Case: Reliance Airport Developers Pvt. Ltd.  Vs. Airports Authority of India and Ors.

authority to decide has been delegated to it unlawfully, or (4) it is without competence to deal with a matter by reason of the parties, the area in which the issue arose, the nature of the subject-matter, the value of that subject-matter, or the non- existence of any other pre-requisite of a valid adjudication. Excess of jurisdiction is not materially distinguishable from lack of jurisdiction and the expressions may be used interchangeably. Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue, or as jurisdictional. (p. 114). There is a presumption in construing statutes which confer jurisdiction or discretionary powers on a body, that if that body makes an error of law while purporting to act within that jurisdiction or in exercising those powers, its decision or action will exceed the jurisdiction conferred and will be quashed. The error must be one on which the decision or action depends. An error of law going to jurisdiction may be committed by a body which fails to follow the proper procedure required by law, which takes legally irrelevant considerations into account, or which fails to take relevant considerations into account, or which asks itself and answers the wrong question. (pp. 119-120) The presumption that error of law goes to jurisdiction may be rebutted on the construction of a particular statute, so that the relevant body will not exceed its jurisdiction by going wrong in law. Previously, the courts were more likely to find that errors of law were within jurisdiction; but with the modern approach errors of law will be held to fall within a bodys jurisdiction only in exceptional cases. The Court will generally assume that their expertise in determining the principles of law applicable in any case has not been excluded by Parliament.(p. 120). Errors of law include misinterpretation of a statute or any other legal document or a rule of common law; asking oneself and answering the wrong question, taking irrelevant considerations into account or failing to take relevant considerations into account when purporting to apply the law to the facts; admitting inadmissible evidence or rejecting admissible and relevant evidence; exercising a discretion on the basis of incorrect legal principles; giving reasons which disclose faulty legal reasoning or which are inadequate to fulfil an express duty to give reasons, and misdirecting oneself as to the burden of proof. (pp.121- 122) 60. H.W.R. Wade and C.F. Forsyth in their book - Administrative Law, 7th Edn., (1994) - discuss the subject regarding the jurisdiction of superior courts over subordinate courts and tribunals under the head Jurisdiction over Fact and Law in Chapter 9, pp. 284-320. The decisions before Anisminic and those in the post - Anisminic period have been discussed in detail. At pp. 319-320, the authors give the Summary of Rules thus: Jurisdiction over fact and law: Summary At the end of a chapter which is top- heavy with obsolescent material, it may be useful to summarise the position as shortly as possible. The overall picture is of an expanding system struggling to free itself from the trammels of classical doctrines laid down in the past. It is not safe to say that the classical doctrines are wholly obsolete and that the broad and simple principles of review, which clearly now commend themselves to the judiciary, will entirely supplant them. A summary can therefore only state the long-established rules together with and broader rules which have now superseded them, much for the benefit of the law. Together they are as follows: Errors of fact Old rule : The court would quash only if the erroneous jurisdictional. New rule : The court will quash if an erroneous and decisive fact was - (a) jurisdictional (b) found on the basis of no evidence; or (c) wrong, misunderstood or ignored. Errors of law Old rule: The court would quash only if the error was- (a) jurisdictional; or (b) on the face of the record. New rule: The court will quash for any decisive error because all errors of law are now jurisdictional. (emphasis supplied) The above position was highlighted by this Court in Mafatlal Industries Ltd. and Ors. v. Union of India and Ors. 1997(89)ELT247(SC) . Stand of respondents about appellants objectionable conduct needs consideration. Para 1.3 of RFP reads as follows: 1.3. Confidentiality- PQB receiving this RFP must have completed and returned the required, duly executed Confidentiality Deed. PQB are reminded that information provided in this RFP and the accompanying documentation package is covered by the terms of the Confidentiality Deed and the Disclaimer set out herein. PQB are also reminded that they are not to make any public statements about the Transaction process or their participation in it. Para 6.13 speaks of the Contract Points and in no uncertain terms provides as follows: ...Any request for information or clarification of information must be directed through the questions and answer process set out in Section 3. 3 hereof. PQB and their advisers must not make contact with any employees of AAI or other GOI agencies or airport customers except as arranged through ABN AMRO as part of the Transaction process. 61. Learned Counsel for the appellant submitted that the expression contract obviously means an illegal attempt for bribery etc. and cannot stand on the way of submission of documents for consideration. The plea is clearly untenable. Though, there is no penal clause for such breach it goes against a very concept of fairness in the process and evaluation of bids. Whatever documents are to be submitted are clearly stipulated. Any attempt to take advantage of any newspaper report, clearly falls foul of the mandate that there shall not be any contract with any person involved in the process of selection. It is unusual that the RFP did not make such a contract is a factor for disqualification. This is to be kept in view in future tenders.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is to be noted that the ultimate authority to take the decision in the matter was EGOM. It was within the powers of EGOM to decide as to what inputs it can take note of and the source of these inputs. Therefore, the necessity for taking views of various committees constituted appears to be a step-in the right direction. This was a step which appears to have been taken for making the whole decision making process transparent. There was no question of having the view of one Committee in preference to another. EC was a Committee constituted as a part of the decision making process like other Committees vis. GRC, COS and IMG. In the multi tier system in the decision making process the authority empowered to take a decision can accept the view expressed by one committee in preference to another for plausible reasons. It is not bound to accept the view of any committee. These committees, it needs no emphasis, are constituted to assist the decision making authority in arriving at the proper decision. It is a matter of discretion of the authority to modify the norms. It is not a case of absolute discretion.31. In the instant case, though the High Court seems to have noted that the EGOM has absolute discretion, it has really not held that the discretion was unfettered. In fact it has on facts found that the discretion was properly exercised to make some variations in the terms of RFP. Coming to the constitution of GETE, no mala fides are alleged against the members. It is only the method of evaluation done by GETE which is challenged apart from contending that GETE should not have been constituted. About the constitution of GETE, as noted above, the stand is clearly untenable. So far as evaluation of the marks as done by EC is concerned, GETE has given reasons for altering the marks allotted which ultimately led to the non qualification of the appellant. There were four identified areas where it was noted that the ECs approach in the evaluation exercise was inconsistent with the terms of the RFP.32. EGOM in its order dated 27.12.2005 constituting GETE, stipulated as follows:The Group would particularly look into and present its recommendations before the COS on:(a) Overall validation of the evaluation process, including calibration of the qualification and sensitivity analysis. The sensitivity analysis will cover the impact of inter-se weight ages of sub-criteria as well as scoring.b) The issues raised by the Members of the Inter Ministerial Group about the evaluation process.c) An overall assessment of transparency and fairness of the evaluation process, including steps required, if any, to achieve a transparent and fair outcome.d) Suggestions for improving the selection process for Joint Venture Partner in the future.Essentially there were four instances of rewriting of priorities and weight ages as contained in the RFP and valuation was then made by the EC on the basis of these re- written priorities and weight ages. These were as follows;(i) Change in priority in the matter of absorption of staff,(ii) Changing the weightage ascribed to property development by merging the marks for infrastructure development and property development,(iii) Changing of the weightage ascribed to non- aeronautical development by failing to consider aeronautical revenue of 40% as a threshold less than which would not get any marks, and(iv) Changing the weightage of experience in respect of a non-OECD airport by treatment of a OECD airport on par with non-OECD airports.33. As regards (i), the EC divided the marks between 3.1.1 and 3.1.2 unequally, and also awarded marks for the extent of absorption proposed from a baseline of Zero instead of a baseline of 40% which was the mandatory absorption criteria. The RFP accorded a priority to a higher absorption of existing staff by the new company. The EC proceeded to modify this priority. It opined that the overall approach was more important than absorption, and gave marks accordingly. So far as (ii) is concerned, the EC again altered the weight ages accorded in the RFP, which considered experience in property development as valuable as infrastructure development and thereby put each of them as a sub-head. According to EC, the former was not as important as the latter and thus gave 1.6 marks for the former (1.2.2) and 4.7 marks for the latter (1.2.3.).34. As consequence of (iii) above, EC gave marks to the appellant who had projected less than 40% non-aeronautical revenue- whereas the RFP clearly gave a weightage to aeronautical revenue beyond 40%. As rightly contended by the respondents, if a project has a high revenue share given to the government, then aeronautical revenue being regulated, the incomes would flow from non-aeronautical revenues. However generation of such non-aeronautical revenues would involve a larger capital investment in property development. EC (a) gave less marks to GVK because it had a high capital outlay projected (as compared to the appellant), (b) did not regard experience in property development as having the same priority as infrastructure development, and (c) gave marks to the appellant for its non-aeronautical revenue, although its projected revenue was less than 40%.As a consequence of (iv) above, EC gave marks to the appellant for Mexico Airport which is admittedly an OECD Airport - on the spacious reasoning that it is virtually like a non-OECD Airport since Mexico is like a developing country.36. As rightly pointed out by learned Counsel for the respondents that if EC felt that the priorities and weight ages as indicated in the RFP were inappropriate, it should have requested AAI/GOI to amend the RFP before the bids were received. Interestingly, the modifications were resorted to after the bids were opened. That is the principal reason for which EGOM appears to have sought views of the COS and the COS was equally entitled to invite a group of experts to examine the matter.It is to be noted that the appellant had no property development experience. It had projected less than 40% non aeronautical revenue and had a partner from an OECD country. The GETEs report shows that even taking these four modifications led to some of the bidders getting more marks. GVK and others did not cross the bench mark of 80% and even after exclusion of these marks, GMR had more than 80% marks. It was only the appellant who crossed the threshold of 80% on account of these four variations and fell below 80% when the effect of these four variations was excluded. Departure from the RFP made by EC after opening the bids can reasonably raise a doubt that EC knew that the modalities would benefit the appellant. In any event, it is not necessary to go into the question whether EC was partial to the appellant because that is nobodys case, though it has been submitted that after opening the bids, EC made the variations and beneficiary was the appellant. GETEs report shows that it enunciated the principle to carry out an exercise that would be more in the nature of validation dealing with the four variations made by EC. GETE also noted that certain issues can be more satisfactorily addressed by process of validation that would involve a re-allocation of marks, on the assessment made by the EC of the bids albeit in a manner that would be consistent with the RFP. It essentially was not an exercise of re-evaluation but of a re-allocation consistent with RFP.38. As noted in GETEs first report, its attempt was to assess whether EC had assigned weight ages and marks in a logical and transparent manner to the sub-factors and whether there had been any biased in favour of or against any of the bidders while assigning marks, with reference to the RFP. While making such examination, the issues raised by the members of IMG were kept in view, but as stated in the report, GETE was not solely guided by their views. Though the first report itself indicated the reasons as to why the evaluation process containing the moderation exercise was not undertaken in respect of bidders, as desired by EGOM GETE did so and submitted its second report. Undisputedly, GMR crossed the bench mark of 80% in respect of both the bids while others did not.It is to be noted that the appellant had come into the zone of consideration only because of lowering of the bench mark as otherwise after the modifications were made by GETE, it had not crossed the bench mark. The appellants stand that if none was found eligible on the basis of 80% bench mark, there should have been a fresh bid, has been answered by the respondents. It has been pointed out that the number of bidders was small. The bidders after opening of the bid knew the merits and demerits of all the bids. There was an urgency for early completion of the airports keeping in view the 2010 Commonwealth Games. The scope for judicial review of administrative actions has been considered by this Court in various cases.The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion, it must not do what it has been forbidden to do, nor must it do what it has not been authorized to do. It must act in good faith, must have regard to all relevant considerations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. These several principles can conveniently be grouped in two main categories: (i) failure to exercise a discretion, and (ii) excess or abuse of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires.41. The present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those class of cases which relate to deployment of troupes, entering into international treaties, etc. The distinctive features of some of these recent cases signify the willingness of the Courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is illegality the second irrationality, and the third procedural impropriety. These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service 1984 (3) All.ER.935, (commonly known as CCSU Case). If the power has been exercised on a non-consideration or non- application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See Commissioner of Income-tax v. Mahindra and Mahindra Ltd. [1983]144ITR225(SC) ).Therefore, to arrive at a decision on reasonableness the Court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four corners of the law, and not one which no sensible person could have reasonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the Court to substitute its view.Therefore, to arrive at a decision on reasonableness the Court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four corners of the law, and not one which no sensible person could have reasonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the Court to substitute its view.In other words, to characterize a decision of the administrator as irrational the Court has to hold, on material, that it is a decision so outrageous as to be in total defiance of logic or moral standards. Adoption of proportionality into administrative law was left for the future. In essence, the test is to see whether there is any infirmity in the decision making process and not in the decision itself. (See Indian Railway Construction Co. Ltd. v. Ajay Kumar (2003)IILLJ150SC )It is also to be noted that there was no stand before the High Court that the appellant wanted to match the bid. Even if it is accepted for the sake of argument, that was so urged it would have no consequence.49. A very attractive argument was advanced that as GMR has been allowed to match the financial dealing of appellant for Mumbai airport, the same modality should have been adopted for the other bidders. Though the argument is attractive, at first flush, it cannot be accepted for the simple reason that when bench mark is crossed, financial consideration is the determinative factor because of revenue sharing. It is to be noted that though emphasis was led that the constitution of Committees of non technical persons could not have thrown much light on the ultimate decision, yet it is to be noted that all the three Committees were part of the government machinery. The issue was to assess correctness of the ECs decision.50. Expression of different views and discussions in different meetings really lead to a transparent process and transparency in the decision making process. In the realms of contract, various choices were available. Comparison of the respective merits, offers of choice and whether that choice has been properly exercised are the deciding factors in the judicial review.51. As has been rightly submitted by learned Counsel for the Union of India, the RFP has to be considered in the context of other documents like substantial document OMDA, execution of the agreements culminating to the final master plan. Initial development plan is nothing but a projection which has to be broadly in line with OMDA. Undisputedly, OMDA is prepared by the GOI and AAI. One of the documents in the transaction documents is OMDA. It is to be noted that if no one was qualified, two alternatives were available either to scrap or abandon the process and second to re-conduct the tenders. As noted above, the practical compulsion which made the choice avoidable cannot be termed as perverse or lacking rationality. The safety valve is the OMDA. The ranking becomes irrelevant after the bidders have come to the arena and then finally the financial bid which determines the ultimate bid. It is to be noted that GETE wanted to know as to whether the variation for allotment of marks in respect of the development side area was done before opening the bids or after opening it. EC had given a very evasive answer stating that same was done before allotting marks. GETEs job was not the evaluation but verifying the evaluation process. GETEs examination was restricted to see whether alignment with RFP was correctly done. GETE was not expected to give fresh opinion and no evaluation was necessary. Weightage introduces subjectivity. GETE has gone by objective standards. The criterion adopted by GETE appears to be more rational. It proceeded with the idea that more objectivity was necessary. So it has called the process to be validation process.52. It is pointed out by learned Counsel for the respondents that parameters for judicial review are different in the matters of contract for normal case of tenders. In case of commercial contracts the normal contractual matters are excluded. It is pointed out that there is no overwhelming public interest involving such matters. GETE had only touched the fallacious approach of EC to make the process transparent. The view taken is a possible view supported by reasons and there should not be any interference. In the ultimate, the question would be whether in the process of selection the Government had adopted transparent and fair process. While balancing several claims a rational approach is necessary and that is to be formed in line with the scope of judicial interference. It is to be noted that Clause 5.5. deals with a situation of the same bidder being the highest bidder for both the airports. It proceeds on the basis that there would be another eligible bidder for the other airport and on that basis the procedure to be adopted has been prescribed. In such a situation the bidder who would be successful i.e. the highest bidder would be asked to take the airport when the difference between his bid and the next higher bid is greater. Such a procedure could be followed where there is second valid bid at the final phase. This procedure does not deal with a situation where there is only one bidder with valid bids for both the airports. In such a situation he becomes the highest bidder for both the airports and for that reason alone, the question of evaluation of financial bid arises.53. If the RFP was to consider at the final phase of evaluation there would be only one bid for each of the airports. In that event, there would be no question of finding out difference between the various bids or comparing bids. That left no option with the EGOM but to either vary RFP or to award one of the airports to GMR and to cancel the process for the second or cancel the entire process. The latter course would not have been in larger public interest. Therefore, the EGOM exercised its option. In final analysis, what the EGOM has done is to accept the report of EC subject to validation done by GETE.It is to be noted that in respect of both the appellant and the GETE wherever subjectivity criteria is involved, GETE has not dealt with the same.56. The mandate of EGOM was to validate and not to invalidate. It was a process for overall validation and calibration to apply the correct standard. It is the texture of the tendered document which is of paramount importance. EC has changed the texture whereas GETE did not do it. It needs no emphasis that uneven denomination breaks the integrity and textures. Perverseness in connection with a finding of fact is an aspect of mistake of law. Linked with the question whether GETEs constitution was legal, other question is whether the jurisdiction conferred on GETE has been properly exercised. Examination of the second question alone would be necessary since we have held that constitution of GETE does not suffer from any infirmity.Stand of respondents about appellants objectionable conduct needs consideration.Para 1.3 of RFP reads as follows:1.3. Confidentiality- PQB receiving this RFP must have completed and returned the required, duly executed Confidentiality Deed.PQB are reminded that information provided in this RFP and the accompanying documentation package is covered by the terms of the Confidentiality Deed and the Disclaimer set out herein. PQB are also reminded that they are not to make any public statements about the Transaction process or their participation in it.Para 6.13 speaks of the Contract Points and in no uncertain terms provides as follows:...Any request for information or clarification of information must be directed through the questions and answer process set out in Section 3. 3 hereof.PQB and their advisers must not make contact with any employees of AAI or other GOI agencies or airport customers except as arranged through ABN AMRO as part of the Transaction process.61. Learned Counsel for the appellant submitted that the expression contract obviously means an illegal attempt for bribery etc. and cannot stand on the way of submission of documents for consideration. The plea is clearly untenable. Though, there is no penal clause for such breach it goes against a very concept of fairness in the process and evaluation of bids. Whatever documents are to be submitted are clearly stipulated. Any attempt to take advantage of any newspaper report, clearly falls foul of the mandate that there shall not be any contract with any person involved in the process of selection. It is unusual that the RFP did not make such a contract is a factor for disqualification. This is to be kept in view in future tenders.