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Wednesday, Nov 08, 2006
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Apex court rejects Reliance plea

Legal Correspondent

"No mala fide in airports contracts"

New Delhi: The Supreme Court on Tuesday upheld the award of contracts to GMR Infrastructure and GVK Industries for modernisation of the Delhi and Mumbai airports.

The procedure adopted in lowering standards as well as giving choice in the opening of the financial bid was not vitiated by mala fide or illegality, said a Bench consisting of Justices Arijit Pasayat and S.H. Kapadia, who dismissed the Reliance appeal against a Delhi High Court judgment.

"No fair procedure"

Reliance Airports Developers' grievance was that there was no fair and transparent procedure in the award of contracts. The Government illegally and arbitrarily, reduced the benchmark of technical expertise from 80 to 50 per cent to favour the rivals, it said.

Rejecting all contentions, the Bench, in separate but concurring judgments, said: "The court will be slow to interfere in matters relating to administrative functions unless the decision is tainted by any vulnerability like illegality, irrationality and procedural impropriety. The appeal is sans merit and deserves to be dismissed."

Justice Pasayat said if the Request for Proposal (RFP) was considered in the final phase of evaluation, there would be only one bid for each of the airports. In that event, there would be no question of finding out the difference among or comparing the various bids. That left the Empowered Group of Ministers (EGOM) with no option but to either vary the RFP or award one of the airports to GMR and to cancel the process for the second or cancel the entire process. The latter course would not have been in the larger public interest. Therefore the EGOM exercised its option in favour of GMR.

Justice Pasayat said if no one was qualified, two alternatives were available: either to scrap or abandon the process, or re-conduct the tenders. "The practical compulsion which made the choice avoidable cannot be termed perverse or lacking in rationality."

Justice Kapadia, however, said the Expert Committee had no business to expand or narrow down the scope of any of the parameters as it was beyond its authority and contrary to the scoring system.

In the present case, the committee changed the factor, viz absorption of employees to the overall approach. This led to a change in priority. Similarly, in the RFP the factor earmarked "property development" was compared to "infrastructure development." The objectivity contemplated in the relevant clause was completely lost because the parameters were narrowed down.

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