V. Gopala Gowda, J.
1. The Writ Petition is filed by M/s. Flemingo Duty-free Shops Pvt., Ltd. a Company incorporated in this year 2004 seeking for issuance of declaratory relief to declare that clause 3.2 of the Invitation for Expression of Interest (hereinafter in short referred to as 'E.O.I') issued by the third respondent which is Bangalore International Airport Limited (hereinafter in short referred to as BIAL'), in which it has sought to restrict issuance of tender documents and consideration of bids only from five persons is arbitrary and discriminatory, that the evaluation of the E.O.I by respondents 3 & 4 with respect to Retail and Duty-Free shop to be established in the International Departure and Arrival Duty-free at the New BIAL, Devanahally is arbitrary, discriminatory and further directions to declare the action of the respondents 3 & 4 in short-listing only respondents 5 to 9 for issuance of tender documents and excluding the petitioner from the said list and decision to issue the tender documents in pursuance of invitation dated 26/7/2006 with respect to Retail and Duty-free shops in the BIAL as stated supra is arbitrary, discriminatory and violative of Article 14 of the Constitution of India and direction to respondent No. 3 to issue tender documents and the amended prayer to quash the tender allotted in favour of 5th respondent, urging various facts and legal contentions.
2. Brief foots and rival legal contentions are referred to in this order with a view to appreciate the contentions and to answer the contentious issues that would arise for our consideration and determination. In order to support and foster rapid development of Bangalore, Government of Karnataka and the Airports Authority of India (in short referred to as 'A.A.I') initiated a Green Field Project for the new BIAL, which is a Public Limited Company. It is a consortium of Karnataka State! Industrial Investment Development Corporation (hereinafter in short referred to as KSIIDC), A.A.I, Unique-Zurich Airport, Larsen & Toubro India Ltd., and Siemens Projects Ventures, GmbH. It is operating under the control of the State in particular under the control of the second respondent-A.A.I, the BIAL discharges duties of a public nature. 26% of the share is held by the Governmental Authorities, all important decisions has to be taken only with the approval of the Governmental Bodies and substantial representation on the Board of Directors from the Government nominees are there for effective functioning of BIAL. It is stated that the State Government has got comprehensive control over the functioning of BIAL. The BIAL has got financial Aid from the State and its Companies, functionally and administratively dominated by and controlled by the first respondent-Union of India (in short referred to as U.O.I). Setting up Airports in India has been generally by the A.A.I in pursuance to the Airport Infrastructure Policy of 1997 by the first respondent-Union of India. Pursuant to the amendment to certain relevant provisions of the Airports Authorities Act, 1994 (in short referred to as 'A.A.I.A' Act), private entities have been allowed to participate in setting up projects. The BIAL has entered into Concessional Agreement with the first respondent in Communication and Navigational Surveillance/Air Traffic Movement agreement with the A.A.I and the State Support and land lease agreement with Government of Karnataka. The vast extent nearly 4000 and odd acres of land given to BIAL to set up and operate Airport to on the basis of lease by the KSIIDC, the land was acquired by the Karnataka State Government in exercise of its eminent domain power. The BIAL has been promoted with the second respondent having significant share holding, in addition to this with KSIIDC and other private shareholders referred to supra with a view to establish the new International Airport at Bangalore. The Union of India has granted exclusive right and privilege to BIAL to carry out development, design, financing, construction, operation and management of the Airport for a period of 30 years. On the opening of BIAL the existing Airport has to close commercial, civil aviation operation and any existing airport should not be developed or upgraded into an International Airport within 150 kms of BIAL for a period of 25 years.
3. The Union of India entered into concession agreement with BIAL granting exclusive right to establish Airport and its operation. The Government of Karnataka has extended several concessions to it by providing large extent of agricultural lands for the establishment of a new Airport. It is also the case of the petitioner that both Union of India and Government of Karnataka have extended various benefits by way of concession in favour of BIAL keeping in view the nature of project undertaken by it. Therefore, it is stated that BIAL is a 'State' within the meaning of Article 12 of the Constitution of India and same is amenable to writ jurisdiction of this Court under Article 226 Constitution of India. It is further stated that BIAL being the public body is discharging duties of a public character, for this reason also it is amenable to the writ jurisdiction. Hence it is required to oblige and act fairly, reasonably in a non-discriminatory manner.
4. The BIAL has published an invitation on 26/7/2006 seeking for E.O.I in setting up Retail Duty-free business and Food and Beverage business within the Airport. The persons who are interested to obtain concession contracts to set up the duty free retail business shops inside the airport were invited to put forward their proposals. It is stated by the BIAL that it is interested in granting concession contracts on revenue sharing basis and it would in turn obtain revenue from a person to whom a duty-free retailing contract would be awarded. The revenue payable would be on percentage of the overall grows turnover of the person carrying out duty-free retail business to the airport authority. The proposal was to award contract for a period of five years from the date of opening date of the Airport with an option to the contractor to extend the same by another two years. The invitation has set out two phased process of awarding contract. The first step involved is inviting for E.O.I from interested parties, then BIAL would shortlist the number of participants to a maximum of parties for the subsequent tender, The second phase involves issuance of tender documents to be short-listed and consideration of tenders submitted by the parties thereafter as per clause 3.1. As per the said invitation, interested persons were required to submit E.O.I by 25th August, 2006. Thereafter tender documents were issued by 4/9/2006 and the same was required to be submitted by 25/10/ 2006. It was expressly mentioned that the purpose of the process was to enable the DIAL to select its strategic retail, food and beverage partners on the basis of transparency and not discriminatorily against arty party. As per clause 3.2 of the Invitation, purpose of seeking E.O.I was to short-list a maximum of five parties for each package and that tender forms would be issued to only to such of the parties shortlisted. It is the case of the petitioner that in the invitation, it does not prescribe detailed criteria on the basis of which E.O.I would be followed broadly. It is stated by it that it was looking for partners with vast and international experience in Airport retailing, strong relation and access to international as well as domestic products and proven track record in providing quality service to customers in the defined of packages. Further it is specified and expected by it that commitment to India and an undertaking of the Indian consumer thereby indicate that it was looking at persons with experience in duty-free retailing in India.
5. It is the case of the petitioner that it operates airport duty-free shops in three regions with 25 shops in international arrival and departure terminals across 12 international airports in India. (The petitioner is a consortium of AerRianta International ctp). The parent company owns and operates duty-free show rooms, braided warehouses and related businesses in various locations in UAE, Kenya, Tanzania, Malawi, Burundi, Srilanka and in India. The said company has offices in Jebel Ali Free Trade Zone in UAE as well as in Nairobi, Kenya and Dar-Es-Salam (Tanzania).
6. It is its further case that it has well established logistic centers with warehouses at Mumbai, Chennai and New Delhi, which act as distribution center for all surrounding locations and it has got a strong supply chain to international logistic center in Jebel Ali, UAE which helps it in getting container loads or assorted supplies of any product in the least possible time.
7. The petitioner entered into consortium arrangement with A.E.R.I, which is a company incorporated under the laws of Ireland with a view to obtain contract from BIAL for running duty-free retail business shops in the international airport. The said company is a dedicated international division of the Dublin Airport Authority, which was first to start duty-free retailing business in the world and it was the first to find duty-free shop at Shannon Airport at Ireland in the year 1947, it has got 60 years of experience in the trade. Its retail business turnover for 2006 was in excess of 900 million US$. It operates in four geographical locations namely America, Europe, Russia and CIS and Middle East It is also engaged in Airport operations at Birmingham, Dusseldorf, Larnaca, Hamburg and Paphos.
8. The petitioner-company has got vast experience in setting up duty-free retailing business at Trivandrum, Jaipur, Amritsar and Lucknow Airports, thereafter it has extended its business to Airports of Chennai, Bangalore, Hyderabad, Ahamedabad, Calicut, Goa, New Delhi and Trichy. After participating in the tenders issued by the A.A.I, it has emerged as an exclusive tenderer. It is the first private free retailer in Indian Airports and Seaports. The aforesaid facts are stated to show that the petitioner company has got vast experience in India in the trade. Therefore, it is eligible to submit its tenders to get a retail duty-free shop both at the departure and arrival lounge of the BIAL. Therefore, it is stated that the petitioner and AerRianta fulfilled requirement as set out in clause 3.2 of the tender invitation and its joint venture partner were certainty eligible to issue the tender documents. It has bona fide believed that it would be issued tender documents and it was expecting communication in this regard from the BIAL. It received no written communication either about it being issued tender documents, rejection of its E.O.I or of any decision of the BIAL not to issue tender documents to it.
9. On 1/9/2006, it was shocked to learn from the BIAL, that it apparently decided to issue tender documents only to respondents 5 to 9 who had also submitted E.O.I along with the petitioner. This implied that BIAL would not be issuing tender documents thereby excluding the petitioner from competition. The joint venture partner of the petitioner addressed E-mail on 1st, 4th and 15th September 2006 expressing its surprise with a request to consider the B.O.I submitted by it. It has not been made known the reasons for its exclusion from the competition. It had issued tender documents only to respondents 5 to 9. Therefore, it has urged that the entire process of inviting bids by BIAL for grant of concession contracts for conducting duty-free retail business in the BIAL is unfair and arbitrary. Therefore, the same cannot be allowed to sustain. If a decision was taken by the BIAL to have a pre-qualification for prospective tenderers, then the authority deciding to resort to such procedure ought to have set out detailed minimum criteria to be met by persons interested in submitting the tenders. The criteria cannot be vague and it ought to have been applied objectively and it should have been communicated to the prospective bidders so as to find out whether they would be eligible or not. When such criteria is not laid, the very pre-qualification itself could be manipulated arbitrarily applying so in favour of certain players in market and exclude certain other players. In the absence of the criteria spelt out by the BIAL for the purpose of short-listing, it is not valid as it gives arbitrary discretion to pick and choose persona thereby depriving eligible competitive participants to get the contract awarded. As already stated supra, expression commitment to India and understanding of the Indian Consumer as mentioned in the tender invitation obviously means and refers to experience in handling duty-free retail business in India. As such duty-free retail business is quite different from domestic retail business.
10. The E.O.I of respondent No. 5 who is a successful contractor did not meet broad criteria as set out in clause 3.2 of the invitation as the E.O.I submitted by it indicates that it has been a partner with the Shoppers Stop India Private Limited which has absolutely no experience in carrying on duty free retailing business in any Airports in the country, the joint venture partner proposed by it also does not have any such experience. Therefore, the E.O.I submitted by it does not meet the requirement of commitment to India and understanding of the Indian Consumer, which is the requirement notified in the tender invitation. So also the 5th respondent does not meet the criteria as it has no duty-free retail business experience in India. In so far as respondents 7 & 8 to the best of the knowledge of the petitioner, it is stated lay it that at the time of submission of their E.O.I, they do not have any tie up with any Indian entity and therefore cannot make any claim having any experience in duty-free retail business in India. So far as 9th respondent is concerned, it is stated that it is not carrying out any duty-free retail business of its own in any Indian Airport. It is further stated that the reason behind the experience of a person with carrying out duty-free retail business in Indian airports is with the purpose as it would assume importance that duty free retail business in Indian airports is still emerging market and private players have been allowed to participate only very recently. To cater with such markets, the preferred choice would be the person already having experience in dealing with such markets. Therefore, it is stated by the petitioner that E.O.I submitted by the petitioner in conjunction with AerRianta is the only one which meets all the requirements as it has commitment to India and understanding of Indian consumers and it fully meets either brood and general criterion having vast and international experience in airport retailing, strong relation and access to international as well as domestic brands and a proven track record in providing quality services to its consumers. It is stated that the process of assessment of the persons who have submitted E.O.I, BIAL has not even issued communication to the petitioner disclosing its decision on the short-listing, The said process has been adopted and applied with a view to exclude the petitioner from the fray knowing fully well that, if, it were allowed to bid, it would have the best chance of bagging the contract by offering best price.
11. It is further alleged that Zurich Airport Authority is a shareholder in the BIAL owning 17% of the shares. The 4th respondent is the person responsible for the tender process who was an employee of the Zurich Airport Authority till he was appointed in BIAL. He was brought into BIAL as per the recommendation of 4th respondent- Zurich Airport, it is apprehended that the 4th respondent deliberately planned to bring the Companies based in Switzerland with whom he had opportunity to work earlier into the Indian market, this was the reason beyond for the BIAL for not being transparent in the tender process for awarding contract. The 5th respondent was earlier a unit of SAIR, which is also owned by Zurich Airport It carrying on duty-free retail business at Zurich Airport It has absolutely no experience with the Indian market in duty-free retail business, still it has been short-listed for issuance of tender documents to participate in the process of awarding contract in question. Therefore, this is a concluded case of extraneous consideration. The 5th respondent has been favoured on account of the above factors, thereby respondents 3 & 4 have thus discriminated the petitioner and the action of the 4th respondent is tainted with legal mala fides and legal malice. Therefore, shortlisting the persons who have submitted E.O.I, issuing tender to respondents 5 to 9 and awarding retail duty-free shop contract in favour of the 5th respondent in not legal and valid and the same is liable to be quashed.
12. The first respondent has not filed its counter.
13. The A.A.I represented by Sri B.R Sena s/o Sri Bhabadeb Sena, Airport Director in A.A.I, Bangalore has filed an affidavit on behalf of the second respondent and stated in the affidavit that it is a formal party to the petition, no relief whatsoever has been claimed by the petitioner against the second respondent, at para 6 it is stated that it is responsible for installations and maintenance of operations of Air Track Services (ATS) consisting of Communication Navigation Surveillance (CNS) and Air Track Management (ATM) service and it is responsible for management of the said services and such services are mandatorily required to be provided by it.
14. Further at para 7 it is stated that, it has no role in the day to day management of BIAL. The decisions which require the approval of the Board of BIAL are discussed and approved by the members of the second respondent, it had right to nominate two representatives on the Board of BIAL subject to percentage of equity holding prescribed in the shareholders agreement of it. It is further submitted that majority of the Board of Directors are from the private partners who constitute majority of the shareholders and Board of Directors.
15. It is further stated that only reserved matters as specified in clause 9.4 of the shareholders agreement are required to be brought before the Board of BIAL if such process are brought before it, the same will be discussed in the Board of the BIAL provided that the same are in its interest and not adversely affecting the interest of the respondent. Further it is stated that the decision regarding disqualification of the petitioner was not discussed and passed by the Board of the Directors of BIAL. Therefore, the second respondent was neither involved in the decision process by BIAL nor regarding disqualification of the petitioner in the tender process.
16. The respondents 3 & 4 have filed joint statement of counter traversing the petition averments inter alia contending that the writ petition is not maintainable against the BIAL as it is neither a 'State' or instrumentality of a State or a body discharging public duties for the purpose of Article 12 of the Constitution of India to exercise power of this Court under Article 226 of the Constitution of India. Further it is contended in the statement of objections that as per the request made by the Managing Director of the petitioner, the 4th respondent met him on 12/9/2006, which fact is established by E-Mail sent by the business development and marketing Manager of A.E.R.I, which is venture partner of the petitioner with whom it submitted E.O.I to BIAL. In the said E-Mail it has made it clear that A.E.R.I respects the decision taken by BIAL regarding its exclusion of the consortium consisting of the petitioner. Therefore, the petitioner would have no locus standi to file this writ petition and further it is stated that AE.RI-partner of the consortium is not a petitioner in this petition, for this reason also the petitioner alone has no locus standi to question the action of the BIAL. Further it is stated that the writ petition is also liable to be dismissed on the ground of suppression of material facts in non-disclosure of material documents. It is further stated that on perusal of the provisions of the 'Shareholders Agreement' (hereinafter in short referred to as 'S.H.A') with G.O.K dated 23/01/2002 entered between the BIAL and State promoters which makes abundantly clear that BIAL is not a Government company as defined Under Section 617 of the Companies Act, 1956, as it has been either established or constituted or created by any law enacted by either the Parliament or the State Legislature. Under clause 9.1(ii) of the S.H.A, the Directors representing the promoters constitutes the majority, as per clause 9.2(vii) of the agreement all decisions are to be taken by a simple majority of the Board of Directors and as per sub-clauses-(iii) & (iv) of Clause-9.1 of the said agreement the Managing Director of BIAL is incharge of the day-to-day affairs nominated by the private promoters though the Chairman nominated by the said promoters docs not have any executive powers. However, Clause-22 of the S.H.A makes it very clear that the terms of the same do not constitute a partnership between the parties besides under clause 7.4 of S.H.A provide promoters the right to induct other investors. On a bare perusal of the provisions of S.H.A, it makes amply clear that neither the U.O.I nor G.O.K exercise their pervasive control over the management or affairs of the BIAL.
17. The BIAL has also entered into a Concession Agreement (in short referred to as 'CA') dated 5th July 2004 with the Ministry of Civil Aviation, Government of India, pursuant to Article 3 at Clause-3.1 sub-clause-3.1.1 of C.A the BIAL has got exclusive right and privilege to carry out development, design, financing, construction, commissioning, maintenance, operation and management of the airport. From the above said agreement, it is very clear and unambiguous fact that the BIAL is neither an agency or instrumentality of the U.O.I or G.O.K in terms of Article 12 of the Constitution of India in view of sub-clause 3.1.1 of Article 3 of C.A. In view of the nature of the above exclusive rights and privileges granted to BIAL for the purpose of development and maintenance of infrastructural facilities required to be provided in the airport and facilities for commercial activities at the airport, award of duty-free shops according to the power of attorney of the Company is with the authority of the Manager of the company, therefore it is purely a management decision in the day-today affairs of the BIAL. Having regard to the right of the management of the airport under the C.A, the activities of the BIAL partake the character of Government Functions such as Customs, Immigration, Quarantine, Communication and Navigation services to be carried out by the relevant authority namely, (GOI, AAI, Director General of Civil Aviation, Bureau of Civil Aviation security etc.,) only and not by BIAL. As per Part-IV-Financial Provision of C.A, sub-clause-10 of Article 10 authorizes BIAL to collect airport charges and other charges in the nature of fees but it has no authority to collect tax. Under Article 10.4 of C.A, BIAL itself is liable to make payment of tax under relevant laws applicable to it. Therefore, it is submitted by it that, it does not exercise any government or sovereign functions as per the C.A in its favour under the agreement. As per Clause-18.13.1 and 18.13.2 of Article. 18 of the C.A, it stipulates that execution of the agreement constitutes private and commercial acts rather than public or governmental acts and no sovereign immunity will be claimed by the GOI in respect of proceedings that may be brought against it in relation to C.A. Therefore, it is evident that the agreement does not either confer or contemplate in any manner the entrustment of sovereign functions of the State on BIAL. The work of designing, financing, constructing and functioning of the airport has been entrusted to it by inviting global tenders which clearly indicates the activity that would be carried on is in the nature of commercial nature in association with the State promoters namely A.A.I and KSIIDC both together holding only 26% of the share holding of the BIAL. As per Clause 3.3 of Article 3 of C.A regarding payment of concessional fee by the BIAL to GOI which clearly indicates the fact that it is not carrying on or exercising any governmental function and further it is stated that there is no master and servant relationship either between the Central or State Government and the employees of the BIAL and they are not governed by service rules applicable to the employees of the Central or State Government. Therefore, in view of the aforesaid aspects, it is stated by the BIAL that it cannot be construed to be a State, Agency or instrumentality of a State in terms of Article 12 for the purpose of Article 226 of the Constitution of India and therefore it has contended that the writ petition is liable to be dismissed at the threshold on the ground of maintainability.
18. The plea urged fey the petitioner that GoK provides financial support to BIAL under S.H.A is factually incorrect. The GoK under the State Support Agreement (hereinafter in short referred to as S.S.A) dt. 20/1/2005 provides loan to BIAL which is repayable by it in accordance with the provisions of the agreement, it has no way substantially financed the activity of BIAL. The land referred to by the petitioner in the petition is concerned, the KSIIDC vide land lease dated 30th April 2005 provided land to the BIAL for construction of the airport on lease basis for a period of 30 years and it continues to be the lessee to the land, no ownership rights are transferred to it, Therefore, on the basis of the aforesaid detailed averment regarding the grant of land by the State Government to BIAL cannot be construed to be a 'State', 'Agency' or instrumentality of State in terms of Article 12 for the purpose of Article 226 of the Constitution of India. Therefore, it is stated that the writ petition is liable to be dismissed at the threshold itself on the ground of its maintainability.
19. The BIAL further submits that in the C.A, it is entitled to make available duty free shops and other amenities in the airport. In this view of the matter, it had called for E.O.I by 26/7/2006 in respect of five packages, which consisted of (i) retail package and (ii) Food and Beverage (F & B) Packagel, F & B Package 2 and F & B Package 3. Clause 2.4 of the EOI deals with the aforesaid aspects. Under clause 3 of the EOI selection process was determined. In clause 3.1 of EOI it is made very clear that the second phase award process was being adopted under clause 3.2 of E.O.I that maximum five (5) parties would be short-listed after receiving EOIs. It is its case that petitioner was one of the parties who submitted its EOI in relation to retail package-1 which consisted of duty-free in the international departure and arrival zones, all retail outlets in the international departure zone, At the time of submitting EOI, petitioner did not raise an objection about clause 3.2 of E.O.I with regard to short-listing of maximum five parties. Therefore, it is not open for it to turn round and object for the same in this writ petition.
20. The BIAL further submits that pursuant to the invitation for EOIs., totally seven companies submitted their EOIs. on fair and just evaluation being done by it, the EOI of petitioner among others was rejected and other remaining five companies were shortlisted for submission of tenders. The contention of the petitioner that it was not aware of the decision of the BIAL of short-listing the persons to whom tender documents would be issued as no communication was made to it and said decision was known from the internet is clearly incorrect and false statement It has deliberately suppressed the material fact while making such an averment in the petition. In fact, the petitioner was informed by E-mail on 1/9/2006 itself regarding the decision on the results of EOIs. and the letter was written by the 4th respondent on the same date. On 1/9/2006 the Managing Director of the petitioner has written to the 4th respondent requesting him to re-look into the matter. However, it is stated that having regard to the evaluation of the EOIs. made by the BIAL, petitioner does not qualify for issuance of the tender documents and the other short-Hated member in evaluation undertaken by the BIAL is not qualified for submission of tender. The aforesaid decision has been arrived at by BIAL on a critical appreciation of all the relevant material aspects. Therefore, there has been no arbitrariness or bias on its part as alleged in the petition, the entire process has been transparent and it has been carried out as per EOI. Submission of EOI by the petitioner without raising any objection either regarding clause 3.2 of E.O.I or the relevant eligibility criteria as alleged by it at this point of time making a grievance is not tenable in law. The allegation made against the respondents 3 & 4 in this petition for first time is an after thought only to make out a case for grant of the reliefs sought for by it, therefore, the allegations made by the petitioner against them is misconceived, hence not sustainable in law. Further the allegations made in the Writ Petition has been denied as totally baseless and unfounded. The 4th respondent categorically denies any personal interest regarding Swiss companies in the matter of awarding major concessions or in the other concessions for the airport such as ground handling tender conducted by the 4th respondent on behalf of BIAL, the world largest ground handling company, Swissport from Switzerland as also another ground handling company based in Zurich, Jet Aviation, both applied for a concession and were not selected. According to respondents 3 & 4 evaluation is done by the BIAL and not by the 4th respondent alone and further the 4th respondent submits that be was not in favour of any company as alleged by the petitioner and the mere fact that he was an employee of Zurich Airport Authority cannot be a ground for casting aspersions against him. In fact, Zurich Airport never had any share in the 5th respondent company or in any company nor it has any sister company and it never had any major equity ownership in Zurich Airport. The 5th respondent since 2001 is fully owned and controlled by two Italian public listed companies, therefore the 5th respondent is not even a sister company. Further the 4th respondent submits that, there are no extraneous considerations involved in the tender process as alleged, he being Chief Commercial Officer of the BIAL, his only aim and goal is to set up airport of international standard by getting in the best players in respective sectors. Therefore, it is stated that the allegations made against the respondents 3 & 4 are unfounded, baseless and deserve to be rejected.
21. Further they submit that under Article 3 of the C.A, Union of India under sub-clause 3.2.2 of Clause-3.2 has conferred upon BIAL right to grant service providers on such terms and conditions that it may determine as reasonable and appropriate. Therefore, it thought fit to adopt two phase methods in granting major concessions. The evaluation of the EOI was done by BIAL in fair, just and balanced manner and there has been no arbitrariness in the decision making process of the list as alleged in the writ petition. Five Companies have been short-listed as the top players in the duty-free retail business in India and world. Though petitioner has experience in establishing duty free shops in India, it did not qualify in the evaluation process, which involve considering merits and demerits of each of the companies who submitted EOIs. The five short-listed parties have submitted substantially mom elaborated procedures than the petitioner, in this view of the matter the E.O.I of the petitioner with its consortium partner AerRianta was rejected Horn the bid process. The allegation of discrimination is totally denied as unfounded and baseless and further stated that the sole aim of having such a stringent standard was adopted to make sure the best players are alone awarded major concessions. The process of selection has been most transparent and it has not been arbitrary as alleged, in support of the said averments, the BIAL has produced xerox copies Annexures-R1 to R8. The respondents have also filed additional statement of objections urging more or less the same facts as has been urged in the original statement of counter.
22. The petitioner has submitted rejoinder submission on 13/11/2006 traversing the averments made in the statement of counter filed by respondents 3 & 4. The same are not required to be referred to in this order as they are nothing but reiteration of their plea taken in the writ petition with reference to the documents produced along with the writ petition.
23. The 5th respondent has filed its statement of counter on 17/9/2007 justifying the process adopted in respect of short-listing and awarding contract in its favour, it has submitted that the petitioner has been disabled to invoke the jurisdiction of this Court, it is further submitted that, if, the prayers of the petitioner were considered and granted, the entire process of tender and exclusion of award contract would result in great hardship, extensive loss and prejudice not only to the 5th respondent, but also to BIAL, at it would have to pay huge penalties to the first respondent in the event of non completion of the international airport within the scheduled time and also City of Bangalore and India as a country would be put to shame in the international scenario, if, the project is not completed.
24. The counter on behalf of the respondent No. 9 is filed inter alia contending that although five parties were short-listed after stage of E.O.I, only two parties i.e. the 5th respondent and the answering respondent submitted final bids, after submission of bids, contract was finally awarded to 5th respondent by BIAL by rejecting the bid of 9th respondent. It is further stated that it is given to understand that the bid submitted by the said respondent was rated next after the bid submitted by the 5th respondent which was declared successful. Further it has also found fault with the criteria followed with regard to evaluation of E.O.I, as it does not prescribe intelligible criteria. With regard to the transparency in the bidding process it has supported the case of the petitioner on the same line as has been stated by it in the writ petition. It is obligatory on the part of the second respondent not only to spell out in detail the criteria to be followed for evaluation of bids submitted by various parties but also to disclose whether such criteria were actually implemented while evaluating the respective bids submitted by the bidders. Further it is stated that the respondents No. 6, 7 & 8 despite having been selected in the pro-qualification round, did not opt to participate in the tender process for reasons best known to them, Eventually only two bids were left for evaluation and selection of respondent No. 3, namely respondent No. 5 and respondent No. 9 along with its other counter part Alpha Airports Group. Further it is stated that with regard to the nature of the functions which are being entrusted to it by the first respondent by entering into the concession agreement which are statutory functions, it is an instrumentality of a 'State' as defined under Article 12 of the Constitution of India. In this regard, it has supported the case of the petitioner stating various averments, which are not required to be adverted to in this order.
25. On the basis of the pleadings and the rival legal contentions urged on behalf of the parties, the following points would arise for consideration:
1. Whether the functions and duties discharged by the BIAL are statutory/public duties and whether is it a State under Article 12 of the Constitution of India?
2. Whether the nature of duties performed by BIAL at the International Airport and operation of flights is a statutory function under Section 12 of Airport Authorities Act, 1994?
3. Whether BIAL is amenable to writ jurisdiction under Article 226 of the Constitution for judicial review?
4. Whether the petitioner has got locus standi to file this writ petition and the writ petition is maintainable?
5. Whether the petitioner has waived/ acquiesced its right having participated in the selection process?
6. Whether the short listing of tenders in the absence of any guide lines in the letter of expression of interest by the BIAL is reasonable, legal and valid?
7. Whether the exercise of administrative power by the BIAL for issuing the tender documents in favour of respondents 5 to 9 by short-listing without assigning reasons for ignoring the petitioner is legal and valid and finally awarding contract in favour of 5th respondent is legal and valid in law?
8. Whether the action of BIAL the award of contract in favour of 5th respondent has affected public interest?
9. Whether the denial of opportunity to offer financial bid to the 9th respondent requires interference by this Court?
10. What Order?
Point Nos. 1 to 3:
26. These two points are inter-related and therefore they are considered together. Learned Senior counsel Mr. Vinod Bobade, for the petitioner submitted that the functions and duties entrusted to BIAL to establish the airport under Section 12(3)(aa) of the Airports Authority of India Act, 1994 (in short referred to as 'A.A.I.A' Act) to regulate air traffic service and transport service as defined under Section 2(d) & (e) of the A.A.I.A Act are statutory functions of 2nd respondent. He placed reliance upon the Constitutional Bench decision of the Apex Court reported in 1973(1) SCC 421 in the case of Sukhdev Singh v. Bhagatram, three Judge Bench decision of the Apex Court reported in in the case of Som Prakash Rekhi v. Union of India and Anr. and the seven Judges Constitutional Bench decision in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Ors. reported in : 3SCR100 and other deeds ions of the Apex Court reported in : 1SCR778 Ujjam Bai v. State of Uttar Pradesh : (1968)ILLJ257SC in the case of Rajasthah State Electricity Board v. Mohan Lal : (1979)IILLJ217SC in the case of Ramana Dayaram Shetty v. International Airport Authrotiy of India and Ors. In support of his legal submission, he pressed into service the following decisions of the Apex Court to justify his legal contention that the nature of functions/duties performed and discharged by BIAL are statutory, therefore it is a 'State' in terms of Article 12 of the Constitution of India for the purpose of invoking jurisdiction of this Court under Article 226 of the Constitution of India:
AIR 1993 SC 1811 LIC of India v. Consumer Education & Research Centre and Ors. para 23 at page 1820, paras 26-27 at para 1821;
: (1989)IILLJ324SC Anadi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.S.R. Rudani and Ors.
Binny Ltd. and Anr. v. Sadasivan and Ors. : (2005)IIILLJ738SC
Zee Telefilms Ltd. and Anr. v. Union of India and Ors. : AIR2005SC2677
Private bodies performing functions akin to public duties
Halabury's Laws of England, 4th Edition 3001 Volume 1(1) (Revised issue), Pg. 116 para 59 Burton v. Wilmington Parking Authority (1961) 6 L.Ed.2D.45 AT 50.
Evans v. Newton (1966) 15 L.Ed. 2D. 373 @ 377, 379,
Jackson v. Metropolitan Edison Co. (1974)49 L.Ed. 2D 477 (per Douglas J. dissenting, @ 488, 489, 490)
27. Further the learned Sr. counsel submitted that the functions which are being carried on by the BIAL are public functions/ statutory duties in view of Section 12 of the A.A.I.A Act. Therefore, it is a 'State' within the meaning of Article 12 of the Constitution of India and therefore, it is amenable to writ jurisdiction of this Court under Article 226 of the Constitution.
28. The above contentions are rebutted by learned Senior Counsel Sri R.N. Narasimha Murthy on behalf of respondents 3 and 4 placing reliance upon the decision of Supreme Court reported in : 3SCR100 in the case of Pradeep Kumar Biswas. He submits that in view of the ratio laid down therein by the Seven Judges Bench of the Apex Court and having regard to the facts of this case, particularly the share holding agreement entered into between the Consortium members of BIAL and KSIIDC, S.S.A dated 20/1/2005 and C.A dated 5/7/2004 between the first respondent/Union of India- RI, Civil Aviation and BIAL. On the basis of the lease deed entered between KSIIDC and BIAL dated 30/ 4/ 2005 to establish a private airport at Devanahalli to assist the 2nd respondent to render technical, financial and other assistance in terms of the lease deed and the concession agreement. The object of establishing BIAL and the nature of the project are explicitly mentioned. Though it is an airport in terms of Section 2(b) of the A.A.I.A Act, lease of land is permissible under Section 12-A(1) of the A.A.I.A Act by the KSIIDC in favour of BIAL to establish international airport with a view to provide facilities and render assistance to the airport authority for operating the airport. Having regard to the nature of functions required to be carried on by the airport at Bangalore on the basis of the agreements referred to supra, providing a duly free shop to the customers by the BIAL in the Airport cannot be termed that it is discharging public functions/duties, which are statutory in nature as it is discharging the enumerated functions of the Airport Authority as provided under Section 12 of the A.A.L.A. Act Therefore, the learned Sr. counsel submitted that the decision in PRADEEP KUMAR BISWAS paras 40, 43, 45 and 47 would with all fours apply in support of BIAL, management and control of the airport absolutely vests with BIAL. As per the terras and conditions of the shareholders agreement, particularly Clause-5 pertaining to business of the company and Clauses-7(2)(a) and 7.3 percentage of share holding and capital structure of BIAL and State promoters at the ratio of 74% and 26% and the management of the company shall initially consist of up to twelve directors under clause 9.1(ii). As per Clause 9.1(iii) the Managing Director of BIAL shall be appointed by the Board, chairman of the Board shall be elected by the Directors from among State promoters and he has no executive power of Administrative management of BIAL, chairman is not present at a board meeting, the directors who are present may appoint an acting chairman for the purpose of Board meeting.. As per Clause 9.2(vii) regarding decisions of the board, it shall be made on simple majority with the written consent of each private promoter and each of state promoters in relation to matters enumerated in Clause 9.4, Clause 10 pertains to Project Implementation. Clause-18 Term of the agreement and Termination. Clause 18.3 relates to private promoter's material breach and its consequences. Clause 18.5 relates to consequences of termination. Under Clause 22, anything shall constitute partnership. Under Clause 25.4 sovereign immunity, unconditionally and irrevocably agreed to by first respondent/Union of India to constitute either a private commercial establishment or public or governmental acts, any proceedings should be brought against it or its assets by any party in relation to the agreement Therefore, it is contended that the nature of functions and duties cannot be at any stretch of imagination termed as public duties/functions, much less statutory in nature. Therefore, contention urged on behalf of the petitioner BIAL is a 'State' as defined under Article 12 is wholly untenable. It is not a 'State' in terms of Article 12 of the Constitution.
29. Merely because Chapter V-A, Section 28-A of the A.A.I.A Act is applicable to the premises of the Airport for the purpose of eviction of unauthorised occupants from that premises, it cannot be construed by this Court that the functions of BIAL are that of public duties/functions. Therefore, it is contended by the learned Sr. counsel that BIAL is not a State as defined under Article 12 of the Constitution of India.
30. Sri V. Lakshminarayana, learned Counsel for 9th respondent supported the submissions made on behalf of the petitioner, he has justified the maintainability of the writ petition by inviting our attention to paragraphs 162 to 169 of Unnikrishnan's case : 1SCR594 and contended that the agreements entered into between the State of Karnataka - BIAL, KSIIDC - BIAL and Union of India - BIAL are for rendering statutory fundamental duties by establishing the international airport at Bangalore. The functions that are carried on by BIAL in the international airport on the basis of those agreements are supplementary to the fundamental statutory duties required to be discharged both by first and second respondent. Therefore, BIAL is a State amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India.
31. with reference to the above rival legal contentions urged by the both the learned Sr. counsel for the parties and learned Counsel on behalf of the parties, on careful examination and consideration of the same by us, Points 1 and 2 have to be answered in favour of the petitioner for the following reasons:
(i). As per notification dated 26/4/2005 published by the State Government granting exemption under Section 9(1) of Karnataka Stamp Act, 1957 for registration of the lease deed executed between BIAL and KSIIDC for establishment of international airport, the KIADB has transferred the lands covered therein to KSIIDC and in turn in favour of BIAL. The registration fee of Rs. 25.33 crores is exempted by giving 100% concession under notification dated 15/4/2005. In view of this, the lands acquired by the State Government in favour of Karnataka Industrial Areas Development Board (in short referred to as 'KIADB') for the infrastructure facility defined under the KIADB Act, 1966 for establishing international airport in exercise of its eminent domain powers under Section 28(1) and 28(4) of KIADB Act, the vast extent of land nearly four thousand and odd acres was acquired under the KIADB Act, the same was subsequently transferred by KIADB to KSIIDC for establishment of international airport and vast extent of land was leased in favour of BIAL for that purpose, the acquisition of vast extent is for the above public purpose. As per the explanation of Section 28 of the A.A.I.A. Act, for removal of doubts, it is declared that for the purposes of aforesaid clause, 'airport' includes private airport. The benefit of Chapter V-A of the A.A.I.A Act is incorporated in the Concession agreement to evict the unauthorised occupants from the premises of BIAL,
(ii). We are required to examine the nature of functions and duties performed by BIAL. It is necessary for this Court to extract 'air traffic service', 'air transport service' and the functions of the Airport Authority enumerated in Sections 2(d), (e), (nn) and 12 of A.A.I.A Act reads as under:
2(d) 'air traffic service' includes flight information service,, alerting service, air traffic advisory service, air traffic control service, area control service, approach control service and airport control service;
(e) 'air transport service' means any service, for any kind of remuneration, whatsoever, for the transport by air of persons, mail or any other thing, animate or inanimate, whether such service relates to a single flight or series of flights;
Section 2(nn) reads:
2(nn) 'private airport' means an airport owned developed or managed by:
(i) any person or agency other than the Authority or any State Government,
(ii) any person or agency Jointly with the Authority or any State Government or both where the share of such agency as the case may be in the assets of the private airport is more than fifty per cent.
12. Functions of the Authority:
(1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the function of the Authority to manage the airports, the civil enclaves and the aeronautical communication stations efficiently.
(2) It shall be the duty of the Authority to provide air traffic service and air transport service at any airport and civil enclaves.
(3) Without prejudice to the generality of the provisions contained in Sub-sections (1) and (2) the Authority may:
(3-aa) establish airports, or assist in the establishment of private airports by rendering such technical, financial or other assistance which the Central Government may consider necessary for such purpose.
(b) plan, procure, install and maintain navigational aids, communication equipment, beacons and ground aids at the airports and at such locations as may be considered necessary for safe navigation and operation of aircrafts;
(c) provide air safety services and search rescue, facilities in co-ordination with other agencies;
(d) establish schools or institutions or centers for the training of its officers and employees in regard to any matter connected with the purposes of this Act;
(e) construct residential buildings for its employees;
(f) establish and maintain hotels, restaurants and restrooms at or near the airports;
(g) establish warehouses and cargo complexes at the airports for the storage or processing of goods;
(h) arrange for postal, money exchange, insurance and telephone facilities for the use of passengers and other persons at the airports and civil enclaves;
(i) make appropriate arrangements for watch and ward at the airports and civil enclaves;
(j) regulate and control the plying of vehicles, and the entry and exit of passengers and visitors, in the airports and civil enclaves with due regard to the security and protocol functions of the Government of India;
(k) develop and provide consultancy, construction or management services, and undertake operations in India and abroad in relation to airports, air-navigation services, ground aids and safety services or any facilities thereat;
(l) establish and manage heliports and airstrips;
(m) provide such transport facility as are, in the opinion of the Authority, necessary to the passengers travelling by air;
(n) form one or more companies under the Companies Act, 1956 or under any other law relating to companies to further the efficient discharge of the functions imposed on it by this Act;
(o) take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power or the discharge of any functions conferred or imposed on its by this Act;
(p) perform any other function considered necessary or desirable by the Central Government for ensuring the safe and efficient operation of aircraft to, from and across the air space of India;
(q) establish training institutes and workshops;
(r) any other activity at the airports and the civil enclaves in the best commercial interests of the Authority including cargo handling, setting up of joint ventures for the discharge of any function assigned to the Authority;
(4) In the discharge of its functions under this section, the Authority shall have due regard to the development of air transport service and to the efficiency, economy and safety of such service.
(5) Nothing contained in this section shall be construed as:
(a) authorizing the disregard by the Authority of any law for the times being in force; or
(b) authorizing any person to institute any proceeding in. respect of duty or liability to which the Authority or its officers or other employees would not otherwise be subject.
(iii). As per Section 4 of the Air Craft Act, 1934 (in short referred to as 'A.C' Act) the first respondent has got power to make Rules as per the 1944 convention dt.7/12/1944 in relation to international civil aviation signed at Chikago. Section 5A of A.C Act confers powers upon the Director General of Civil Aviation or other officer specially empowered in accordance with the provisions of the Act to any person/a engaged in air craft operations or using any aerodrome in the interest of security of India or for securing the safety of air craft operations. Section 11-A of the A.C Act provides for penalty for failure to comply with the directions issued by him Under Section 5-A of the Act.
(iv). In view of the aforementioned provisions of the Airports Authority Act and Air Craft Act, on the basis of the agreements referred to supra, the lease deed, the terms and conditions regarding constitution of Board of Directors, appointment of Chairman, Managing Director, BIAL is established. It may be a private airport but nevertheless the provisions of Air Craft Act, Rules framed thereunder and Airport Authorities Act are applicable to it. Though the establishment of airport and its maintenance as per the agreements referred to supra is entrusted to BIAL, it has to discharge the above statutory functions/ duties under Section 12-A of the A.A.I.A. Act. In view of these undisputed facts, the Constitutional Bench decisions and other decisions of the Apex Court referred to in the preceding paragraphs relied upon by the learned Senior Counsel Mr. Vinod Bobade, for the petitioner are applicable in support of the claim of the petitioner. The relevant paragraphs of the aforesaid decisions referred to supra in the preceding paragraphs relied upon by the learned Sr. counsel for the petitioner are extracted as hereunder:
(v). The Constitutional Bench (Seven Judges Bench) of the Apex Court in Ujjam Bai v. State of Uttar Pradesh reported in AIR 1962 SC 1621 @ 1678 para 132 has held as hereunder:
152. In the first place, it has to be pointed out that the definition is only inclusive, which itself is apt to indicate that besides the Government and the Legislature there might be other instrumentalities of State action which might be comprehended within the expression 'State'....Again, Article 12 winds up the list of authorities falling within the definition by referring to 'other authorities' within the territory of India which cannot obviously be read as ejusdem generis with either the Government or legislature or local authorities. The words are of wide amplitude and capable of comprehending every authority created under a statute and functioning within the territory of India. There is no characterization of the nature of the 'authority' in this residuary clause and consequently it must include every type of authority set up under a statute for the purpose of administering the laws made by the Parliament or by the State including those vested with the duty to make decisions in order to implement those laws.(vi). The Apex Court in Sukhdev Singh and Ors. v. Bhagaram Bardar Singh Raghuvanshi reported in : (1975)ILLJ399SC after referring to its various decisions and Halabury's Laws of England has held thus, the relevant paras reads as hereunder:
39. A public authority is a body which has public or statutory duties to perform and which performs those duties and carries out its transactions for the benefit of the public and not for private profit. Such an authority is not precluded from making a profit for the public benefit. (See Halsbury's Laws of England 3rd Vol.30 paragraph 1317 at 682).
82. Part IV of the Constitution gives a picture of the services which the State is expected to undertake and render for the welfare of the people. Article 298 provides that the executive power of the Union and State extends to the carrying on of any business or trade. As I said, the question for consideration is whether a public corporation set up under a special statute to carry on a business or service which Parliament thinks necessary to be carried on in the interest of the nation is an agency or instrumentality of the State and would be subject to the limitations expressed in Article 13(2) of the Constitution, A State is an abstract entity. It can only act through the instrumentality or agency of natural or juridical persons. Therefore, there is nothing strange in the notion of the State acting through a corporation and making it an agency or instrumentality of the State.
93. The governing power wherever located must be subject to the fundamental constitutional limitations. The need to subject the power centers to the control of constitution requires an expansion of the concept of State action....
98. The state may aid a private operation in various ways other than by direct financial assistance. It may give the organization the power of eminent domain, it may grant tax exemptions, or it may give monopolistic status for certain purposes. All these are relevant in making an assessment whether the operation is private or savours of State action-(25). See generally: The meaning of State Action, LX Columbia Law Rev 1083.
Institution engaged in matters of high public interest car performing public functions are by virtue of the nature of the functions performed government engaged. See the decisions in Terry v. Adams 273 US 536 and Nixon v. Condon 268 US 73. Activities which are too fundamental to the society are by definition too important not to be considered government function.
(vii). The next noteworthy decision of the Constitutional Bench of the Apex Court in Ajay Hasla and Ors. v. Khalid Mujib Sehravardi and Ors. reported in : (1981)ILLJ103SC wherein the Apex Court after referring to its decision in International Airport Authority case has kid down the law as hereunder:
11. We may point out that it is immaterial for this purpose whether the corporation is created by or under a statute. The test is whether it is an instrumentality or agency of the State and not as to how it has been created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government Company or a company formed under the Companies Act, 1956 or it may be a society registered under the Societies registration Act or any other similar statute. Whatever may be its genetical origin, it would be an 'authority' within the meaning of Article 12 if it is an instrumentality or agency of the government and that would have to be decided on a proper ascertainment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be deckled, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the government so as to come within the meaning of expression 'authority' in Article 12.(viii) The Seven Judge Bench decision of the Apex Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Technology case reported in (2002) 3 SCC 111 after considering its various decisions has held that the functions/duties to be performed by the authority come within the purview of 'State' under Article 12 of the Constitution and has also laid down the law on Article 12 on 'centers of power' and the cause for expansion of 'state' at paras 6, 10, 15, 16, 40, 41 and finally it has summed-up at para 96 which relevant paragraphs reads as follows:
6. That an 'inclusive' definition is generally not exhaustive is a statement of the obvious and as far as Article 12 is concerned, has been so held by this Court in Ujjam Bai v. State of U.P. AIR 1962 SC 1621 The words 'State' and 'authority' used in Article 12 therefore remain, to use the words of Cardoso (Benjamin Cardozo: The Nature of the Judicial Process}, among 'the great generalities of the Constitution'' the content of which has been and continues to be supplied by courts from time to time.
l0. Keeping pace with this broad approach to the concept of equality under Articles 14 and 16, courts have whenever possible, sought to curb an arbitrary exercise of power against individuals by 'centers of power', and there was correspondingly an expansion in the judicial definition of 'State' in Article 12.
15. The use of the alternative is significant. The court scrutinised the history of the formation of the throe Corporations, the financial support given by the Central Government, the utilization of the finances so provided, the nature of service rendered and noted that despite the fact that each of the Corporations ran on profits earned by it nevertheless the structure of each of the Corporations showed that the three Corporations represented the 'voice and hands'' of the Central Government. The Court came to the conclusion that although the employees of the three Corporations were not servants of the Union of the State, 'these statutory bodies are 'authorities' within the meaning of Article 12 of the Constitution'.
16. Mathew, J. in his concurring judgment went further and propounded a view which presaged the subsequent developments in the law. He said: (SCC p.449 para 82)
A State is an abstract entity. It can only act through the instrumentality or agency or natural or juridical persons. Therefore, there is nothing strange in the notion of the State acting through a corporation and making it an agency or instrumentality of the State.It is further held by Mathew J, that;
The State may aid a private operation in various ways other than by direct financial assistance. It may give the organization the power of eminent domain, it may grant tax exemptions, or it may give monopolistic status for certain purposes. All these are relevant in making an assessment whether the operation la private or savours of State action. See generally: The meaning of State Action', LX Columbia Law Rev 1083.
Institutions engaged in matters of high public interest or performing public functions are by virtue of the nature of the functions performed government agencies. See the decisions in Terry v. Adams 273 US 536 and Nixon v. Condon 266 US 73. Activities which are too fundamental to the society are by definition too important not to be considered government function.
23. 'From this perspective, the logically sequitur is that it realty does not matter what guise the State adopts for this purpose, whether by a corporation established by statute or incorporated under a law such as the Companies Act or the Societies Registration Act, 1860. Neither the ostensible form of the corporation, nor is ostensible autonomy would take away from its character as 'State' and its constitutional accountability under Part II vis-a-vis the individual if it were in fact acting as an instrumentality or agency of the Government.
40. The picture that emerges is that the tests formulated in Ajay Hasia (Ajay Hasia v. Khalid : (1981)ILLJ103SC axe not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi be considered to be a State within the meaning of Article 12. The question in each case would be - whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State.
41. Coming now to the facts of CSIR, we have no doubt that it is well within the range of Article 12, a conclusion which is sustainable when judged according to the tests judicially involved for the purpose.
98. Simply by holding a legal entity to be on instrumentality or agency of the State it does not necessarily become an authority within the meaning of 'other authorities'' in Article 12. To be an authority, the entity should have been created by a statute or under a statute and functioning with liability and obligations to the public. Further, the Statute creating the entity should have vested that entity with power to make law or issue binding directions amounting to law within the meaning of Article 13(2) governing its relationship with other people or the affairs of other people - their rights, duties, liabilities or other legal relations. If created under a statute, then there must exist some other statute conferring on the entity such powers. In either case, it should have been entrusted with such functions as are governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence governmental. Such authority would be the State, for, one who enjoys the powers or privileges of the State. It is this strong statutory flavour and clear indicia of power -constitutional or statutory, and its potential or capability to act to the detriment of fundamental rights of the people, which makes it an authority; though in a given case, depending on the facts and circumstances, an authority may also be found to be an instrumentality or agency of the State and to that extent they may overlap....
(ix). In view of Zee Telefilms Ltd. and Anr v. Union of India and Ors. reported in : AIR2008SC2675 , in which tests are laid down in para 40 that the Body must be financially, functionally and administratively dominated under the control of Government and such control must be particular to the Body in question and must be pervasive. No doubt, in that case after referring to some tests from Ajay Hasia case, it is held that BCCI is not 'State' and it is not created by statute and no part of its capital is held by the Government. Practically no financial assistance is given by the Government to meet the whole or entire expenditure of the Board.' The Board does enjoy a monopoly status in the field of cricket but such status is not State conferred or State protected. There is no existence of a deep and pervasive State control. The control if any is only regulatory in nature as applicable to other similar bodies. This control is not specifically exercised under any special statute applicable to the Board. All functions of the Board are not public functions. The Board is not created by transfer of a government-owned corporation. It is an autonomous body
(x). The decision of Ujambai referred to supra having regard to changing socio-economic policies in India and variety of methods by which Governmental functions are performed or by which the Government carries on trade or business by a society, corporation etc, the functions that would be carried on by BIAL is an instrumentality of the 'State' under Article 12 of the Constitution of India. The statutory body-second respondent may be empowered to divest its power and functions wholly or partially in any interest or juridical person or it may act generally or in collaboration with the other bodies, public or private, for performing its functions.
(xi). In the case of Burton v. Wilmington Parking Authority (1961) 6 L.Ed. 2d. 45 @ 50 after referring to the act of a private lessee to a private authority has held to be State action in violation of 14th amendment as the lessee of the parking authority was operating a restaurant in the automobile parking building and was refusing to serve solely on the ground that he was a negro, the relevant para of the law laid down reads thus:
Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance.
The land and building were publicly owned. As an entity, the building was dedicated to 'public uses' in performance of the Authority's 'essential governmental functions'.
Addition of all these activities, obligations and responsibilities of the Authority, the benefits mutually conferred, together with the obvious fact that the restaurant is operated as an integral part of a public building devoted to a public parking service, indicates that degree of state participation and involvement in discriminatory action which it was the design of the Fourteenth Amendment to condemn.... By its inaction, the Authority, and through it the State, has not only made itself a party to the refusal of service, but has elected to place its power property and prestige behind to place the admitted discrimination. The State has so far insinuated itself into a position of interdependence with Eagle that it must be recognised as a joint participant in the challenged activity, which on that account cannot be considered to have been to 'purely private' as to fall outside the scope of the Fourteenth Amendment... what we hold today is that when at State leases; public property in the manner and for the purpose shown to have been the case here, the proscriptions of the Fourteenth Amendment must be complied with by the lessee as certainly as though they were binding covenants written into the lease itself.
(xii). In another case in Evans v. Newton (1966) 15 L.Ed. 2d. @ 377, 379 regarding bequeathing of private land by a will to the Mayor and Council of Macon, Georgia after the death of the testator's wife and daughters, for use as 'a park and pleasure ground' for while people only, was held to be usable by all - whites and blacks - and that no 'aegregation' could be permitted in view of the 14th amendment as it was a 'public park', the relevant portion reads thus:
What is 'private' and what is 'state' action is not always easy to determine. Conduct that is formally private may become so entwined with governmental policies or so impregnated with a governmental character as to become subject to constitutional limitation placed upon state action.
Under the circumstances of this case, we cannot but conclude that the public character of the park requires it to be treated as a public institution subject to the command of the Fourteenth Amendment, regardless of who now has titled under state law.
(xiii). In another case reported in (1974) 49 L.Ed. 2d. 477 in the case of Jackson v. Metropolitan Edison Co. which decision has been referred to in the International Airport Authority of India's case, it is laid down as hereunder:
A particularized inquiry into the circumstances of each case is necessary in order to determine whether a given factual situation falls within 'the variety of individual-state relationship'.... The dispositive question in any state-action case is not whether any single fact or relationship presents a sufficient degree of state involvement, but rather whether the aggregate of all relevant factors compels a of state responsibility.
It is not enough to examine seriatim each of the factors upon which a claimant relies and to dismiss each individually as being insufficient to support a finding of state action. It is the aggregate that is controlling.
In the aggregate, these factors depict a monopolist providing essential services as a licensee of the State and within a framework of extensive state supervision and control. The particular regulations at issue, were authorised by state law and were made enforceable by the weight and authority of the State. Moreover, the State retains the power of oversight to review and amend the regulations if the public interest so requires. Respondent's action are sufficiently intertwined with these of the State, and its termination of service provisions are buttressed by state law, to warrant a holding that respondent's actions in terminating this house-holder's service were 'state action' for the purpose of giving federal jurisdiction over respondent under 42 USC s. 1983.
(xiv). From the aforementioned legal principles laid down by the Constitutional Benches of the Supreme Court and American Law, the doctrine of 'State action' would with all fours applicable to the facts of the case to come to the conclusion that to provide duty free shops in the BIAL as per the agreement referred to supra is necessary in the international airport. The facilities provided therein are in the nature of Statutory functions/ public functions by BIAL for the convenience of travelling public. All the facilities provided by BIAL, be it a State, lessee or entity, performs statuary/public functions in the Airport This is expressly apparent from Clause 7.1 of Clause 7 of S.S.A dated 20/1/2005. The relevant clause reads as hereunder:
7.1 Airport Operation and Maintenance:
BIAL shall operate and maintain the Airport in accordance with Good Industry Practice. BIAL shall at all times comply with Applicable Laws in the operation and maintenance of the Airport and shall maintain, keep in good operating repair and condition, the Airport, in accordance with the Operation and Maintenance Plan, an indicative outline of which is as set out in Schedule 6 attached hereto. BIAL shall submit the Operation and Maintenance Plan to GOK no later than one (1) year from Financial Close.
BIAL shall also renew, replace and upgrade to the extent reasonably necessary, the Airport which for these purposes shall exclude any systems or equipment to be operated by AA1 in accordance with the terms of the CNS/ATM agreement
All operation, maintenance, repair and other works shall be carried out in such a way as to minimise inconvenience to users of the Airport If any operation, maintenance, repair or other works necessitate interrupting or suspending the landing or taking-off of any aircraft, or the closure of the Airport, for any period of time, BIAL shall, except in case of an emergency, give to the DGCA and to all affected users of the Airport such prior written notice thereof as the DGCA may from time to time reasonably require.
(xv). Section 22-A of the A.A.I.A Act empowers the 2nd respondent to levy and collect development fee from embarking passengers under Clauses (b) for establishment or development of a now airport in lieu of the airport referred in clause(a) or (c) for investment in the equity in respect of shares to be subscribed by the Authority in companies engaged in establishing, owning, developing, operating or maintaining a private airport in lieu of the airport referred to in Clause (a) or advancement of loans to such companies or other persona engaged in such activities.
(xvi.) The effect of exclusion of provisions of Chapter V-A of the A.A.I.A Act from the ambit of Rent Control Act from the premises leased to BIAL is that the Government while dealing with the citizens in inspect of its properly, would not act for its own purpose as a private landlord but would act in public interest In this regard, the Constitutional Bench of the Apex Court at para 69 in the case of Ashoka Marketing Ltd. and Anr. v. Punjab National Bank and Ors. after referring to its earlier decision in the case of Dwarakadas Marfatia & Sons v. Board of Trustees of The Port of Bombay reported in : 2SCR751 has kid down the law as under:
69 ... every activity of a public authority especially I the background of the as sumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public interest All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the as sumption that they would not act as private landlords, must be judged by that standard.(xvii). The assistance provided by both the Union of India and State Government and other statutory authorities in permitting BIAL to establish and maintain BIAL at Devanahalli, without which the airport could not have been established, and Re. 250 crores provided to BIAL by the Government of Karnataka under the State agreement and capital of BIAL partly owned by it, 26% share capital owned by 2nd respondent, 13% by BIAL, in pursuant to the Concessional agreement referral to supra, there is transfer of powers of respondent No. 2 to R-3 in relation to air traffic services to be rendered to the public at large. The grant of monopoly status in the concession agreement given to the BIAL is State conferred or State protected as the concession agreement provides exclusivity of private concession to the existing airport and prohibits any airport being set-up within 150 Kms from BIAL.
(xviii). Even if it is not an entity and 'State' under Article 12 of the Constitution of India, the actions of BIAL are subject to judicial review under Article 226 of the Constitution of India. In this regard, learned Sr. counsel for petitioner has rightly placed reliance upon the decisions reported in : (1976)ILLJ274SC in the case of Rohtas Industries v. Rohtas Staff 1991(1) SCC 171 : 1995(5) SCC 1811 : : (2003)IILLJ1123SC in the case of G. Basi Reddy v. International Crops Research Instt. The principles laid down in those decisions with all fours applicable to the case on hand and therefore BIAL is amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India as it has been discharging statutory functions/ duties in establishing International Airport at Devahanalli as it has undertaken to discharge the statutory functions of the Airport Authority in establishing private Airport and its maintenance.
(xix). The word 'person' is with avowed object deliberately used in Article 226 of the Constitution of India, which may be a natural person or juridical person such as Government, Private or Public Limited company, society, body, corporation etc, who will perform public functions/duties in the public interest. They are all amenable to judicial review power of this Court is the legal principle enunciated by the Apex Court in the above referred cases.
(xx). Further as per the decisions in Rohtas Industries, Anadi Mukta and Unnikrishnan referred to supra, the Supreme Court has succinctly held that the scope of High Court power under Article 226 of the Constitution of India is also to issue writs against a private body/person. The words 'any person or authority' referred to in Article 226 of the Constitution of India is therefore not to be confined only to statutory authorities and instrumentalities of State for issuing writs against any persons. They may cover any person or body performing statutory, public functions and duties. Hue form of the body is not relevant for the purpose of exercise of power of this Court under Article 226 of Constitution of India. What is relevant is the nature of functions or duties imposed upon such person and performed by it. As per the development of law, Prof. D. Smith, whose statement is extracted in Anadi Muktas case at paras 17-23, it is stated thus:
The words 'any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may court any other person or body performing public duty. The form of the body concerned is not very much relevant. What ftp relevant is the nature of duly imposed on the body....Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statuts. Commencing on the development of the law, professor be Smith status 'To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have imposed character, common law, custom or even contract'. We share this view.(xxi). In Unnikrishnan's case, after referring to Anadi Mukta and Drawakanath cases, it is held at paragraphs 81 and 83 as under:
81. As a sequel to this, an important question arises: what is the nature of functions discharged by these institutions? They discharge a public duty, If a student desires to acquire a degree, for example, in medicine, he will have to route through a medical college. These medical colleges are the instruments to attain the qualification. If, therefore, what is discharged by the educational institution is a public duty, that requires to act fairly.
83. The emphasis in this case is as to the nature of duty imposed on the body. It requires to be observed that the meaning of authority under Article 226 came to be laid down distinguishing the same term from Article 12. In spite of it, if the emphasis is on the nature of duty on the same principle it has to be held that these educational institutions discharge public duties. Irrespective of the institutions receiving aid it should be held that it is a public duty. The absence of aid does not detract from the nature of duty.
(xxii). The learned Sr. counsel for the petitioner has placed reliance upon the following decisions of the Apex Court wherein the scope of Article 226 is laid down by the Apex Court in Basi Reddy v. International Crops Research Instt. reported in : (2003)IILLJ1123SC the Apex Court has laid down the law that A Writ under Article 226 can lie against a 'person' if it is a statutory body or performs a public function or discharge a public or statutory duty', in the case of Zee Telefilms Ltd. v. Union of India referring to Anadi Mukta's came it has held that 'thus, it is clear that when a private body performs its public functions even if it is not a State, the aggrieved person has a remedy not only under the ordinary law but also under the Constitution by way of a writ petition under Article 226. Lastly referring to the cave of Binny Ltd. v. Sadasivan reported in : (2005)IIILLJ738SC reported in : AIR2005SC2677 it has held that, 'Artical 226 is couched in such a way that a writ of mandamus could be issued even against a private authority....discharging a public function...A body is performing a 'public function' when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public function when they intervene or participate in social or economic affairs in the public interest.
(xxiii.) For the foregoing reasons, we answer Point Nos. 1 to 3 in favour of the petitioner.
Point Nos. 4 and 5:
32. The learned Senior Counsel has submitted that the petitioner has got locus standi to file the writ petition as it being the member of the consortium of AerRianta, he has placed strong reliance upon the petition averments contending that the petitioner has entered into consortium agreement with AerRianta International opt, which is a company incorporated under the laws of Ireland to obtain contract for running duty-free retail business with BIAL and the said company is dedicated to International Division of the Dublin Airport Authority. It was the first to start duty-free retailing business in the world and it has fulfilled the experience wanted by the BIAL in its tender notification as it has set up free retailing business at Trivendurm, Jaipur, Amritsar and Lucknow Airports and further it has extended its business to airports at Chennai, Bangalore, Hyderabad, Ahmedabad, Calicut, Goa, New Delhi and Trichy. The petitioner in India has experience in emerging markets of its parent company across the world. It decided to join hands with AerRianta International opt, for submitting a bid to obtain contract from BIAL in respect of carrying on the aforesaid business. According to the petitioner, the consortium of it with AerRianta International opt, would be the only one qualified to receive tender and submit bid for obtaining contract for duty-free retailing at BIAL. It is admitted that the petitioner was the first company to enter into the private retail duty-free business in Indian Airports and no other company privately owned has as much experience in duty free retailing in Indian Airports. Therefore, consortium of petitioner with AerRianta International opt, submitted EOI to BIAL on 23/8/2006 which is in complete compliance with all requirement set out in the EOI invitation by furnishing all the information as set out in clause 3.2 of the invitation, The petitioner did not receive any written communication regarding issuance of tender documents or about it expression of interest being rejected or of any other decision of BIAL not to issue tender documents to it. In the rejoinder statement, petitioner has reiterated its stand taken in the writ petition.
33. The learned Senior Counsel Sri. R.N. Narasimhamurthy on behalf of respondents 3 & 4 contended placing strong reliance upon the statement of counter filed on their behalf by taking up preliminary objection that writ petition is not maintainable, that petitioner above has no locus standi to file this petition without its consortium partner. The writ petition should have been filed by the consortium consisting of petitioner and AerRianta International opt
34. Further it is contended by the learned Sr. counsel for the petitioner in the counter statement filed by respondents 3 & 4 they have taken the plea that the petitioner has no locus standi to file this writ petition is not tenable in law by placing strong reliance upon the unreported decision of the Bombay High Court filed by the very same petitioner in W P No. 617/2007 and Anr. v. the Union of India and Ors.. At paragraph 47 of the said decision similar objection raised in the said case by the contesting respondents therein was considered by that High Court and held that such an objection is not well founded for the reason that EOI was submitted by the petitioner in partnership with AerRianta and therefore when opportunity to submit tender was denied, rights of the petitioner as its partner were also violated. Therefore, it cannot be said that the petitioner does not have cause of action for challenging action of the respondents 3 & 4. The said reasoning of the Bombay High Court decision with all fours applicable to the case on hand for the reason that cause of action arose for the petitioner particularly having regard to the fact that it is vitally aggrieved party being a consortium partner of Air Rianta who has got excellent experience for running duty-free shops in various places in India.
35. The contention urged on behalf of the respondents No. 3 and 4 that the petitioner and AerRianta have participated in the tender process by submitting E.O.I pursuant to the tender invitation accepting the conditions enumerated therein without demur. Therefore the petitioner has acquiesced its right in challenging the impugned action. Further contention urged on behalf of respondents No. 3 and 4 that both petitioner and AerRianta sent the E-Mail as per Annexures-R5 and R6 to respondent No. 4 requesting him to re-look into the matter, further as could be seen from the E-Mail dt. 12/09/2006 sent by AerRiant to R4, it has made clear that it respects the decision taken by BIAL regarding exclusion of consortium consisting of the petitioner. The above contention is untenable in law. Therefore, the learned Sr. counsel in support of his contention that petitioner has not acquiesced his right to file this Writ Petition, in support of this submission he has placed strong reliance upon the constitutional bench decision of the Apex Court reported in Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors. : AIR1986SC180 , which reads as follows:
28. It is not possible to accept the contention that the petitioners are estopped from setting up their fundamental rights as a defence to the demolition of the huts put up by them on pavements or parts of public roads. There can be no estoppel against the Constitution. The Constitution is not only the paramount law of the land but, it is the source and sustenance of all laws. Its provisions are conceived in public interest and are intended to serve a public purpose. The doctrine of estoppel is based on the principle that consistency in word and action imparts certainty and honesty to human affairs. If a person makes a representation to another, on the faith of which the latter acts to his prejudice, the former cannot resile from the representation made by him. He must make it good. This principle can have no application to representations made regarding the assertion or enforcement of fundamental rights. For example, the concession made by a person that he does not possess and would not exercise his right to tree speech and expression or the right to move freely throughout the territory of India cannot deprive him of those constitutional rights any more than a concession that a person has no right of personal liberty can justify his detention contrary to the terms of Article 22 of the Constitution. Fundamental rights are undoubtedly conferred by the Constitution upon individuals which have to be asserted and enforced by them, if those rights are violated. But, the high purpose which the Constitution seeks to achieve by conferment of fundamental rights is not only to benefit individuals but to secure the larger interests of the community. The Preamble of the Constitution says that India is a democratic Republic. It is in order to fulfil the promise of the Preamble that fundamental rights are conferred by the Constitution, some on citizens like those guaranteed by Articles 15, 16, 19, 21 and 29 and, some on citizens and non-citizens alike, like those guaranteed by Articles 14, 21, 22 and 25 of the Constitution. No individual can barter away the freedoms conferred upon him by the Constitution. A concession made by him in a proceeding, whether under a mistake of law or otherwise, that he does not possess or will not enforce any particular fundamental right, cannot create an estoppel against him in that or any subsequent proceeding. Such a concession, if enforced, would defeat the purpose of the Constitution. Were the argument of estoppel valid, an all-powerful State could easily tempt an individual to forego his precious personal freedoms on promise of transitory, immediate benefits. Therefore, notwithstanding the fact that the petitioners had conceded in the Bombay High Court that they have no fundamental right to construct hutments on pavements and that they will not object to their demolition after October 15, 1981, they are entitled to assert that any such action on the part of public authorities will be in violation of their fundamental rights. How far the argument regarding the existence and scope of the right claimed by the petitioners is well-founded is another matter. But, the argument has to be examined despite the concession.
29. The plea of estoppel is closely connected with the plea of waiver, the object of both being to ensure bonafides in day-to-day transactions. In Basheshar Nath v. CIT 1959 Supp 1 SCR 528 a Constitution Bench of this Court considered the question whether the fundamental rights conferred by the Constitution can be waived, Two members of the Bench (Das, C.J. and Kapoor, J.) held that there can be no waiver of the fundamental right founded on Article 14 of the Constitution. Two others (N.H. Bhagwati and Subba Rao, JJ.) held that not only could there be no waiver of the right conferred by Article 14, but there could be no waiver of any other fundamental right guaranteed by Part HI of the Constitution. The Constitution makes no distinction, according to the learned Judges between fundamental rights enacted for the benefit of an individual and those enacted in public interest or on grounds of public policy.
36. With regard to the statutory rights and liabilities that are involved in this case, the learned Sr. counsel for the petitioner has placed strong reliance upon the decision of the Apex Court reported in (1996) 6 SCC 507 in the case of P.R. Deshpande v. Maruti Balaram Haibatti wherein it fa held that the principle of estoppel has no application when statutory rights and liabilities are involved, he has further placed reliance upon another Constitutional Bench judgment of the Apex Court reported in AIR 1961 SC 1327 in the case of Bhau Ram v. Baij Nath Singh and Ors. in support of the proposition that no ones can be deprived of his legal rights. The cause of action when third respondent arbitrarily short-listed the petitioner without any norms and guidelines though all the statutory requirements under clause 3.2 of the invitation published by the BIAL was complied with and EOI was submitted, without any reason or rhyme short-listing and without communicating the same to the petitioner being a consortium partner has certainly affected the legal rights accrued in favour of it.
37. Further the contention urged on behalf of the respondents No. 3 and 4 that the petitioner has no locus standi for filing this petition is contrary to the Federal Court decision in the case of United Provinces v. Atiqa Begum reported in , wherein the Federal Court has held that a party whose presence is essential, no effective decree can be passed, hence, this Court has got power to give appropriate writ and quash the contract awarded in favour of 5th respondent and with regard to the contention urged on behalf of the respondents 3 & 4 that the petitioner has no locus standi is wholly untenable in law and liable to be rejected.
Accordingly, we reject the same and answer the aforesaid point Nos. 4 and 5 in favour of the petitioner company holding that the action of the respondents No. 3 and 4 in short listing the tenders without there being any intelligible guidelines enumerated in this regard in the EOI and without assigning any reasons or communicating the same whatsoever to the petitioner has certainly affected the legal right of the petitioner to submit its bid to get the contract awarded in its favour as it it more qualified.
Point No. 6:
38. The submission of the learned Senior counsel for the petitioner with regard to the aforesaid point is that the entire process of short-listing of persons who had submitted their E.O.I is arbitrary as there was lack of transparency in the action of respondents 3 & 4 for the following reasons:
a) No lawful justification for short listing 5 out of 7 parties who have submitted EOIs.
b) No norms at all are enumerated in the tender invitation notification for short listing.
c) Selection criteria followed by R3 & R4 lacked legal certainty, since they are imprecise and they do not provide for objective norms or bench marks for proper evaluation.
d) No document or documents at all showing the evaluation process.
e) No Committee of Experts or any Committee was constituted at all by R3 & R4 for considering and evaluating the merits and demerits of the parties in their E.O.I for short-listing their tender documents.
f) The matter was never placed before the Board for its approval as averred by AAI.
g) No reasons whatsoever are recorded by R3 and communicated to the petitioner. No reasons are given to the Court in the affidavits, record also does not disclose the reasons for either short listing and awarding the contract in question in favour of respondent No. 5.
(i). In support of the aforesaid submission, learned Sr. counsel for the petitioner has rightly placed strong reliance upon the following decisions of the Supreme Court reported in 1978(3) SCC 503 @ 510 in the case of Dr. Amarjit Singh Ahluwalia v. The State of Punjab and Ors. wherein the law has been laid down at para 9 as under:
9 It is interesting to notice that in the United States it is now well settled that an executive authority must be rigorously held to the standards by which it professes its actions to be judges and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. Vide the judgment of justice Frankfurter in Vitarelli v. Seaton 3 L.Ed. 2d, 1012. This view is of course not based on the equality clause of the United States Constitution and it is evolved as a rule of administrative law.
(ii). The learned Sr. counsel for the petitioner has rightly placed reliance upon the decision of the Apex Court reported in : (1979)IILLJ217SC (Ramana Dayaram Shetty v. International Airport Authority) in support of the proposition that 'it is now well settled that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards', wherein the Apex Court in the aforesaid decision @ para 10 after referring to its earlier decisions in Dr. A.S. Ahhuwalia and Sukhdev's has laid down the law, which relevant portion reads as under:
10. ... It may toe noted mat this rule, though supportable also as an emanation of Article 14, does not rest merely on that Article. It has an independent existence. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority.... Whatever be the concept of the rule of law, whether it be the meaning given by Dicey in his 'The Law of the Constitution' or the definition given by Hayek 1 his 'Road to Serfdom' and 'Constitution of Liberty or the exposition set forth by Harry Jones in his 'The Rule of Law and the Welfare State', there is as pointed out by Mathew, J., in his article on 'The Welfare State', Rule of Law and Natural Justice' in 'Democracy, Equality and Freedom', substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found. It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affection of some right or denial of some privilege.
(iii). Further, it is well settled lay that discretion in any authority or body must always be exercised reasonably and not arbitrarily as laid down at paras 33 and 50 in Reliance Airport Developers (P) Lid. v. Airports Authority of India reported in (3006) 10 SCC 1, the relevant paras are necessary to be extracted in this judgment and it reads thus:
33. 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 prevent it from being wholly absolute, capricious, or review.
50. GETE also noted that certain issues can be more satisfactorily addressed by process of validation that would involve a reallocation of marks, on the assessment made lay EC of the bids albeit in a manner that would be consistent with RFP. It essentially was not an exercise of re-evaluation but of a reallocation consistent with RFP.
(iv). Further the learned senior counsel for the petitioner has rightly contended that the decision of respondents 3 & 4 in the absence of guidelines and norms required to be followed to short-list the persons who have expressed their E.O.I pursuant to the invitation of tender contract to run retail duty-free shop in BIAL is bad in law. In support of the said contention, he has very aptly relied upon the decision of the Apex Court in the case of The Siemens Engineering and . v. The Union of India and Anr. reported in : AIR1976SC1785 @ wherein the Apex Court has kid down the law at para 6 which relevant portion is extracted hereunder:
6. ... Then alone administrative authorities and tribunals exercising quasi-judicial functions will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance would not satisfy the requirement of law.
(v). The aforesaid decision is again followed by the Apex Court in the case of Organo Chemical Industries v. Union of India reported in : (1979)IILLJ416SC and laid down the law at para 33 which relevant portion is extracted hereunder:
33. This Court has impressed the requirements of natural justice on such jurisdictions and one such desideratum is spelling out reasons for the order made, in other words, a speaking order. The inscrutable face of a sphinx is ordinarily incongruous with a judicial or quasi-judicial performance.
(vi). Further the learned Sr. counsel has aptly relied upon the decision of the Apex Court reported in B. Ramakicenin v. Union of India : (2008)1SCC362 wherein it has reiterated the law laid down in R. D. Shetty's case referred above in support of the proposition that it is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority, further the learned senior counsel has placed strong reliance upon the observations made by the Author H.M. Seervai in Constitutional Law of India, 4th Ed. Vol 2, p. 1487 @ para 16.92 in support of the contention that; if, 'a body has exercised its discretionary powers capriciously or on irrelevant grounds, it is to be taken as not having exercised its powers at an in the eye of law'.
(vii). Further he has placed strong reliance upon the landmark constitutional bench decision of the Supreme Court in the case of A.K. Kraipak and Ors. v. Union of India and Ors. reported in AIR 1970 SC 180 wherein it has laid down the law at paras 13, 14 & 20 which relevant portions are extracted hereunder:
13 'The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated.... In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of the rule of law would lose its validity if the instrumentalities of the State are not charged with the duty to discharge their functions in a just and fair manner...
14. With the increase of the power of the administrative bodies it has become necessary to provide guidelines for the just exercise of their power. To prevent the abuse of that power and to see that it does not become a new despotism, Courts are gradually evolving the principles to be observed while exercising such powers. In matters like these public good is not advanced by a rigid adherence to precedents....
Finally the Court at para 20 said:
The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice...Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries, An unjust decision in an administrative enquiry may have more fax reaching effect than a decision in a quasi-judicial enquiry...Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision of the case.
(viii). In the said decision the Apex Court has clearly obliterated the distinction between administrative and quanta-judicial power for applying the principles of natural justice. The learned Sr. counsel for the petitioner has further placed reliance upon another decision of the Supreme Court in L.I.C. of India and Anr. v. Consume Educational and Research Centre and Ors. reported in : AIR1995SC1811 in support of the proposition that 'every action of the public authority or the person acting in public interest or its acts give rise to public element, should be guided by public interest', he also placed strong reliance upon the decision of the Supreme Court in Star Enterprises and Ors. v. City and Industrial Development Corporation of Maharashtra Ltd. and Ors. reported in : 2SCR826 in which it has referred to the decisions of R.D SHETTY, AJAY HASLA and number of decisions in support of the proposition that the Authority who is required to discharge statutory functions/ duties has to act within the ambit of Rule of Law and would not be allowed to conduct itself arbitrarily and its dealings with the public would be liable to judicial review. A quotation from Lord Denning, in Padfield v. Minister of Agriculturs 1968 A.C. 997 is placed reliance by learned senior counsel According to him the said words of Lord Denning are apposite on the point of reasons. Further he has placed strong reliance that existence, recording and communication of reasons is a salutary and vital safeguard against arbitrary exercise of power, reasons for any decision are judicially reviewable and that reasons must be clear, cogent, certain and they cannot be vague. The evaluation of E.O.I was done on the basis of criteria, merits and demerits considered does not amount to giving reasons in law, further it is clear from the EOI invitation that one of the important criterion was experience in Indian duty-free retailing, it is equally clear that respondent No. 3 company avers that they have considered and short listed five players to be the top players in the field without reason, therefore its action is arbitrary exercise of power as there is complete irrationality on the part of the BIAL in the selection process laid down by the invitation for E.O.I and it also amounts an arbitrary exercise of power by it Learned Sr. counsel further placed reliance upon the decision of B. Ramakicenin in referred to supra for another legal submission that short listing has to be effected on two requirements; 'it has to be on some rational, objective basis' and 'if prescribed method of short-listing has been mentioned, that method alone has to be followed', he also placed reliance upon the decision of Reliance Energy referred to supra in support of the legal contention that Article 14 of Constitution of India has to be read in conjunction with rights conferred by other articles like Article 21 which refers to 'right to life'. The process of short listing by the BIAL according to him without transparency, secretive manner and non-issue of tender documents to the petitioner is not only arbitrary but also tantamount to total denial of fair opportunity which is a clear case of malafide adopted by the BIAL with a view to exclude the petitioner from the fray knowing fully well that if it were to be allowed to bid, it would have had the best chance of bagging the contract by offering the best price. The above said submission of the learned Sr. counsel is well founded as the action of BIAL in short-listing persons who had submitted their E.O.I without guidelines and reasons is contrary to law laid down by the Apex Court in catena of cases referred to supra upon which reliance is placed by the learned Sr. counsel for the petitioner, the legal principles laid down in those decisions would aptly apply to the case on hand. Further it is rightly contended by the learned Sr. counsel for the petitioner that in view of the public character of running the international Airport at Devanahally by BIAL which is the statutory function of the A.A.I, it was bound to follow the doctrine of fair-play, transparency, and good faith in all its activities. Therefore, the BIAL is under a duty to act reasonably and cannot act arbitrarily in a whimsical and capricious manner and further in the invitation for EOI, uncertain elastic and subjective criteria stipulated are bad in law as held by the Apex Court in Reliance Energy case referred to supra. If criteria, valid norms and guidelines which are required to be enumerated in the tender invitation that are required to be followed by BIAL for short listing the tenderers who had submitted their B.O.I, than the BIAL should have rigorously followed the same to consider the Indian experience of the petitioner in the trade, exclusion of the petitioner from submitting bid application on account of short-listing it is not only arbitrary, but also unreasonable and not supported by any reason or law.
(ix). Participation by giving B.O.I does not debar the petitioner to challenge the validity of tender process and the criteria in this Writ petition, in support of this contention strong reliance is placed upon the decision of the House of Lords reported in (1819)1 BLIGH 1 @ 21-22 in the case of Ker v. Wanchope which decision is referred to in Broom's Legal Maxima @ p 485 wherein it concerned a will wherein the House of Lords has held 'it is equally settled in the law of Scotland as of England that no person can accept or reject the same instrument', further placed reliance upon the decision of the Apex Court in the case of P.R. Deshpande v. Maruti reported in : 3SCR1079 wherein the Apex Court at para 7 referring to its earlier decision reported in : AIR1993SC352 in the case of R.N. Gosain v. Yashpal Dhir held that tenants conduct of giving an undertaking to vacate a premises to the High Court then filing a petition under Article 136 of the Constitution of India does not amount to 'approbation and reprobation'. The Apex Court in the said case has held that it cannot impede right of appeal of the appellant and particularly constitutional remedy available to him; and also correctly placed reliance upon constitutional bench decision of the Apex Court in the case of Bahu Ram v. Baij Nath Singh and Ors. reported in AIR 1961 SC 1327 has considered the doctrine in the context of argument a person who withdrew price of preemption that was deposited in the court below, after special leave to appeal under Article 136 had been granted, cannot proceed with the appeal and be heard to say that decree is erroneous. In the said case at para 7, the Apex Court has held that 'no one can be deprived of his legal rights including right of appeal'. Therefore it is rightly submitted by the learned Sr. counsel on behalf of the petitioner that the petitioner's right to challenge the action of BIAL in not providing criteria and guidelines in the EOI for short-listing the persons who have submitted their tenders in pursuant to the invitation, though it has participated in the process, as its right to challenge the action of BIAL is neither waived nor it is estopped as contended by respondents No. 3 and 4 to do so before this Court seeking judicial review in the matter.
(x). The aforesaid contentions are rebutted by the learned Senior Counsel Mr. R.N. Narasimha Murthy on behalf of respondents No. 3 and 4- placing strong reliance upon clause 3.2 of the invitation for EOI issued by BIAL to short-list maximum out of total EOIs received. The entire process of short listing of persons who have submitted their interest to participate in the bid was conducted by selection committee consisting of employees of third respondent, who had necessary knowledge to evaluate the EOI. Its process was transparent where all parties were evaluated of their strength, experience and the vision they had for the Airport being developed. The decision of the selection committee was based on unanimous decision of all members of the selection committee and BIAL adopted process of calling EOI for short listing certain number of bidders for issuing tender documents, the same was in pursuance of Clause-3.2 of the concession agreement which essentially sets out the fact that the third respondent could grant service provider rights to any person for the purpose of carrying out the activities and business described in Clause 3.2.1 of Article-3 on such terms and conditions as the BIAL may determine as appropriate. Therefore, it is contended toy him that having regard to the aforesaid clause in the concession agreement, it was a mandatory requirement on the part of the BIAL to call for any tenderers or follow two stage tender process as has been done in the instant case and it could have devised any other method for selection of its own choice. However, the intention of it is very clear to have best players in the market and get the best offers from them vis-a-vis its intention was to give fair chance to the Companies to bag with various packages. The process involving assigning of its exclusive contractual rights, it was open for BIAL to adopt such devise as it thought it fit to assign its right which in its opinion is best suited in which it has full confidence. Assigning of its private contractual rights is not amenable to judicial review.
(xi). With reference to the said rival legal contentions, we have to answer the above point in favour of the petitioner for the reason that as we have already recorded our reasons while answering points 1 to 3 in this judgment with regard to public duties, functions/statutory duties which are required to be carried out by the BIAL pursuant to the statutory provisions of Section 12 of A.A.I Act and the functions of the second respondent A. A has been entrusted to the third respondent-BIAL established by members of the consortium of BIAL running of the private international airport at Devanahally, to discharge the statutory functions of the second respondent-A.A.I and in view of the various constitutional bench decisions of the Apex Court which are extracted in the preceding paragraphs of this judgment in answer to the contentious points 1 to 3 to hold that discharge of functions by the BIAL pursuant to the shareholder agreement, lease deed and concession agreement referred to supra for establishment of private Airport statutorily permissible after amending to Section 12(3}(aa) of the A. A.I.A. Act. Nonetheless its functions are that of the Airport Authority and therefore it has been discharging public duties and functions in providing airport facility to the public at large by establishing BIAL in the vast extent of nearly 4000 and odd acres of land acquired by the Karnataka State Government in exercise of its eminent domain power in favour of K.I.A.D.B and the Government order produced by the BIAL would establish the fact that the said vast extent of land acquired by the State Government for the purpose of formation of an international Airport and the said land has been transferred in favour of K.S.I.I.D.C and in turn it is leased in favour of BIAL and the companion shareholders. The board of management of the BIAL, its administrative functions required to be performed by the Board of Directors, its decision and their activities are subject to regulations of the statutory provisions of the A.C and A.A.I.A Act and Rules framed therein. Therefore, we have already held that BIAL is an Authority and State which comes as defined under Article 12 of the Constitution of India and as interpreted by the Supreme Court in the catena of decisions which are extracted in the preceding paragraphs of this judgment while answering the aforesaid contentious point Therefore, award of contract by extending invitation to persons inviting their interest must provide certain requirement under clause 3.2 of the invitation permitting eligible persons who fulfill the requirement submit their EOI then the further process of BIAL must be transparent in the business, all the norms and guidelines are required to be laid down in the tender invitation to comply with constitution provision of Article 14 of Constitution of India, its action must be transparent it should contain reasons and it should exercise its discretionary power judiciously as held by the Apex court in catena of decision on the above contentious points submitted by the learned Counsel on behalf of the petitioner. Learned Senior Counsel Mr. Vinod Bobade has rightly placed reliance upon the American Law with reference to 14th amendment to U.S Constitution, which is equivalent to Article 14 of our Constitution. Section 1 of said 14th amendment reads thus:
1. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
This has not been done by BIAL in shortlisting the persons who have expressed their EOI excluding the petitioner from issuance of tender documents without intimation to it Therefore, the various decisions relied upon by the learned senior counsel Sri Vinod Bobde for the petitioner which are referred to and relevant paragraphs extracted in the preceding paragraphs are well founded and accepted by this Court to answer the above contentious point in favour of the petitioner. Since we have accepted the submissions of the learned Sr. counsel for the petitioner for the reasons stated supra, the submissions made by the learned senior counsel on behalf of R3 and R4 are wholly untenable in law and therefore, we cannot accept the same as perusal of the entire record of BIAL in relation to the Award of EOI and short-listing of the tenders by it is vitiated on account of arbitrary and unreasonable exercise of power. Further we must candidly state and record our finding that short-listing of persons who have submitted E.O.I including the petitioner is vitiated on account of arbitrariness, lack of transparency, colourable exercise of power particularly by BIAL in the absence of norms and guidelines required to be incorporated in the tender invitation. Even in the absence of such guidelines and norms, it is the bounden duty of the BIAL to assign reasons as to why the petitioner has been excluded from issuance of tenders and prefer only respondents 5 to 9 by accepting their E.O.I and short-listing others, particularly the experience petitioner has got in India. Therefore, we have to answer the aforesaid points in favour of the company holding that the action of respondent No. 3 not only suffers from arbitrariness but also suffers from legal mala fides and its short listing is an administrative action the same must be supported by valid and acceptable reasons. The reasons are not forthcoming from the records.
Therefore, we have to hold that the short listing of respondents 5 to 9 for issuing tenders and further without giving opportunity to the 9th respondent at the time of financial bid and awarding contract in favour of 5th respondent BIAL is once again a clear case of arbitrary exercise of power by it. Accordingly we answer the above point in the affirmative.
Point Nos. 7 to 9:
39. We have to answer the above points against the BIAL for the following reasons:
(i). As we have already answered point Nos. 5 & 6 assigning our reasons and held that the action of the BIAL in short listing respondent Nos. 5 to 9 and excluding the petitioner company from issuance of the tender despite the fact that it has got qualification, experience in the Indian market as per the eligibility criteria enumerated in the EOI, it has been running its business in various international and national airports in different parts of other countries and our country which are referred to in the earlier paragraphs of the judgment, it is one of the important aspect which should have been weighed in the mind of the selection committee of the third respondent keeping in view that it is discharging public functions and the premises is a public premises. Therefore in the concession agreement, it has been specifically stated that Chapter V(A) of the A.A.I.A Act is applicable to the premises in question to follow the procedure for eviction of unauthorized occupants of the Airport availing the provisions are on the lines of Public Premises (Eviction of Unauthorized Occupants) Act, 1971 is made applicable to the premises of the third airport which is being managed by BIAL is one of the strong and powerful indicator that airport premises is a public premises in terms of the definition of Section 2(c) of the PP(EOUC) Act and the BIAL is managing it, therefore it is a State which we have already answered while answering issue No. 1 to 3 by assigning valid and cogent reasons with reference to the provisions of the Act and law laid down by the Apex Court in catena of cases referred to supra. Therefore, the decision of the Supreme Court in Ashok Marketing Ltd. v. Punjab National Bank : 3SCR649 in which decision Dwarkadas Marfatia's decision referred to supra is considered and it has been held that every activity of public authority especially in the background of the as sumption on which the authority enjoys immunity from the rigours of Rent Act would not act as private landlords must be judged by that standard. In view of our reasons recorded above as we have already held it is discharging public function, the further allegations made against the 4th respondent that action of the respondent No. 3 suffers from malice for the reason that the 4th respondent who has issued invitation for expression of interest has been an employee of Zurich Airport Authority and ha was interested in the contract being awarded to respondent No. 5 which is Swiss Entity and further allegations made at para 34 in the writ petition that the 5th respondent was unit of Swiss Air (SAIR) which has also owned the Zurich Airport and Flughafen Zuerich AG, shareholder of BIAL were both owned by Swiss Air and it; went bankrupt in 2001. (both the units were sold). Although respondents' objection is that he was an employee of the Zurich Airport Authority and there was no such company whereas he admits that he was an employee of Zurich Airport Authority which holds 17% shares in BIAL and further contention of the 5th respondent that 5th respondent is owned and controlled by two Italian Companies and further it is the contention that the 4th respondent alone do not makes a decision but the BIAL decided the matter. This fact is falsified by the affidavit of Airport Authority of India, which clearly stated in para 9 that the matter was never placed before the Board of Directors of the Company.
(ii). Therefore, it is clear that Board of Directors including two promoters were kept out from the decision making process, short listing and final choice of awarding contract ignoring the experience of the petitioner to render good service to the Indian Consumer. The contention is that it is a mala fide exercise of power.
(iii). We have already held that the short listing is bad and opportunity was not given to the petitioner to submit its tender and participate in the competition, and reasons not assigned for excluding the petitioner and opportunity was not given to the 9th respondent to participate in the financial bid and not giving opportunity to the petitioner and 9th respondent to offer their financial bid for the purpose of establishing retail duty free shop in the Airport run by BIAL on such terms and conditions certainly it would have offered best price that could have increased the percentage of revenue to the second respondent-A.A.I out of the gross income that would have been earned by the BIAL. Issuing tender to the 5th respondent as already stated is not only arbitrary exercise of power by BIAL but also lacks transparency. Matter was not decided by the Board of Directors as stated by the second respondent in its affidavit at para 9 referred to supra and not given opportunity to the 9th respondent though it was in the short list, it has submitted its tender as we have to answer that as held in the Reliance Company's case referred to supra and also in other cases referred to supra, short listing and awarding of contract in favour of the 5th respondent is not only arbitrary, the same is against the public interest but also is at the instance of the 4th respondent
(iv). Therefore, we have to answer that in discharging its public duty, it has not followed the well settled principle of law in awarding contract in favour of 5th respondent which is clear case of legal malice and the same is writ large on the face of the record. Therefore, we have to answer issue Nos. 7 to 9 in favour of the petitioner.
(v). It has been brought to our notice that the appellant and another had also filed W.P. No. 617/2007 in the High Court of Judicature at Bombay challenging the process adopted by Mumbai International Airport Pvt. Ltd. and awarding contract in favour of awardee in that case. That Writ Petition was disposed of on 05/06/2008 setting aside the contract awarded in favour of awardee and direction was issued to the Mumbai International Airport to re-do the matter in the light of the observations made therein. The matter was taken-up to the Supreme Court questioning the correctness of that High Court, During the pendency of the matter in the Supreme Court, it is stated that some settlement has been arrived at between the petitioner and Mumbai International Airport. Consequently, the petitioner has secured interest in the Mumbai International Airport. However, subsequently the Supreme Court granted stay of the order of the Mumbai High Court and therefore the direction issued by it to redo the contract process was not complied.
(vi). In this case, if the petitioner enters into such a settlement with the BIAL, it should be precluded from considering its claim while re-doing the matter as directed by this Court.
(vii). For the aforementioned reasons, the Writ Petition. Rule made absolute. The short-listing of respondent Nos. 5 to 9 and awarding of contract in favour of 5th respondent is hereby quashed. The 3rd respondent is directed to re-do the matter afresh from the stage of submission of E.O.I by petitioner and others keeping in view the observations made in this order and the principles laid down by the decisions of Apex Court. The entire process shall be completed by BIAL within 45 days from the date of receipt of a copy of this order and further we direct respondent No. 1-Union of India and respondent No. 2-A.A.I to see that the above directions issued to BIAL should be complied with.