Reliance Airport Developers Pvt. Ltd vs Airports Authority Of India And Ors

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, 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.

or Ltd. being the financial adviser to the ABN AMRO Transaction. Foreign Airline(s) Means a Foreign Entity that provides air transport services. GTA or Global The technical adviser, to AAI advising

Technical Adviser or on the technical aspects in relation to Airplan this Transaction, being Airport Planning Ply Ltd. (Airplan).

Initial Development The Development Plan submitted by the 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 interest document issued by AAI in relation to the Transaction.

Legal Consultant or The legal adviser to the Transaction, AMSS being Amarchand & Mangaldas & Suresh A.Shroff & Co.

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 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

Any Bidder not meeting the Phase 1 Assessment of ? mandatory Mandatory Requirement requirement will have its Offer removed from further consideration. ? ?? Clarification Debt and equity ? commitment as Phase 2 Assessment of specified at Financial Commitment Appendix A is evaluated and Offers not meeting the requirement are excluded from further consideration. ? Technical Pre- All remaining Phase 3 Qualifications offers are ?Management Capability, assessed on Commitment and value add technical ? prequalification ?Development criteria and Capability, Commitment only those and value add assessed with technical pre- qualification on each of the two criteria of 80% or more proceed to Phase 4 ? Phase 4 Assessment of Financial ? The offer of the Consideration Bidder with highest Financial consideration for the Airport is selected as Successful Bidder

5.2 Mandatory Requirement

The Mandatory Requirements for Stage 2 Offers are as

follows:

Mandatory Requirements for Stage 2 Offers  Confirmation of acceptance of final Transaction Documents  Confirmation 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 Consortium bidding for the same Airport  Consortium has an Airport Operator who has relevant and significant experience of operating, managing and developing airports.

 Confirm that the Offer is capable of acceptance anytime during the Bid Period  Confirm that the offer commits the Offeror to the mandatory capital projects and/the Initial Development Plan is in accord with the Development Planning.  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 l0% and there is no participation by any airline that is a Foreign Entity and their 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 JVC is 25%  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.

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

 Development Capability, Commitment and Value Add

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

GOIs strategic objectives are evaluated 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. Each of the two

global pre-qualification criteria is assessed out of a

possible 100 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

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

Experience in operating global or regional hub airports, including achieving improved connectivity.

Track record in route and traffic 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 last 5 years.

Experience if any, with operating a multi-airport system.

The performance of commercial operations at major Airports managed by airport Operators, covering retail, property and other commercial operations, focusing on airport where non-aeronautical revenue is 40% or more of total revenue.

Performance in turning around and improving aeronautical and non- aeronautical operations at airports.

Experience in operating and developing airports in non- OECD countries and a track record in improved performance.

Experience in proactive environmental monitoring, evaluation, planning and implementation of environmental systems and improvements.

(b) Experience of 12.5 Commercial/retail the other Prime experience Members (separately Experience with major identifying and property development evaluating Indian Experience with major and non-Indian Prime infrastructure Member experience on developments.

an equal weight Experience with handling HR basis). issues in ownership change situations.

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 resources committed to the transaction in each area of airport management including:

7 Traffic and route development and marketing 7 Aeronautical operations 7 Cargo handling 7 Slot management 7 Terminal operations 7 Airport Retail operations 7 Airport Property operations 7 Environmental Management

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

6.7 Variations to the RFP

AAI/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.

6.12 Other AAI rights:

AAI/GOI reserves the right in its absolute discretion

without liability and at any stage during the Transaction

process, to:

? Add to, or remove parties from any shortlist of PQBs or

Bidders;

? Require additional information from any PQB or Bidders;

 Vary its tender requirements;

 Terminate further participation in the Transaction process

for any PQB or Bidder;

 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

 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)

xx xx xx

A.7 Relevant Management Experience and Expertise

xx xx xx

(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.

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 incorporate the mandatory

capital projects as set out in the Transaction Documents and

shall use the base Traffic Forecasts prepared by SH&E. Where

the PQB has a strong view that an alternative traffic

forecast 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:

(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

development areas and their functions.

(ii). Information on traffic, passenger and

cargo flows, both landside and airside.

(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 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 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 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 approach to each issue.

(f) 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 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 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 of various committees constituted appears to be a step

in the right direction. This was a step which appears to

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 vis. GRC, COS and IMG.

In the multi tier system in the decision making process

the authority 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.

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,

not by humour; it must not be arbitrary, vague and fanciful

but legal and regular. (See Craies Statute Law, 6th Edn.

P.273 and Ramji Dayawala & Sons (P) Ltd. v. Invest Import

(1981 (1) 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 173)

considered the word discretion with reference to its

exercise and held: Discretion means 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: (Rooke case (1598) 5 Co. Rep. 99b, 100a) 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 ought to continue himself. (See

Kumaon Mandal Vikas Nigam Ltd. v. Girja Shankar Pant and

Ors. (2001 (1) SCC 182).

Discretion when applied to a court of justice, means

sound discretion guided by law. It must be governed by rule,

not by humour; it must not be arbitrary, vague and fanciful

but legal and regular.

Though the word, discretion literally means and

denotes an uncontrolled power of disposal yet in law, the

meaning given to this word appears 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

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.

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 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.

The word discretion standing single and unsupported

by circumstances 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. The word in itself

implies vigilant circumspection and care: therefore, where

the Legislature concedes discretion it also imposes a heavy

responsibility.

The discretion of a Judge is the law of tyrants; it is

always unknown. It is different in different men. It is

casual, and depends upon .constitution, 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, (1680) 8

How St Tr 57.

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 wholly absolute, capricious, or exempt from

review.

Such discretion is usually given on matters of

procedure or punishment, or costs of administration rather

than with reference to vested substantive rights. The

matters which should regulate the exercise of discretion

have been 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 (Per Willes J.

in Lee v. Budge Railway Co., (1871) LR 6 CP 576 and in

Morgan v. Morgan, 1869 LR 1 P & M 644).

In ADVANCED LAW LEXICON BY P. RAMANATHA 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 an act of a judicial character, and, as used

with reference to discretion exercised 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 circumstances which are necessary to make a sound,

fair and just determination, and a knowledge of the facts

upon which the discretion may properly operate. [Corpus

Juris Secundum, Vol. 27, page 289 as referred in Aero

Traders Pvt. Ltd. v. Ravinder Kumar Suri, VI (2004) SLT 428,

430, para 6]

A discretion, said Lord WRENBURY, does not empower a

man to do what he likes merely because he is minded to do

so, he must in the exercise of his discretion do not what he

likes but what he ought. In other words, he must, by the use

of his reason, ascertain and follow the course which reason

dictates. (Roberts v. Hopwood, 1925 AC 578). This approach

to construction has two consequences the statutory

discretion must be truly exercised, and when exercised it

must be exercised reasonably. (MAXWELL).

Discretion, said Lord MANSFIELD in R. v. Wilkes,

(1770) 98 ER 327), when applied to a Court of justice,

means sound discretion guided by law. It must be governed by

rule, not by humour, it must not be arbitrary, vague, and

fanciful but legal and regular. (See Craies on Statute Law,

6th Edn. P.273)

Discretion means when it is said that something is

to be done within the discretion of the authorities that

that something is to be done according to the rules of

reason and justice, not according to private opinion:

Rookes case according to law, 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 Mondal v. Hindustan

Petroleum Corporation Ltd, (AIR 1995 Cal 327, 333-335). (See

also Aero Traders Pvt. Ltd. v. Ravindra Kumar Suri, VI

(2004) SLT 428, 430, para 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 Wilkes case, (1970) 4 Hurr 2528, must be a sound one

governed by law and guided by rule, not by humour; Lord

DENNING put it eloquently in Breem v. 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 that

discretionary power is not exceeded or misused. Discretion

is a science of understanding to discern between right or

wrong, between shadow and substance, between equity and

colourable glosses and pretences and not to do according to

ones 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, 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 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.

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 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 person. 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 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 confine himself (Per Lord HALSBURY, L C. in Sharp

v. Wakefield. (1891) Appeal Cases 173.

The word discretion standing single and unsupported

by circumstances signifies exercise of judgment, skill or

wisdom as distinguished from folly, unthinking or haste;

evidently therefore a discretion cannot he arbitrary but

must be a result of judicial thinking. The word in itself

implies vigilant circumspection and care; therefore, where

the Legislature concedes discretion it also imposes a heavy

responsibility. (See National Insurance Co. Ltd. v. Keshav

Bahadur, AIR 2004 SC 1581, 1584, para 10).

The discretion of a Judge is the law of tyrants; it is

always unknown. It is different in different men. It is

casual and depends upon constitution., 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,

(1680) 8 How St Tr 57; as cited in National Insurance

Corporation Ltd. v. Keshav Bahadur, AIR 2004 SC 1581, 1584,

para 11 and Kumaron Mandal Vikas Nigam Ltd. v. Girja

Shanker Pant, (2001) 1 SCC 182).

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)

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

signifies unrestrained exercise of choice or will; freedom

to act according to ones own judgment; unrestrained

exercise of will; the liberty of power of acting without

other control than ones 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 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)

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 falsity and truth, between

wrong and right, between shadow and substance, between

equity and colourable glasses and pretences, and not to do

according to the will and private affections of persons.

The very word discretion standing single and

unsupported by circumstances signifies exercise of judgment,

skill or wisdom as distinguished from folly, unthinking or

haste; evidently therefore discretion cannot be arbitrary

but must be a result of judicial thinking. (33 Bom 334 ).

The word discretion in itself implies vigilant

circumspection and care; therefore where the legislature

concedes wide discretion it also imposes a heavy

responsibility. (AIR 1933 Sind 49)

There may be several degrees of Discretion, discretio

generalis, discretio legalis, discretio specialis,-

Discretio generalis is 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 Rookes and

Keighleys 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 .... 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, 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 permits 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, or costs of administration rather

than with reference to vested substantive rights. The

matters which should regulate the exercise of discretion

have been 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, J.; and see

Morgan v. Morgan, 1869, LR 1 P & M 644, 647). That

discretion, like other judicial discretions, must be

exercised according 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 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, 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 law; legal discretion,

and not personal discretion sound discretion guided by fixed

legal principles.

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.

Coming to the constitution of GETE, no mala 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 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 ECs 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 follows:

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

(a) Overall validation of the evaluation process, including calibration of the qualification and sensitivity analysis.

The sensitivity analysis will cover the impact of inter-se weightages of sub-

criteria as well as scoring.

b) The issues raised by the Members of the Inter Ministerial Group about the evaluation process.

c) An overall assessment of transparency and fairness of the evaluation process, including steps required, if any, to achieve a transparent and fair outcome.

d) Suggestions for improving the selection process for Joint 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;

(i) Change in priority in the matter of absorption of staff,

(ii) Changing the weightage ascribed to property development by merging the marks for infrastructure development and property development,

(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-OECD 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 criteria.

The RFP accorded a priority to a higher absorption of

existing staff by the new company. The EC proceeded to

modify this priority. It opined that 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 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 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 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 reasoning that it is virtually

like a non-OECD Airport since Mexico is like a developing

country.

Relevant portions of GETEs reports read as follows:

FIRST REPORT DATED 7.1.2006

xx xx xx xx

2.1. The Group of Eminent Technical Experts (GETE) had

their first meeting and deliberations on Friday, 30th

December, 2005The presentation was basically for

explaining the contents of the Request for Proposal

(RFP), the approach adopted by the EC in evaluating the

technical bids 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 E.C. based on the mandate given to them by the

I.M.G. On query from the GETE, they formed 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 Information or submission of additional

documents. E.C. stated that the assignment of marks for

technical evaluation was done 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, 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 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 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

informed that the E.C. had taken about one and a half

months to complete this exercise, 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 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 Government and kept sealed, the

possibility of these being changed during the course of

evaluation cannot be ruled out.

2.4 With all the papers made available to the GETE,

the need for seeking 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 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 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

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 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 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 GRCs) report on

their meeting dated 23rd/24th November, 2005). This is

not in conformity to RFP.

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.

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

anomalies have been observed in the allocation of the

weightages. While equal weightage has been allocated to

most of the sub- factors; un-equal allocation has been

done in two cases (1.2.2 /1.2.3 & 3.1.1/3.1.2). The

justification given by EC that these sub-factors are of

different importance is not considered satisfactory and

convincing because such a logic can apply to many other

sub-factors as well. Since weightages of these sub-

factors were not mentioned in RFP and allocation of

equal weightage has been done in majority of sub-

factors, we feel the same concept of equal weightage

should have been adopted for these two sub-factors

also. By assigning different weightages there is room

to suspect that some of the bidders have been favoured.

4.4. In sub-factor 1.1.6, the assessment of performance

of commercial operations of major airports covering

retail property and other commercial operations was to

be done focusing on Airports having non-aeronautical

revenue of 40% or more of total revenue. Though non-

aeronautical earnings of bidder E are only 37%, but

they have been given 75% marks. This is considered to

be in non-conformity of the RFP. The explanation of EC

that 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%.

4.5 In sub-factor 1.1.8, 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

countries like Ecuador, Uruguay 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.

4.6 In sub-factor 3.1.2 (proportion of AAI Staff

targeted for absorption into JVC by year 3), EC has

awarded 50% marks for minimum 40% absorption and

remaining 50% on prorata basis between 40% to 100%

absorption. Since 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 100% absorption.

4.7 If moderation of marks for the above mentioned

items is done, following reduction in the score of

bidder E will take place:

Sr. No. Item Mumbai Delhi (i) If equal weightage is 1.1 1.1 given to sub-factors 1.2.2 & 1.2.3. (ii) If equal weightage is 0.5 0.6 given to sub-factors 3.1.1 & 3.1.2. (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%. (iv) If score of sub-factor 2.1 2.1 1.1.8 given for experience in an OECD country, is excluded. (v) If marking system of 1.6 1.9 sub-factor 3.1.2 as modified keeping 0 for 40% absorption and 5 for 100% absorption. Total (i) to (vi) 6.0 6.4 Resultant score of E 75.0 74.6 for criteria 4.1.1.

From the above, it is clear that the above moderation

clearly disqualifies bidder E in criteria 4.1.1.

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

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 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 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-`-vis

marks scored by bidder E in regard to Delhi

Airport as brought out under:-

Maximum Score Score of B Score of E Delhi 44.5 30.2 43.0

4.10. Admittedly bidder 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 1.1 marks 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.

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. Based on this

exercise, the marks secured by the different bidders

are given in a tabulated form separately for Delhi and

Mumbai Airports.

A- Table showing moderated scores of all the bidders in criteria A (Management Capabilities) for Mumbai Airport Sl. Weightage A B C D E F No. 1.1 25.0 6.7 22.5 17.1 19.7 19.6 17.2 1.2 12.5 2.8 9.7 9.7 4.7 9.2 9.5 2.1 12.5 5.4 7.1 11.7 6.7 9.6 8.8 2.2 12.5 5.0 10.0 11.3 5.0 11.3 10.0 3.1 12.5 6.9 10.5 10.9 7.2 10.8 10.5 3.2 12.5 2.5 12.5 5.0 7.5 11.3 11.3 3.3& 12.5 6.3 12.5 7.5 6.3 9.4 8.8 3.4 Total 100 35.6 84.8 73.2 57.1 81.2 76.1 Score as per shift 35.5 84.7 73.1 57.0 81.0 76.0 Moderation due to

(i) If equal + -0.21 - -0.02 -1.09 -

weightage is given 0.96 0.02 0.23 to sub-factor 1.2.2 and 1.2.3 (ii) If equal +1.8 -0.81 +0.3 -0.32 -0.49 - weightage is given 5 5 0.81 to sub-factor 3.1.1 and 3.1.2 (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 reduced from 75% to 50% - others no change. (iv) If score of 0.0 0.0 0.0 0.0 -2.1 0.0 sub-factor 1.1.8 given for experience in OECD country to E is excluded - others no change. (v) If marking 0.0 -1.98 - -3.13 -1.82 - system of sub- 0.17 1.98 factor 3.1.2 is modified keeping 0 for 40% absorption and 5 for 100% absorption. Total variation +2.8 -3.00 +0.1 -3.47 -6.20 - 1 6 3.02 Revised score 38.3 81.7 73.3 53.5 74.8 73.0

B- Table showing moderated scores of all the bidders in criteria A (Management Capabilities) for Delhi Airport

Sl. Weightage A B C D E No. 1.1 25.0 6.7 22.5 17.1 19.7 19.6 1.2 12.5 2.8 9.7 9.7 4.7 9.2 2.1 12.5 7.5 7.1 11.7 6.7 9.6 2.2 12.5 5.0 10.0 11.3 5.0 11.3 3.1 12.5 6.9 10.5 10.9 7.2 10.6 3.2 12.5 2.5 12.5 5.0 7.5 11.3 3.3 & 12.5 6.3 12.5 7.5 6.3 9.4 3.4 Total 100 37.7 84.8 73.2 57.1 81.0 Score as per shift 37.6 84.7 73.1 57.0 80.9 Moderation due to

(i) If equal + -0.21 - -0.02 -1.09 weightage is given 0.96 0.02 to sub-factor 1.2.2 and 1.2.3

(ii) If equal +1.8 -0.81 +0.3 -0.32 -0.60 weightage is given 5 5 to sub-factor 3.1.1 and 3.1.2

(iii) If the marks 0.0 0.0 0.0 0.0 -0.70 of sub-factor 1.1.6 given to E for non-

aeronautical revenue less than 40% are reduced from 75% to 50% -

others no change.

(iv) If score of 0.0 0.0 0.0 0.0 -2.1 sub-factor 1.1.8 given for experience in OECD country to E is excluded - others no change. (v) If marking 0.0 -1.98 - -3.13 -1.60 system of sub- 0.17 factor 3.1.2 is modified keeping 0 for 40% absorption and 5 for 100% absorption. Total variation +2.8 -3.00 +0.1 -3.47 -6.09 1 6 Revised score 40.4 81.7 73.3 53.5 74.8

As rightly pointed out by learned counsel for the

respondents that if 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

group of experts to examine the matter.

The details relating to the marks allotted to the bids

are as follows:

Delhi airport

Sl. Name of Technical evaluation Financia No. Bidder l Bid % Management Development capability capability Pre- Post-

Sridharan Sridharan 1 Reliance-ASA 80.9 74.8 81.0 45.99 (Bidder E) 2 GMR-Frapport 84.7 81.7 80.1 43.64 (Bidder B) 3 DS 73.1 73.3 70.5 40.15 Construction Munich Airport (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

Mumbai Airport

Sl. Name of Technical evaluation Financia No. Bidder l Bid % Management Development capability capability Pre- Post-

Sridharan Sridharan 1 Reliance-ASA 81.0 74.8 80.2 21.33 (Bidder E) 2 GMR-Frapport 84.7 81.7 92.7 33.03 (Bidder B) 3 DS 73.1 73.3 54.7 28.12 Construction Munich Airport (Bidder C) 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 (Bidder A) opened 6 GVK-ACSA 76.0 73.0 59.3 38.70 (Bidder F)

Learned counsel for the respondents have emphasized

that a curious 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% non aeronautical

revenue and had a partner from an OECD country.

The GETEs 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 exclusion 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 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 nobodys case, though it

has been submitted that after opening the bids, EC made the

variations and beneficiary was the appellant.

GETEs 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 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.

As noted in GETEs 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

any of the bidders while assigning marks, with reference to

the RFP. While making such examination, the issues raised

by the 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 not undertaken in respect of bidders, as

desired by EGOM GETE did so and submitted its second report.

Undisputedly, GMR crossed the bench mark of 80% in respect

of both the bids while others did not.

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 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 2010

Commonwealth Games.

The scope for judicial 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 stated to be referable

to broad area of Governmental activities in which the

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 U.P. and

Ors. v. Renusagar Power Co. and 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 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 individual case. In 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 considerations 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 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 it acts ultra vires.

The present trend of judicial opinion 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 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 impropriety.

These principles were highlighted by Lord Diplock in Council

of Civil 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 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:

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, which the Courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the governments 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 House of Lords in council of Civil Service 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 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 prerogative to decide whether to institute legal proceedings 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 administrative functions unless decision is

tainted by any vulnerability 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 Wednesburys

case is treated as the landmark so far as laying down

various basic principles relating 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 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 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 consider. If he does not obey those rules, he may truly be said, and often 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....In another, it is taking into consideration extraneous matters. It is unreasonable that it might 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 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)

Therefore, to arrive at a decision on reasonableness

the Court has to find out if the administrator has left out

relevant factors 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, having regard to

the above principles, 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.

The principles of judicial review of administrative

action were further summarized in 1985 by Lord Diplock in

CCSU case as illegality, procedural 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 has I think, developed to a stage today when, 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 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 law of several of our fellow members of the European Economic Community.

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 to outrageous in its defiance of logic or of accepted moral standards that 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 as to be in

total defiance of logic or moral standards. Adoption of

proportionality into administrative law was left for the

future.

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 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 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 for 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 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, however, that the law can never be satisfied in any administrative field merely by a finding that the decision 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. (2000)1 WLR 840 are

correct. And Laws L.J. (at 847 (para 18) rightly emphasized

in Mahmoods case that the

intensity of review in a public law case will depend on the

subject matter in hand.

(underlined for emphasis)

In Huang & Ors v. Secretary of State 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 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 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. In 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 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)

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 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 where if two views are possible and one view has

been taken. In such a case, in the absence of mala fide

taking one of the views cannot be a ground for judicial

review. In Asia Foundation & Construction Ltd. v. Trafalgar

House Construction (I) Ltd. and Ors. (1997(1) SCC 738) this

Court observed as follows:

9. The Asian Development Bank came into existence under an Act called the Asian Development Act, 1966, in pursuance of an international agreement to which India was a signatory. This new financial institution was established for accelerating the economic 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 ahead with such high cost projects unless the financial institutions like the World Bank or the Asian Development Bank grant loan or 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 granting the award must be duly adhered to.

In the aforesaid premises on getting the evaluation bids of the appellant and Respondent-1 together with the consultants 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 said to be either arbitrary or capricious or illegal requiring Courts 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 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 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 651) , this Court has held that:

The duty of the court is to confine itself to the question of legality.

Its concern should be:

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

2. committed an error of law,

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.

Therefore, it is not for the Court to determine whether a particular policy or particular 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 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 must give effect to it;

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

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

10. 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 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 considered opinion that none of the criteria has been satisfied justifying Courts 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-1 was the lowest bidder and the alleged mistake committed by the consultant in the matter of bid evaluation in not taking into account the customs duty and the contention of Mr. Sorabjee, learned senior counsel that it has been conceded by all parties concerned before the High Court that on corrections being made respondent-1 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 authorities concerned should accept the lowest bid. Further we find from the letter dated 12.7.1996 that Paradip Port Trust itself has come to the following conclusion:

The technical capability of any of the three bidders to undertake the works is not in question. Two of the bids are very similar 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 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 1 being the lowest bidder 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 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.

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.

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 should 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 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

not 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 ECs 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 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 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 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 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 before opening the bids

or after opening it. EC had given a very evasive answer

stating that same was done before allotting marks. GETEs

job was not the evaluation but verifying the evaluation

process. GETEs 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 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

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 interference.

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.

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 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 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

bids. That left no option with the EGOM but to either vary

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.

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. I.V.R. Construction Ltd. and Ors.

(1999 (1) 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 should intervene.

The view was re-iterated in Master Marine Services (P)

Ltd. v. Metcalfe & Hodgkinson (P) Ltd. and Anr. (2005 (6)

SCC 138).

In the Queens Bench decision in R. v. Department of

Constitutional Affairs (2006 All ER (D) 101) 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.

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 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.

It is to be noted that in respect of both the appellant

and the GETE wherever subjectivity criteria 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. It

needs no emphasis 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

GETEs 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

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 11) it was observed as follows:

It is well known that perversity represents a very high hurdle. In 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 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 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 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

provisions for obtaining reliefs contained in the Act and

the ouster clauses, the jurisdiction of the ordinary court

is not excluded. So, the matter assumes 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, 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 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; Halsburys 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:

The tribunal must not only have jurisdiction at the outset, but must retain it unimpaired until it has 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 & Bros. [(1971) 1 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. Govt. of AP (1991 (4) SCC 93),

Shiv Kumar Chadha v. Municipal Corpn. of Delhi (1993 (3) SCC

161). In M.L. 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, 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 question of jurisdiction is determinable at the commencement, not at 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 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 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.

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 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 its jurisdiction. It would turn 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 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 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 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 much latitude the court is prepared to allow....

In the subsequent Constitution Bench decision in Hari 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 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 when there is lack of power and when there is an erroneous exercise of it. The difficulty 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 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 jurisdiction for purpose of judicial review has been one of public policy rather than one of logic. [S.A. Smith, Judicial Review of Administrative Action, 2nd Edn., p. 98. (1968 Edn.)

The observation of the learned author, (S.A. De Smith)

was continued in its 3rd 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 only as is

seen from the footnotes. It should be stated that the said

observation 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 developments in the law and

the academic opinion that has emerged due to the change in

the perspective.

After 1980, the decision in first Anisminics case came

up for further 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) 1 All E.R. 97. It should be noted that Racal,

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 review, as

legality, procedural propriety and rationality and

this decision had its impact on the development of the law

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-law on the

subject has been reviewed in leading text books. In the

latest edition of De Smith on Judicial Review of

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

SJurisdiction and its ramifications. The authors have

discussed the pure theory of jurisdiction, the innovative

decision in Anisminic case, the 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:

After Anisminic virtually every error of law is a jurisdictional error, and the only place left for non-jurisdictional error is where 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). 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 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 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 of jurisdictional error will prove satisfactory. The distinction between jurisdictional and non-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.

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 Halsburys Laws of England - 4th Edn. (Reissue),

1989 Vol. 1(1), p. 113 to the following effect:

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. 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 (1) it is improperly constituted, or (2) the proceedings have been improperly instituted, or (3) authority to decide has been delegated to it unlawfully, or (4) it is without 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 used interchangeably.

Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue, or as jurisdictional. (p. 114).

There is a presumption in construing statutes which confer jurisdiction or discretionary powers on a body, that if that 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 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 wrong question. (pp. 119-120)

The presumption that error of law goes to jurisdiction may be rebutted on the construction of a particular statute, so that the relevant body will not exceed its jurisdiction by going wrong in law. Previously, the courts were more likely to find that errors of law were within jurisdiction; but with the modern approach errors of law will be held to fall within a bodys 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).

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 to apply 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. (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 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 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 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

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

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

(c) wrong, misunderstood or ignored.

Errors of law

Old rule: The court would quash only if the error was-

(a) jurisdictional; or

(b) on the face of the record.

New rule: The court will quash for any decisive error because all errors of law are now jurisdictional. (emphasis supplied)

The above position was highlighted by this Court in

Mafatlal Industries Ltd. and Ors. v. Union of India and Ors.

(1997 (5) SCC 536).

Stand of respondents about appellants objectionable

conduct needs consideration.

Para 1.3 of RFP reads as follows:

1.3. Confidentiality- PQB receiving this RFP must have completed and returned the required, duly executed Confidentiality Deed.

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 or their participation in it.

Para 6.13 speaks of the Contract Points and in no

uncertain terms provides as follows:

..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 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 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 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.