P.A. Musthafa v Union of India and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **WEDNESDAY, THE 19TH DAY OF FEBRUARY 2014/30TH MAGHA, 1935** **WP(C).No. 12613 of 2013 (B) ----------------------------** ## **PETITIONER :** - **----------** **P.A. MUSTHAFA, AGED 42 YEARS, PALASSERI HOUSE, KUMMINIPARAMBA P.O. MALAPPURAM DISTRICT, KERALA-673638.** **BY ADVS.SRI.O.V.MANIPRASAD SRI.SAJU J PANICKER** ## **RESPONDENTS:** - **-----------** **1. UNION OF INDIA REPRESENTED BY ITS SECRETARY CIVIL AVIATION DEPARTMENT, NEW DELHI-110001.** **2. AIRPORT AUTHORITY OF INDIA REPRESENTED BY DEPUTY GENERAL, NEW DELHI-110001.** **3. AIRPORT AUTHORITY OF INDIA, REPRESENTED BY AIRPORT DIRECTOR TRIVANDRUM INTERNATIONAL AIRPORT THIRUVANANTHAPURAM-695008.** **4. THE MANAGER (COMMERCIAL)AAI, ADMIN ANNEX 1ST FLOOR, DOMESTIC TERMINAL BUILDING, TRIVANDRUM INTERNATIONAL AIRPORT THIRUVANANTHAPURAM-695008.** **R1 BY ADV. SRI.P.PARAMESWARAN NAIR,ASG OF INDIA R2,R3 & R4 BY ADV. SRI.V.SANTHARAM** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20-11-2013, THE COURT ON 19-02-2014 DELIVERED THE FOLLOWING:** **BP** **WP(C).No. 12613 of 2013 (B)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** ## **-----------------------** - **P1: THE TRUE COPY OF NOTICE INVITING TENDER ISSUED BY THE 2ND RESPONDENT.** - **P2: THE TRUE COPY OF THE LETTER DATED 04.01.2013 ISSUED BY THE 3RD RESPONDENT.** - **P3: THE TRUE COPY OF THE LETTER DATED 01.02.2013 ISSUED BY THE 34D RESPONDENT.** - **P4: THE TRUE COPY OF THE LETTER DATED 09.05.2013 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.** - **P5: THE TRUE COPY OF THE LETTER REFERRED BY THE 3RD RESPONDENT IN EXT P4 DATED 12.12.2012.** - **P6: THE TRUE COPY OF THE AWARD FOR OPERATING ON BAGGAGE WRAPPING MACHINE IN TRIVANDRUM AIRPORT DATED 27.03.2008.** - **P7: THE TRUE COPY OF THE LICENSE AGREEMENT EXECUTED BETWEEN THE PETITIONER AND 2ND RESPONDENT.** - **P8: THE TRUE COPY OF THE PAN CARD.** - **P9: THE TRUE COPY OF THE SALES TAX REGISTRATION AND SERVICE TAX REGISTRATION.** - **P10: THE TRUE COPY OF THE NO DUES CERTIFICATE ISSUED FROM CALICUT, TRIVANDRUM, MANGALORE, COIMBATORE, THIRUCHIRAPPALLY AND GOA AIRPORTS.** - **P11: THE TRUE COPY OF THE SELF DECLARATION FURNISHED BY THE PETITIONER.** - **P12: THE TRUE COPY OF THE DOCUMENTS ISSUED FROM MANGALORE, CALICUT, AND TRIVANDRUM AIRPORTS.** - **P13: THE TRUE COPY OF THE DETAILS OF SECURITY DEPOSIT AVAILABLE WITH AAI.** - **P14: THE TRUE COPY OF THE COMPLAINT FILED BEFORE THE CHAIRMAN, AAI AND CHIEF VIGILANCE OFFICER.** - **P15: THE TRUE COPY OF THE COMPLAINT FILED BEFORE THE HON'BLE MINISTER FOR CIVIL AVIATION.** - **P16: COPY OF LETTER DT 25/4/2013 GIVEN TO AIRPORT AUTHORITY OF INDIA BY PETITIONER.** ## **WP(C).No. 12613 of 2013 (B)** **P17: COPY OF THE AWARD OF THE LICENSE TO THE PETITIONER IN CALICUT AIRPORT, MANGALORE AIRPORT AND GOA AIRPORT.** **RESPONDENT(S)' EXHIBITS :** **EHT.R3(a): COPY OF THE COMMUNICATION DT 12/12/2012 OF BAGGAGE WRAPPING SERVICES.** **EXT.R3(b): COPY OF THE COVERING LETTER DT 15/12/2012.** **EXT.R3(c): COPY OF THE COMMUNICATION DT 10/5/2013 ALONG WITH ITS ANNEXURES.** **EXT.R3(d): COPY OF THE COMMUNICATION DT 11/6/2013.** **//TRUE COPY//** **P.A.TO JUDGE** **BP** ## **A.M.SHAFFIQUE, J** ## *** * * * * * * * * * * * *** W.P.C.No.12613 of 2013 ---------------------------------------- Dated this the 19[th] day of February 2014 ## **J U D G M E N T** This writ petition is filed for quashing Ext.P4 by which the tender submitted by the petitioner was cancelled and it was decided to retender the licence for operating baggage wrapping machine at the International Terminal at Thiruvananthapuram Airport. 2. The facts involved in the case would disclose that the petitioner submitted his tender for operating baggage wrapping machine in terms with the notice inviting tender issued by the Airport Authority of India. Petitioner was qualified in the technical bid process as it was a two bid system. Petitioner was informed as per Ext.P3 dated 01/02/2013 that he is the highest bidder. While awaiting for the confirmation of the above, by Ext.P4 the petitioner was informed that the competent authority had decided to cancel the tender and to proceed for retender. According to W.P.C.No.12613/13 2 the petitioner, the very action of cancelling the tender and proceeding with retender is illegal and arbitrary. It is also contended that the reasons stated for cancelling the tender is unreasonable. Hence he further seeks for a direction to award the work in his favour. 3. Counter affidavit is filed by respondents 2 to 4 inter alia contending that though the tender was purchased in the name of “Baggage Wrapping Services” the tender was submitted in the letter head of the petitioner. This, according to respondents, amounts to violation of the tender conditions. They also rely upon Clause 15 of the General Information/Guidelines which indicates that the Airport Authority of India reserves its right to reject any or all tenders in part or in full without assigning any reason. It is further indicated that subsequent to the issuance of Ext.P1 tender, the Airport Authority of India realised that the machine size or area it occupies should not be a criteria for eligibility as the area/size is only indicative. Hence in order W.P.C.No.12613/13 3 to optimize its revenue by attracting more participants the Regional Executive Director at Chennai decided to cancel the tender process and to retender the proceedings. It is also contended that the petitioner has no right to demand the award of work as the tender process was not finalised. 4. The learned counsel for the petitioner would contend that the reasons stated in Ext.P4 for cancelling the tender is absolutely baseless. It is stated in Ext.P4 that Sri.P.A.Musthafa has purchased tender documents in the name and style “Baggage Wrapping Services” and participated in the name and style of Sri.P.A.Musthafa. As per general conditions at paragraph 1, tender documents were transferred and therefore it amounts to a transfer. In the counter affidavit, the respondents has produced R3(a), a letter issued for purchasing tender documents. It, apparently, is issued by Sri.P.A.Musthafa as proprietor of Baggage Wrapping Services. The tender is submitted as per Ext.R3(b) by Sri.P.A.Musthafa. W.P.C.No.12613/13 4 5. The contention raised by the respondents is that the tender documents are not transferred. On a perusal of Exts.R3(a) and R3(b) one cannot form an opinion that the tender documents were transferred by Baggage Wrapping Services to Sri.P.A.Musthafa. The Baggage Wrapping Services is only the name of a concern in which Sri.P.A.Musthafa is the proprietor and merely on account of the fact that Sri.P.A.Musthafa has used the letter head of Baggage Wrapping Services, a proprietary concern, it does not mean that the tender was purchased by Baggage Wrapping Services. The proprietor of the concern cannot be differentiated with the name of the concern. Therefore even if it is purchased by Baggage Wrapping Services, it can only be termed as a purchase by Sri.P.A.Musthafa. Therefore the reasons stated in Ext.P4 for cancelling the tender is apparently not justifiable. 6. Next question is whether the petitioner is entitled for any direction to the respondents to proceed further with W.P.C.No.12613/13 5 Ext.P1 tender documents. In Ext.P4, the respondents decided to cancel the tender and proceed for retender. Though not stated in Ext.P4, in the counter affidavit filed, respondent authority contends that they intend to proceed for retender to attract more participants by changing the eligibility criteria. As far as the tender process is concerned, petitioner has only submitted his tender and he is found to be technically qualified and he is the highest bidder. That by itself does not mean that the work should be awarded to the petitioner. It is the settled principle of law that merely because a person is the highest bidder, it does not provide him any right to demand the work unless the highest bid is accepted by the principal. Though the petitioner was informed in this case as per Ext.P3 that he was the highest bidder, his tender has not been accepted and therefore the petitioner cannot have a legal right to demand the award of work by the Airport Authority of India. In **Uttarpradesh Avas Evam Vikas Parishad and others v. Om Prakash** W.P.C.No.12613/13 6 **Sharma** _[(2013) 5 SCC 182]_ the Supreme Court has reiterated the position that the bidder who had participated in the tender process has no other right except the right to equality and fair treatment in the matter of evaluation on competitive basis offered by interested persons. It is also further held that so long as an order regarding final acceptance of the bid has not been passed by the competent authority, the highest bidder acquire no vested right to have the auction concluded in his favour and the auction proceedings can always be cancelled. 7. In **Jagdish Mandal v. State of Orissa and Others** _[(2007) 14 SCC 517]_ the Supreme Court had occasion to consider the scope of judicial review and it is held at paragraph 22 as under: _“_ _**22.** Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not_ W.P.C.No.12613/13 7 _to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural_ W.P.C.No.12613/13 8 _violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:_ _(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;_ _OR_ _Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;_ ## _(ii) Whether public interest is affected._ _If the answers are in the negative, there should be no interference under Article 226._ W.P.C.No.12613/13 9 _Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.”_ 8. When the settled position of law is that the tenderer has no legal right to demand the award of work, as long as the process for tender has been properly complied with, the tenderer cannot insist for the award of work. It is true that the reasons stated by the respondent in Ext.P4 does not appear to be justifiable. But still, if a decision has been taken by the Airport Authority of India in public interest to proceed for retender, this Court cannot insist that they should proceed to award the work to the petitioner. 9. Under these circumstances, when the petitioner is not entitled for demanding the right to carry out the work, Ext.P4 cannot be set aside on the ground that the reason for W.P.C.No.12613/13 10 cancellation is bad. As already stated, once Airport Authority of India has decided to cancel the present tender and proceed with retender, the said decision cannot be interfered on any of the grounds taken by the petitioner. In the result, I am of the view that no relief could be granted to the petitioner and accordingly the writ petition is dismissed. (sd/-) ## **(A.M.SHAFFIQUE, JUDGE)** jsr