsed the views expressed in the Consultants' Evaluation Reports.
Certain queries were raised by members of the GRC and the Consultants
C clarified the position so far as the queries are concerned. In the Evaluation
Report a list of evaluation criteria where a different approach has been adopted ·
by the Consultants was indicated. On 1.12.2005, GRC submitted its report to
IMG. In the meeting of IMG held on 2.12.2005 reports of Consultants and
GRC were placed. ~onsultants made a representation to the IMG. The majority
members felt that the terms of the RFP had been adhered to and there had
D been sufficient transparency in the process. It is to be. noted that one of the
members who was the member of the Planning Commission had recorded his
personal opinion. Majority of the members of the Committee felt that if the
entire bid process was transparent and GRC was satisfied with the process it
would not be necessary to go by the advise of the member of the Planning.
E Commission and the final decision should be left to the EGOM. The matter
was placed before the EGOM on 5.12.2005. EGOM directed IMG to undertake
an independent review of the Consultants' evaluation with GRCs assistance
and give a clear recommendation to EGOM. It was noted that the bid
documents could be made available to the IMG and they could seek
F clarification from the Consultants. It was felt that there was no need for
change in the evaluation criteria as stipula~ed in the RFP documents. It was
stipulated that IMG would not undertake any fresh evaluation or allocate
marks for any of the criteria and finally the mandate of IMG will be restricted
to ascertain as to whether it is in agreement or otherwise with the assessment/
findings and allocation of marks across various criteria in respect of various
G bids. IMG was required to complete the exercise in two weeks. Oil 6.12.2005
a meeting of the IMG was held. Bid documents were shown to the members
of the lMG. Another meeting was held on 9.12.2005 and the Consultants
were directed to re-work the marks matrix by striet adherence to RFP norms.
On foar days i.e. 12th, 13th, 14th and 16th December, 2005 meeting of IMG
was held. In the meeting queries were raised by IMG members as to whether
H evaluation was consistent with the RFP evaluation criteria and the answers
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUfH.OFINDIA [PASAYAT,J.)411

given by the Consultants. On 20.12.2005 RAL wrote to the Chairman, EGOM A
criticizing the SKYTRAX Repor:t and denying that Consultants acted in an
improper/biased manner or that the technical evaluation conducted by the
Consultants was flawed. RAL wrote another letter on the same day to the
EGOM pointing out its alliance with international players.

On 21.l2.2005 EGOM metto consider the views of the IMG. It decided B
that a Committee of Secretaries (in short 'COS') should be set up to advise
the EGOM on all issues relating to the restructuring and modernization of the
two airports. The COS was required to consider and recommend the selection
of appropriate JV bidders for executing the works related thereto. The COS
was set up by order dated 21.12.2005 to assist the EGOM. It met and decided C
: to set up two members Committee consisting of Mr. Sreedharan & Mr.
Sevadasan (hereinafter described as Sreedharan Committee or Group of
Eminent Technical Experts (in short 'GETE') to recommend to the COS on
the overall validation of the evaluation process including calibration of the
·qualifying cut off and sensitivity analysis. 'GETE' was accordingly appointed
, to review the Consultants, Evaluation Report (in short 'CER') on 27 .12.2005. D
; RAL wrote to the Ministry of Civil Aviation (in short 'MCA') asking that
! copies of its letters dated 20.12.2005 be forwarded to the GETE.

' ABN AMRO wrote a letter regarding clarification sought by MCA on
' determination of bids attached to the criteria used in the technical
· prequalification of bidders for the two airports. GETE submitted its report on E
. 7.1.2006. A meeting of the COS was held on 9.1.2006. On 12.1.2006 a
.: meeting of EGOM was held where GETE's report was considered. EGOM
' felt that the GETE had apparently done the evaluation of all the bidders as
is evident from the conclusion drawn about status of the other bidders in para
4.8 of its report. No details of revaluation were available about the. other F
bidders, as have been provided in respect of RAL. EGOM therefore decided
that in order to reach a definite conclusion, GETE was to be requested fo do
a similar revaluation exercise in respect of other bidders. Supplementary
report of GETE was submitted on 17. l.2006. On 23. l.2006 RAL Airport
Operator wrote to the GOI asserting that it had the requisite qualification. On
24.1.2006 meeting of EGOM was held and several decisions were taken. On G
28.1.2006 RAL wrote to GOI asking it to adhere to the RFP norms. On
30.1.2006 AAI wrote to the bidders informing them that the final bids were
to be opened on January 31, 2006.

On 31.1.2006 Executive Director of AAI informed RAL that GMR H
412 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A would be given a choice of the two airports and whichever airport w'Chooses,
it would be required to match the higher financial bid. On that 'day itself,
RAL wrote to the AAI alleging change of procedure and protesting against
the same. Later on, the financial bids were opened that day. A report was
submitted by the Committee opening the financial bids. RAL again wrote to
B the members of the EGOM alleging illegalities in consideration of the bids.
On the next day again RAL wrote to the members of the EGOM regarding
the events that had transpired during the opening of bids. AAI wro~e to RAL
setting out the procedure followed while opening and evaluating the financial
bids.

·C Writ Petition was filed by RAL before the Delhi High Court on 2.2.2006.
On 4.2.2006 GO! informed GMR and GVK that they have been selected as
successful bidders for undertaking the restructuring and modernization of the
. Delhi and Mumbai airports respectively and required them to furnish enhanced
bid bonds guarantees for Rs.500 crores. Both GMR and GVK furnished their
b.id bonds guarantees of Rs.500 crores each on 6.2.2006 and 8.2.2006.
D
On 1.3.2006 Special Purpose Vehicle (in short 'SPY') was formed for
Delhi while on the next day SPY was formed for the. Mumbai airport. On
4.4.2006 Operations Management and Development Agreement (in short
'OMDA') was signed by the concerned parties. At this stage, it would be
appropriate to take note of what has been described as OMDA. Shareholders
E agreement with GMR and GVK was signed. Consequently 26% shares in
SPY were allotted to AAI and 74% shares allotted to GMR. Similarly, 26%
shares in SPY were allotted to AAI and 74% shares allotted to GVK. ·

By the impugned order, RAL's writ petition before the Delhi High
F Court was dismissed by orde.r dated 21.4.2006.

The primary stand of the appellant is that the EGOM/GOI should have
accepted the recommendations of the EC and should not ha".e asked the
GETE to make further examination. It is submitted that GETE did not examine
the queries relating to GMR as raised by the !MG and the reduction of
G technical qualification from 80% to 50% was imp~rmissible. It is also submitted
that the appointment of GETE itself was illegal and unauthorized. The High
Court proceeded on the basis as if EGOM had absolute discretion in the
matter of choosing the modalities. It is also submitted that the, uniform patte~
of assessment has not been done and while reducing the marks so far as the
appellant is concerned, similar procedure has not been adopted so far as
H
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OF INDIA [PASA YAT, J.J4} 3

GMR and GVK are concerned. In the initial assessment, only the GMR and A
the appellant had crossed the bench mark. If in respect of one airport GMR
was given the option of matching the financial bid of the appellant, in respect
of the other airport similar option should have been given to the appellant
who was at the relevant point of time and even now willing to match the,
financial bid of GVK. There was no justification for reduction of standard, B
from 80% to 50%, particularly when at all stages EGOM had emphasized.
that there shall not be any compromise with quality. The argument that any
bidder who had crossed the mandatory requirement stage would be competent
to execute the contract is completely erroneous since in that case there was
no need to fix the high bench mark of 80%. Appellant had scored over 80%
on the development side and fell short of merely 6% less than 80% on the C
management side. The award of contract to the third ranked bidder i.e. GVK
who had scored only 59% on the development side and whose bid had been
adversely commented upon by all committees is against public interest. The
bench mark of 80% had been approved by the EGOM. The EC expressly
recommended against lowering the bench mark and the EGOM in its meeting D
on 5.12.2005 had also wanted the bench mark to remain at 80%. GETE had
also not recommended lowering of the bench mark.

The constitution of GETE was without jurisdiction as it was outside the
RFP. Allegations made by the respondents in the arguments that EC was
"t biased are not factually correct. As noted above, GETE was not competent E
to deal with the issues relating to airports and, therefore, it was not a competent
body to express any view. GETE's evaluation of appellants bid was wrong
and it should not have interfered with EC's evaluation. Different weightages
were justified in case for criteria 1.2.2 and 1.2.3 and also in respect of criteria
3.1.l and 3.1.2. GETE's view as regards non aeronautical revenue being less
than 40% is not correct. Its view about the lack of experience of operating F
in a non-OECD country is also erroneous. The marking system for absorption
of AAI employees as done in the case of the appellant has been wrongly
interfered with.

Appellant has contended that EC has given marks on the basis of RFP
parameters. According to it, the parameters were fixed by the GOI or the EC. G ·
The que~tion is not of allotting marks, the real issue is whether right parameters
have been applied. It has been emphasized that the other Committees consisted.
of mainly bureaucrats or persons with inadequate technical knowledge, only
the EC was an expert body and, therefore, its view had to be given primacy.
H

.-
414 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

> A GMR had qualified in both the bids. Appellant has contended that the
option of choosing one of the airports should not have been given to GMR
but it should have been allotted the Mumbai airport because of its superior
quality of bid in respect of the said airport. By giving option to choose one
of the airports, the fate of the appellant was sealed because in the other, it
B had fallen below the bench mark. Though in one case, appellant's Qid was
above the bench mark and its bid was the best amongst those who were
below the bench mark in respect of the other airport, it has not been able to
get any of the airports.

Despite the specific mandate GETE had not examined the queries qua
C the other bidders. Objective criteria assessment which was the foundation for
GETE's decision has no basis. In fact GETE itself had indicated that the.
assessment was subjective in totality. By making an artificial distinction
between the subjective and objective queries, the real essence has been lost
and unacceptable yardsticks have been applied. Queries made by members of
the Review Committee, comments of the EC, comments of the Planning
D Commission's representatives and the various queries raised by IMG have
been either lightly brushed aside or not considered by the GETE. The decision
. for lowering of technical standard was arbitrary. EGOM should have examined
the conflicting reports given by the experts. Since no reason has been given
by EGOM to adopt the report of the GETE by giving its preference over the
E report of EC, same cannot be maintained. Report of GETE was not
independently examined. By reducing the bench mark, the zone of
consideration was enlarged and it was against public interest Since different
yardsticks have been adopted and a partisan approach has been adopted, the
decision is clearly unsustainable and is amenable to judiciai review. Selective
examination by GETE is not bona fide though no personal. allegation of ma/a
F fide is made against the members of GETE. Adoption of technical criteria for
one airport and financial criteria for the other is not in accordance with law.

In response, learned counsel for the GMR, GVK, Union of India and
the AAI have submitted that the appellant is trying to enlarge the scope of
judicial review. It is not a case of non existence of power. It essentially
G relates to exercise of power. The appellant is trying to contend that the report
of EC was sacrosanct and GETE's report was not to be accepted. GETE has
formed its view as to how the allotment of marks made by EC was clearly
not in line with the prescription made in the RFP. Marks have been allotted
by EC on irrational basis and even marks had been awarded when no marks
H were to be awarded. Even the EC while commenting upon the weaknesses of
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J4 J 5

the airport development plan of GMR itself had said that the weaknesses A
would be sorted out at the stage when the master plan is drawn up. It is
pointed out that EC on whose evaluation appellant has led great stress found
only one flaw with the plan given by GVK i.e. lack of re-use of existing
facilities and the high cost limits to assess it as medium. This is really a non-
factor, according to learned counsel for GVK, because plan envisages fresh
creation of assets at Mumbai airport whose existing buildings are out-dated. 13
It is characterized as a lack of reuse as well as involving high costs. It is
pointed out that GVK's develcpment plan took note of much larger amount
of fresh development of assets considering that the existing buildings are out-
dated. It has also considered that large sum of money for rehabilitation of the
slum dwellers is required as they would have to be re-housed if a realistic C
plan for expansion of facilities and runways was to be drawn up. The
development in each of the phases of the 20 years of projected development
was also a relevant factor. There was departure by EC from the norms in
various cases without good reasons. Where there is such departure it shows
arbitrariness. This is a case which relates to judicial review of the exercise
of power and not the existence of power. D
It is pointed out that the basic fallacy in the argument of the appellant
is its stress on EC being the only advisor to assist the EGOM in arriving at
a decision. It is submitted that as rightly observed by the High Court, it was
a part of multiitier decision making process and appointment of GETE is a
E'
part of the process. It is pointed out that though the appellant has challenged
the constitution of GETE, it, in uncertain terms, asked the GETE to assess the
materials placed before it by the appellant. The EGOM has given rea~ons for
the appointment of GETE.

The EC was not designated in the RFP as an external expert agency on p
whose evaluation the Government was obliged to act. In fact at the first stage
itself GRC was constituted to review the evaluation done by EC. The report
of EC had no binding effect on the IMG much less the EGOM. The AAI
required permission from the Cabinet for privatization of airports. The ultimate
decision makirig authority was EGOM. However, since the decision making
process involvt>d inputs from series of 'in house' committees, this creation of G
GETE is in fact a part of 'in house mechanism'. This itself is clear from the
fact that several Committees were constituted like EC, GRC, IMG and COS.
In view of the existence of various tiers in the decision making process,
EGOM who has delegated the power of Cabinet did not exceed the powers
by setting up the committees. If the appellant's submission is accepted, even H
416 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A the GRC, IMG and COS being not the committees mentioned specifically in
the RFP, their constitution would be vulnerable. This is certainly not a case
of the appellant and these were not external agencies. These committees form
part of the 'in-house mechanism' for evaluation of the bids. Their reports
were to be used as inputs in the final decision making process and thus
B imparted a great deal of transparency. Judicial review cannot involve evaluation
of the comparative merits.

It has also been emphasized that the various discussions in the
Committees established beyond doubt that the Union of India wanted a
transparent process to be adopted considering the fact that this was a first
C case of private JV. It enabled the EGOM to take note of various view points
and take the final decision. These discussions strengthened the decision making
process and did not weaken it as contended by the appellant. It has also been
submitted that .the conduct of the appellant is itself contrary to the norms
fixed by the RFP. Though it was specifically indicated that there shall not be
any contract with the authorities connected with the decision making process,
D several times appellant wrote letters relating to matters which were under
consideration. It baffles one as to how the appellant had knowledge as to
what had transpired in the meetings. It was conveniently mentioned that the
source of appellant's knowledge was "newspaper reports". The appellant
therefore has clearly violated the norms fixed by RFP and on ·that ~core
E alone, its bid should have been kept out of consideration. A person who seeks
relief on r.quitable ground should have clean conduct and surreptitious methods
adopted by it cannot be condoned and this, according to learned counsel for
the respondents, is an additional factor to dismiss the appeal filed by the
appellant.

p It appears that whatever has been discussed in the various meetings
apparently found its way outside. Who was responsible for the leak is not
very clear but it is not a very healthy trend. The meetings were highly
confidential and sensitive in nature dealing with global tenders.

Various clauses of RFP which have relevance read as follows:
G
l. INTRODUCTION

l: l. Purpose of this RFP

The purpose of this Document is to:
H
RELL AIRPORT DEVELOPERS PVf. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.J4 l 7

* Provide an overview of the process for Stage 2 of the restructuring A
and modernization of Mumbai Airport Transaction;

* Specify the terms and procedures governing the transaction
process for selecting Joint Venture Partners and for the Joint
Venture Company (JVC) to be incorporated for the Airport;

* Specify the requirements for the preparation and lodgement of B.
binding offers and

* Outline the approach that will be used in evaluating Binding
Offers.

Terms used in this RFP are defined in the Glossary section of this RFP. C
1.2. Other Documentation and Information

In addition to this RFP, Pre Qualified Bidders (PQB) will be issued the
following documentation and material:

An Information Memorandum for the Airport;
D
*
* Draft Transaction Documents for the Airport (open for discussions
before finalising the terms and conditions);

* Specialist Reports and AAI data substantially in CD ROM form
with some documents in hard copy form for the Airport. E
AAI may choose to update, vary or add to all or some of this information
(including this RFP) at any time during the Transaction process.

A separate document will be provided to PQB outlining the times, dates
and venues of their scheduled meetings with the AAI, the Airport management F
team and parties of the GTT, as relevant and necessary.

1.3. Confidentiality

PQB receiving this RFP must have completed and returned the required,
duly executed Confidentiality Deed. G
PQB are reminded that information provided in this RFP and the
accompanying documentation package is covered by the terms of the
Confidentiality Deed and the Disclaimer set out herein. PQB are also reminded
that they are not to make any public statements about the Transaction process
H
418 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A or their participation in it.

1.4. The Transaction

AAI is offering a long term Operations, Management and Development
Agreement to suitably qualified, experienced and resourced parties to design,
B construct, operate, maintain, upgrade, modernize, finance, manage and develop
the Airport. The Successful Bidder will partkipate in a Joint Venture Company
with the AAI (and other GOI public sector entities) and such JVC shall be
awarded the right to operate, manage and develop the Airport.

An overview of the indicative Transaction structure is set out in
C Appendix G.

The key features of the Transaction are as follows:

* The Operations, Management and Development Agreement wilJ
be for an initial period of30 years with the JVC having the right
D to extend this by a further 30 years, i!l acc.ordance with the terms
and conditions of the Transaction Documents.

* The Successful Bidder will have an initial 74% equity interest
and AA!, along with other GOI Public Sector Entities, will have
26% equity interest in the JVC.
E
* AAI will endeavor to contribute (without any binding
commitment) equity funds in cash in proportion to its equity
share to assist the JVC in funding working capital and major
developments upto a cap of Rs.5000 million (Rupees five
thousand million) for the Airport. It is AAI's intention to maintain
F 26% equity share capital in the JVC.

* If AAI along With other GOI Public Sector Entities does not
wish to contribute to further equity calls, the JV Partners will
contribute the additional equity and the equity interest, of AAI
and other GOI Public Sector En~ities will be correspondingly
G reduced but the voting rights with regard to reserved board and
shareholder matters {as contained in the Shareholders Agreement)
will be preserved in the manner set forth in the Shareholders
Agreement.

* JVC will have an Employee Arrangement for a period of three
years whereby AAI employees (other than those pertaining to
H
- RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 419

ATC and CNS departments) posted at the Airport on Effective
Date continue to provide their services at the Airport. Further the
A

JVC will be required, during the three years period to make offers
of employment in order to absorb a minimum of 40% (or such
higher percentage as committed by the Bidder) of the existing
AAI employees working at the Airport excepting those engaged
in Communication Navigation Surveillance (CNS), Air Traffic B
Management (ATM), Security, as reduced for retirements,
resignations, transfers and death. Employment offers can be made
at any time during this Employee Arrangement Period but in no
event later than three (3) months prior to the end date of the
Employee Arrangement Period. At the end of this Employee C
Arrangement Period those employees who do not take up the
employment offers or who are not made such an employment
offer will return to the services of AAI. Additional weightage is
provided in the evaluation process to Bidders who commit to
make offers of employment in order to absorb more than the
minimum level of 40%. There will be a financial penalty, as set out D
in the OMDA, for any shortfall between the 40% or such higher
nominated percentage and the result actually achieved.
Due to the public and economic importance of the Airport a State
Support Agreement will be entered into between the JVC and
GOI. The State Support Agreement will address matters such as E
principles of economic regulation, approvals, assistance with
licensing and coordination with government agencies. Under the
State Support Agreement, the JVC for a specific Airport will have
a "Right of First Refusal (ROFR)" with regard to the second
airport in the vicinity (except in the case of a proposed new F
airport in/for Pune) on the basis of a competitive bidding process,
in which the JVC can also participate. In the event, the JVC is not
the successful bidder, the JVC will have the ROFR by matching
the first ranked bid in terms of the selection criteria for the
second airport, provided the JVC has satisfactory performance
without any material default at the time of exercising the ROFR. G
It is the endeavour of the AAI/GOI that a State Government' Support
Agreement will be entered into with the State Government of Maharashtra
wherein the said State Government will provide assistance on a best endeavour
basis on dealing with encroachments, reservation of land for settlement of
H
420 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A encroachments and .assistance in making land available if required for
aeronautical purposes, surface land transport access to the Airport, expediting
-
applicable clearances and the provisions, where applicable, of essential utility
services. However, bidders should note that the exact form of the State
Government Support Agreement and contents thereof will be decided upon
B receipt of feedback from the said State Government. Upon receipt offeedback
from the said State Government and finalization of form and contents of the
State Government Support Agreement, the same will be provided to Pre-
Qualified Bidders .

. The JVC for the Airport will have a lease over the land and assets (with
C certain exclusions which are not limited only to carve out assets listed in the
schedule to the Lease Deed) of the Airport for the tenure of the OMDA.

The NC will enter into separate MOUs with various agencies such as
Customs, immigration, Health and Plant and Animal Quarantine to deal with
issues relating to space, performance standards, facilitation/coordination
D mechanism.

The NC will be required to prepare a Master Plan for the development,
expansion and modernization of the Airport, covering a time period of 20
years as well as the ultimate vision of the Airport at full aeronautical
development and to submit th~s for approval of MCA within the stipuiated
E time frame as outlined in the Transaction Documents. The Master Plan has
to be consistent with the Initial Development Plan submitted as part of the
Binding Offer. Thereafter, the NC will be required to update the Master Plan
every ten years (or upon occurrence of certain traffic trigger events or as and
when circumstances warrant). In addition, each major development requires
F the preparation and approval of a Major Development Plan setting out the
proposed details of the development.

The Airport, in recognition of its natural monopoly position, will be
subjected to economic regulatory measures. The reg_ulatory authority or the
GOI (until such regulatory authority is in place) will set a price cap for
G aeronautical charges and will be entitled to impose other standards.

Over the tenure of the OMDA, the Joint Venture Company will pay both
a nominal lease rental and a fee (consisting of an upfront fee of Rs.1,500
million (Rupees one thousand five hundred million) and an annual fee expressed
as a percentage of gross revenue of the Airport) for the right to operate,
H manage and develop the Airport. The fee will be calculated annually in
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 421

advance on projected revenue, paid monthly and with an adjustment at the A
end of each quarter to reflect any difference between actual and projected
revenue. Revenue for this purpose shall mean all pre-tax gross revenue of
JVC, excluding the following: (a) payments made by JVC, if any, for the
activities undertaken by Relevant Authorities; (b) Insurance proceeds except
insurance indemnification for loss of revenue; (c) any amount that accrues to
JVC from sale of any capital assets or items, (d) Payments and/or monies B
collected by'JVC for and on behalf of any governmental authorities under
applicable law. It is clarified that annual fee payable to AAI and Employee
Arrangement costs payable to AAI shall not be deducted from revenue,

2. GOVERNMENT OBJECTIVES, REQUIREMENTS AND REGULATION C
2.1 Key Strategic Objectives

Key strategic objectives of the GOI are:

World class development and expansion:
D
Ensure world class phased development and expansion such that the
JVC meets its commitments through the timely provision of high quality
airport infrastructure, on both the airside and landside, to meet growing
demand; and

World class airport management: E

Ensure the creation of world class airport management team and systems
through the selection of serious, committed Successful Bidders with suitable
operational expertise, managerial and financial capability, Financial commitment
and the commitment to provide quality airport services, in order to transform F
the present Airport into world class international airport.

2.2. Other Transaction Objectives

In addition to the key strategic objectives, other Transaction objective
include:
G
Timely completion end certainty of Transactions, with minimal residual
risks.

Appropriate financial consideration for the right to operate, manage
and develop the airport.
H
422 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Smooth transition of operations from AAI to JVC.

Appropriate regulation - achieving economic regulation of aeronautical
assets that is fair, commercially and economically appropriate,
transparent, predictable, consistent and stable while protecting the
interests of users and ensuring that the Airports are operated and
B developed in accordance with world standards;

Fair and equitable treatment of AAI employees, including preservation
of accrued entitlements.

Diversity of ownership between Mumbai and Delhi Airports, to enhance
C competition, encourage innovation and allow competitive
benchmarking, and

Ensure satisfaction on the part of passengers and airlines by the
provision of quality services· and the provision of State-of-the-art
facilities.
D The GOI's key strategic and other Transaction objectives will provide the
means of establishing the bid evaluation criteria.

2.3. Management and Development Requirements

E Reflecting the focus on the strategic objectives, Bidders will be required
to present as part of their Binding Offer a fully detailed Business Plan and
Initial Development Plan, as well as a Transition Plan and certain other
documents. Tliese documents will be an important element in the selection of
the Successful Bidder for the Airport.

·p TERM OF REFERENCE

1.0. Scope of work
I.I. The scope of work for the FINANCIAL CONSULTANT shall
consist of the following:
G a Updating of the traffic, financial, commercial and operational data
pertaining to the two airports;
b. Organizing Road Shows in India and/or abroad, if required;
c. Preparation of the Request for Expression of interest. (RFEOI),
Request for Proposal · (RFP), draft concession agreement, draft
H
RELi. AIRPORT DEVEWPERS PVT. LTD. v. AIRPORTS AUTH.OFINDIA [PASAYAT, J.] 423

Joint venture agreement and all other necessary project A
documentation.
d. Determining the pre-qualification criteria, technical and financial
evaluation criteria which will include formulation and analysis of
various options along with the recommended approach in respect
of the same; B
e. Evaluation of Expressions of Interests and Technical and Financial
proposals received.
f. Organizing and managing interactions and communications with
the potential bidders;
c
g. Negotiation assistance together with other advisors to AAI in
successfully concluding the transaction;
h. Work closely with AAI on overall coordination and management
of various aspects of the transaction;
i Any other work as may be i:equired for the successful completion D
of the transaction,

Glossary

Words and phrases used in the document have the meaning set out below.
E
AAI Airports Authority of India

Airport Operator - The Entity in the Consortium submitting the
Binding Offer who has been identified as
such by the Bidder and who is assessed for
the necessary qualifications for operating, F
managing and developing a major
international airport which seeks to provide
airport management services to the Joint
Venture Company.

Financial Consultant ABN AMRO Asia Corporate Finance (I) Pvt. G
or Ltd. being the financial adviser to the
ABNAMRO Transaction.

Foreign Airline(s) Means a Foreign Entity that provides air
transport services. H
424 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A
GTA or Global The technical adviser, to AAI advising on
Technical Adviser or the technical aspects in relation to this
Airplan Transaction, being Airport Planning Ply Ltd.
(Airplan).
Initial Development The Development Plan submitted by the
B Plan Bidder(s) an part of their Offer which sets
out "plans over a calmed period for the
development of the Airport to meet traffic
growth as per the terms hereof.
ITREOI The Invitation to Register an Expression of
c interest document issued by AAI in relation
to ·tlie Transaction.
Legal Consultant or The legal adviser to the Transaction,
AMSS being Amarchand & Ma!lgaldas & Suresh
A. Shroff & Co. •:..:..

D 5. EVALUATION OF STAGE 2 OFFERS

5.1 Overview of Evaluation Process

This section sets out the approach that will be applied by the AAI and
its advisers when evaluating Offers. General Guidance in relation to the
E relative importance of each of the criteria and certain tender requirements are
set out below.

The approach to be followed will be undertaken in four phases as set
out in summary form in the figure below:

Phase Explanation
F

Any Bidder not meeting the
mandatory requirement will
have its Offer removed from
further consideration.
G Assessment of
Phase 1
Mandatory Requirement

Clarification

H Debt and equity commitment
RELL AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.] 425

as specified at Appendix A A
is evaluated and Offers not·
Assessment of meeting the requirement are ,
Phase 2 excluded from further
Financial Commitment
consideration ..

B

All remaining offers are
Phase 2 assessed on technical
Technical Pre- prequalification criteria and · C
Qualifications only those assessed with
technical pre-qualification on
*Management Capability, each of the two criteria of
Commitment and value 80% or more proceed to
add Phase 4
D
*Development Capability,
Commitment and value
add

The offer of the Bidder with
highest Financial
.E
consideration for the Airport
is selected as Successful
Assessment of Bidder
Phase 4
Financial Consideration
F

5.2. Mandatory· Requirement

The Mandatory Requirements for Stage 2 Offers are as follows:
G
Mandatory Requirements for Stage 2 Offers
426 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Confinnation of acceptance of final Transaction Documents
Confinnation that the Networth criteria of the Bidder as per the
requirement in the ITREOI document continues to be fulfilled

No Consortium member or Group Entity of a Consortium member
or nominated Airport Operator is participating in more than one
B Consortium bidding for the same Airport
Consortium has an Airport Operator who has relevant and
significant experience of operating, managing and developing
airports.

c Confinn that the Offer is capable of acceptance anytime during
the Bid Period

Confinn that the offer commits the Offeror to the mandatory
capital projects and/the Initial Development Plan is in accord with
the Development Planning.
D Principles. and the Traffic Forecast (It is to be noted that Traffic
Forecasts are only the Base level forecast)
Equity Ownership in the Joint Venture Company by a Scheduled
Airline and their Group Entities does not exceed 10% and there
is no participation by any airline that is a Foreign Entity and their
E Group Entities, subject to the exemption of group Entities that are
existing airport operator.
FDI in the JVC does not exceed 49%
Minimum equity ownership by Indian Entities (other than AAI/
GOI public sector entities) in the NC is 25%
F
Provision of suitable probity and security statements
Lodgement of Offer that incorporates all the material required as
set out in Appendices A to E, inclusive, in this Document
Submission of Bid Bond.
G
5.4. Assessment of Technical Pre-Qualification

The Technical pre-qualification is based on two global pre-qualification
criteria

•Management Capability, Commitment and Value Add
H
RELi. AIRPORT DEVEWPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.] 427

·Development Capability, Commitment and Value Add A
Each of these is assessed in terms of a set of pre-qualification criteria and
supporting pre-qualification factors that are detailed in the Section 5.6.

The purpose of the Technical Pre Qualification phase is to ensure that
only those Bidders that can address the GOl's strategic objectives are evaluated B
at the final phase of the evaluation process and that only Bidders satisfying
the benchmark of 80% under the technical pre qualification requirements are
allowed into the final phase of Evaluation.

A scoring system will be applied based on the assessment of the
evaluation terms of the Offer against the Technical pre-qualification criteria. C
Each of the two global pre-qualification criteria is assessed out of a possible
l 00 marks. The assessment is on an absolute basis not relative as between
the Offers. Hence there is no predetermined number of Offers that will be
considered in the final phase.

5.6. Technical Pre-Qualification Criteria and Factors D
This section sets out the pre-qualification criteria and pre-qualification factors
that will be used to assess each of the two global pre-qualification factors.

Pre-Qualification Pre- Pre-Qualification E
Criteria Qualification factors
Criteria
Weighting

F
Global Technical Pre- (A) Management Capability,
Qualification Commitment and Value Add
Criteria:
Sub Criteria: (i) Management Capability
(a) Experience of the nominated 25 Each of the following to be supported G
Airport Operator by documents case studies and relevant
statistics (PAX and cargo statistics for
each airport nominated)
Number, scale and geographic diversity

H
428 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A of airports operated and managed by the
airport operators with substantial
domestic, international and cargo
operations including specific role of the
airport operator in respect of each of these
operations
B
Experience in operating global or regional
hub airports, including achieving
improved connectivity.
Track record in route and traffic
c development and in managing relations
with airlines and other key stakeholders.
The level of service quality performance
achieved at major airports managed by
the Airport Operator and trends over the
D last 5 years.
Experience if any, with operating a multi-
airport system.
The performance of commercial
operations at major Airports managed by
E airport Operators, covering retai~ property
and other commercial operations,
focusing on airport where non-
aeronautical revenue is 40% or more of
total revenue.

F Performance i11 around and improving
aeronautical and non-aeronautical
operations at airports.
Experience in operating and developing
airports in non-OECD countries and a
G track record in improved performance.
Experience in proactive environmental
monitoring, evaluation, planning and
implementation of environmental systems
and improvements.
H
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.} 429

(b) Experience of 12.5 Commercial/retail experience A
the other Prime Members Experience with major property
(separately identifying and development experience with major
evaluating Indian and non- infrastructure developments.
Indian Prime Member experience Experience with handling
", on an equal weight basis). HR issues in ownership change
situations. B
Sub Criteria: (ii) Management Commitment
(a) Commitment of 12.5 Level of equity commitment
airport operator Performance based nature of the Airport
Operator Agreement
Experience and level of management c
resources committed to the transaction
, in
each area of airport management
including:

* Traffic and route development and
marketing b
* Aeronautical operations
* Cargo handling
* Slot management
* Terminal operations
* Airport Retail operations E
* Airport Property operations
(
* Environmental Management

(b) Commitment by 12.5 Experience and level of
other Prime Members management resources committed by the F
(separately identifying and other Prime Members in and non-
evaluating Indian aeronautical operations and development
Prime Members.

6.7. Variations to the RFP Q,
AAl/GOI reserves the right, in its absolute discretion and at any stage, to
cancel, add to or amend the information, terms, procedures and protocols set
out in the RFP. PQB and Consortium member will have no claim against AAI
with respect to the exercise, or failure to exercise, such rights.
H
J-
\_
430 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 6.12. Other AA/ rights: "
AAl/GOI reserves the right in its absolute discretion without liability
and at any stage during the Transaction-proces~, to:
•
• Add to, or remove parties from any shortlist of PQBs or-Bidders; f;
B • Require additional information from any PQB or Bidders;

• Vary its tender requirements;

• Terminate further participation in the Transaction process for any
PQB or Bidder;

c • Change the structure and timing of the Transaction process;

• Accept or reject any Offer at any time for any reason;

• Not provide PQBs or Bidders any reasons for any actions or
decisions it may take including in respect of the exercise by the
AAI of any or all of the above mentioned rights; and
D
• Take such other action as it considers, in its absolute discretion,
appropriate in relation to the Transaction process for the Airport.
xx xx xx

APPENDIX 'A' (Information to be included in offer)
E
xx xx xx
I
A. 7 Relevant Management Experience and Expertise

xx xx xx

F (c) In addition, please provide information on any experience that the airport
operator has with turning around the performance of under performing airports
and in the operation, management, development of major airports in developing
countries and handling human resource management issues in ownership
change situation, including privatization.
G xx xx xx

A.11. Initial Development Plan

The Initial Development Plan must be prepared in conformity with the Airport
Development Planning Principles set out in the Transaction Document, shall
H incorporate the mandatory capital projects as set out in the Transaction
REL!. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYA T, J.] 431

Documents and shall use the base Traffic Forecasts prepared by SH & E. A
Where the PQB has a strong view that an alternative trafficforecast is
significantly more likely to occur, it can indicate the implications for the timing
of the implementation of the development plan.

The Offer should provide the following information in the initial
Development Plan: B
(a) A long-term airport development vision for year 20 and the ultimate
vision for the Airport showing the following:

(i) The full configuration of the Airport identifying all aeronautical
facilities and their operating capacity and all commercial C
development areas and their functions.

(ii) Information on traffic, passenger and cargo flows, both landside
and airsicte.

(b) The development path for the Airport leading up to its long-term
vision in year 20, shown in five (5) yearly stages for each functional D
area, namely airfield, apron, passenger terminals, cargo terminals, car
parks, city side access roads and commercial area together with capital
expenditure estimates. The development path should show the linkage
of the development to traffic projections, with the indicated trigger
points for both the commencement of the development and its E .
completion.

(c) An outline of how the development path can be flexibly adjusted
to accommodate both lower and higher traffic flows than the base
projection used for Airport development planning.

(d) Set out how it is planned to fully maintain aeronautical operation
F
during the development phase.

(e) Explain how key stakeholders will be involved during both the
planning and implementation stages, including the preparation of the
Master Plan, identifying issues that will need to be addressed and the G
approach to each issue .

.(t) Identify any constraints that will negatively impact on the
Development Plan, explain the extent of the impact and any mitigating
strategy proposed. ·
Pivotal challenge by the appellant is to the constitution of GETE and H
432 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A the scope for its constitution. It is to be noted that the ultimate authority to
take the decision in the matter was EGOM. It was within the powers ofEGOM
to decide as to what inputs it can take note of and the source of these inputs.
Therefore, the necessity for taking views of various committees constituted
appears to be a step in the right direction. This was a step which appears to
B have been taken for making the whole decision making process transparent.
There was no question of having the view of one Committee in preference
to another. EC was a Committee constituted as a part of the decision making
process like other Committees viz. GRC, COS and IMG.

In the multi tier system in the decision making process the authority
C empowered to take a decision can accept the view expressed by one committee
in preference to another for plausible reasons. It is not bound to accept the
view of any committee. These committees, it needs no emphasis, are constituted
to assist the decision making authority in arriving at the proper decision. It
is a matter of discretion of the authority to modify the norms. It is not a case
of absolute discretion.
D
While exercising the discretion, certain parameters are to be followed.

"Discretion" said Lord Mansfield in R. v. Wilkes, (1770) 4 Burr 2527,
when applied to a court of justice, means sound discretion guided by law. It
must be governed by rule, n<H by humour; it must not be arbitrary, vague and
E fanciful but legal and regular. (See Craies Statute Law, 6th Edn. P. 273 and
Ramji Dayawala & Sons (P) Ltd. v. Invest Import, [It::81] l SCC 80.

'Discretion' undoubtedly means judicial discretion and not whim, caprice
or fancy of a Judge. (See Dhurandhar Prasad Singh v. Jai Prakash University
- and Ors., [2001] 6 SCC 534. Lord Halsbury in Sharp v. Wakefield(1891) AC
F 173 considered the word 'discretion' with reference t0 its exercise and held:
'Discretion' means when it is said that somet'.1ing is to be done within the
discretion of the authorities that something is to be done according to the
rules of reason and justice, not according to private opinion: (Rooke case,
(1598) 5 Co. Rep. 99b, lOOa) according to law, and not humour. It is to be, not
G arbitrary, vague, and fanciful but legal and regular. And it must be exercised
within the limit, to which an honest man competent to the discharge of his
office ought to continue himself. (See Kumaon Manda! Vikas Nigam Ltd. v.
Girja Shankar Pant and Ors., [2001] 1 SCC 182).

'Discretion' when aprlied to a court of justice, means sound discretion
H guided by law. It must be governed by rule, not by humour; it must not be
RELL AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.J 433

arbitrary, vague and fanciful but legal and regular. A
Though the word, 'discretion' literally means and denotes an
uncontrolled power of disposal yet in law, the meaning given to this word
appe2rs to be a power decide within the limits allowed by positive rules of
law as to the punishments, remedies or costs. This would mean that even if B
a person has a discretion to do something the said discretion has to be
exercised within the limit allowed by positive rules of law. The literal meaning
of the word 'discretion' therefore, unmistakably avoids untrammeled or
uncontrolled choice and more positively pointed out at there being a positive
control of some judicial principles.
c
Discretion, in general, is the discernment of what is right and proper.
It denotes knowledge and prudence, that discernment which enables a person
to judge critically of what is correct and proper united with caution; nice
discernment, and judgment directed by circumspection: deliberate judgment;
soundness of judgment; a science or understanding to discern between D
falsity and truth, between wrong and right, between shadow and substance,
between equity and colourable glosses and pretences, and not to do according
to the will and private -affections of persons. When it is said that something
is to be done within the discretion of the authorities, that something is to be
done according to the rules of reason and justice, not according to private
opinion; according to law and not humour. It is to be not arbitrary, vague, and E
fanciful, but legal and regular. And it must be exercised within the limit, to
which an honest man, competent to the discharge of his of.fice ought to
confine himself (Per Lord HALSBURY, LC. in Sharp v. Wakefield. (1891)
Appeal Cases 173.

The word "discretion' standing single and unsupported by circumstances
F
signifies exercise of judgment, skill or wisdom as distinguished from folly,
unthinking or haste; evidently therefore a discretion cannot be arbitrary but
must be a result of judicial thinking. (33 Born 334) The word in itself implies
vigilant circumspection and care: therefore, where the Legislature concedes
discretion it also imposes a heavy responsibility. [(See National Insurance G
Co. Ltd v. Keshav Bahadur, AIR (2004) SC 1581, 1584, para lO)(AIR 1933
Sind 49)).

The discretion of a Judge is the Jaw of tyrants; it is always unknown.
It is different in different men. It is casual, and depends upon constitution, H
434 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A temper, passion. In the best it is often times caprice; in the worst it is every
vice, folly, and passion to which human nature is liable," said Lord Camden,
L.C.J., in Hindson and Kersey, (16.80) 8 How St Tr 57. as cited'in'National
Insurance Corporation Ltd. v. Keshav Bahadur, A1R:2004·sc 1581, 1584, para
11 and Kumaron Manda! Vikas Nigam Ltd. V; Girja ShankerPant;'(2001) l'SCC
;B 182). " • I . ~ '. . ~,

.f.,1 I

If a certain latitude or liberty accorded by statute or,rules to a Judge
as distinguished from a ministerial· or administrative official, in adjudicating on
matters brought before him. It is judicial discretion, It limits and regulates the
exercise of the discretion, and prevents it from 'being 1 wholly. absolute,
C capricious, or exempt from review .

. In "ADVANCED LAW LEXICON" BY P. Rf.MANA THA AIYAR, it has
-.been stated as· follows: "Discretion. ·Power of the. Court.or arbitrators to
decide as they think fit. The word "discretion" connotes necessarily 1 &n act
of a judicial character, and, as used with reference to dis~retion exercised
·D judicially, it implies the absence of a hard-and~fast rule, and it requires. an
actual exercise of judgment and a consideration of the facts and circumst~mces
which are necessary to make a sound, fair ,and just determination, andia
·knowledge of the facts upon which the discretion may properly operate.
[Corpus Juris Secundum, Vol. 27, page 289 as referred in Aero Traders Pvt.
E Ltd..v. Ravir1der Kumar Suri, VI (2004) SLT428, 430, para 6]" ,
• _,_ ' ,. ·' / .t ~

''.A discretion", said Lord WRENBURY, "does not empower a man to do
• • " "< • } '. ,, If• ' ' f '" , f j ~ 'i: I .• I . . ' , ,: ·

what he likes merely because he is minded to do so, he must
• · • ~ •' · ' · n · · · ·1. ,
in the exercise
· , _· . ·• ~ j • . , " · • , ·_. 1 .' ' ': ' ~ ., , • ·,

of his discretion do not what he likes but what he ought. Jn l other. (',..,,..
words,
'!
he 111-.,if_,. ,,

.F must, by the use of his reason, ascertain and follow the course which reason
dictates/,'.(Roberts "'H~pwood;J925AC578)~ This approacl} to construction
. has·, two consequences tthe statutory discretion mu~ttbe truly )exercised; _and
. w.hen,exercised it must be.exer:<;:ise<l reasonably. (MAXWELL), ., .
r •• - • - •, ( '1 . " I ·'I'· lf ,ti
1
,, l ;_
• '! .~·. ~ t; d 1.. ·~ ' _p· .' 1'

. , "J?i~cn;tion", said. L01J MANSf}f'.Lf) R. ~.. W.\,k.~s,p779~ 9~ E,R,f.2,7), i?
. G 'when appJied to a Court of justice, means s?µ~d discre.tion gu\d~f'; b_Y. !~~·
It m~~~;br governed by ,rule, not by hun_:io1;1r,1.it ~u~t .not be arbitr~ry, va~ue,
and fanciful but legal and regular. (See Craies on Statute Law, 6th Edn. ~.273)
- • - • t ,,,

. 'Dis9retion' means when it/? s~\d tr~t soip~t~in~,~s,tq .~~ .d,?t~~ within
~he qiscretion of the _authorities that that somet~in~ .~s to be done. ac~ording
H
.. RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OF INDIA[PASAYAT,J.J 435

to the rules of reason and justice, not according to private opinion: Rooke's A
case according to Jaw, and not humour. It is to be not arbitrary, vague and
fanciful, but legal and regular. Lord HALSBURY LC in Susannah Sharp v.
Wakefield, (1891) AC 173 at p. 179 referred to in Siben Kumar Monda/ v.
Hindustan Petroleum Corp0ration Ltd, (AIR 1995 Cal 327, 333-335). (See also
Aero Traders Pvt. Ltd v. Ravindra Kumar Suri, VI (2004) SLT 428, 430, para B
6; Man Mal Sharma v. Bikaner Sahkari Upbhokta Bhandar, (AIR 1999 Raj
13, 18) and Rekha Bhasin v. Union of India, (AIR 1998 Del 314, 322.)

Discretion, Lord MANSFIELD stated in classic terms in, John Wilke's
case, (1970) 4 Hurr 2528, must be a sound one governed by Jaw and guided
by rule, not by humour; Lord DENNING put it eloquently in Breem v. C
Amalgamated Engineering Union, [1971] 1 All ER 1148, that in a Government
of Laws' "there is nothing like unfettered discretion immune from judicial
reviewability." Courts stand between the executive and the subject alert, to
see th'.lt discretionary power is not exceeded or misused. Discretion is a
science of understanding to discern between right or wrong, between shadow D
and substance, between equity and colourable glosses and pretences and not
to do according to one's wills and private affections. Lord BRIGHTMAN
elegantly observed in the case of, Chief Constable of North Sales Police v.
Evans, [1982] 3 All ER 141 that:

"Judicial review, as the words imply is not an appeal from a decision, E
but a review of the matter in which the decision was made."

"The judge, even when he is free, is still not wholly free. He is not to
innovate at pleasure. He is not a knight-errant roaming at will in pursuit of
his own ideal of beauty or of goodness. He is to draw his inspiration from F
consecrated principles. He is not to yield to spasmodic sentiment, to vague
and unregulated benevolence. He is to exercise a discretion informed by
tradition, methodized by analogy, disciplined by system, and subordinated to
'the primodial necessity of order in the social life'. Wide enough in all
conscience is the field of discretion that remains." BENJAMIN CARDOZE in
'The Nature of Judicial Process'. G

The power to decide within the limits allowed by positive rules of law
as to punishments, remedies or costs and generally to regulate matters of
procedure and administration; discernment of what is right and proper [See
Article 136(1 ), Constitution) H
436 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A 'Discretion' is governed by rule and it must not be arbitrary, vague and
fanciful. (See Jaisinghani v. Union of India, AIR (1967) SC 1427, 1434).
.
When any thing is left to any person, Judge or magistrate to be done
according to his discretion, the law intends it must be done with sound
discretion, and according to law, (Tomlin). In its ordinary meaning, the word
B signifies unrestrained exercise of choice or will; freedom to act according to
one's own judgment; unrestrained exercise of will; the liberty of power of
acting without other control than one's own judgment. But, when applied to
public functionaries, it means a power or right conferred upon them by law,
of acting officially in certain circumstances according to the dictates of their
C own judgment and conscience, uncontrolled by the judgment or conscience
of others. Discretion is to discern between right and wrong; and therefore
whoever hath power to act at discretion, is bound by the rule of reason and
law. ( 2 Inst. 56, 298; Tomlin) There may be several degrees of Discretion,
discretio generalis, discretio legalis, discretio specialis,- Discretio generalis is
D required of every one in everything that he is to do, or attempt "Legalis
discretio", is that which Sir E Coke meaneth and setteth forth in Rooke's and
Keighley's cases and this is merely to administer justice according to the
prescribed rules of the law.

"The third discretion is where the laws have given no .certain rule ....
E and herein discretion is the absolute judge of the cause, and gives the rule."
(Callis. 112. 113) DISCRETION, FREE AND UNQUALIFIED, The "free and
unqualified discretion" to refuse or grant licences, which is given to justices
by the Beer Dealers Retail Licences is absolute as well as regards the renewal
of an old, as the grant of a new, licence. (R. v. Kay, 52 LJMC 90). Discretion,
F Judicial is a certain latitude or liberty accorded by statute or rules to a judge
as distinguished from a ministerial or administrative official, in adjudicating on
matters brought.before him, The use of the word "judicial" limits and regulates
the exercise of the discretion, and prevents it from being wholly absolute,
capricious, or exempt from review. But the presence of the word "discretion"
G pemiits the judge to consider as a judge, what are vaguely termed, all the
circumstances of the case and the purpose for which he is invested with the
considerations of convenience or utility or saving of expense rather than on
considerations of strict law or technicalities.

Such discretion is usually given on matters of procedure or punishment,
H or costs of administration rather than with reference to vested substantive
RELi. AIRPORT DEVELOPERS PVT.LTD.''· AIRPORTS AUTH.OF INDIA (PASAYA T, J.]43 7

~ rights. The matters which should regulate the exercise of discretion have been A
stated by eminent judges in somewhat different forms of words but with
substantial identity. When a statute gives a judge a discretion,, what is meant
is a judicial discretion, regulated according to the known rules of law, and not
the mere whim or caprice of the person to whom it is given on the assumption
that he is discreet (Lee v. Bude Railway Co., (1871) LR 6 CP 576, 580, WILLES, B
J.; and see Morgan v. Morgan, (1869), LR l P & M 644, 647). "That discretion,
like other judicial discretions, must be exercised acco'rding to common sense
and according to justice, and if there is a miscarriage in the exercise of it, it
will be reviewed; but still it is a discretion, and for my own part I think that
when a tribunal is invested by Act of Parliament, or by rules, with a discretion,
without any indication in the Act or rules of the grounds on .which the C
discretion is to be exercised, it is a mistake to lay down any rules with a view
of indicating the particular grooves on which the discretion would run, for if
the Act or rules did not fetter the discretion of the judge, why should the
Court do so?" Gardner v. Jay, (1885) 29 Ch D 50 at 58, per BOWEN, L.J.) (See
also 5 Cal 259) Discretion of Court. "Ability to discern by the right line of law, P
and not by the crooked cord of private opinion, which the vulgar call
discretion"; freedom to act according to the judgment of the Court, or according
to the rules of equity, and the nature of circumstances; judicial discretion
regulated according to known rules of Jaw; legal discretion, and not personal
discretion sound discretion guided by fixed legal principles". E
In the instant case, though the High Court seems to have noted that
the EGOM has absolute discretion, it has really not held that the discretion
was unfettered. In fact it has on facts found that the discretion was properly
exercised to make some variations in the terms of RFP.
F
Coming to the constitution of GETE, no ma/a fides are alleged against
the members. It is only the method of evaluation done by GETE which is
challenged apart from contending that GETE should not have been constituted.
About the constitution of GETE, as noted above, the stand is clearly untenable.
So far as evaluation of the marks as done by EC is concerned, GETE has given G
reasons for altering the marks allotted which ultimately led to the non
qualification of the appellant. There were four identified areas where it was
noted that the EC's approach in the evaluation exercise was inconsistent with
the terms of the RFP.

EGOM in its order dated 27.12.2005 constituting GETE, stipulated as H
438 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.

A follows:

"The Group would particularly look into and present 'its
recommendations before the COS on:

(a) Overall vali dation of the evaluation process, incl~ding
0

B calibration of the qualification and sensitivity analysis. The
j '

sensitivity analysis will cover the impact of inter-se
,J - • - ~

weightages•
of sub-criteria as well
•
asJ scoring.
. L

(b) The issues raised by the Members'ofthe. Inter Ministerial
Group about the evaluation 'process. ' . ·· · ·
c I
(c) An overall assessment of transparency and .fairness of
the evaluation process, including steps required, if any, to
achieve a transparent and fair outcome. e '
I ' . '•'j_
(d) Suggestions for improving the selection process for Joint
D Venture Partner in the future." , '

Essentially there were four instances of rewriting of priorities and
weightages as contained in the RFP and valuation was then made by the' EC
on the basis of these re-written priorities and weightages. These were as
follows:
E
(i) Change in priority in the matter of absorption of staff,

(ii) Changing the weightage ascribed to property developmeht by
merging the marks for infrastructure de'velopmerit and property
' . .
development.
F (iii) Changing of the weightage ascribed to
non-aeronautical
development by failing to consider aeronautical revenue·of 40%
as a "threshold" - less than which would not get any marks, and

(iv) Changing the weightage of experience in respect of a non-
OECD airport by treatment
. of a 'oECD
.. airport on par with. non-
G ,

C?ECD airports.

As regards (i), the EC divided the marks between 3.1.1 and 3.1.2 unequally,
and also awarded marks for the extent of absorption proposed from a baseline
of Zero - instead of a baseline of 40% which was the mandatory absorption
H criteria. The RFP accorded a priority to a higher absorpti~n of e~isting staff
RELL AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA[PASAYAT,J.]439

by the new company. The EC proceeded to modify this priority. It opined that A
the overall approach was more important than absorption, and gave marks
accordingly. So far as (ii) is concerned, the EC again altered the weightages
accorded in the RFP, which considered experience in "property development"as
valuable as "infrastructure development" and thereby put each of them as a
sub-head. According to EC, the former was not as important as the latter and )3
thus gave 1.6 marks for the former (1.2.2) and 4.7 marks for the latter (1.2.3.).

As consequence of (iii) above, EC gave marks to the appellant who had
projected less than 40% non-aeronautical revenue - whereas the RFP clearly
gave a weightage to aeronautical revenue beyond 40%. As rightly contended
by the respondents, if a project has a high revenue share given to the C
government, then aeronautical revenue being regulated, the incomes would
flow from non-aeronautical revenues. However generation of such non-
aeronautical revenues would involve a larger capital investment in property
development. EC (a) gave less marks to GVK because it had a high capital
outlay projected (as compared to the appellant), (b) did not regard experience D
in property development as having the same priority as infrastructure
development, and (c) gave marks to the appellant for its non-aeronautical
revenue, although its projected revenue was less than 40%.

As a consequence of (iv) above, EC gave marks to the appellant for
Mexico Airport which is admittedly an OECD Airport - on the spacious E
reasoning that it is virtually like a non-OECD Airport since Mexico is like a
developing country.

Relevant portions of GETE's reports read as follows:

FIRST REPORT DATED 7.1.2006 F

xx xx xx xx

2.1. The Group of Eminent Technical Experts (GETE} had their first
meeting and deliberations on Friday, 30th December, 2005 ....The presentation G
was basically for explaining the contents of the Request for Proposal {RFP),
the approach adopted by the EC in evaluating the technical bid and the views
expressed by Inter Ministerial Group (IMG) on the EC evaluation. The EC
explained that the weightage marks for the two criteria and sub-criteria were
already indicated in the RFP for the information of bidders. Splitting up these
marks to the different sub-factors of sub-criteria was done by the EC based H
440 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A on the mandate given to them by the IMG. On query from the GETE, they
fonned that after the technical bids were opened certain clarifications were
invited from bidders mainly to sort out discrepancies in their submittals and
not for eliciting additional Infonnation or submission of additional documents.
EC stated that the assignment of marks for technical evaluation was done
B strictly based on the .submittals of the tenderers.

2.2. The GETE again met on 2 January when only Shri Sanjay Narayan
and Dr. Sihag were present. The Consultants were not invited to this meeting.
In this meeting Shri Sanjay Narayan handed over to the GETE a copy of the
Note prepared for the Committee of Secretaries (COS) dated 23rd December,
C 2005 together with all Annexures which also contained details of marks assigned
(both original and revised) to the Consortiums A to E in The Annexure IX
and Appendix-II to Annexure XII to the Note. In this meeting, the GETE
enquired at what stage the apportionment of marks to the sub-factors was
done by the EC and whether after assigning these marks, the same had the
D approval of the I.M.G. The GETE also wanted to know whether after assigning
the marks to the sub-factors, the same were kept in a sealed cover to obviate
the possibility of any changes or alterations to these marks during evaluation
stage. The GETE also enquired whether a formal Tender Committee was
appointed for the technical\ and financial evaluation of the bids and whether
E the Airport Authority of India, as the owner, was associated in the technical
evaluation. It was informed to the GETE that there was no Tender Committee
per se and the assignment of marks to the sub-factors was done entirely by
the EC. (The Global Consultants) and at no stage Airport Authority of India
was associated in assessing and assigning the marks. The GETE was infonned
that the EC had taken about one and a half months to complete this exercise,
F scrutinizing about 40,000 pages of submissions.

2.3. The GETE again met on 4th January, 2006 when ABN-AMROs letter
dated 3rd January, 2006 in reply to queries raised was handed over to the
GETE (Annexure- B.). From this letter it appears inter-se weightage and marks
to the sub-factors were finalized prior to assigning scores on the offers, but
G there was no categorical assertion that this was finalized before the exercise
was started and kept seated. We are only pointing out that since these inter-
se weightages were not approved by the Govemme.nt and kept sealed, the
possibility of these being changed during the course of evaluation cannot be
ruled out.
H
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.) 441

2.4. With all the papers made available to the GETE, the need for seeking A
further clarification from the EC was not felt. Therefore, they were not invited
for any further clarification by the GETE.

3. Scrutiny of the evaluation procedure adopted by EC.:

3.1.1 We (GETE) did not call for the technical bid papers nor perused B
the same. We also did not make any attempt for a fresh technical evaluation
of the bids by assigning marks to the sub-criteria and sub-factors. Our
attempt was to assess whether the E.C. had assigned weightages and marks
in a logical and transparent manner to the sub-factors and whether there has
been any bias in favour of or against any of the bidders while assigning C
marks. For this we relied upon the RFP and the. mark sheets attached to the
Note prepared for the Committee of Secretaries.

3.1.2 While examining the assignments of marks to the various bidders
we kept in mind the issues raised by the members of the Inter Ministerial
Group but we were not solely guided by their views. We also examined in a D
dispassionate way whether there was any flaw or bias in the exercise of
subjectiveness while assigning marks to the different consortiums. Our
observations in this matter are briefly given as under-

3.1.3 The Global Consultants prepared ITREOI in January, 2004 which E
was approved by the IMG in February, 2004 but the appointment of the Global
Consultants was approved by EGOM in April, 2004. Thus the Consultants
started working even before their appointment was approved.

3.1.4 From the report of the Govt. Review Committee, it is seen that the
Evaluation Committee (E.C.) has stated that their evaluation was not based F
merely on the submittals but they relied upon some published statistics,
information available within their setup and their own perception and
understanding of various aspects of Evaluation (Please refer GRC's) report on
their meeting dated 23rd/24th November, 2005). This is not in conformity to
RFP.
0
xx xx xx

4.2. There are 8 sub-criterions in the criteria no. 4.1.1 out of which 4
have further sub-factors. Similarly there are 11 sub-criterions in the criteria
4.1.2 out of which 8 have further sub-factors. H
442 SUPREME COURT REPORTS [:2006) SUPP. 8 S.C.R.

A 4.3. Through allocation of weightage to different sub-criterions were
indicated in RFP, weightage to different ·sub-factors were not, indicated 'but
was assigned later by EC based on• IMG directions: EC has not confirmed
explicitly whether these weightages were assigned before or after opening of
bids. Certain a~omalies have been observed in the allocation of the 'weightages.
B While .equal weightage has been allocated to most of the sub- factors; un-
equal allo~ation)1~s· been done in two case~ (1.2::2
ll.i.3 3. 1f3. l.2). The ·& i'.
justific(lti~~ give~ ·by EC that the~e s~b-facto.rs are ~f diffe(e~t i~portance. is
1

I . I 1 1 " t" . : "I" tj

not consideredL sa~isf~ctory and convi~cing besav~f .;;u'~h a l~gic can· apply
to many other sub-factors1 as ,well. Since weightages of these sub- factors
wer~ ~ot mentioned in RF Pand allocation- of~qu~l weightage 'itas ~been done
C in ~ajority of s~b-factors, we feel the sam~ c~-n~ept of eq~al weightage
should have been adopted for these two sub~factors also. By assigning
different weightages there is ro~m to suspect that so~e of the bidders h~ve
been.favoured. ,. , ,..
'· - - '
I) 4.4. In sub-factor 1.1.6, the assessment of performance of commercial
operations of. major. airp~rts covering retaii" propert/and
.. ,, · I
~ther
'
.commercial
operations was to be done focusing on Airports having non-aeronautical
revenue. of 40% or more of total. revenu~. Though, non~ aeronautical, earnings
of bidder "E" are only 37%, but they have been g'i~~n °75% marks. This ·is
considered to be in non-conformity of the XFP. The explanation of EC that
E wording of the Clause did not make the 40% mandatory is not convincing.
In any case, since ~the. non-aeronautical earnings _of. '-'E" was less .than the
threshold limit of 40%, assigning a high score of 75% was not justified. This
should have been of the order of 40% to 50%.

F 4.5. In sub-factor l.l .8, the assessment of operating in non-OECD
countries was.to be as per the RFP. Bidder "E" operating in Mexico, which,
is an OECD country, has been awarded 75% marks, which is not in conformity
to RFP. The explanation given by EC to IMG that the bidder has Airport
development experience in other developing coµntries like Ecuador, Uruguay
G and Guatemala, is not considered convincing. Our considered opinion is the
"track record in improved performance" is also to be judged only in the
context of a non-OECD country. Therefore, awarding marks against this item
is not considered in conformity to the item in RFP.
• r i" '

4.6. In sub-factorJ. l'.2 (proportion of AAI Staff targeted for absorption
H into JVC by year 3), EC has awarded SO% marks for minimum 40% absorption
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.]44~

and remaining 50% on prorata basis between 40% to I 00% absorption. Since A
RFP has stipulated 40% absorption as minimum acceptable and additional
weightage has been contemplated for a higher proportion of absorption, we
feel it is more reasonable and rational to distribute full marks ....to l 00%
absorption.

4. 7. If moderation of marks for the above mentioned items is done, B
following reduction in the score of bidder 'E' will take place:
Sr.No. Item Mumbai Delhi
{i) If equal weightage is 1.1 l.l
given to. sub-factors
l.2.2 & l.2.3.
c
(ii) If equal weightage is 0.5 0.6
given to sub-factors
3.l.l & 3.1.2.
D
(iii) If the marks of sub- 0.7 0.7
factor 1.1.6 given
for non-aeronautical revenue
less than 40% are reduced
from 75 % to 50%.
E
(iv) If score of sub-factor 2.1 2.1
l. l .8 given for experience
in an OECD country, is
excluded.
F
(v) If marking system of 1.6 1.9
sub-factor 3. l.2 as
modified keeping 'O' for
40% absorption and '5' for
l 00% absorption. G

Total (i) to (vi) 6.0 6.4

Resultant score of 'E' 75.0 74.6
for criteria 4.1. l.
444 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A From the above, it is clear that the above moderation clearly disqualifies
bidder E in criteria 4.1. l.

4.8. Modernization exercise attempted above will not make any material
difference in the position of bidders 'A', 'C', 'D' and 'F' who will remain still
B disqualified. In regard to bidder 'B' he will still be well above the qualifying
marks of 80%. In fact his position would improve marginally. Therefore, we
have not attempted to moderate the marks of the other bidders based on our
observations of paras 4.3 to 4.6.

4.9 While scrutinizing the marks for criteria 4.1.2 we have the following
C observations to make:-

The GETE have not studied the development plan of this bidder or any
other bidder for that matter. We have also not discussed this with the GTA
(Air Plan). Considering the type of deficiencies in the developmental plans
pointed out by AAI, we feel the marking of bidder 'E' has been on a liberal
D side in regard to sub~criteria 6.1 to 6.5. This will also be the marks if we
compare the marks scored by bidder B vis-a-vis marks scored by bidder 'E'
in regard to Delhi Airport as brought out under:-
Maximum Score Score of B Score ofE
Delhi 44.5 302 43.0
E
4.10. Admittedly b.idder B has better credentials, for airport development
and such vast difference in marks scored by bidder 'E' over bidder B cannot
be easily explained. We feel that if the rational approach has been adopted
bidder 'E' who now gets qualified by 0.3 marks for Mumbai and by l.l marks
F for Delhi would have been disqualified.

4.11. Since in any case in our view bidder 'E' gets disqualified on the
basis of our assessment contained in Para-4.7 above, we are of the opinion
that qualifying bidder E technically is not correct.

G SECOND REPORT OF GETE DATED 13th JANUARY, 2006

xx xx xx xx

Based on the methodology adopted by GETE for moderating the marks
of bidder 'E', we have now moderated the scores of all other bidders as well.
H Based on this exercise, the marks secured by the different bidders are given
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 445

in a tabulated form separately for Delhi and Mumbai Airports. A
A- Table showing moderated scores of all the bidders in criteria 'A'
(Management Capabilities) for Mumbai Airport

SI. No. Weightage A B c D E F
B
I.I. 25.0 6.7 22.5 17.l . 19.7 19.6 172

12. 12.5 2.8 9.7 9.7 4.7 92 9.5

2.1 12.5 5.4 7.1 11.7 6.7 9.6 8.8 c
22 12.5 5.0 10.0 11.3 5.0 11.3 10.0

3.1 12.5 6.9 10.5 10.9 72 10.8 10.5

32 12.5 2.5 12.5 5.0 7.5 11.3 11.3 D

3.3&3.4 12.5 6.3 12.5 7.5 6.3 9.4 8.8

/
Total 100 35.6 84.8 732 57.l 812 76.1

Score as per shift 35.5 84.r 73.l 57.0 81.0 76.0 E
'

Moderation due to

(i) If equal weightage 0.96 021 02 --0.02 -1.09 --0.23
is given to sub-factor
F
1.2.2 and 1.2.3
(ii) If equal weightage +1.85 --0.81 +o.35 --0.32 --0.49 --0.81
is given to sub-factor
3.1.1and3.1.2
G
(iii) If the marks 0.0 0.0 0.0 0.0 --0.70 0.0
of sub-factor 1.1.6
given to 'E' for non-
aeronautical revenue
less than 40% are
H'

~
446 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

,'A reduced from-75«!(o to;~ I '.
50% -others no
ch<irige.· • ~ '.. J . "I ~
T .. t ' ,-tr [
"' rl• "-•
I

I ..
(iv) If score Of sub- 0.0 • 0.0 -' 0.0 0.0 -2.I 0.0
factor 1.1.8 given for
'
;.B experience in OECD
- country-to 'E' is.
excluded - others
-no, change.:
(v) If !Ilar~i~g-syst~~ 0.0 -1.98 -0.17 -3.13 -1.82 -1.98
c of sub-factor 3. l.2is
mod_ified ~eepi~g 'O'
for 40% absorption and
'5' for 100% absorption.
Total variation +2.81 -3.00 +o.16 -3.47 -6.20 -3.02
Revised score 38.3 8i.7 73.3 53.5 74.8 73.0
.n-
B - Table showing moderated scores of all the bidders in criteria 'A'
- (Management Capabilities) for Delhi Airport

SL No. Weightage A B c D- E

E I.I 25.0 6.7 22.5 17.1 - 19.7 19.6

12 12.5 2.8 9.7 9.7- 4.7 92

2.l 12.5 7.5 7.l 11.7. 6.7 9.6
F
22 12.5 5.0 10.0 11.3 5.0 11.3

3.1 12.5 6.9 10.5 10.9 72 10.6

32 12.5 2.5 12.5 5.0 7.5 113
.G
3.3 & 12.5 6.3 12.5 7.5 6.3 9.4
3.4

Total 100 37.7 84.8 732 57.l 81.0

·H
- RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OFINDIA [PASA YAT, J.J447

Score as per shift 37.6 84.7 73.l 57.0 80.9 A
Moderation due to
(i) If equal weightage +-0.% -0.21 -0.02 -0.02 -1.09
is given to sub-factor
1.2.2 and l .2.3
B
(ii) If equal weightage +l.85 -0.81 +-035 -032 -0.60
is given to sub-factor
3. l.l and 3.1.2
(iii) If the marks of sub- 0.0 0.0 0.0 0.0 -0.70
factor l. l .6 given
to E for non-
c
aeronautical revenue
less than 40% are
r~duced from 75%
to 50% -others no
change. D
(iv) If score of sub- 0.0 0.0 0.0 0.0 -2.1
factor l.1.8 given for
experience in OECD
country to 'E' is
excluded - others no E
change.
(v) If marking system 0.0 -1.98 -0.17 -3.13 -l.60
of sub-factor 3. l.2 is
modified keeping 'O' for
40% absorption and 5 F
for l 00% absorption.
Total variation +2.8 -3.00 +-0.16 -3.47 -6.09
Revised score 40.4 81.7 733 53.5 74.8

As rightly pointed out by learned counsel for the respondents that if G
EC felt that the priorities and weightages as indicated in the RFP were
inappropriate, it should have requested AAI/GOI to amend the RFP before the
bids were received. Interestingly, the modifications were resorted to after the
bids were opened. That is the principal reason for which EGOM appears to
have sought views of the COS and the COS was equally entitled to invite a
H
448 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. .,.__
A group of experts to examine the matter.
The details relating to the marks allotted to the bids are as follows:

Delhi air12ort
SI. Name of Technical evaluation Financial
B No. Bidder Bid%
Management Development
capability capability
Pre- Post-
Sridharan Sridharan
c Reliance- 80.9 74.8 81.0 45.99
ASA
(Bidder E)
2 GMR-
Frapport 84.7 81.7 80.l 43.64
D (Bidcl~r B)
3 DS 73.1 73.3 70.5 40.15
Construction
Munich
Airport
E (Bidder C)
4 Sterlite - 57.0 53.5 61.9 37.04
Macquarie
(Bidder D)
5 Essel-TAV 37.6 40.4 41.4 Bid not
(Bidder A) opened
F
Mumbai AirQort
SI. Name of Technical P-valuation Financial
No. Bidder Bid%
Management Development
G capability capability
,,Pre- Post-
Sridharan Sridharan
Reliance- 81.0 74.8 80.2 21.33
ASA
H (Bidder E)
RELi. AIRPORT DEVELOPERS PVT. LTD. t'. AIRPORTSAUTH.OFINDIA[PASAYAT,J.J 449

2 GMR- 84.7 81.7 CJl..7 33.03 A
Frapport
(Bidder B)
3 DS 73.1 73.3 54.7 28.12
Construction
Munich B
Airport
(BidderC)
4 Sterlite 57.0 53.5 65.1 Bids not
Macquarie opened
(Bidder D)
5 Essel-TAV 35.5 38.3 29.4 Bids not c
(Bidder A) opened
6 GVK-ACSA 76.0 73.0 59.3 38.70
(BidderF)

Learned counsel for the respondents have emphasized that a curious D
feature of the four changes is that at least three of them were in principle
designed to enable the appellant to get over the shortcomings in its bid. It
is to be noted that the appellant had no property development experience. It
had projected less than 40% noR aeronautical revenue and had a partner from
an OECD country.
E
The GETE's report shows that even taking these four modifications led
to some of the bidders getting more marks. GVK and others did not cross the
bench mark of 80% and even after exclus~on of these marks, GMR had more
than 80% marks. It was only the appellant who crossed the threshold of 80%
on account of these four variations and fell below 80% when the effect of F
these four variations was excluded.

Departure from the RFP made by EC after opening the bids can
reasonably raise a doubt that EC knew that the modalities would benefit the
appellant. In any event, it is not necessary to go into the question whether
EC was partial to the appellant because that is nobody's case, though it has G
been submitted that after opening the bids, EC made the variations and
beneficiary was the appellant.

GETE's report shows that it enunciated the principle to carry out an
exercise that would be more in the nature of validation dealing with the four H
450 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A variations made by EC.

GETE also noted that certain issues can be more satisfactorily addressed
by process of validation that would involve a re-allocation of marks, on the
assessment made by the EC of the bids albeit in a manner that would be
B consistent with the RFP. It essentially was not an exercise of re-evaluation but
of a re-allocation consistent with RFP.

As noted in GETE's first report, its attempt was to assess whether EC
had assigned weightages and marks in a logical and transparent manner to
the sub-factors and whether there had been any biased in favour of or against
C any of the bidders while assigning marks, with reference to the RFP. While
making such examination, the issues raised by the members of IMG w.ere kept
in view, but as stated in the report, GETE was not solely guided by their
views.

Though the first report itself indicated the reasons as to why the
D evaluation process containing the moderation exercise was not undertaken in
respect of bidders, as desired by EGOM GETE did so and submitted its
second report. Undisputedly, GMR crossed the bench ipark of 80% in respect
of both the bids while others did· not.

E Challenge has been made by the appellant to the lowering of the bench
mark. It is to be noted that the appellant had come into the zone of
consideration only because of lowering of the bench mark as otherwise after
the modifications were made by GETE, it had not crossed the bench mark.

The appellants stand that if none was found eligible on the basis of
F 80% bench mark, there should have been a fresh bid, has been answered by
the respondents. It has been pointed out that the number of bidders was
small. The bidders after opening of the bid knew the merits and demerits of
all the bids. There was an urgency for early completion of the airports keeping
in view the 20 I 0 Common wealth Games.
G
The scope for juc..iicial review of administrative actions has been
considered by this Court in various cases.

One of the points that falls for determination is the scope for judicial
interference in matters of administrative decisions. Administrative action is
H
· RELL AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 451

stated to be referable to broad area of Governmental activities in which the A
repositories of power may exercise every class of statutory function of
executive, quasi-legislative and quasi-judicial nature. It is trite law that exercise
of power, whether legislative or administrative, will be set aside if there is
manifest error in the exercise of such power or the exercise of the power is
manifestly arbitrary (See State of UP. and Ors. v. Renusagar Power Co. and B
Ors., AIR (1988) SC 1737. At one time, the traditional view in England was that
the executive was not answerable where its action was attributable to the
exercise of prerogative power. Professor De Smith in his classical work "Judicial
Review of Administrative Action" 4th Edition at pages 285-287 states the
legal position in his own terse language that the relevant principles formulated
by the Courts may be broadly summarized as follows. The authority in which C
a discretion is vested can be compelled to exercise that discretion, but not
to exercise it in any particular manner. In general, a discretion must be
exercised only by the authority to which it is committed. That authority must
genuinely address itself to the matter before it; it must not act under the
dictates of another body or disable itself from exercising a discretion in each D
individual case. rn the purported exercise of its discretion, it must not do what
it has been forbidden to do, nor must it do what it has not been authorized
to do. It must act in good faith, must have regard to all relevant cons·iderations
and must not be influenced by irrelevant considerations, must not seek to
promote purposes alien to the letter or to the spirit of the legislation that gives E
it power to act, and must not act arbitrarily or capriciously. These several
principles can conveniently be grouped in two main categories: (i) failure to
exercise a discretion, and (ii) excess or abuse of discretionary power. The two
classes are not, however, mutually exclusive. Thus, discretion may be
improperly fettered because irrelevant considerations have been taken into
account, and where an authority hands over its discretion to another body F
it acts ultra vires.

The present trend of judicial opm1on is to restrict the doctrine of
immunity from judicial review to those class of cases which relate to deployment
of troupes, entering into international treaties, etc. The distinctive features of G
some of these recent cases signify the willingness of the Courts to assert their
power to scrutinize the factual basis upon which discretionary powers have
been exercised. One can conveniently classify under three heads the grounds
on which administrative action is subject to control by judicial review. The
first ground is 'illegality' the second 'irrationality', and the third 'procedural H
452 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A impropriety'. These principles were highlighted by Lord Diplock in Council
ofCivil Service Unions v. Minister for the Civil Service, [1984] 3 All.ER. 935,
(commonly known as CCSU Case). If the power has been exercised on a non-
consideration or non-application of mind to relevant factors, the exercise of
power will be regarded as manifestly erroneous. If a power (whether legislative
B or administrative) is exercised on the basis of facts which do not exist and
which are patently erroneous, such exercise of power will stand vitiated. (See
Commissioner of Income-tax v. Mahindra and Mahindra Ltd., AIR (1984) SC
1182). The effect of several decisions on the question of jurisdiction have
been summed up by Grahame Aldous and John Alder in their book
"Applications for Judicial Review, Law and Practice" thus:
c
"There is a general presumption against ousting the jurisdiction
of the Courts, so that statutory provisions which purport to exclude
judicial review are construed restrictively. There are, however, certain
areas of governmental activity, national security being the paradig,
D which the Courts regard themselves as incompetent to investigate,
beyond an initial decision as to whether the government's claim is
bona fide. In this kind of non-justiciable area judicial review is not
entirely excluded, but very limited. It has also been said that powers
conferred by the Royal Prerogative are inherently unreviewable but
since the speeches of the Hquse of Lords in council of Civil Service
E Unions v. Minister for the Civil Service this is doubtfuL Lords Diplock,
Scaman and Roskili appeared to agree that there is no general distinction
between powers, based upon whether their source is statutory or
prerogative but that judicial review can be limited by the subject
matter of a particular power, in that case national security. May
F prerogative powers are in fact concerned with sensitive, non-justiciable
areas, for example, foreign affairs, but some are reviewable in principle,
including the prerogatives relating to the civil service where national
security is not involved. Another non-justiciable power is the Attorney
Generals's prerogative to decide whether to institute legal proceedings
G on behalf of the public interest."

(Also see Padfield v. Minister of Agriculture, Fisheries and Food LR
(1968) AC 997.

The Court will be slow to interfere in such matters relating to
H
... RELi. AIRPORT DEVELOPERS PVT LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT, J.J453

administrative functions unless decision is tainted by any vulnerability A
enumerated above; like illegality, irrationality and procedural impropriety.
Whether action falls within any of the categories has to be established. Mere
assertion in that regard would not be sufficient.

The famous case commonly known as "The Wednesbury's case" is
treated as the landmark so far as laying down various basic principles relating B
to judicial review of administrative or statutory direction.

Before summarizing the substance of the principles laid down therein
we shall refer to the passage from the judgment of Lord Greene in Associated
Provincial Picture Houses Ltd. v. Wednesbury Corpn., (KB at p. 229: All ER C
p. 682). It reads as follows:

" ..... .It is true that discretion must be exercised reasonably. Now what
does that mean? Lawyers familiar with the phraseology used in relation
to exercise of statutory discretions often use the word 'unreasonable' D
in a rather comprehensive sense. It has frequently been used and is
frequently used as a general description of the things that must not
be done. For instance, a person entrusted with a discretion must, so
to speak, direct himself properly in law. He must call his own attention
to the matters which he is bound to consider. He must exclude from
his consideration matters which are irrelevant to what he has to E.
consider. If he does not obey those rules, he may truly be said, and
ofteri is said, to be acting 'unreasonably.' Similarly, there may be
something so absurd that no sensible person could even dream that
it lay within the powers the authority ... .ln another, it is taking into
consideration extraneous matters. It is unreasonable that it might F
almost be described as being done in bad faith; and in fact, all these
things run into one another."

Lord Greene also observed (KB p. 230: All ER p. 683)

... .it must be proved to be unreasonable in the sense that the G
court considers it to be a decision that no reasonable body
can come to. It is not what the court considers unreasonable.
.... The effect of the legislation is not to set up the court as
an arbiter of the correctness of one view over another. "
(emphasis supplied)
H
454 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A Therefore, to arrive at a decision on 'reasonableness' the Court has to
find out ifthe administrator has left out relevant factors or taken into account
irrelevant factors. The decision of the administrator must have been within the
four comers of the law, and not one which no sensible person could have
reasonably arrived at, having regard to the above principles, and must have
B been a bona fide one. The decision could be one of many choices open to
the authority but it was for that authority to decide upon the choice and not
for the Court to substitute its view.

The principles of judicial review of administrative action were further
summarized in 1985 by Lo!d Diplock in CCSU case as illegality, procedural
C impropriety and irrationality. He said more grounds could in future become
available, including the doctrine of proportionality which was a principle
followed by certain other members of the European Economic Community.
Lord Diplock observed in that case as follows:

" .... .Judicial review as I think, developed to a stage today when,
D
without reiterating any analysis of the steps by which the development
has come about, one can conveniently classify under three heads the
grounds on which administrative action is subject to control by judicial
review. The first ground I would call 'illegality', the second irrationality
and the third 'procedural impropriety'. That is not to say that further
E development on a case-by-case basis may not in course of time add
further grounds. I have in mind particularly the possible adoption in
the future of the principle of 'proportionality' which is recognized in
the administrative Jaw of several of our feIJow members of the European
Economic Community."
F
Lord Diplock explained "irrationality" as follows:

"By irrationality I mean what can by now be succinctly referred to as
Wednesbury unreasonableness. It applies to a decision which is so
outrageous in its defiance of logic or of accepted moral standards that
G no sensible person who had applied his mind to the question to be
decided could have arrived at it."

In other words, to characterize a decision of the administrator as
"irrational" the Court has to hold, on material, that it is a decision so outrageous
H as to be in total defiance of logic or moral standards. Adoption of
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.J 455

proportionality into administrative law was left for the future. A
In essence, the test is to see whether there is any infirmity in the
decision making process and not in the decision itself. (See Indian Railway
Construction Co.Ltd v. Ajay Kumar, [2003) 4 SCC 579)

Wednesbury principles of reasonableness to which reference has been B
made in almost all the decisions referred to hereinabove is contained in
Wednesburys case (supra). In that case Lord Green MR has held that a
decision of a public authority will be liable to be quashed in judicial review
proceeding where the court concludes that the decision is such that no
authority properly directing itself on the relevant law and acting reasonably C
could have arrived it.

The standards of judicial review in terms of Wednesbury is now
considered to be traditional in England in contrast to higher standards under
the common law of human rights. Lord Cooke in R. v. Secretary of State/or D
the Home Department, ex parte Daly, [2001) 3 All ER 433 observed:

"And I think that the day will come when it will be more widely
recognized that the Wednesbury case was an unfortunately
retrogressive decision in English administrative law, in so far as it
suggested that there are degrees of unreasonableness and that only E
a very extreme degree can bring an administrative decision within the
legitimate scope of judicial invalidation. The depth of judicial review
and the deference due to administrative discretion vary with the
subject matter. It may well be, hewever, that the law can never be
satisfied in any administrative field merely by a finding that the decision F
under review is not capricious or absurd."

It is further observed that this does not mean that there has been a shift to
merits review. On the contrary, the respective roles of judges and administrators
are fundamentally distinct and will remain so. To this extent the general tenor
of the observations in R (Mahmood) v. Secretary of State for the Home Dept,. G
(2000)1 WLR 840 are correct. And Laws L.J. (at 847 (para 18) rightly emphasized
in Mahmood's case that the intensity of review in a public law case will
... depend on the subject matter in hand' .

(underlined for emphasis) H

<
456 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A In Huang & Ors. v. Secretary ofState for the Home Department, [2005]
3 All ER 435 it is observed:

"50 .... the depth of judicial review and the deference due to
administrative discretion vary with the subject matter. Can we find a
principled approach to give this proposition concrete effect in cases
B such as these appeals? In R (on the application of Prolife Alliance)
v. BBC, [2003] 2 All ER 977, Lord Hoffmann said:

"My Lords, although the word "deference" is now very
popular in describing the relationship between the judicial
c and the other branches of government, I do not think that
its overtones of servility, or perhaps gracious concession,
are appropriate to describe what is happening. Jn a society
based upon the rule of law and the separation of powers,
it is necessary to decide which branch of government has
in any particular instance the decision-making power and
D
what the legal limits of that power are. That is a question
of law and must therefore be decided by the courts.

(underlined for emphasis)

E Section 9 of the Judicial Review Procedure Act, 1996 (Canada) states
that the Court may reject an application for judicial review of a statutory
power of decision, if there is mere irregularity in form or a technical irregularity,
or if the court feels that there has been no miscarriage of justice.

Chapter 5 of the US Code 41 also talks about judicial review of
F administrative decisions regarding public contracts. It states that the courts
would not interfere in an award process unless it is shown to be manifestly
fraudulent, capricious and so grossly erroneous as to imply bad faith.

While exercising power of judicial review courts should not proceed
G where if two views are possible and one view has been taken. In such a case,
in the absence of ma/a fide taking one of the views cannot be a ground for
judicial review. In Asia Foundation & Construction Ltd. v. Trafalgar House
Construction (!) Ltd. and Ors., [ 1997] l SCC 73 8 this Court observed as
follows:

H "9. The Asian Development Bank came into existence under an Act

>
RELi. AIRPORT OEVEWPERS PVT.LTD. i·. AIRPORTS AUTH.OF INDIA [PASAYAT, J.] 457

called the Asian Development Act, 1966, in pursuance of an A
international agreement to which India was a signatory. This new
financial institution was established for accelerating the economi~
development of Asia and the Far East. Under the Act the Bank and
its officers have been granted certain immunities, exemption and
privileges. It is well known that it is difficult for the country to go B
ahead with such high cost projects unless the financial institutions
like the World Bank or the Asian Development Bank grant loan ot
subsidy, as the case may be. When such financial institutions grant
such huge loans they always insist that any project for which loan.
has been sanctioned must be carried out in accordance with the
specification and within the scheduled time and the procedure for C
granting the award must be duly adhered to. In the aforesaid premises·
on getting the evaluation bids of the appellant and Respondent- I
together with the consultant's opinion after the so-called corrections ,
made the conclusion of the Bank to the effect "the lowest evaluated
substantially responsive bidder is consequently AFCONs" cannot be D
said to be either arbitrary or capricious or illegal requiring Court's
interference in the matter of an award of contract. There was some
dispute between the Bank on one hand and the consultant who was
called upon to evaluate on the other on the question whether there
is any power of making any correction to the bid documents after a ,E
specified period. The High Court in construing certain clauses of the
bid documents has come to the conclusion that such a correction was
permissible and, therefore, the Bank could not have insisted upon
granting the contract in favour of the appellant. We are of the
considered opinion that it was not within the permissible limits of
interference for a court of law, particularly when there has been no F
allegation of malice or ulterior motive and particularly when the court
has not found any mala fides or favouritism in the grant of contract
in favour of the appellant. In Tata Cellular v. Union of India, [ 1994]
6 SCC 65 l , this Court has held that:
G
The duty of the court is to confine itself to the question of
legality. Its concern should be:

l. Whether a decision-making authority exceeded its powers,

2. committed an error of law, H
458 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 3. committed a breach of the rules of natural justice,

4. reached a decision which no reasonable tribunal would
have reached or,

5. abused its powers.
B
Therefore, it is not for the Court to determine whether a particular
policy or partic!-Jlar decision taken in the fulfilment of that policy is
fair. It is only concerned with the manner in which those decisions
have been taken. The extent of the duty to act fairly will vary from
case to case. Shortly put, the grounds upon which an administrative
c action is subject to control by judicial review can be classified as
under:

(i) Illegality: This means the decision-maker must understand
correctly the law that regulates his decision-making power and
D must give effect to it;

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

E The above are only the broad grounds but it does not rule out addition of
further grounds in course of time."

I 0. Therefore, though the principle of judicial review cannot be
denied so far as exercise of contractual powers of government
bodies are· concerned, but it is intended to prevent arbitrariness
F or favouritism and it is exercised in the larger public interest or
if it is brought to the notice of the court that in the matter of
award of a contract power has been exercised for any collateral
purpose. But on examining the facts and circumstances of the
present case and on going through the records we are of the
G considered opinion that none of the criteria has been satisfied
justifying Court's interference in the grant of contract in favour
of the appellant. We are not entering into the controversy raised
by Mr Parasaran, learned Senior Counsel that the High Court
committed a factual error in coming to the conclusion that
Respondent- I was the lowest bidder and the alleged mistake
H committed by the consultant in the matter of bid evaluation in not
RELi.AiRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.1'459

taking into account the customs duty and the contention of Mr. A
Sorabjee, learned senior counsel that it has been conceded by all
parties concerned before the High Court that on correctibns
being made respondent- I was the lowest bidder. As in our view
in the matter of a tender a lowest bidder may not claim .an
enforceable right to get the contract though ordinarily the B
authorities concerned should accept the lowest bid. Further we
find from the letter dated 12. 7.1996 that Paradip Port Trust its~lf
has come to the following conclusion:

"The technical capability of any of the three bidders (o
unde1take the works is not in question. Two of the bids are C
very 3imilar in price. If additional commercial information
which has now been provided by bidders through Paradip
Port Trust, had been available at the time of assessment, the
outcome would appear to favour the award to AFCONS." .

11. This being the position, in our considered opinion, the High D
Court was not justified in interfering with the award by going
into different clauses of the bid document and then coming
to the conclusion that the terms provided for modifications
or corrections even after a specified date and further coming
to the conclusion that Respondent I being the lowest bidder E
there was no reason for the Port Trust to award the contract
in favour of the appellant. We cannot lose sight of the fact
of escalation of cost in such project on account of delay and
the time involved and further in a coordinated project like
this, if one component is not worked out the entire project F
gets delayed and the enormous cost on that score if rebidding
is done. The High Court has totally lost sight of this fact
while directing the rebidding. In our considered opinion, the
direction of rebidding in the facts and circumstances of the
present case instead of being in the public interest would be
grossly detrimental to the public interest". G

It is also to be noted that there was no stand before the High Court that
the appellant wanted to match the bid. Even if it is accepted for the sake of
argument, that was so urged it would have no consequence.
H
460 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A A very attractive argument was advanced that as GMR has been allowed
to match the financial dealing of appellant for Mumbai airport, the same
modality shoulcl have been adopted for the other bidders. Though the argument
is attractive, at first flush, it cannot be accepted for the simple reason that
when bench mark is crossed, financial consideration is the determinative
B factor because of revenue sharing.

It is to be noted that though emphasis was led that the constitution of
Committees of non technical persons could net have thrown much light on
the ultimate decision, yet it is to be noted that all the three Committees were
part of the government machinery. The issue was to assess correctness of the
C EC's decision.

Expression of different views and discussions in different meetings
really lead to a transparent process and transparency in the decision making
process. In the realms of contract, various choices were available. Comparison
D of the respective merits, offers of choice and whether that choice has been
properly exercised are the deciding factors in the judicial review.

As .has been rightly submitted by learned counsel for the Union of
India, the RFP has to be considered in the context of other documents like·
substantial document OMDA, execution of the agreements culminating to the
E final master plan. Initial development plan is nothing but a projection which
has to be broadly in line with OMDA. Undisputedly, OMDA is prepared by
the GOI and AAI. One of the documents in the transaction documents is
OMDA.

It is to be noted that if no one was qualified, two alternatives were
F
available either to scrap or abandon the process and second to re-conduct
the tenders. As noted above, the practical compulsion which made the choice
avoidable cannot be termed as perverse or lacking rationality.

The safety valve is the OMDA. The ranking becomes irrelevant after the
G bidders have come to the arena and then finally the financial bid which
determines the ultimate bid.

It is to be noted that GETE wanted to know as to whether the variation
for allotment of marks in respect of the development side area was done
H before opening the bids or after opening it. EC had given a very evasive
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OF INDIA[PASAYAT, J.] 46.1

answer stating that same was done before allotting marks. GETE's job was not A
the evaluation but verifying the evaluation process. GETE's examination was
restricted to see whether alignment with RFP was correctly done. GETE was

- not expected to give fresh opinion and no evaluation was necessary.

Weightage introduces subjectivity. GETE has gone by objective
standards. The criterion adopted by GETE appears to be more rational. It
B
proceeded with the idea that more objectivity was necessary. So it has called.
the process to be validation process.

It is pointed out by learned counsel for the respondents that parameters
for judicial review are different in the matters of contract for normal case of c
tenders. In case of commercial contracts the normal contractual matters are .
excluded. It is pointed out that there is no overwhelming public interest
involving such matters. GETE had only touched the fallacious approach of
EC to make the process transparent. The view taken is a possible view
supported by reasons and there should not be any interferP-nce.
D
In the ultimate, the question would be whether in the process of selection
the Government had adopted transparent and fair process.

While balancing several claims a rational approach is necessary and
(
that is to be formed in line with the scope of judicial interference. E
It is to be noted that Clause 5.5. deals with a situation of the same
bidder being the highest bidder for both the airports. It proceeds on the basis
that there would be another eligible bidder for the other airport and on that
basis the procedure to be adopted has been prescribed. In such a situation
the bidder who would be successful i.e. the highest bidder would be asked F
to take the airport when the difference between his bid and the next higher
bid is greater. Such a procedure could be followed where there is second valid
bid at the final phase. This procedure does not deal with a situation where
there is only one bidder with valid bids for both the airports. In such a
situation he becomes the ·highest bidder for both the airports and for that G
reason alone, the question of evaluation of financial bid arises.

If the RFP was to consider at the final phase of evaluation there would
be only one bid for each of the airports. In that event, there would be no
question of finding out difference between the various bids or comparing
H

A
462 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A bids. That left no option with.the EGOM but to either vary RFP or to award
one of the airf)orts to GMR and to cancel the process for the second or cancel
the entire process. The latter course would not have been in larger public
interest. Therefore, the EGOM exercised its option.

B In final analysis, what the EGOM has done is to accept the report of
EC subject to validation done by GETE.

The extent of judicial review in a case of this nature where the texture
cannot be matched with one relating to award of contract, the observations
of this Court in Raunaq International Ltd v. /. V.R. Construction Ltd and
C Ors., [1999] I SCC 492 are relevant. It was observed as follows:

"13. Hence before entertaining a writ petition and passing any interim
orders in such petitions, the court must carefully weigh conflicting
public interests. Only when it comes to a conclusion that there is an
overwhelming public interest in entertaining the petition, the court
D should intervene."

The view was re-iterated in Master Marine Services (P) Ltd. v. Metcalfe
& Hodgkinson (P) Ltd and Anr., [2005] 6 SCC 138.

E In the Queen's Bench decision in R. v. Department of Constitutional
Affairs, [2006] All ER (D) l 0 I it was inter-alia held as follows:

"It is not every wandering from the precise paths of best practice that
lends fuel to a claim for judicial review."

F . Same would be available only if public law element is apparent which
would arise only in a case of"bribery,corruption, implementation of unlawful
policy and the like." In the case of commercial contract, the aforesaid view
about wandering was noted. In paras 50 and 51 it was noted as follows:

"It does not have the material or expertise in this context to
G "second guess" the judgment of the panel. Furthermore, this process
is even more clearly in the realm of commercial judgment for the
defendant, which judgment cannot properly be the subject of Public
Law challenge on the grounds advanced in the evidence before me.

H It is to be noted that in respect of both the appellant and the GETE
RELL AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 463

wherever subjectivity criteria is involved, GETE has not dealt with the same. A
The mandate of EGOM was to validate and not to invalidate. It was a
process for overall validation and calibration to apply the correct standard.
It is the texture of the tendered document which is of paramount importance.
EC has changed the texture whereas GETE did not do it. It needs no emphasis B
that uneven denomination breaks the integrity and textures.

Perverseness in connection with a finding of fact is an aspect of mistake
of law. Linked with the question whether GETE's constitution was legal, other
question is whether the jurisdiction conferred on GETE has been properly
exercised. Examination of the second question alone would be necessary C
since we have held that constitution of GETE does not suffer from any
infirmity. In R (Iran) v. Secretary of State [2005 EWCA Civ 982 at para I I)
it was observed as follows:

"It is well known that "perversity" represents a very high hurdle. In D
Miftari v. SSHD, (2005) EWCA Civ 481) the whole court agreed that
the word meant what it said: it was a demanding concept. The majority
of the court (Keene and Maurice Kay LJJ) said that it embraced
decisions that were irrational or unreasonable in the Wednesbury
sense (even if there was no wilful or conscious departure from the
rational), but it also included a finding of fact that was wholly E.
unsupported by the evidence, provided always that this was a finding
as to a material matter.

Opinions may differ as to when it can be said that in the "public law
domain, the entire proceeding before the appropriate authority is illegal and F
without jurisdiction or the defect or infirmity in the order goes to the root of
the matter and makes it in law invalid or void. The matter may have to be
considered in the light of the provisions of the particular statute in question
and the fact-situation obtaining in each case. It is difficult to visualise all
situations hypothetically and provide an answer. Be that as it may, the
question that frequently arises for consideration, is, in what situation/cases G
the non-compliance or error or mistake, committed by the statutory authority
or tribunal, makes the decision rendered ultra vires or a nullity or one without
jurisdiction? If the decision is without jurisdiction, notwithstanding the
provisiens for obtaining reliefs contained in the Act and the "ouster clauses",
the jurisdiction of the ordinary court is not excluded. So, the matter assumes H
464 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A significance. Since the landmark decision in Anisminic Ltd. v. Foreign
Compensation Commission, [1969] 1 ALL E.R. 208, the legal world seems to
have accepted that any "jurisdictional error" as understood in the liberal or
modern approach, laid down therein, makes a decision ultra vires or a nullity
or without jurisdiction and the "ouster clauses" are construed restrictively,
B and such provisions whatever their stringent language be, have been held,
not to prevent challenge on the ground that the decision is ultra vires and
being a complete nullity, it is not a decision within the meaning of the Act.
The concept of jurisdiction has acquired "new dimensions". The original or
pure theory of jurisdiction means the authority to decide and it is determinable
at the commencement and not at the conclusion of the enquiry. The said
C approach has been given a go-by in Anisminic case as we shall see from the
discussion hereinafter [see De Smith, Woolf and Jowell - Judicial Review of
Administrative Action (1995) Edn. p. 238; Halsbury's Laws of England (4th
Edn.) p. 114, para 67, footnote (9)]. As Sir William Wade observes in his book,
Administrative Law (7th Edn.), 1994, at p. 299:
D
"The tribunal must not only have jurisdiction at the outset, but must
retain it unimpaired until it ha• discharged its task."

The decision in Anisminic case (supra) has been cited with approval in a
number of cases by this Court.(See: Union of India v. Tarachand Gupta &
E Bros., [1971] l SCC 486, A.R. Antulay v. R.S. Nayak, [1988] 2 SCC 602, R.B.
Shreeram Durga Prasad and Fatehchand Nursing Das v. Settlement
Commission (IT & WT) [1989] 1 SCC 628, N. Parthasarathy v. Controller of
Capital Issues, [1991] 3 SCC 153, Associated Engineering Co. v. Gov,: ofAP,
[1991] 4 SCC 93, Shiv Kumar Chadha v. Municipal Cc,rpn. of Delhi [1993]
F 3 SCC 161. In ML. Sethi v. R.P. Kapur, [1972] 2 SCC 427 legal position after
Anisminic case (supra) was explained to the following effect:

12 The word 'jurisdiction' is a verbal coat of many colours. Jurisdiction
originally seems to have had the meaning which Lord Reid ascribed
to it in Anisminic Ltd. v. Foreign Compensation Commission, namely,
G the entitlement to enter upon the enquiry in question. If there was an
entitlement to enter upon an enquiry into the question, then any
subsequent error could only be regarded as an error within the
jurisdiction. The best known formulation of this theory is that made
by Lord Darman in R. v. Bolton (1841) 1 QB 66. He said that the
H
RELL AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH. OF INDIA [PASAYAT, J.J 465

question of jurisdiction is determinable at the commencement, not at . A
the conclusion of the enquiry. In Anisminic Ltd., Lord Reid said:

'But there are many cases where, although the tribunal had
jurisdiction to enter on the enquiry, it has done or failed to do
something in the course of the enquiry which is of such a nature
that its decision is a nullity. It may have given its decision in bad B
faith. It may have made a decision which it had no power .to make.
It may have failed in the course of the enquiry to comply with
the requirements of natural justice. It may in perfect good faith
have misconstrued the provisions giving it power to act so that
it failed to deal with the question remitted to it and decided some C
question which was not remitted to it It may have refused to take
into account something which it was required to take into account.
Or it may have based its decision on some matter which, under
the provisions setting it up, it had no right to take into account.
I do not intend this list to be exhaustive." D
In the same case, Lord Pearce said:

"Lack of jurisdiction may arise in various ways. There may be an
absence of those formalities or things which are conditions precedent
to the tribunal having any jurisdiction to embark on an enquiry. Or the E
tribunal may at the end make an order that it has no jurisdiction to
make. Or in the intervening stage while engaged on a proper enquiry,
the tribunal may depart from the rules of natural justice; or it may ask
itself the wrong questions; or it may take into account matters which
it was not directed to take into account. Thereby it would step outside F
its jurisdictim.. It would tum into its enquiry into something not
directed by Parliament and fail to make the enquiry which Parliament
did direct. Any of these things would cause its purported decision to
be a nullity." ·

The dicta of the majority of the House of Lords, in the above case G
would show the extent to which 'lack' and 'excess' of jurisdiction
have been assimilated or, in other words, the extent to which we have
moved away from the traditional concept of 'jurisdiction'. The effect
of the dicta in that case is to reduce the difference between
jurisdictional error and error of law within jurisdiction almost to vanishing H
466 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A point. The practical effect of the decision is that any error of law can
be reckoned as jurisdictional. This comes perilously close to saying
that there is jurisdiction if the decision is right in law but none if it
is wrong. Almost any misconstruction of a statute can be represented
as 'basing their decision on a matter with which they have no right
to deal', 'imposing an unwarranted condition' or 'addressing
B
themselves to a wrong question'. The majority opinion in the case
leaves a court or tribunal with virtually no margin of legal error.
Whether there is excess of jurisdiction or merely error within
jurisdiction can be determined only by construing the empowering
statute, which will give little guidance. It is really a question of how
c much latitude the court is prepared to allow .... "

In the subsequent Constitution Bench decision in Hori Prasad Mulshanker
Trivedi v. V.B. Raju and Ors., [1974] 3 SCC 415, it was held as follows:

" ... Though the dividing line between lack of jurisdiction or power and
D erroneous exercise of it has become thin with the decision of the
House of Lords in the Anisminic case (i.e. Anisminic Ltd v. Foreign
Compensation Commission, [ 1967] 2 All E.R. 986), we do not think
that the distinction between the two has been completely wiped out.
We are aware of the difficulty in formulating an exhaustive rule to tell
E when there is lack of power and when there is an erroneous exercise
of it. The clifficulty has arisen because the word 'jurisdiction' is an
expression which is used in a variety of senses and takes its colour
from its context, (see per Diplock, J. at p. 394 in the Anisminic case).
Whereas the 'pure' theory of jurisdiction would reduce jurisdictional
F control to a vanishing point, the adoption of a narrower meaning
might result in a more useful legal concept even though the formal
structure of law may lose something of its logical symmetry. 'At
bottom the problem of defining the concept of jnrisdiction for purpose
of judicial review has been one cf public policy rather than one of
logic'. [S.A. Smith, Judicial Review of Administrative Action, 2nd
G
Edn., p. 98. (1968 Edri.)

The observation of the learned author, (S.A. De Smith) was continued
in its 31d Edn. (1973) at p.98 and in its 4th Edn. (1980) at p. 112 of the book.
The observation aforesaid was based on the then prevailing academic opinion
H
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 467

only as is seen from the footnotes. It should be stated that the said observation A
is omitted from the latest edition of the book De Smith, Woolf and Jowell
Judicial Review of Administrative Action - 5th Edn. (1995) as is evident from
p. 229; probably due to later deveiopments in the law and the academic
opinion that has emerged due to the change in the perspective.

After 1980, the decision in first Anisminic 's case came up for further
B
consideration before the House of Lords, Privy Council and other courts. The
three leading decisions of the House of Lords wherein Anisminic principle
was followed and explained, are the following: Re Racal Communications
Ltd, [1980] 2 All E.R 634; O'Reilly v. Mackman, [1982] 3 All. E.R. 1124; Re.
v. Hull University Visitor, [1993] l All E.R. 97. It should be noted that Racal, C
in re case (supra) the Anisminic principle was held to be inapplicable in the
case of (superior) court where the decision of the court is made final and
conclusive by the statute. (The superior court referred to in this decision is
the High Court) [1981 AC 374 (383, 384, 386, 391). In the meanwhile, the House
of Lords in CCSU case (supra) enunciated three broad grounds for judicial D
review, as "legality'', "procedural propriety" and "rationality" and this decision
had its impact on the development of the Jaw in post-Anisminic period. In the
light of the above four important decisions of the House of Lords, other
decisions of the Court of appeal, Privy Council etc. and the later academic
opinion in the matter the entire case-Jaw on the subject has been reviewed
in leading text books. In the latest edition of De Smith on Judicial Review of E
Administrative Action-edited by Lord Woolf and Jowell, Q.C. [Professor of
Public Law, 5th Edn. 1995], in Chapter 5, titled as "Jurisdiction, Vires, Law and
Fact" (pp.223-294), there is exhaustive analysis about the concept
"Jurisdiction" and its ramifications. The authors have discussed the pure
theory of jurisdiction, the innovative decision in Anisminic case, the F
development of the law in post-Anisminic period, the scope of the "finality"
clauses (exclusion of jurisdiction of courts) in the statutes, and have laid
down a few propositions at pp. 250-256 which could be advanced on the
subject. The authors have concluded the discussion thus at p. 256:
G
After Anisminic virtually every error of law is a jurisdictional error,
and the only place left for non-jurisdictional error is ~here the
components of the decision made by the inferior body included matters
of fact and policy as well as law, or where the error was evidential
(concerning for example the burden of proof or admission of evidence).
H
468 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A Perhaps the most precise indication of jurisdictional error is that
advanced by Lord Diplock in Racal Communications, when he
suggested that a tribunal is entitled to make an error when the matter
'involves, as may do interrelated questions of law, fact and degree'.
Thus it was for the county court judge in Pearlman to decide whether
B the installation of central heating in a dwelling amounted to a
'structural, alteration, extension or addition'. This was a typical question
of mixed law, fact and degree which only a scholiast would think it
appropriate to dissect into two separate questions, one for decision
by the superior court, viz., the meaning of these words, a question
which must entail considerations of degree, and the other for decision
c by a county court viz., the application of words to the particular
installation, a question which also entails considerations of degree.

It is, however, doubtful whether any test ofjurisdictional error will
prove satisfactory. The distinction between jurisdictional and non-
D jurisdictional error is ultimately based upon foundations of sand.
Much of the superstructure has already crumbled. What remains is
likely quickly to fall away as the courts rightly insist that all
administrative action should be, simply, lawful, whether or not
jurisdictionally lawful.

E The jurisdictional control exercised by superior courts over subordinate
courts, tribunals or other statutory bodies and the scope and content of such
power has been pithily stated in Halsbury 's Laws of England - 4th Edn.
(Reissue), 1989 Vol. 1(1), p. 113 to the following effect:

F "The inferior court or tribunal lacks jurisdiction if it has no power to
enter upon an enquiry into a matter at all; and it exceeds jurisdiction
if it nevertheless enters upon such an enquiry or, having jurisdiction
in the first place, it proceeds to arrogate an authority withheld from
it by perpetrating a major error of substance, form or procedure, or by
making an order or taking action outside its limited area of competence.
G Not every error committed by an inferior court or tribunal or other
body, however, goes to jurisdiction. Jurisdiction to decide a matter
imports a limited power to decide that matter incorrectly.

A tribunal lacks jurisdiction if (I) it is improperly constituted, or
(2) the proceedings have been improperly instituted, or (3) authority
H
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.]469

to decide has been delegated to it unlawfully, or (4) it is without A
competence to deal with a matter by reason of the parties, the area
in which the issue arose, the nature of the subject-matter, the value
of that subject-matter, or the non-existence of any other pre-requisite
of a valid adjudication. Excess of jurisdiction is not materially
distinguishable from lack of jurisdiction and the expressions may be B
used interchangeably.

Where the jurisdiction of a tr~bunal is dependent on the existence
of a particular state of affairs, that state of affairs may be described
11
as· preliminary to, or collateral to the merits of, the issue, or as
jurisdictional. (p. 114). C
There is a presumption in construing statutes which confer
jurisdiction or discretionary powers on a body, that ifthat body makes
an error of law while purporting to act within that jurisdiction or in
exercising those powers, its decision or action will exceed the D
jurisdiction conferred and will be quashed. The error must be one on
which the decision or action depends. An error of law going to
jurisdiction may be committed by a body which fails to follow the
proper procedure required by law, which takes legally irrelevant
considerations into account, or which fails to take relevant
considerations into account, or which asks itself and answers the E
wrong question. (pp. 119-120)

The presumption that error of law goes to jurisdiction may be
r~butted on the construction of a particular statute, so that the relevant
· body will not exceed its jurisdiction by going wrong in law. Previously, F
the courts were more likely to find that errors of law were within
jurisdiction; but with the modem approach errors of law will be held
to fall within a body's jurisdiction only in exceptional cases. The
Court will generally assume that their expertise in determining the
principles of law applicable in any case has not been excluded by
Parliament.(p. 120). G
Errors of law include misinterpretation of a statute or any other
legal document or a rule of common law; asking oneself and answering
the wrong question, taking irrelevant considerations into account or
failing to take relevant considerations into account when purporting H
470 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A to oapply the law to the facts; admitting inadmissible evidence or
rejecting admissible and relevant evidence; exercising a discretion on
the basis of incorrect legal principles; giving reasons which disclose
faulty legal reasoning or which are inadequate to fulfil an express duty
to give reasons, and misdirecting oneself as to the burden of proof."
B (pp.121-122)

H.W.R. Wade and C.F. Forsyth in their book Administrative Law, 7th
Edn., ( 1994), discuss the subject regarding the jurisdiction of superior courts
over subordinate courts and tribunals under the head "Jurisdiction over Fact
and Law" in Chapter 9, pp. 284-320. The decisions before Anisminic and those
C in the post - Anisminic period have been discussed in detail. At pp. 319- 320,
the authors give the Summary of Rules thus:

Jurisdiction over fact and law: Summary

At the end of a chapter which is top-heavy with obsolescent
D material, it may be useful to summarise the position as shortly as
possible. The overall picture is of an expanding system struggling to
free itself from the trammels of classical doctrines laid down in the
past. It is not safe to say that the classical doctrines are wholly
obsolete and that the broad and simple principles of review, which
E clearly now commend themselves to the judiciary, will entirely supplant
them. A summary can therefore only state the long-established rules
together with and broader rules which have now superseded them,
much for the benefit of the law. Together they are as follows:

Errors of fact
F
Old rule : The court would quash only if the erroneous jurisdictional.

New rule : The court will quash if an erroneous and decisive fact was-

(a) jurisdictional
G
(b) found on the basis of no evidence; or

( c) wrong, misunderstood or ignored.

Errors of law
H
RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 471

Old rule: The court would quash only if the error was - A
(a) jurisdictional; or

(b) on the face of the record.

New rule: The court will quash for any decisive error because all B
errors of law are now jurisdictional."

(emphasis supplied)'

The above position was highlighted by this Court in Ma/at/a/ Industries
Ltd and Ors. v. Union of India and Ors., [1997] 5 SCC 536. C
Stand of respondents about appellant's objectionable conduct needs ,
consideration.

Para 1.3 of RFP reads as follows:
·.n
"1.3. Confidentiality - PQB receiving this RFP must have completed
and returned the required, duly executed Confidentiality Deed.

PQB are reminded that infonnation provided in this RFP and the
accompanying documentation package is covered by the terms of the E
Confidentiality Deed and the Disclaimer set out herein. PQB are also
reminded that they are not to make any public statements about the
Transaction process or their participation in it.

Para 6.13 speaks of the 'Contract Points' and in no uncertain terms provides
as follows: F
" ....Any request for information or clarification of information must be
directed through the questions and answer process set out in Section
3.3 hereof.

PQB and their advisers must not make contact with any employees G,
of AAI or other GOI agencies or airport customers except as arranged
through ABN AMRO as part of the Transaction process."

Learned counsel for the appellant submitted that the expression
'contract' obviously means an illegal attempt for bribery etc. and cannot H
472 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A stand on the way of submission of documents for consideration. The plea is
clearly untenable. Though, there is no penal clause for such breach it goes
against a very concept of fairness in the process and evaluation of bids.
Whatever documents are to be submitted are clearly stipulated. Any attempt
to take advantage of any newspaper report, clearly falls foul of the mandate
B that there shall not be any contract with any person involved in the process
of selection. It is unusual that the RFP did not make such a contract is a factor
for disqualification. This is to be kept in view in future tenders.

The inevitable conclusion is that the appeal is sans merit, deserves
dismissal, which we direct. Costs made easy.
c
KAPADIA, J. Although, I respectfully agree with the conclusion
contained in the opinion of brother, Arijit Pasayat, the importance of the
scoring system in the tender process has impelled me to elucidate and clarify
certain crucial aspects. Hence, this separate opinion.

D The basic controversy in the present case is: whether the E.C. had
exceeded its authority in the assessment of technical pre-qualification.

In the scoring system objectivity has an important role to play (Clause
5.4). In the scoring system the identification of factors (including sub-factors),
E allocation of marks to each of these factors (including sub-factors) and giving
of marks are three distinct and different stages. Clause 5.4 dealt with assessment
of technical pre-qualifications. Under that clause a scoring system was to be
applied based on the assessment of the Terms of the Offer against the Technical
Pre-qualification criteria. It further stipulated that assessment shall be on
F absolute basis and not relative as between the offers. Under the said system,
each factor had to be allocated certain marks. Objectivity had to be provided
in the allocation of marks (and not in giving of marks) to each factor (including
sub-factors). This was not done. For example, RFP required certain marks to 1

be allocated for absorption of existing staff. Greater the absorption, higher the
marks to be given. In the present case, the E.C. changed the factor, namely,
G "absorption of employees" to the overall approach. This led to change in
priority. Similarly, in the RFP, the factor earmarked was "property development"
which E.C. compared to "infrastructure development". Experience in property
development is different from experience in infrastructure development. Similarly,
RFP had given weightage to aeronautical revenue whereas in allocation of
H marks, E.C. obliterated the difference between aeronautical and non-aeronautical
RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [KAPADIA, J.] 473

revenues. The above examples are given only to show that objectivity which A
was the underlying principle underlying clause 5.4 is completely lost either
by expanding the enumerated factors like aeronautical revenue, overall
capability vis-a-vis capacity to absorb existing work-force and comparison df
property development with infrastructure development or by allocating un-
even marks to sub-factors. In my view, E.C. had no business to expand or B
narrow down the scope of any of the above factors as it was beyond its
authority and contrary to the scoring system.

With these words, I agree with the conclusion contained in the opinion
of brother, Arijit Pasayat.
c
RP. Appeal dismissed.