On 14th July, a bench of Delhi High Court consisting of Justices Rekha Palli and Vipin Sanghi held that the Requests for Proposal (RFP) issued by the Airport Authority of India for engaging agencies to provide Ground Handling Services at Groups C and D airports is discriminatory and arbitrary and, require to be struck down. The court further found that the tender/RFP in question in respect of Group D-1 airports having been found to be offensive, the entire tender/RFP would fall to the ground, as the offensive parts cannot be culled out for the purpose of saving the rest of the tender/RFP.
Facts of the case:
The present writ petition was filed under Article 226 of the Constitution of India, by the Centre for Aviation Policy, Safety and Research (CAPSR), seeking quashing of the Requests For Proposal (RFPs) issued by the respondent no.2 (Airport Authority of India) for engaging agencies to provide Ground Handling Services at Groups C and D airports. The petitioner’s grievance against the impugned RFPs is that the eligibility criteria contained therein are not only a radical departure from the past, but also stipulate onerous technical and financial qualifications, thereby rendering most of the extant ground handling agencies ineligible to participate in the tender process, especially those which have been providing GHS at the smaller airports of the country, that fall under the categories of Groups C, D-1 and D2 airports, for the last many years.
Contention of the petitioner:
Mr. Umakant Mishra, learned counsel for the petitioner submitted the following contention:
- It was contended that the impugned tenders were unsustainable and radically different from past practices and imposed onerous and exclusionary eligibility criteria intending to benefit the bigger businesses and automatically worked.
- It was submitted that while the respondent no.2 claimed that the same was done for ease of administration, in reality, this sub categorization involved the clustering of airports that were spatially and geographically distant, of different sizes and capacity – neither of which could be deemed convenient. Thus, failing to show any rationale for arriving upon this decision.
- It was urged that the micro and small sized enterprises were being actively prejudiced by this policy decision and that they would no longer be able to sustain their businesses on their own.
- It was further submitted that by adopting such practices in its tenders, the respondent no.2, a Government body, had completely violated the directions contained in the circulars issued by the Central Government touching the importance of domestic sufficiency and fostering of local businesses as a part of its domestic and international policy.
Contention of the Respondent:
Mr. Sanjay Jain, the learned Additional Solicitor General appearing for the respondents argued the petition on the following grounds:
- It was urged that the petition failed to raise any question of public importance and also that the petitioner had failed to demonstrate its locus standi to file the same.
- As far as the issues relating to the eligibility conditions prescribed in the tender were concerned, it was submitted that the intention thereof was not to exclude small businesses, but to exclude Ground Handling Authorities (GHA) which lacked the requisite expertise and infrastructure.
- It was further submitted that in the light of the growing rate of major incidents in the country’s airports, it was felt necessary to regulate the GHS tendering process in this manner so to ensure national security.
- Mr. Jain then submitted that there was no question of the impugned tenders being in violation of the Government’s 2012 MSME policy as by virtue of these RFPs, the respondent no. 2 was not procuring any services, but was in fact selling licenses to qualified bidders for providing GHS to airlines.
Observation and judgment:
The Hon’ble bench of the court observed the following:
- It was observed that despite being an important, game-changing criterion which completely narrowed down the playing field to a few participants, the respondents did not deem it necessary to state the same explicitly in the separate, comprehensive, especially dedicated portions of the RFP which set down the Technical Qualifications or Technical Criteria.
- The financial criterion which had been prescribed under the RFP by the respondents by resorting to clustering of airports, knowing fully well that the same would lead to the automatic ouster of smaller enterprises who could provide the very same services at lesser cost. This would necessarily imply that only those bidders with higher annual turnover would be in a position to bid.
- The decisions to cluster the airports and fix an exorbitant and prohibitive Annual Turnover criterion appeared to have been taken in a complete vacuum; they were an antithesis to the Atmanirbhar Bharat policy, far removed from a rational nexus with the national civil aviation policy of the respondent no.1 or, any meaningful explanations.
In the light of the above, the court held that the RFP was discriminatory and arbitrary and, required to be struck down. Thus, it accordingly, quashed the tender/RFP in question in respect of Group D-1 airports and permitted the respondents to come up with a fresh tender process keeping in view the court’s findings.
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