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CASE NO.: Appeal (civil)  2515 of 2006

PETITIONER: Reliance Airport Developers Pvt. Ltd.

RESPONDENT: Airports Authority of India and Ors.

DATE OF JUDGMENT: 07/11/2006

BENCH: ARIJIT PASAYAT

JUDGMENT: JUDGEMENT

ARIJIT PASAYAT, J.

    Challenge  in  this  appeal is to  the  judgment  of  a

Division Bench of the Delhi High Court.  Decision taken by a

group  of Ministers in a matter of joint venture partnership

as  a part of the privatization policy of the Government  of

India was assailed before the High Court.

     According  to  the appellant, the project  has  to  be

grounded because of several major defects which would render

the  projects\022 take off disastrous. The respondents  on  the

other hand contend that minor technical flaws, if any,  have

been  rectified before the ultimate decision was  taken  and

the  project has been rightly held to be in a fit  condition

to take off.

     The  key  players  in this dispute  are  M/s  Reliance

Airports  Developers  Pvt. Ltd. (in short  \021RAL\022),  Airports

Authority of India (in short \021AAI\022), Government of India (in

short \021GOI\022), GMR Infrastructures Ltd. (in short \021GMR\022), GVK

Industries Ltd. (in short \021GVK\022).

     Background  facts  sans  unnecessary  details  are  as

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follows:

     As  a part of the GOI\022s avowed policy of privatization

of  strategic national assets, the first step appears to  be

privatization  of two airports i.e. Mumbai and  Delhi  on  a

joint venture basis. In March, 2003 AAI initiated process to

consider modernization of Delhi and Mumbai Airports  on  the

basis  of an earlier decision taken on January 12,  2000  by

the Union Cabinet relating to re-structuring of airports  of

AAI  through long term leasing route. On 11.9.2003  the  GOI

approved  restructuring  of airports  of  Mumbai  and  Delhi

through  joint  venture  (shortly  called  \021JV\022)  route  and

constituted  Empowered Group of Ministers (in short  \021EGOM\022)

to   decide   the   detailed  modalities  including   design

parameters, bid evaluation criteria etc. based on  which  JV

partners were to be selected. It was required to submit  the

final   proposal   for  Government\022s  approval.   An   Inter

Ministerial Group (in short \021IMG\022) was set up to assist EGOM

for  re-structuring of two airports. The  same  was  set  up

under the Chairmanship of Additional Secretary-cum-Financial

Adviser  of  Ministry  of Civil Aviation.  Subsequently,  on

15.6.2004, EGOM was re-constituted under the Chairmanship of

Minister  of  Defence. On 12.10.2004 IMG was  re-constituted

under  the  Chairmanship  of Secretary,  Ministry  of  Civil

Aviation. On the basis of recommendations made by IMG,  EGOM

approved  appointment  of  Global Technical  Adviser,  Legal

Consultant and Financial Consultant (called GTA, LC & FC  in

short  respectively). They were Airport Planning  Ply  Ltd.,

Amarchand, Mangaldas & Suresh A. Shroff & Co. and  ABN  AMRO

Asia  Corporate Finance (I) Pvt. Ltd (in short Airplan, AMSC

and  ABN  AMRO  respectively). The Consultants prepared  the

\023Invitation To Register An Expression of Interest\024  (shortly

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called   \021ITREOI\022)  and  the  same  was  endorsed  by   IMG.

Subsequently,  EGOM approved the same. On 17.2.2004,  ITREOI

was  issued  for the two airports. Request for proposal  was

routed by AAI and the bidders were invited to bid on certain

basis and pattern. The tendering process involved two tiers;

i.e.  an Expression Cum Request for Qualification (in  short

\021ECRQ\022) and a Request for Proposal (in short \021RFP\022). At  the

RFP  stage,  evaluation was carried out in four stages.  The

first  two  stages involved verification in  the  nature  of

mandatory  norms.  The third stage was technical  evaluation

stage and the final stage was financial evaluation stage. On

15.2.2005, EGOM finalized and approved key principles of RFP

and  draft  transaction documents. The  RFP  documents  were

issued on 1.4.2005.

    Certain changes to the draft transaction documents were

approved by EGOM. Before such approval, RFP documents of the

two  airports  were forwarded to the bidders.  On  30.8.2005

final  transaction documents were forwarded to the  bidders.

The deadline for submissions of bids was fixed as 14.9.2005.

There  were  in fact six bidders for Delhi and five  bidders

for Mumbai. On 19.9.2005, a meeting of IMG was held relating

to  methodology  for  evaluation of  offers  and  evaluation

criteria  in RFP documents. IMG decided that bid  evaluation

on  all parameters shall be carried out by a composite  team

of  GTA,  LC  and FC. IMG also decided to set  up  a  review

committee  to review the evaluation carried out by  GTA,  LC

and  FC.  The  same  was also described  as  an  \023Evaluation

Committee\024 (in short \021EC\022).

     The  technical  bids  were  opened  on  22.9.2005.  On

10.10.2005 Government Review Committee (in short \021GRC\022)  was

constituted to undertake an independent review of evaluation

report  of  bids of two airports and re-structuring  process

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prepared   by   the   Evaluation   Committee/Advisers.   The

Consultants submitted their evaluation report. GRC held  its

meeting   on   23.11.2005  and  24.11.2005  to  review   the

Consultants\022  Evaluation Reports.  GRC  endorsed  the  views

expressed  in  the Consultants\022 Evaluation Reports.  Certain

queries   were  raised  by  members  of  the  GRC  and   the

Consultants clarified the position so far as the queries are

concerned.  In  the Evaluation Report a list  of  evaluation

criteria where a different approach has been adopted by  the

Consultants  was indicated. On 1.12.2005, GRC submitted  its

report  to  IMG.  In  the meeting of IMG held  on  2.12.2005

reports of Consultants and GRC were placed. Consultants made

a  representation to the IMG. The majority members felt that

the  terms of the RFP had been adhered to and there had been

sufficient  transparency in the process. It is to  be  noted

that  one  of the members who was the member of the Planning

Commission  had recorded his personal opinion.  Majority  of

the  members  of the Committee felt that if the  entire  bid

process  was  transparent and GRC  was  satisfied  with  the

process it would not be necessary to go by the advise of the

member  of  the  Planning Commission and the final  decision

should be left to the EGOM. The matter was placed before the

EGOM  on  5.12.2005.  EGOM  directed  IMG  to  undertake  an

independent review of the Consultants\022 evaluation with GRC\022s

assistance and give a clear recommendation to EGOM.  It  was

noted that the bid documents could be made available to  the

IMG  and they could seek clarification from the Consultants.

It  was  felt  that  there was no need  for  change  in  the

evaluation  criteria as stipulated in the RFP documents.  It

was  stipulated  that  IMG  would not  undertake  any  fresh

evaluation  or  allocate marks for any of the  criteria  and

finally  the mandate of IMG will be restricted to  ascertain

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as  to  whether  it  is in agreement or otherwise  with  the

assessment/findings and allocation of marks  across  various

criteria  in  respect of various bids. IMG was  required  to

complete  the exercise in two weeks. On 6.12.2005 a  meeting

of the IMG was held. Bid documents were shown to the members

of  the  IMG. Another meeting was held on 9.12.2005 and  the

Consultants  were directed to re-work the  marks  matrix  by

strict adherence to RFP norms. On four days i.e. 12th, 13th,

14th and 16th December, 2005 meeting of IMG was held. In the

meeting  queries were raised by IMG members  as  to  whether

evaluation  was consistent with the RFP evaluation  criteria

and  the answers given by the Consultants. On 20.12.2005 RAL

wrote  to the Chairman, EGOM criticizing the SKYTRAX  Report

and  denying  that  Consultants acted in an  improper/biased

manner  or  that the technical evaluation conducted  by  the

Consultants was flawed. RAL wrote another letter on the same

day to the EGOM pointing out its alliance with international

players.

    On  21.12.2005 EGOM met to consider the  views  of  the

IMG.  It  decided that a Committee of Secretaries (in  short

\021COS\022)  should  be set up to advise the EGOM on  all  issues

relating to the restructuring and modernization of  the  two

airports. The COS was required to consider and recommend the

selection of appropriate JV bidders for executing the  works

related  thereto.  The  COS  was  set  up  by  order   dated

21.12.2005 to assist the EGOM. It met and decided to set  up

two  members  Committee consisting of Mr. Sreedharan  &  Mr.

Sevadasan  (hereinafter described as \021Sreedharan  Committee\022

or  Group of Eminent Technical Experts (in short \021GETE\022)  to

recommend  to  the  COS  on the overall  validation  of  the

evaluation  process including calibration of the  qualifying

cut  off  and  sensitivity analysis.  GETE  was  accordingly

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appointed  to review the Consultants\022 Evaluation Report  (in

short  \021CER\022) on 27.12.2005.  RAL wrote to the  Ministry  of

Civil  Aviation (in short \021MCA\022) asking that copies  of  its

letters dated 20.12.2005 be forwarded to the GETE.

    ABN  AMRO wrote a letter regarding clarification sought

by  MCA  on  determination of bids attached to the  criteria

used  in  the technical prequalification of bidders for  the

two  airports.  GETE  submitted its report  on  7.1.2006.  A

meeting  of  the  COS was held on 9.1.2006. On  12.1.2006  a

meeting of EGOM was held where GETE\022s report was considered.

EGOM  felt  that the GETE had apparently done the evaluation

of  all the bidders as is evident from the conclusion  drawn

about status of the other bidders in para 4.8 of its report.

No  details  of revaluation were available about  the  other

bidders,  as  have  been provided in respect  of  RAL.  EGOM

therefore  decided  that  in  order  to  reach  a   definite

conclusion,  GETE  was  to  be requested  to  do  a  similar

revaluation   exercise   in  respect   of   other   bidders.

Supplementary report of GETE was submitted on 17.1.2006.  On

23.1.2006  RAL  Airport Operator wrote to the GOI  asserting

that  it  had  the  requisite  qualification.  On  24.1.2006

meeting  of EGOM was held and several decisions were  taken.

On 28.1.2006 RAL wrote to GOI asking it to adhere to the RFP

norms. On 30.1.2006 AAI wrote to the bidders informing  them

that the final bids were to be opened on January 31, 2006.

    On  31.1.2006  Executive Director of AAI  informed  RAL

that  GMR  would be given a choice of the two  airports  and

whichever airport it chooses, it would be required to  match

the  higher financial bid. On that day itself, RAL wrote  to

the AAI  alleging change of procedure and protesting against

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the same. Later on, the financial bids were opened that day.

A   report  was  submitted  by  the  Committee  opening  the

financial bids. RAL again wrote to the members of  the  EGOM

alleging illegalities in consideration of the bids.  On  the

next  day  again  RAL  wrote to  the  members  of  the  EGOM

regarding the events that had transpired during the  opening

of bids. AAI wrote to RAL setting out the procedure followed

while opening and evaluating the financial bids.

    Writ  Petition was filed by RAL before the  Delhi  High

Court on 2.2.2006. On 4.2.2006 GOI informed GMR and GVK that

they   have   been  selected  as  successful   bidders   for

undertaking the restructuring and modernization of the Delhi

and  Mumbai  airports  respectively  and  required  them  to

furnish  enhanced  bid bonds guarantees for  Rs.500  crores.

Both  GMR  and  GVK furnished their bid bonds guarantees  of

Rs.500 crores each on 6.2.2006 and 8.2.2006.

    On  1.3.2006  Special Purpose Vehicle (in short  \021SPV\022)

was  formed  for Delhi while on the next day SPV was  formed

for  the  Mumbai airport. On 4.4.2006 Operations  Management

and Development Agreement (in short OMDA\022) was signed by the

concerned parties. At this stage, it would be appropriate to

take  note  of what has been described as OMDA. Shareholders

agreement  with  GMR  and GVK was signed.  Consequently  26%

shares  in SPV were allotted to AAI and 74% shares  allotted

to  GMR. Similarly, 26% shares in SPV were allotted  to  AAI

and 74% shares allotted to GVK.

    By  the impugned order, RAL\022s writ petition before  the

Delhi High Court was dismissed by order dated 21.4.2006.

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     The  primary stand of the appellant is that the  EGOM/

GOI  should have accepted the recommendations of the EC  and

should  not have asked the GETE to make further examination.

It  is  submitted  that  GETE did not  examine  the  queries

relating  to  GMR as raised by the IMG and the reduction  of

technical  qualification from 80% to 50% was  impermissible.

It is also submitted that the appointment of GETE itself was

illegal and unauthorized.  The High Court proceeded  on  the

basis  as  if EGOM had absolute discretion in the matter  of

choosing  the  modalities. It is  also  submitted  that  the

uniform  pattern of assessment has not been done  and  while

reducing  the  marks so far as the appellant  is  concerned,

similar procedure has not been adopted so far as GMR and GVK

are  concerned. In the initial assessment, only the GMR  and

the  appellant had crossed the bench mark. If in respect  of

one  airport  GMR  was  given the  option  of  matching  the

financial  bid  of the appellant, in respect  of  the  other

airport  similar  option  should  have  been  given  to  the

appellant who was at the relevant point of time and even now

willing  to  match the financial bid of GVK.  There  was  no

justification  for reduction of standard from  80%  to  50%,

particularly  when  at all stages EGOM had  emphasized  that

there shall not be any compromise with quality. The argument

that  any  bidder who had crossed the mandatory  requirement

stage  would  be  competent  to  execute  the  contract   is

completely erroneous since in that case there was no need to

fix  the  high bench mark of 80%. Appellant had scored  over

80% on the development side and fell short of merely 6% less

than  80%  on the management side. The award of contract  to

the third ranked bidder i.e. GVK who had scored only 59%  on

the  development  side  and whose  bid  had  been  adversely

commented upon by all committees is against public interest.

The bench mark of 80% had been approved by the EGOM. The  EC

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expressly  recommended against lowering the bench  mark  and

the  EGOM  in its meeting on 5.12.2005 had also  wanted  the

bench  mark  to remain at 80%. GETE had also not recommended

lowering of the bench mark.

    The constitution of GETE was without jurisdiction as it

was outside the RFP.  Allegations made by the respondents in

the arguments that EC was biased are not factually correct.

As  noted  above, GETE was not competent to  deal  with  the

issues  relating to airports and, therefore, it  was  not  a

competent  body  to express any view. GETE\022s  evaluation  of

appellant\022s bid was wrong and it should not have  interfered

with  EC\022s  evaluation.  Different weightages were justified

in  case for criteria 1.2.2 and 1.2.3 and also in respect of

criteria  3.1.1  and  3.1.2.  GETE\022s  view  as  regards  non

aeronautical revenue being less than 40% is not correct. Its

view about the lack of experience of operating in a non-OECD

country is also erroneous. The marking system for absorption

of  AAI  employees as done in the case of the appellant  has

been wrongly interfered with.

    Appellant has contended that EC has given marks on  the

basis  of  RFP  parameters. According to it, the  parameters

were  fixed  by the GOI or the EC. The question  is  not  of

allotting  marks, the real issue is whether right parameters

have  been  applied. It has been emphasized that  the  other

Committees  consisted of mainly bureaucrats or persons  with

inadequate  technical knowledge, only the EC was  an  expert

body and, therefore, its view had to be given primacy.

     GMR  had  qualified  in both the bids.  Appellant  has

contended  that the option of choosing one of  the  airports

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should  not have been given to GMR but it should  have  been

allotted the Mumbai airport because of its superior  quality

of  bid in respect of the said airport. By giving option  to

choose  one  of the airports, the fate of the appellant  was

sealed  because in the other, it had fallen below the  bench

mark.  Though  in one case, appellant\022s bid  was  above  the

bench  mark and its bid was the best amongst those who  were

below the bench mark in respect of the other airport, it has

not been able to get any of the airports.

     Despite the specific mandate GETE had not examined the

queries qua the other bidders. Objective criteria assessment

which  was the foundation for GETE\022s decision has no  basis.

In  fact  GETE itself had indicated that the assessment  was

subjective  in totality. By making an artificial distinction

between  the  subjective  and objective  queries,  the  real

essence has been lost and unacceptable yardsticks have  been

applied.   Queries made by members of the Review  Committee,

comments  of  the EC, comments of the Planning  Commission\022s

representatives and the various queries raised by  IMG  have

been  either lightly brushed aside or not considered by  the

GETE.  The  decision for lowering of technical standard  was

arbitrary. EGOM should have examined the conflicting reports

given by the experts. Since no reason has been given by EGOM

to  adopt  the  report of the GETE by giving its  preference

over the report of EC, same cannot be maintained. Report  of

GETE  was not independently examined. By reducing the  bench

mark,  the  zone of consideration was enlarged  and  it  was

against  public  interest. Since different  yardsticks  have

been  adopted and a partisan approach has been adopted,  the

decision  is  clearly  unsustainable  and  is  amenable   to

judicial  review. Selective examination by GETE is not  bona

fide  though  no personal allegation of mala  fide  is  made

against  the members of GETE. Adoption of technical criteria

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for  one airport and financial criteria for the other is not

in accordance with law.

    In response, learned counsel for the GMR, GVK, Union of

India  and  the  AAI have submitted that  the  appellant  is

trying to enlarge the scope of judicial review. It is not  a

case  of  non existence of power. It essentially relates  to

exercise  of power. The appellant is trying to contend  that

the report of EC was sacrosanct and GETE\022s report was not to

be  accepted.  GETE  has  formed its  view  as  to  how  the

allotment  of marks made by EC was clearly not in line  with

the  prescription made in the RFP.  Marks have been allotted

by  EC  on irrational basis and even marks had been  awarded

when  no  marks  were  to  be awarded.  Even  the  EC  while

commenting  upon  the weaknesses of the airport  development

plan  of  GMR itself had said that the weaknesses  would  be

sorted out at the stage when the master plan is drawn up. It

is  pointed  out  that EC on whose evaluation appellant  has

led great stress found only one flaw with the plan given  by

GVK  i.e. lack of re-use of existing facilities and the high

cost  limits to assess it as medium. This is really  a  non-

factor,  according to learned counsel for GVK, because  plan

envisages  fresh creation of assets at Mumbai airport  whose

existing buildings are out-dated. It is characterized  as  a

lack of reuse as well as involving high costs. It is pointed

out  that  GVK\022s development plan took note of  much  larger

amount  of fresh development of assets considering that  the

existing  buildings  are out-dated. It has  also  considered

that  large  sum  of money for rehabilitation  of  the  slum

dwellers is required as they would have to be re-housed if a

realistic  plan for expansion of facilities and runways  was

to be drawn up. The development in each of the phases of the

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20  years  of  projected development  was  also  a  relevant

factor.  There was departure by EC from the norms in various

cases without good reasons. Where there is such departure it

shows  arbitrariness.  This  is  a  case  which  relates  to

judicial  review  of  the exercise  of  power  and  not  the

existence of power.

     It  is  pointed  out  that the basic  fallacy  in  the

argument of the appellant is its stress on EC being the only

advisor to assist the EGOM in arriving at a decision.  It is

submitted that as rightly observed by the High Court, it was

a   part   of  multi-  tier  decision  making  process   and

appointment of GETE is a part of the process. It is  pointed

out   that   though   the  appellant  has   challenged   the

constitution of GETE, it, in uncertain terms, asked the GETE

to  assess  the materials placed before it by the appellant.

The EGOM has given reasons for the appointment of GETE.

     The  EC  was not designated in the RFP as an  external

expert agency on whose evaluation the Government was obliged

to   act.  In  fact  at  the  first  stage  itself  GRC  was

constituted to review the evaluation done by EC.  The report

of  EC  had no binding effect on the IMG much less the EGOM.

The   AAI   required  permission  from   the   Cabinet   for

privatization  of  airports. The  ultimate  decision  making

authority  was  EGOM.  However, since  the  decision  making

process   involved  inputs  from  series   of   \021in   house\022

committees, this creation of GETE is in fact a part  of  \021in

house  mechanism\022. This itself is clear from the  fact  that

several  Committees were constituted like EC, GRC,  IMG  and

COS.  In  view  of  the existence of various  tiers  in  the

decision making process, EGOM who has delegated the power of

Cabinet  did  not  exceed  the  powers  by  setting  up  the

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committees. If the appellant\022s submission is accepted,  even

the  GRC,  IMG  and  COS being not the committees  mentioned

specifically  in  the  RFP,  their  constitution  would   be

vulnerable.   This is certainly not a case of the  appellant

and  these were not external agencies. These committees form

part of the \021in-house mechanism\022 for evaluation of the bids.

Their  reports  were  to  be used as  inputs  in  the  final

decision  making process and thus imparted a great  deal  of

transparency.  Judicial review cannot involve evaluation  of

the comparative merits.

      It   has   also  been  emphasized  that  the  various

discussions in the Committees established beyond doubt  that

the  Union  of  India  wanted a transparent  process  to  be

adopted  considering the fact that this was a first case  of

private JV. It enabled the EGOM to take note of various view

points  and  take  the  final  decision.  These  discussions

strengthened the decision making process and did not  weaken

it as contended by the appellant. It has also been submitted

that the conduct of the appellant is itself contrary to  the

norms fixed by the RFP. Though it was specifically indicated

that  there  shall not be any contract with the  authorities

connected  with the decision making process,  several  times

appellant wrote letters relating to matters which were under

consideration.  It baffles one as to how the  appellant  had

knowledge as to what had transpired in the meetings. It  was

conveniently  mentioned  that  the  source  of   appellant\022s

knowledge was \023newspapers\022 reports\024. The appellant therefore

has  clearly  violated the norms fixed by RFP  and  on  that

score   alone,  its  bid  should  have  been  kept  out   of

consideration.   A  person  who seeks  relief  on  equitable

ground  should have clean conduct and surreptitious  methods

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adopted  by  it  cannot be condoned and this,  according  to

learned counsel for the respondents, is an additional factor

to dismiss the appeal filed by the appellant.

     It  appears  that whatever has been discussed  in  the

various  meetings apparently found its way outside. Who  was

responsible for the leak is not very clear but it is  not  a

very  healthy  trend. The meetings were highly  confidential

and sensitive in nature dealing with global tenders.

     Various  clauses of RFP which have relevance  read  as

follows:

 1    INTRODUCTION

 1.1  Purpose of this RFP

 The purpose of this Document is to:

 \025  Provide an overview of the process for Stage 2  of  the

  restructuring   and  modernization  of   Mumbai   Airport

  Transaction;

 \025   Specify   the  terms  and  procedures  governing   the

  transaction process for selecting Joint Venture  Partners

  and   for   the  Joint  Venture  Company  (JVC)   to   be

  incorporated for the Airport;

 \025   Specify  the  requirements  for  the  preparation  and

  lodgement of binding offers and

 \025  Outline  the  approach that will be used in  evaluating

  Binding Offers.

 Terms  used  in  this  RFP  are defined  in  the  Glossary

 section of this RFP.

 1.2  Other Documentation and Information

 In  addition to this RFP, Pre Qualified Bidders (PQB) will

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 be issued the following documentation and material:

 \025 An Information Memorandum for the Airport;

 \025  Draft  Transaction Documents for the Airport (open  for

 discussions before finalising the terms and conditions);

 \025  Specialist Reports and AAI data substantially in CD ROM

 form  with  some  documents in  hard  copy  form  for  the

 Airport.

 AAI  may  choose to update, vary or add to all or some  of

 this  information (including this RFP) at any time  during

 the Transaction process.

 A  separate document will be provided to PQB outlining the

 times,  dates and venues of their scheduled meetings  with

 the  AAI, the Airport management team and parties  of  the

 GTT, as relevant and necessary.

 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.

    1.4  The Transaction

    AAI  is  offering a long term Operations,  Management  and

 Development  Agreement to suitably qualified,  experienced

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 and  resourced  parties  to  design,  construct,  operate,

 maintain, upgrade, modernize, finance, manage and  develop

 the  Airport. The Successful Bidder will participate in  a

 Joint  Venture Company with the AAI (and other GOI  public

 sector  entities) and such JVC shall be awarded the  right

 to operate, manage and develop the Airport.

    An  overview of the indicative Transaction structure is

 set out in Appendix G.

 The key features of the Transaction are as follows:

 \025  the  Operations,  Management and Development  Agreement

  will  be  for an initial period of 30 years with the  JVC

  having  the right to extend this by a further  30  years,

  in  accordance  with  the terms  and  conditions  of  the

  Transaction Documents.

 \025  the  Successful Bidder will have an initial 74%  equity

  interest  and  AAI,  along with other GOI  Public  Sector

  Entities, will have 26% equity interest in the JVC.

    \025  AAI  will  endeavor to contribute (without any  binding

  commitment)  equity funds in cash in  proportion  to  its

  equity  share  to  assist  the  JVC  in  funding  working

  capital  and  major developments upto a  cap  of  Rs.5000

  million  (Rupees five thousand million) for the  Airport.

  It  is  AAI\022s  intention  to maintain  26%  equity  share

  capital in the JVC.

    \025  If AAI along with other GOI Public Sector Entities does

  not  wish to contribute to further equity calls,  the  JV

  Partners  will contribute the additional equity  and  the

  equity  interest,  of  AAI and other  GOI  Public  Sector

  Entities  will be correspondingly reduced but the  voting

  rights  with  regard  to reserved board  and  shareholder

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  matters  (as  contained  in the  Shareholders  Agreement)

  will  be  preserved  in  the  manner  set  forth  in  the

  Shareholders Agreement.

    \025  JVC  will have an Employee Arrangement for a period  of

  three  years  whereby  AAI employees  (other  than  those

  pertaining  to  ATC and CNS departments)  posted  at  the

  Airport  on  Effective  Date continue  to  provide  their

  services  at  the  Airport.  Further  the  JVC  will   be

  required,  during the three years period to  make  offers

  of  employment in order to absorb a minimum  of  40%  (or

  such  higher  percentage as committed by the  Bidder)  of

  the   existing  AAI  employees  working  at  the  Airport

  excepting   those  engaged  in  Communication  Navigation

  Surveillance   (CNS),  Air  Traffic   Management   (ATM),

  Security,   as  reduced  for  retirements,  resignations,

  transfers  and death. Employment offers can  be  made  at

  any  time during this Employee Arrangement Period but  in

  no  event  later than three (3) months prior to  the  end

  date  of the Employee Arrangement Period. At the  end  of

  this  Employee Arrangement Period those employees who  do

  not  take  up the employment offers or who are  not  made

  such  an employment offer will return to the services  of

  AAI.  Additional weightage is provided in the  evaluation

  process   to  Bidders  who  commit  to  make  offers   of

  employment  in  order  to absorb more  than  the  minimum

  level  of 40%. There will be a financial penalty, as  set

  out  in  the OMDA, for any shortfall between the  40%  or

  such  higher nominated percentage and the result actually

  achieved.

    \025  Due  to  the  public  and economic  importance  of  the

 Airport  a  State Support Agreement will be  entered  into

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 between  the  JVC  and GOI.  The State  Support  Agreement

 will  address  matters  such  as  principles  of  economic

 regulation,  approvals,  assistance  with  licensing   and

 coordination  with government agencies.  Under  the  State

 Support  Agreement,  the JVC for a specific  Airport  will

 have a \023Right of First Refusal (ROFR)\024 with regard to  the

 second  airport in the vicinity (except in the case  of  a

 proposed  new  airport in/for Pune)  on  the  basis  of  a

 competitive  bidding process, in which the  JVC  can  also

 participate.  In the event, the JVC is not the  successful

 bidder,  the JVC will have the ROFR by matching the  first

 ranked  bid  in  terms of the selection criteria  for  the

 second   airport,   provided  the  JVC  has   satisfactory

 performance  without any material default at the  time  of

 exercising the ROFR.

       It  is  the  endeavour  of the  AAI/GOI  that  a  State

 Government  Support Agreement will be  entered  into  with

 the  State  Government  of Maharashtra  wherein  the  said

 State  Government  will  provide  assistance  on  a   best

 endeavour    basis   on   dealing   with    encroachments,

 reservation  of  land for settlement of encroachments  and

 assistance  in  making  land  available  if  required  for

 aeronautical  purposes, surface land transport  access  to

 the  Airport,  expediting applicable  clearances  and  the

 provisions,   where   applicable,  of  essential   utility

 services.  However,  bidders should note  that  the  exact

 form  of  the  State  Government  Support  Agreement   and

 contents  thereof will be decided upon receipt of feedback

 from  the  said State Government. Upon receipt of feedback

 from  the said State Government and finalization  of  form

 and  contents  of the State Government Support  Agreement,

 the same will be provided to Pre-Qualified Bidders.

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    The JVC for the Airport will have a lease over the land

 and  assets (with certain exclusions which are not limited

 only  to  carve out assets listed in the schedule  to  the

 Lease Deed) of the Airport for the tenure of the OMDA.

    The  JVC  will  enter into separate MOUs  with  various

 agencies  such as Customs, immigration, Health  and  Plant

 and  Animal  Quarantine to deal with  issues  relating  to

 space,  performance  standards,  facilitation/coordination

 mechanism.

    The  JVC will be required to prepare a Master Plan  for

 the   development,  expansion  and  modernization  of  the

 Airport,  covering a time period of 20 years  as  well  as

 the  ultimate  vision of the Airport at full  aeronautical

 development and to submit this for approval of MCA  within

 the  stipulated time frame as outlined in the  Transaction

 Documents. The Master Plan has to be consistent  with  the

 Initial  Development Plan submitted as part of the Binding

 Offer. Thereafter, the JVC will be required to update  the

 Master  Plan  every  ten  years  (or  upon  occurrence  of

 certain   traffic   trigger  events   or   as   and   when

 circumstances   warrant).   In   addition,   each    major

 development  requires the preparation and  approval  of  a

 Major  Development Plan setting out the  proposed  details

 of the development.

      The  Airport, in recognition of its natural  monopoly

 position,   will  be  subjected  to  economic   regulatory

 measures. The regulatory authority or the GOI (until  such

 regulatory  authority is in place) will set  a  price  cap

 for  aeronautical charges and will be entitled  to  impose

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 other standards.

          Over  the tenure of the OMDA, the Joint Venture Company

 will   pay  both  a  nominal  lease  rental  and   a   fee

 (consisting of an upfront fee of Rs.1,500 million  (Rupees

 one  thousand  five  hundred million) and  an  annual  fee

 expressed  as  a  percentage  of  gross  revenue  of   the

 Airport) for the right to operate, manage and develop  the

 Airport.  The fee will be calculated annually  in  advance

 on  projected revenue, paid monthly and with an adjustment

 at  the  end  of  each quarter to reflect  any  difference

 between  actual  and projected revenue. Revenue  for  this

 purpose  shall  mean  all pre-tax gross  revenue  of  JVC,

 excluding  the  following: (a) payments made  by  JVC,  if

 any,   for   the   activities   undertaken   by   Relevant

 Authorities;  (b)  Insurance  proceeds  except   insurance

 indemnification for loss of revenue; (c) any  amount  that

 accrues  to JVC from sale of any capital assets or  items,

 (d)  Payments and/or monies collected by JVC  for  and  on

 behalf  of  any governmental authorities under  applicable

 law.   It is clarified that annual fee payable to AAI  and

 Employee  Arrangement costs payable to AAI  shall  not  be

 deducted from revenue,

 2 GOVERNMENT OBJECTIVES, REQUIREMENTS AND REGULATION      2.1  Key Strategic Objectives

    Key strategic objectives of the GOI are:

         World class development and expansion:

      Ensure  world class phased development and  expansion

    such  that  the JVC meets its commitments  through  the

    timely    provision    of    high    quality    airport

    infrastructure,  on both the airside and  landside,  to

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    meet growing demand; and

          World class airport management:    

         Ensure   the  creation  of  world  class   airport

    management  team and systems through the  selection  of

    serious,  committed  Successful Bidders  with  suitable

    operational   expertise,   managerial   and   financial

    capability, Financial commitment and the commitment  to

    provide quality airport services, in order to transform

    the  present  Airport  into world  class  international

    airport.

2.2 Other Transaction Objectives

    In  addition  to  the key strategic  objectives,  other

    Transaction objective include:

         Timely  completion end certainty of  Transactions,

    with minimal residual risks.

         Appropriate financial consideration for the  right

    to operate, manage and develop the airport.

         Smooth transition of operations from AAI to JVC.

         Appropriate    regulation-   achieving    economic

    regulation  of  aeronautical  assets  that   is   fair,

    commercially and economically appropriate, transparent,

    predictable, consistent and stable while protecting the

    interests  of users and ensuring that the Airports  are

    operated   and  developed  in  accordance  with   world

    standards;

         Fair  and  equitable treatment of  AAI  employees,

    including preservation of accrued entitlements.

         Diversity  of ownership between Mumbai  and  Delhi

    Airports,  to enhance competition, encourage innovation

    and allow competitive benchmarking,  and

         Ensure satisfaction on the part of passengers  and

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    airlines by the provision of quality services  and  the

    provision of State-of-the-art facilities.

 The  GOI\022s  key strategic and other Transaction objectives

 will  provide the means of establishing the bid evaluation

 criteria.

 2.3   Management and Development Requirements

    Reflecting  the  focus  on  the  strategic  objectives,

 Bidders  will  be  required to present as  part  of  their

 Binding  Offer a fully detailed Business Plan and  Initial

 Development  Plan,  as  well  as  a  Transition  Plan  and

 certain  other  documents.  These  documents  will  be  an

 important  element  in  the selection  of  the  Successful

 Bidder for the Airport.

     TERM OF REFERENCE

1.0  Scope of work

1.1  The  scope  of work for the FINANCIAL CONSULTANT  shall

    consist of the following:

 a.Updating  of  the  traffic,  financial,  commercial  and

    operational data pertaining to the two airports;

 b.    Organizing  Road Shows in India  and/or  abroad,  if

 required;

 c.      Preparation  of  the  Request  for  Expression  of

    interest  (RFEOI),  Request for Proposal  (RFP),  draft

    concession agreement, draft Joint venture agreement and

    all other necessary project documentation.

 d.Determining  the  pre-qualification criteria,  technical

    and  financial evaluation criteria which  will  include

    formulation and analysis of various options along  with

    the recommended approach in respect of the same;

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 e Evaluation  of  Expressions of Interests  and  Technical

    and Financial proposals received.

 f.        Organizing   and   managing   interactions   and

    communications with the potential bidders;

 g.       Negotiation   assistance  together   with   other

    advisors   to   AAI  in  successfully  concluding   the

    transaction;

 h. Work  closely  with  AAI  on overall  coordination  and

    management of various aspects of the transaction;

 i.    Any other work as may be required for the successful

    completion of the transaction,

 Glossary

 Words  and  phrases used in the document have the  meaning

 set out below.

AAI                      Airports Authority of India                         Airport Operator -     The  Entity  in the Consortium submitting                       the    Binding   Offer   who   has   been                       identified as such by the Bidder and  who                       is    assessed    for    the    necessary                       qualifications  for  operating,  managing                       and   developing  a  major  international                       airport  which  seeks to provide  airport                       management services to the Joint  Venture                       Company.                         Financial  Consultant  ABN  AMRO Asia Corporate Finance (I) Pvt. or                     Ltd.  being the financial adviser to  the ABN AMRO               Transaction. Foreign Airline(s)     Means a Foreign Entity that provides  air                       transport services. GTA or Global          The  technical adviser, to  AAI  advising Technical Adviser or   on  the technical aspects in relation  to Airplan                this  Transaction, being Airport Planning                       Ply Ltd. (Airplan). Initial Development    The  Development  Plan submitted  by  the Plan                   Bidder(s)  an part of their  Offer  which                       sets  out plans over a calmed period  for                       the  development of the Airport  to  meet                       traffic growth as per the terms hereof. ITREOI                 The  Invitation to Register an Expression                       of  interest document issued  by  AAI  in                       relation to the Transaction. Legal  Consultant  or  The  legal  adviser to  the  Transaction, AMSS                   being  Amarchand  &  Mangaldas  &  Suresh                       A.Shroff & Co.    

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 5.   EVALUATION OF STAGE 2 OFFERS

 5.1 Overview of Evaluation Process

    This  section sets out the approach that will  be  applied

 by  the  AAI  and  its  advisers when  evaluating  Offers.

 General  Guidance  in relation to the relative  importance

 of  each  of  the criteria and certain tender requirements

 are set out below.

    The  approach to be followed will be undertaken in four

 phases as set out in summary form in the figure below:

 Phase                                        Explanation

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

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                                           consideration                                             for  the  Airport                                             is   selected  as                                             Successful                                             Bidder

 5.2 Mandatory Requirement

 The  Mandatory  Requirements for Stage  2  Offers  are  as

 follows:

Mandatory Requirements for Stage 2 Offers \025 Confirmation of acceptance of final  Transaction Documents \025  Confirmation that the Networth criteria of the Bidder  as per  the requirement in the ITREOI document continues to  be fulfilled \025  No  Consortium  member or Group Entity  of  a  Consortium member  or  nominated Airport Operator is  participating  in more than one Consortium bidding for the same  Airport \025  Consortium  has an Airport Operator who has relevant  and significant experience of operating, managing and developing airports. \025  Confirm  that the Offer is capable of acceptance  anytime during the Bid Period \025  Confirm  that  the  offer  commits  the  Offeror  to  the mandatory capital projects and/the Initial Development  Plan is in accord with the Development Planning. \025  Principles and the Traffic Forecast (It is  to  be  noted that Traffic Forecasts are only the Base level forecast) \025  Equity  Ownership  in  the Joint  Venture  Company  by  a Scheduled  Airline and their Group Entities does not  exceed l0%  and there is no participation by any airline that is  a Foreign  Entity  and their Group Entities,  subject  to  the exemption  of  group  Entities  that  are  existing  airport operator. \025 FDI in the JVC does not exceed 49% \025  Minimum  equity ownership by Indian Entities (other  than AAI/GOI public sector entities) in the JVC is 25% \025 Provision of suitable probity and security statements \025  Lodgement  of  Offer that incorporates all  the  material required as set out in Appendices A to E, inclusive, in this Document \025 Submission of Bid Bond.    

    5.4 Assessment of Technical Pre-Qualification

 The  Technical  pre-qualification is based on  two  global

 pre-qualification criteria

 \025 Management Capability, Commitment and Value Add

 \025 Development Capability, Commitment and Value Add

 Each  of  these  is assessed in terms of  a  set  of  pre-

 qualification  criteria  and supporting  pre-qualification

 factors that are detailed in the Section 5.6.

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    The purpose of the Technical Pre Qualification phase is

 to  ensure  that only those Bidders that can  address  the

 GOI\022s  strategic  objectives are evaluated  at  the  final

 phase  of  the  evaluation process and that  only  Bidders

 satisfying  the benchmark of 80% under the  technical  pre

 qualification  requirements are  allowed  into  the  final

 phase of Evaluation.

    A   scoring  system  will  be  applied  based  on   the

 assessment  of  the evaluation terms of the Offer  against

 the  Technical pre-qualification criteria. Each of the two

 global  pre-qualification criteria is assessed  out  of  a

 possible  100  marks. The assessment  is  on  an  absolute

 basis  not relative as between the Offers. Hence there  is

 no  predetermined number of Offers that will be considered

 in the final phase.

5.6 Technical Pre-Qualification Criteria and Factors

This section sets out the pre-qualification criteria and pre-

qualification  factors that will be used to assess  each  of

the two global pre-qualification factors.

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

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                           operators  with substantial                             domestic, international and                             cargo  operations including                             specific   role   of    the                             airport operator in respect                             of each of these operations                                                          Experience   in   operating                             global   or  regional   hub                             airports,         including                             achieving          improved                             connectivity.                                                          Track  record in route  and                             traffic development and  in                             managing   relations   with                             airlines   and  other   key                             stakeholders.                                                          The    level   of   service                             quality         performance                             achieved  at major airports                             managed   by  the   Airport                             Operator  and  trends  over                             the last 5 years.                                                          Experience  if  any,   with                             operating  a  multi-airport                             system.                                                          The     performance      of                             commercial  operations   at                             major  Airports managed  by                             airport Operators, covering                             retail, property and  other                             commercial      operations,                             focusing  on airport  where                             non-aeronautical revenue is                             40%   or   more  of   total                             revenue.                                                          Performance   in    turning                             around     and    improving                             aeronautical    and    non-                             aeronautical operations  at                             airports.                                                          Experience in operating and                             developing airports in non-                             OECD  countries and a track                             record      in     improved                             performance.                                                          Experience   in   proactive                             environmental   monitoring,                             evaluation,  planning   and                             implementation           of                             environmental  systems  and                             improvements.                              (b)  Experience   of  12.5  Commercial/retail the    other   Prime        experience Members  (separately        Experience    with    major identifying      and        property development evaluating    Indian        Experience    with    major

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and non-Indian Prime        infrastructure Member experience on        developments. an    equal   weight        Experience with handling HR basis).                     issues  in ownership change                             situations.                              

Sub Criteria:         (ii) Management Commitment (a)  Commitment   of  12.5  Level of equity commitment airport operator                                         Performance based nature of  the                             Airport Operator Agreement                                                          Experience    and    level    of                             management  resources  committed                             to  the transaction in each area                             of       airport      management                             including:                                                          7    Traffic and route                             development and marketing                             7    Aeronautical operations                             7    Cargo handling                             7    Slot management                             7    Terminal operations                             7    Airport Retail operations                             7    Airport Property                             operations                             7    Environmental Management                              (b)Commitment     by  12.5  Experience    and    level    of other  Prime Members        management  resources  committed (separately                 by  the  other Prime Members  in identifying      and        non-aeronautical operations  and evaluating    Indian        development Prime Members.

6.7 Variations to the RFP

AAI/GOI  reserves the right, in its absolute discretion  and

at  any  stage, to cancel, add to or amend the  information,

terms, procedures and protocols set out in the RFP. PQB  and

Consortium  member  will  have no  claim  against  AAI  with

respect  to  the  exercise,  or failure  to  exercise,  such

rights.

6.12   Other AAI rights:

AAI/GOI  reserves  the  right  in  its  absolute  discretion

without  liability and at any stage during  the  Transaction

process, to:

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

Bidders;

? Require additional information from any PQB or Bidders;

\025 Vary its tender requirements;

\025 Terminate further participation in the Transaction process

for any PQB or Bidder;

\025  Change  the  structure  and  timing  of  the  Transaction

process;  \025 Accept or reject any Offer at any time  for  any

reason;

\025 Not provide PQBs or Bidders any reasons for any actions or

decisions  it may take including in respect of the  exercise

by the AAI of any or all of the above mentioned rights; and

\025  Take  such other action as it considers, in its  absolute

discretion,  appropriate  in  relation  to  the  Transaction

process for the Airport.

              xx        xx             xx

APPENDIX \021A\022 (Information to be included in offer)

              xx        xx             xx

A.7 Relevant Management Experience and Expertise

              xx        xx             xx

(c)   In   addition,  please  provide  information  on   any

experience that the airport operator has with turning around

the  performance  of under performing airports  and  in  the

operation,  management, development  of  major  airports  in

developing  countries and handling human resource management

issues    in    ownership   change   situation,    including

privatization.

         xx             xx             xx

A.11.  Initial Development Plan

The  Initial Development Plan must be prepared in conformity

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with the Airport Development Planning Principles set out  in

the  Transaction Document, shall incorporate  the  mandatory

capital projects as set out in the Transaction Documents and

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

the  PQB  has  a  strong  view that an  alternative  traffic

forecast  is  significantly more likely  to  occur,  it  can

indicate   the   implications  for   the   timing   of   the

implementation of the development plan.

       The  Offer should provide the following information in the

Initial Development Plan:

 (a)   A long-term airport development vision for year 20 and

    the ultimate vision for the Airport showing the following:

            (i).  The full configuration of the Airport

         identifying all aeronautical facilities and

         their operating capacity and all commercial

         development areas and their functions.

         (ii). Information on traffic, passenger and

         cargo flows, both landside and airside.

    (b) The development path for the Airport leading up  to

    its  long-term  vision in year 20, shown  in  five  (5)

    yearly   stages  for  each  functional   area,   namely

    airfield,  apron, passenger terminals, cargo terminals,

    car  parks, city side access roads and commercial  area

    together   with  capital  expenditure  estimates.   The

    development  path  should  show  the  linkage  of   the

    development to traffic projections, with the  indicated

    trigger  points  for  both  the  commencement  of   the

    development and its completion.

    (c)  An  outline  of how the development  path  can  be

    flexibly adjusted to accommodate both lower and  higher

    traffic flows than the base projection used for Airport

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    development planning.

    (d)  Set  out  how  it  is planned  to  fully  maintain

    aeronautical operation during the development phase.

    (e)  Explain  how  key stakeholders  will  be  involved

    during  both  the  planning and implementation  stages,

    including   the   preparation  of  the   Master   Plan,

    identifying  issues that will need to be addressed  and

    the approach to each issue.

    (f)  Identify  any  constraints  that  will  negatively

    impact  on the Development Plan, explain the extent  of

    the impact and any mitigating strategy proposed.

      Pivotal  challenge  by  the  appellant  is   to   the

constitution of GETE and the scope for its constitution.  It

is  to  be  noted that the ultimate authority  to  take  the

decision in the matter was EGOM. It was within the powers of

EGOM to decide as to what inputs it can take note of and the

source  of these inputs. Therefore, the necessity for taking

views of various committees constituted appears to be a step

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

have been taken for making the whole decision making process

transparent. There was no question of having the view of one

Committee  in  preference to another.  EC  was  a  Committee

constituted  as a part of the decision making  process  like

other Committees vis. GRC, COS and IMG.

    In the multi tier system in the decision making process

the  authority empowered to take a decision can  accept  the

view expressed by one committee in preference to another for

plausible reasons. It is not bound to accept the view of any

committee.  These  committees, it  needs  no  emphasis,  are

constituted  to  assist  the decision  making  authority  in

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arriving  at  the  proper  decision.  It  is  a  matter   of

discretion of the authority to modify the norms. It is not a

case of absolute discretion.

    While exercising the discretion, certain parameters are

to be followed.

    \023Discretion\024  said Lord Mansfield in R. V Wilkes  (1770

(4)  Burr  2527, \021when applied to a court of justice,  means

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

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

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

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

(1981 (1) SCC 80).

     \021Discretion\022 undoubtedly means judicial discretion and

not  whim,  caprice  or  fancy of a Judge.  (See  Dhurandhar

Prasad  Singh v. Jai Prakash University and Ors.  (2001  (6)

SCC  534). Lord Halsbury in Sharp v. Wakefield (1891 AC 173)

considered  the  word  \021discretion\022 with  reference  to  its

exercise  and held: \023Discretion\024 means when it is said  that

something  is  to  be  done within  the  discretion  of  the

authorities  that something is to be done according  to  the

rules  of  reason  and  justice, not  according  to  private

opinion:  (Rooke case (1598) 5 Co. Rep. 99b, 100a) according

to  law, and not humour. It is to be, not arbitrary,  vague,

and fanciful but legal and regular. And it must be exercised

within  the limit, to which an honest man competent  to  the

discharge  of  his  office ought to continue  himself.  (See

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

Ors. (2001 (1) SCC 182).

     \021Discretion\022 when applied to a court of justice, means

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

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

but legal and regular.

    Though  the  word,  discretion\022  literally  means   and

denotes  an uncontrolled power of disposal\022 yet in law,  the

meaning  given  to this word appears to be  a  power  decide

within the limits allowed by positive rules of law as to the

punishments, remedies or costs. This would mean that even if

a   person  has  a  discretion  to  do  something  the  said

discretion  has to be exercised within the limit allowed  by

positive  rules  of  law. The literal meaning  of  the  word

\021discretion\022  therefore, unmistakably avoids untrammeled  or

uncontrolled choice and more positively pointed out at there

being a positive control of some judicial principles.

    Discretion, in general, is the discernment of  what  is

right  and  proper. It denotes knowledge and prudence,  that

discernment  which enables a person to judge  critically  of

what  is  correct  and  proper  united  with  caution;  nice

discernment,   and  judgment  directed  by   circumspection:

deliberate  judgment; soundness of judgment;  a  science  or

understanding to discern between falsity and truth,  between

wrong  and  right,  between shadow  and  substance,  between

equity and colourable glosses and pretences, and not  to  do

according to the will and private -affections of persons.

    The  word  \023discretion\022 standing single and unsupported

by  circumstances signifies exercise of judgment,  skill  or

wisdom  as  distinguished from folly, unthinking  or  haste;

evidently  therefore a discretion cannot  be  arbitrary  but

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

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implies  vigilant circumspection and care: therefore,  where

the  Legislature concedes discretion it also imposes a heavy

responsibility.

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

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

casual, and depends upon .constitution, temper, passion.  In

the best it is often times caprice; in the worst it is every

vice,  folly, and passion to which human nature is  liable,\024

said  Lord Camden, L.C.J., in Hindson and Kersey,  (1680)  8

How St Tr 57.

    If a certain latitude or liberty accorded by statute or

rules  to  a  Judge as distinguished from a  ministerial  or

administrative official, in adjudicating on matters  brought

before  him.  It  is  judicial  discretion.  It  limits  and

regulates  the exercise of the discretion, and  prevents  it

from  being  wholly  absolute, capricious,  or  exempt  from

review.

    Such   discretion  is  usually  given  on  matters   of

procedure  or punishment, or costs of administration  rather

than  with  reference  to  vested  substantive  rights.  The

matters  which  should regulate the exercise  of  discretion

have  been  stated  by eminent Judges in somewhat  different

forms of words but with substantial identity. When a statute

gives  a  Judge  a discretion, what is meant is  a  judicial

discretion, regulated according to the known rules  of  law,

and not the mere whim or caprice of the person to whom it is

given  on the assumption that he is discreet (Per Willes  J.

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

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

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    In \023ADVANCED LAW LEXICON\024 BY P. RAMANATHA AIYAR, it has

been stated as follows:

    \023Discretion.  Power  of  the Court  or  arbitrators  to

decide  as  they  think fit. The word \023discretion\024  connotes

necessarily  an act of a judicial character,  and,  as  used

with  reference  to  discretion  exercised  judicially,   it

implies the absence of a hard-and-fast rule, and it requires

an  actual exercise of judgment and a consideration  of  the

facts and circumstances which are necessary to make a sound,

fair  and  just determination, and a knowledge of the  facts

upon  which  the  discretion may properly  operate.  [Corpus

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

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

430, para 6]\024

    \023A discretion\024, said Lord WRENBURY, \023does not empower a

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

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

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

of  his reason, ascertain and follow the course which reason

dictates.\024 (Roberts v. Hopwood, 1925 AC 578). This  approach

to   construction   has  two  consequences   the   statutory

discretion  must be truly exercised, and when  exercised  it

must be exercised reasonably. (MAXWELL).

    \023Discretion\024,  said Lord MANSFIELD  in  R.  v.  Wilkes,

(1770)  98  ER  327), \021when applied to a Court  of  justice,

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

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

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

6th Edn. P.273)

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      \021Discretion\022 means when it is said that something  is

to  be  done  within the discretion of the authorities  that

that  something  is to be done according  to  the  rules  of

reason  and  justice,  not  according  to  private  opinion:

Rooke\022s case according to law, and not humour. It is  to  be

not  arbitrary, vague and fanciful, but legal  and  regular.

Lord  HALSBURY LC in Susannah Sharp v. Wakefield, (1891)  AC

173 at p. 179 referred to in Siben Kumar Mondal v. Hindustan

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

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

(2004)  SLT  428,  430, para 6; Man Mal  Sharma  v.  Bikaner

Sahkari  Upbhokta Bhandar, (AIR 1999 Raj 13, 18) and   Rekha

Bhasin v. Union of India,  (AIR 1998 Del 314, 322.)

    Discretion, Lord MANSFIELD stated in classic terms  in,

John  Wilke\022s case, (1970) 4 Hurr 2528, must be a sound  one

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

DENNING   put   it   eloquently  in  Breem  v.   Amalgamated

Engineering  Union,  (1971)  1  All  ER  1148,  that  in   a

Government  of  Laws\022   \023there is  nothing  like  unfettered

discretion immune from judicial reviewability.\024 Courts stand

between  the  executive and the subject alert, to  see  that

discretionary  power is not exceeded or misused.  Discretion

is  a  science of understanding to discern between right  or

wrong,  between  shadow and substance,  between  equity  and

colourable glosses and pretences and not to do according  to

one\022s wills and private affections. Lord BRIGHTMAN elegantly

observed  in  the case of, Chief Constable  of  North  Sales

Police v. Evans, (1982) 3 All ER 141 that:

                    \023Judicial review, as the words imply  is           not  an  appeal from a decision,  but  a           review  of  the  matter  in  which   the           decision was made.\024                       \023The  judge, even when he is free, is still not wholly free.

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He is not to innovate at pleasure. He is not a knight-errant

roaming at will in pursuit of his own ideal of beauty or  of

goodness.  He  is  to draw his inspiration from  consecrated

principles.  He is not to yield to spasmodic  sentiment,  to

vague  and  unregulated benevolence. He  is  to  exercise  a

discretion  informed  by tradition, methodized  by  analogy,

disciplined  by  system, and subordinated to \021the  primodial

necessity of order in the social life\022. Wide enough  in  all

conscience  is  the  field  of  discretion  that   remains.\024

BENJAMIN CARDOZE in \021The Nature of Judicial Process\022.

    Discretion, in general, is the discernment of  what  is

right  and  proper. it denotes knowledge and prudence,  that

discernment  which enables a person to judge  critically  of

what  is  correct  and  proper  united  with  caution;  nice

discernment,   and  judgment  directed  by   circumspection;

deliberate  judgment; soundness of judgment;  a  science  or

understanding to discern between falsity and truth,  between

wrong  and  right,  between shadow  and  substance,  between

equity and colourable glosses and pretences, and not  to  do

according to the will and private affections of person. When

it  is  said  that  something  is  to  be  done  within  the

discretion of the authorities, that something is to be  done

according  to the rules of reason and justice, not according

to  private opinion; according to law and not humour. It  is

to  be  not  arbitrary, vague, and fanciful, but  legal  and

regular. And it must be exercised within the limit, to which

an  honest  man, competent to the discharge  of  his  office

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

v. Wakefield. (1891) Appeal Cases 173.

    The  word  \023discretion\024 standing single and unsupported

by  circumstances signifies exercise of judgment,  skill  or

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wisdom  as  distinguished from folly, unthinking  or  haste;

evidently  therefore a discretion cannot  he  arbitrary  but

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

implies  vigilant circumspection and care; therefore,  where

the  Legislature concedes discretion it also imposes a heavy

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

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

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

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

casual  and depends upon constitution., temper, passion.  In

the  best  it  is often times caprice : in the worst  it  is

every  vice,  folly, and passion to which  human  nature  is

liable,  said Lord CAMDEN. L. C.J., in Hindson  and  Kersey,

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

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

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

Shanker Pant, (2001) 1 SCC 182).

    The  power  to  decide  within the  limits  allowed  by

positive  rules of law as to punishments, remedies or  costs

and   generally   to  regulate  matters  of  procedure   and

administration; discernment of what is right and proper [See

Article 136(1), Constitution)

    \021Discretion\022  is governed by rule and it  must  not  be

arbitrary, vague and fanciful. (See Jaisinghani v. Union  of

India, AIR 1967 SC 1427, 1434).

    When  any  thing  is  left  to  any  person,  Judge  or

magistrate to be done according to his discretion,  the  law

intends it must be done with sound discretion, and according

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to   law,  (Tomlin).  In  its  ordinary  meaning,  the  word

signifies  unrestrained exercise of choice or will;  freedom

to   act  according  to  one\022s  own  judgment;  unrestrained

exercise  of  will; the liberty of power of  acting  without

other control than one\022s own judgment. But, when applied  to

public  functionaries, it means a power or  right  conferred

upon   them   by  law,  of  acting  officially  in   certain

circumstances  according  to  the  dictates  of  their   own

judgment  and  conscience, uncontrolled by the  judgment  or

conscience of others. Discretion is to discern between right

and  wrong;  and  therefore whoever hath  power  to  act  at

discretion,  is bound by the rule of reason  and  law.  (  2

Inst. 56, 298; Tomlin)

    DISCRETION, in general, is the discernment of  what  is

right  and  proper. It denotes knowledge and prudence,  that

discernment  which enables a person to judge  critically  of

what  is  correct  and  proper  united  with  caution;  nice

discernment,   and  judgment  directed  by   circumspection;

deliberate  judgment; soundness of judgment;  a  science  or

understanding to discern between falsity and truth,  between

wrong  and  right,  between shadow  and  substance,  between

equity and colourable glasses and pretences, and not  to  do

according to the will and private affections of persons.

    The   very   word  \023discretion\024  standing  single   and

unsupported by circumstances signifies exercise of judgment,

skill  or wisdom as distinguished from folly, unthinking  or

haste;  evidently therefore discretion cannot  be  arbitrary

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

The   word   \023discretion\024   in   itself   implies   vigilant

circumspection  and  care; therefore where  the  legislature

concedes   wide   discretion  it  also   imposes   a   heavy

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responsibility. (AIR 1933 Sind 49)

    There  may  be several degrees of Discretion, discretio

generalis,    discretio   legalis,   discretio   specialis,-

Discretio  generalis is required of every one in  everything

that  he  is to do, or attempt \023Legalis discretio\024, is  that

which  Sir  E Coke meaneth and setteth forth in Rooke\022s  and

Keighley\022s  cases  and this is merely to administer  justice

according to the prescribed rules of the law.

    \023The  third discretion is where the laws have given  no

certain  rule  .... and herein discretion  is  the  absolute

judge of the cause, and gives the rule.\024 (Callis. 112. 113)

    DISCRETION,  FREE  AND  UNQUALIFIED,  The   \023free   and

unqualified  discretion\024 to refuse or grant licences,  which

is  given to justices by the Beer Dealers Retail Licences is

absolute  as well as regards the renewal of an old,  as  the

grant of a new, licence. (R. v. Kay, 52 LJMC 90).

    Discretion, Judicial is a certain latitude  or  liberty

accorded  by  statute or rules to a judge  as  distinguished

from   a   ministerial   or  administrative   official,   in

adjudicating on matters brought before him, The use  of  the

word  \023judicial\024  limits and regulates the exercise  of  the

discretion,  and  prevents it from  being  wholly  absolute,

capricious, or exempt from review. But the presence  of  the

word  \023discretion\024 permits the judge to consider as a judge,

what  are vaguely termed, all the circumstances of the  case

and   the  purpose  for  which  he  is  invested  with   the

considerations  of  convenience  or  utility  or  saving  of

expense  rather  than on considerations  of  strict  law  or

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technicalities.

    Such   discretion  is  usually  given  on  matters   of

procedure  or punishment, or costs of administration  rather

than  with  reference  to  vested  substantive  rights.  The

matters  which  should regulate the exercise  of  discretion

have  been  stated  by eminent judges in somewhat  different

forms of words but with substantial identity. When a statute

gives  a  judge  a discretion, what is meant is  a  judicial

discretion, regulated according to the known rules  of  law,

and not the mere whim or caprice of the person to whom it is

given  on  the assumption that he is discreet (Lee  v.  Bude

Railway  Co., (1871) LR 6 CP 576, 580, WILLES, J.;  and  see

Morgan  v.  Morgan,  1869, LR 1  P  &  M  644,  647).  \023That

discretion,  like  other  judicial  discretions,   must   be

exercised  according  to  common  sense  and  according   to

justice,  and if there is a miscarriage in the  exercise  of

it,  it will be reviewed; but still it is a discretion,  and

for my own part I think that when a tribunal is invested  by

Act  of  Parliament, or by rules, with a discretion, without

any  indication in the Act or rules of the grounds on  which

the  discretion is to be exercised, it is a mistake  to  lay

down  any  rules  with a view of indicating  the  particular

grooves on which the discretion would run, for if the Act or

rules did not fetter the discretion of the judge, why should

the  Court do so?\024 Gardner v. Jay, (1885) 29 Ch D 50 at  58,

per BOWEN, L.J.) (See also 5 Cal 259)

    Discretion of Court. \023Ability to discern by  the  right

line of law, and not by the crooked cord of private opinion,

which  the vulgar call discretion\024; freedom to act according

to  the judgment of the Court, or according to the rules  of

equity, and the nature of circumstances; judicial discretion

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regulated according to known rules of law; legal discretion,

and not personal discretion sound discretion guided by fixed

legal principles\024.

     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 EC\022s approach in the evaluation exercise

was inconsistent with the terms of the RFP.

     EGOM  in its order dated 27.12.2005 constituting GETE,

stipulated as follows:

         \023The  Group would particularly look into  and           present  its recommendations before  the  COS           on:                       (a) Overall validation of the evaluation            process,  including calibration  of  the            qualification and sensitivity  analysis.            The  sensitivity analysis will cover the            impact  of inter-se weightages  of  sub-            criteria as well as scoring.                        b)  The issues raised by the Members  of            the  Inter  Ministerial Group about  the            evaluation process.                        c) An overall assessment of transparency

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          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.\024            

      Essentially there were four instances of rewriting of

priorities  and  weightages as  contained  in  the  RFP  and

valuation was then made by the EC on the basis of these  re-

written priorities and weightages.  These were as follows;

         (i)  Change in priority in the matter of absorption of                staff,                      (ii) Changing the weightage ascribed to property development                by merging the marks for infrastructure development and                property development,

         (iii)     Changing of the weightage ascribed to non-                aeronautical development by failing to consider aeronautical                revenue of 40% as a \023threshold\024 \027 less than which would not                get any marks, and                      (iv) Changing the weightage of experience  in                respect   of   a  non-OECD  airport   by                treatment of a OECD airport on par  with                non-OECD airports.            

     As regards (i), the EC divided the marks between 3.1.1

and  3.1.2 unequally, and also awarded marks for the  extent

of absorption proposed from a baseline of Zero \026instead of a

baseline of 40% which was the mandatory absorption criteria.

The  RFP  accorded  a  priority to a  higher  absorption  of

existing  staff  by  the new company. The  EC  proceeded  to

modify  this  priority. It opined that the overall  approach

was   more   important  than  absorption,  and  gave   marks

accordingly.   So  far as (ii) is concerned,  the  EC  again

altered the weightages accorded in the RFP, which considered

experience   in  \023property  development\024  as   valuable   as

\023infrastructure development\024 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.).

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      As  consequence of (iii) above, EC gave marks to  the

appellant  who  had projected less than 40% non-aeronautical

revenue-  whereas  the  RFP  clearly  gave  a  weightage  to

aeronautical revenue beyond 40%. As rightly contended by the

respondents, if a project has a high revenue share given  to

the  government, then aeronautical revenue being  regulated,

the  incomes  would  flow  from  non-aeronautical  revenues.

However  generation of such non-aeronautical revenues  would

involve a larger capital investment in property development.

EC  (a) gave less marks to GVK because it had a high capital

outlay projected (as compared to the appellant), (b) did not

regard experience in property development as having the same

priority  as infrastructure development, and (c) gave  marks

to the appellant for its non-aeronautical  revenue, although

its projected revenue was less than 40%.

    As  a  consequence of (iv) above, EC gave marks to  the

appellant  for  Mexico Airport which is admittedly  an  OECD

Airport  -  on  the spacious reasoning that it is  virtually

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

country.

    Relevant portions of GETE\022s reports read as follows:

    FIRST REPORT DATED 7.1.2006

         xx        xx        xx             xx

    \0232.1. The Group of Eminent Technical Experts (GETE) had

    their  first meeting and deliberations on Friday,  30th

    December,  2005\005\005\005\005The presentation was  basically  for

    explaining  the  contents of the Request  for  Proposal

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

    technical  bids  and  the  views  expressed  by   Inter

    Ministerial  Group (IMG) on the EC evaluation.  The  EC

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    explained that the weightage marks for the two criteria

    and  sub-criteria were already indicated in the RFP for

    the information of bidders. Splitting up these marks to

    the  different sub-factors of sub-criteria was done  by

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

    I.M.G.  On query from the GETE, they formed that  after

    the  technical  bids were opened certain clarifications

    were   invited  from  bidders  mainly   to   sort   out

    discrepancies in their submittals and not for eliciting

    additional  Information  or  submission  of  additional

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

    technical  evaluation was done strictly  based  on  the

    submittals of the tenderers.

    2.2  The  GETE  again met on 2 January when  only  Shri

    Sanjay   Narayan  and  Dr.  Sihag  were  present.   The

    Consultants were not invited to this meeting.  In  this

    meeting Shri Sanjay Narayan handed over to the  GETE  a

    copy  of  the  Note  prepared  for  the  Committee   of

    Secretaries  (COS) dated  23rd December, 2005  together

    with  all  Annexures  which also contained  details  of

    marks  assigned  (both original  and  revised)  to  the

    Consortiums A to E in The Annexure IX and Appendix-  II

    to  Annexure XII to the Note. In this meeting, the GETE

    enquired  at what stage the apportionment of  marks  to

    the  sub-factors was done by the EC and  whether  after

    assigning these marks, the same had the approval of the

    I.M.G.  The  GETE  also wanted to  know  whether  after

    assigning  the marks to the sub-factors, the same  were

    kept  in  a sealed cover to obviate the possibility  of

    any  changes  or  alterations  to  these  marks  during

    evaluation  stage.  The GETE also  enquired  whether  a

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    formal Tender Committee was appointed for the technical

    and  financial evaluation of the bids and  whether  the

    Airport   Authority  of  India,  as  the   owner,   was

    associated in the technical evaluation. It was informed

    to  the GETE that there was no Tender Committee per  se

    and the assignment of marks to the sub-factors was done

    entirely by the EC. (The Global Consultants) and at  no

    stage  Airport  Authority of India  was  associated  in

    assessing  and  assigning  the  marks.  The  GETE   was

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

    months  to  complete this exercise, scrutinizing  about

    40,000 pages of submissions.

    2.3  The GETE again met on 4th January, 2006 when  ABN-

    AMRO\022s  letter  dated 3rd January,  2006  in  reply  to

    queries  raised was handed over to the GETE  (Annexure-

    B.). From this letter it appears inter-se weightage and

    marks  to  the  sub-factors  were  finalized  prior  to

    assigning  scores  on  the offers,  but  there  was  no

    categorical  assertion that this was  finalized  before

    the  exercise was started and kept seated. We are  only

    pointing out that since these inter-se weightages  were

    not  approved  by the Government and kept  sealed,  the

    possibility of these being changed during the course of

    evaluation cannot be ruled out.

    2.4   With  all the papers made available to the  GETE,

    the need for seeking further clarification from the  EC

    was  not felt. Therefore, they were not invited for any

    further clarification by the GETE.

3. Scrutiny of the evaluation procedure adopted by EC.:

    3.1:1  We  (GETE)  did not call for the  technical  bid

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    papers  nor perused the same. We also did not make  any

    attempt for a fresh technical evaluation of the bids by

    assigning  marks  to the sub-criteria and  sub-factors.

    Our attempt was to assess whether the E.C. had assigned

    weightages  and  marks  in  a logical  and  transparent

    manner  to the sub-factors and whether there  has  been

    any  bias  in  favour of or against any of the  bidders

    while assigning marks. For this we relied upon the  RFP

    and  the mark sheets attached to the Note prepared  for

    the Committee of Secretaries.

    3.1.2  While examining the assignments of marks to  the

    various  bidders we kept in mind the issues  raised  by

    the  members of the Inter Ministerial Group but we were

    not solely guided by their views. We also examined in a

    dispassionate way whether there was any flaw or bias in

    the exercise of subjectiveness while assigning marks to

    the  different  consortiums. Our observations  in  this

    matter are briefly given as under-

    3.1.3   The  Global  Consultants  prepared  ITREOI   in

    January,  2004  which  was  approved  by  the  IMG   in

    February,  2004  but  the  appointment  of  the  Global

    Consultants was approved by EGOM in April,  2004.  Thus

    the  Consultants  started  working  even  before  their

    appointment was approved.

    3.1.4 From the report of the Govt. Review Committee, it

    is seen that the Evaluation Committee (E.C.) has stated

    that  their  evaluation was not  based  merely  on  the

    submittals   but   they  relied  upon  some   published

    statistics,  information available within  their  setup

    and  their own perception and understanding of  various

    aspects  of Evaluation (Please refer GRC\022s)  report  on

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

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    not in conformity to RFP.

              xx        xx             xx

    4.2  There are 8 sub-criterions in the criteria no. 4.1.1

    out of which 4 have further sub-factors. Similarly there are

    11 sub-criterions in the criteria 4.1.2 out of which 8 have

    further sub-factors.

    4.3  Through allocation of weightage to different  sub-

    criterions   were   indicated  in  RFP,  weightage   to

    different  sub-factors  were  not  indicated  but   was

    assigned  later by EC based on IMG directions.  EC  has

    not confirmed explicitly whether these  weightages were

    assigned  before  or  after opening  of  bids.  Certain

    anomalies have been observed in the allocation  of  the

    weightages. While equal weightage has been allocated to

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

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

    justification given by EC that these sub-factors are of

    different importance is not considered satisfactory and

    convincing because such a logic can apply to many other

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

    factors  were  not mentioned in RFP and  allocation  of

    equal  weightage  has  been done in  majority  of  sub-

    factors,  we  feel the same concept of equal  weightage

    should  have  been  adopted for these  two  sub-factors

    also.  By assigning different weightages there is  room

    to suspect that some of the bidders have been favoured.

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

    of  commercial  operations of major  airports  covering

    retail property and other commercial operations was  to

    be  done  focusing  on Airports having non-aeronautical

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

    aeronautical earnings of bidder \023E\024 are only  37%,  but

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

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

    that  wording  of  the  Clause did  not  make  the  40%

    mandatory is not convincing. In any case, since the non-

    aeronautical  earnings  of  \023E\024  was  less   than   the

    threshold limit of 40%, assigning a high score  of  75%

    was  not justified. This should have been of the  order

    of 40% to 50%.

    4.5 In sub-factor 1.1.8, the assessment of operating in

    non-OECD countries was to be as per the RFP. Bidder \021E\022

    operating  in  Mexico, which, is an OECD  country,  has

    been  awarded 75% marks, which is not in conformity  to

    RFP. The explanation given by EC to IMG that the bidder

    has  Airport development experience in other developing

    countries like Ecuador, Uruguay and Guatemala,  is  not

    considered  convincing. Our considered opinion  is  the

    \023track  record in improved performance\024 is also  to  be

    judged  only  in  the  context of a  non-OECD  country.

    Therefore,  awarding marks against  this  item  is  not

    considered in conformity to the item in RFP.

    4.6  In  sub-factor  3.1.2  (proportion  of  AAI  Staff

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

    awarded  50%  marks  for  minimum  40%  absorption  and

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

    absorption. Since RFP has stipulated 40% absorption  as

    minimum  acceptable and additional weightage  has  been

    contemplated for a higher proportion of absorption,  we

    feel  it  is more reasonable and rational to distribute

    full marks \005\005\005\005 to 100% absorption.

    4.7  If  moderation  of marks for the  above  mentioned

    items  is  done, following reduction in  the  score  of

    bidder \021E\022 will take place:

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  Sr. No.              Item             Mumbai     Delhi      (i)       If  equal  weightage is    1.1        1.1                given   to  sub-factors                1.2.2 & 1.2.3.     (ii)       If  equal  weightage is    0.5        0.6                given   to  sub-factors                3.1.1 & 3.1.2.     (iii)      If  the  marks of  sub-    0.7        0.7                factor 1.1.6 given  for                non-aeronautical                revenue  less than  40%                are  reduced from 75  %                to 50%.     (iv)       If  score of sub-factor    2.1        2.1                1.1.8     given     for                experience in  an  OECD                country, is excluded.      (v)       If  marking  system  of    1.6        1.9                sub-factor   3.1.2   as                modified  keeping   \0210\022                for  40% absorption and                \0215\022       for      100%                absorption.                Total (i) to (vi)          6.0        6.4                Resultant score of  \021E\022    75.0       74.6                for criteria 4.1.1.

From  the  above,  it  is clear that  the  above  moderation

clearly disqualifies bidder \021E\022 in criteria 4.1.1.

    4.8  Modernization exercise attempted  above  will  not

    make any material difference in the position of bidders

    \021A\022,   \021C\022,   \021D\022  and  \021F\022  who  will   remain   still

    disqualified. In regard to bidder \021B\022 he will still  be

    well  above  the qualifying marks of 80%. In  fact  his

    position would improve marginally. Therefore,  we  have

    not  attempted  to  moderate the  marks  of  the  other

    bidders based on our observations of paras 4.3 to 4.6.

    4.9 While scrutinizing the marks for criteria 4.1.2  we

    have the following observations to make:-

         The  GETE  have  not studied the  development

    plan  of this bidder or any other bidder  for that

    matter.  We have also not discussed this with  the

    GTA   (Air   Plan).  Considering   the   type   of

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    deficiencies  in the developmental  plans  pointed

    out  by AAI, we feel the marking of bidder \021E\022 has

    been  on  a liberal side in regard to sub-criteria

    6.1  to  6.5.  This will also be the marks  if  we

    compare  the marks scored by bidder \021B\022  vis-‘-vis

    marks  scored  by  bidder \023E\024 in regard  to  Delhi

    Airport as brought out under:-

          Maximum Score      Score of \021B\022     Score of \021E\022 Delhi          44.5               30.2             43.0

    4.10.  Admittedly bidder B has better credentials,  for

    airport  development and such vast difference in  marks

    scored  by bidder \021E\022 over bidder \021B\022 cannot be  easily

    explained.  We feel that if the rational  approach  has

    been  adopted bidder \021E\022 who now gets qualified by  0.3

    marks for Mumbai and by 1.1 marks for Delhi would  have

    been disqualified.

    4.11  Since  in  any case in our view bidder  \021E\022  gets

    disqualified  on the basis of our assessment  contained

    in   Para-4.7  above,  we  are  of  the  opinion   that

    qualifying bidder \021E\022 technically is not correct.

SECOND REPORT OF GETE DATED 13th JANUARY, 2006

    \023xx            xx             xx        xx

    Based on the methodology adopted by GETE for moderating

    the  marks  of  bidder \021E\022, we have now  moderated  the

    scores  of  all other bidders as well.  Based  on  this

    exercise,  the  marks secured by the different  bidders

    are  given in a tabulated form separately for Delhi and

    Mumbai Airports\024.

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A-  Table  showing moderated scores of all  the  bidders  in criteria \021A\022 (Management Capabilities) for Mumbai Airport Sl.     Weightage    A     B      C       D      E      F No.  1.1       25.0     6.7   22.5   17.1   19.7   19.6   17.2  1.2       12.5     2.8   9.7    9.7     4.7    9.2    9.5  2.1       12.5     5.4   7.1    11.7    6.7    9.6    8.8  2.2       12.5     5.0   10.0   11.3    5.0   11.3   10.0  3.1       12.5     6.9   10.5   10.9    7.2   10.8   10.5  3.2       12.5     2.5   12.5   5.0     7.5   11.3   11.3 3.3&       12.5     6.3   12.5   7.5     6.3    9.4    8.8 3.4 Total      100     35.6   84.8   73.2   57.1   81.2   76.1 Score as per shift 35.5   84.7   73.1   57.0    81.0  76.0 Moderation due to                                      (i)    If    equal +     -0.21   -     -0.02   -1.09  - weightage is given 0.96          0.02                 0.23 to      sub-factor 1.2.2 and 1.2.3 (ii)    If   equal +1.8  -0.81   +0.3  -0.32   -0.49  - weightage is given 5             5                    0.81 to      sub-factor 3.1.1 and 3.1.2 (iii) If the marks 0.0   0.0     0.0   0.0     -0.70  0.0 of      sub-factor 1.1.6 given to \021E\022 for           non- aeronautical revenue less  than 40%   are  reduced from 75% to 50%  - others no change. (iv)  If score  of 0.0   0.0     0.0   0.0     -2.1   0.0 sub-factor   1.1.8 given          for experience in OECD country to \021E\022  is excluded -  others no change. (v)   If   marking 0.0   -1.98   -     -3.13   -1.82  - system   of   sub-               0.17                 1.98 factor  3.1.2   is modified   keeping \0210\022     for    40% absorption and \0215\022 for           100% absorption. Total variation    +2.8  -3.00   +0.1  -3.47   -6.20  -                    1             6                    3.02 Revised score      38.3  81.7    73.3  53.5    74.8   73.0

B-  Table  showing moderated scores of all  the  bidders  in criteria \021A\022 (Management Capabilities) for Delhi Airport

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

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Score as per shift 37.6   84.7   73.1   57.0    80.9   Moderation due to                                      (i)    If    equal   +   -0.21     -   -0.02   -1.09   weightage is given 0.96          0.02 to      sub-factor 1.2.2 and 1.2.3 (ii)    If   equal +1.8  -0.81   +0.3  -0.32   -0.60   weightage is given   5             5 to      sub-factor 3.1.1 and 3.1.2 (iii) If the marks  0.0   0.0     0.0   0.0    -0.70   of      sub-factor 1.1.6 given to \021E\022 for           non- aeronautical revenue less  than 40%   are  reduced from 75% to 50%  - others no change. (iv)  If score  of  0.0   0.0     0.0   0.0     -2.1   sub-factor   1.1.8 given          for experience in OECD country to \021E\022  is excluded -  others no change. (v)   If   marking  0.0  -1.98     -   -3.13   -1.60   system   of   sub-               0.17 factor  3.1.2   is modified   keeping \0210\022     for    40% absorption and \0215\022 for           100% absorption. Total variation    +2.8  -3.00   +0.1  -3.47   -6.09                        1             6 Revised score      40.4   81.7   73.3   53.5    74.8                 

    As  rightly  pointed  out by learned  counsel  for  the

respondents  that  if  EC  felt  that  the  priorities   and

weightages  as  indicated in the RFP were inappropriate,  it

should  have requested AAI/GOI to amend the RFP  before  the

bids  were  received. Interestingly, the modifications  were

resorted  to  after  the  bids were  opened.   That  is  the

principal reason for which EGOM appears to have sought views

of  the  COS  and the COS was equally entitled to  invite  a

group of experts to examine the matter.

     The details relating to the marks allotted to the bids

are as follows:

Delhi airport

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Sl.    Name of           Technical evaluation         Financia No.    Bidder                                          l Bid %                        Management        Development                              capability        capability                      Pre-      Post-                                         Sridharan  Sridharan  1  Reliance-ASA     80.9       74.8        81.0        45.99     (Bidder E)  2  GMR-Frapport     84.7       81.7        80.1        43.64     (Bidder B)  3  DS               73.1       73.3        70.5        40.15     Construction     Munich     Airport     (Bidder C)  4  Sterlite \026       57.0       53.5        61.9        37.04     Macquarie     (Bidder D)  5  Essel \026 TAV      37.6       40.4        41.4       Bid not     (Bidder A)                                         opened                                

Mumbai Airport

Sl.    Name of           Technical evaluation         Financia No.    Bidder                                          l Bid %                        Management        Development                              capability        capability                      Pre-      Post-                                         Sridharan  Sridharan  1  Reliance-ASA     81.0       74.8        80.2        21.33     (Bidder E)  2  GMR-Frapport     84.7       81.7        92.7        33.03     (Bidder B)  3  DS               73.1       73.3        54.7        28.12     Construction     Munich     Airport     (Bidder C)  4  Sterlite \026       57.0       53.5        65.1      Bids not     Macquarie                                          opened     (Bidder D)  5  Essel \026 TAV      35.5       38.3        29.4      Bids not     (Bidder A)                                         opened  6  GVK-ACSA         76.0       73.0        59.3        38.70     (Bidder F)

     Learned  counsel for the respondents  have  emphasized

that  a curious feature of the four changes is that at least

three  of  them  were in principle designed  to  enable  the

appellant to get over the shortcomings in its bid. It is  to

be  noted  that  the  appellant had no property  development

experience.  It had projected less than 40% non aeronautical

revenue and had a partner from an OECD country.

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     The  GETE\022s 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 nobody\022s case, though  it

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

variations and beneficiary was the appellant.

    GETE\022s report shows that it enunciated the principle to

carry  out  an exercise that would be more in the nature  of

validation dealing with the four variations made by EC.

     GETE  also  noted  that certain  issues  can  be  more

satisfactorily addressed by process of validation that would

involve a re-allocation of marks, on the assessment made  by

the  EC  of  the  bids  albeit in a  manner  that  would  be

consistent with the RFP. It essentially was not an  exercise

of re-evaluation but of a re-allocation consistent with RFP.

     As  noted in GETE\022s first report, its attempt  was  to

assess  whether EC had assigned weightages and  marks  in  a

logical  and  transparent  manner  to  the  sub-factors  and

whether  there  had been any biased in favour of or  against

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any of the bidders while assigning marks, with reference  to

the  RFP.  While making such examination, the issues  raised

by  the  members of IMG were kept in view, but as stated  in

the report, GETE was not solely guided by their views.

    Though the first report itself indicated the reasons as

to  why  the  evaluation process containing  the  moderation

exercise  was  not  undertaken in  respect  of  bidders,  as

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

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

of both the bids while others did not.

     Challenge  has  been  made by  the  appellant  to  the

lowering  of  the  bench mark. It is to be  noted  that  the

appellant  had  come  into the zone  of  consideration  only

because of lowering of the bench mark as otherwise after the

modifications  were  made by GETE, it had  not  crossed  the

bench mark.

     The  appellant\022s stand that if none was found eligible

on  the  basis of 80% bench mark, there should have  been  a

fresh bid, has been answered by the respondents. It has been

pointed  out  that  the  number of bidders  was  small.  The

bidders  after  opening  of the  bid  knew  the  merits  and

demerits  of  all the bids. There was an urgency  for  early

completion  of  the  airports  keeping  in  view  the   2010

Commonwealth Games.

    The scope for judicial review of administrative actions

has been considered by this Court in various cases.

    One  of the points that falls for determination is  the

scope for judicial interference in matters of administrative

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decisions.  Administrative action is stated to be  referable

to  broad  area  of  Governmental activities  in  which  the

repositories of power may exercise every class of  statutory

function  of executive, quasi-legislative and quasi-judicial

nature.  It  is  trite law that exercise of  power,  whether

legislative or administrative, will be set aside if there is

manifest error in the exercise of such power or the exercise

of  the power is manifestly arbitrary (See State of U.P. and

Ors. v. Renusagar Power Co. and Ors. (AIR 1988 SC 1737).  At

one  time,  the  traditional view in England  was  that  the

executive   was   not  answerable  where  its   action   was

attributable to the exercise of prerogative power. Professor

De   Smith  in  his  classical  work  \023Judicial  Review   of

Administrative  Action\024 4th Edition at pages 285-287  states

the  legal  position  in  his own terse  language  that  the

relevant principles formulated by the Courts may be  broadly

summarized  as follows. The authority in which a  discretion

is  vested can be compelled to exercise that discretion, but

not  to exercise it in any particular manner. In general,  a

discretion must be exercised only by the authority to  which

it  is  committed.  That  authority must  genuinely  address

itself  to  the matter before it; it must not act under  the

dictates of another body or disable itself from exercising a

discretion  in  each  individual  case.  In  the   purported

exercise of its discretion, it must not do what it has  been

forbidden  to  do,  nor  must it do what  it  has  not  been

authorized  to  do.  It must act in good  faith,  must  have

regard  to  all  relevant considerations  and  must  not  be

influenced  by irrelevant considerations, must not  seek  to

promote purposes alien to the letter or to the spirit of the

legislation  that gives it power to act, and  must  not  act

arbitrarily  or  capriciously. These several principles  can

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conveniently be grouped in two main categories: (i)  failure

to  exercise  a  discretion, and (ii)  excess  or  abuse  of

discretionary  power.  The  two classes  are  not,  however,

mutually  exclusive.  Thus,  discretion  may  be  improperly

fettered  because irrelevant considerations have been  taken

into  account,  and  where  an  authority  hands  over   its

discretion to another body it acts ultra vires.

     The  present trend of judicial opinion is to  restrict

the doctrine of immunity from judicial review to those class

of  cases  which  relate to deployment of troupes,  entering

into  international treaties, etc. The distinctive  features

of some of these recent cases signify the willingness of the

Courts to assert their power to scrutinize the factual basis

upon which discretionary powers have been exercised. One can

conveniently classify under three heads the grounds on which

administrative  action  is subject to  control  by  judicial

review.   The  first  ground  is  \021illegality\022  the   second

\021irrationality\022,  and  the  third \021procedural  impropriety\022.

These principles were highlighted by Lord Diplock in Council

of  Civil  Service Unions v. Minister for the Civil  Service

(1984 (3) All.ER.935), (commonly known as CCSU Case). If the

power  has  been  exercised on a non-consideration  or  non-

application  of  mind to relevant factors, the  exercise  of

power  will be regarded as manifestly erroneous. If a  power

(whether legislative or administrative) is exercised on  the

basis  of  facts which do not exist and which  are  patently

erroneous, such exercise of power will stand vitiated.  (See

Commissioner  of  Income-tax v. Mahindra and  Mahindra  Ltd.

(AIR  1984 SC 1182). The effect of several decisions on  the

question  of  jurisdiction have been summed  up  by  Grahame

Aldous  and  John  Alder  in their  book  \023Applications  for

Judicial Review, Law and Practice\024 thus:

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               \023There is a general presumption against           ousting  the jurisdiction of the  Courts,  so           that  statutory provisions which  purport  to           exclude   judicial   review   are   construed           restrictively.  There are,  however,  certain           areas   of  governmental  activity,  national           security being the paradig, which the  Courts           regard    themselves   as   incompetent    to           investigate, beyond an initial decision as to           whether the government\022s claim is bona  fide.           In this kind of non-justiciable area judicial           review  is  not entirely excluded,  but  very           limited.  It  has also been said that  powers           conferred   by  the  Royal  Prerogative   are           inherently   unreviewable   but   since   the           speeches of the House of Lords in council  of           Civil  Service  Unions v.  Minister  for  the           Civil   Service   this  is  doubtful.   Lords           Diplock, Scaman and Roskili appeared to agree           that  there is no general distinction between           powers,  based upon whether their  source  is           statutory  or  prerogative but that  judicial           review  can be limited by the subject  matter           of  a particular power, in that case national           security. May prerogative powers are in  fact           concerned   with  sensitive,  non-justiciable           areas, for example, foreign affairs, but some           are  reviewable in principle,  including  the           prerogatives  relating to the  civil  service           where  national  security  is  not  involved.           Another non-justiciable power is the Attorney           General\022s  prerogative to decide  whether  to           institute legal proceedings on behalf of  the           public interest.\024            

      (Also   see  Padfield  v.  Minister  of  Agriculture,

Fisheries and Food (LR (1968) AC 997).

     The  Court  will be slow to interfere in such  matters

relating  to  administrative functions  unless  decision  is

tainted   by   any  vulnerability  enumerated  above;   like

illegality,   irrationality  and   procedural   impropriety.

Whether action falls within any of the categories has to  be

established.  Mere  assertion in that regard  would  not  be

sufficient.

     The  famous  case commonly known as \023The  Wednesbury\022s

case\024  is  treated  as the landmark so far  as  laying  down

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various  basic  principles relating to  judicial  review  of

administrative or statutory direction.

    Before  summarizing the substance of  the  principles

laid  down therein we shall refer to the passage from  the

judgment  of Lord Greene in Associated Provincial  Picture

Houses Ltd. v. Wednesbury Corpn. (KB at p. 229: All ER  p.

682).  It reads as follows:

                                    \023......It  is true that  discretion                must  be exercised reasonably.  Now                what   does  that  mean?    Lawyers                familiar with the phraseology  used                in    relation   to   exercise   of                statutory discretions often use the                word  \021unreasonable\022  in  a  rather                comprehensive   sense.    It    has                frequently   been   used   and   is                frequently   used  as   a   general                description of the things that must                not be done. For instance, a person                entrusted  with a discretion  must,                so   to   speak,   direct   himself                properly in law.  He must call  his                own  attention to the matters which                he  is  bound to consider. He  must                exclude   from   his  consideration                matters  which  are  irrelevant  to                what  he  has to consider.   If  he                does  not obey those rules, he  may                truly  be said, and often is  said,                to    be   acting   \021unreasonably\022.                Similarly,  there may be  something                so  absurd that no sensible  person                could even dream that it lay within                the   powers   the  authority....In                another,   it   is   taking    into                consideration  extraneous  matters.                It  is  unreasonable that it  might                almost  be described as being  done                in  bad  faith; and  in  fact,  all                these things run into one another.\024                 Lord Greene also observed (KB p.230: All ER p.683)                           \023....it  must  be  proved   to   be                unreasonable in the sense that  the                court considers it to be a decision                that  no  reasonable body can  come                to.   It  is  not  what  the  court                considers unreasonable.  ....   The                effect of the legislation is not to                set  up the court as an arbiter  of                the  correctness of one  view  over                another.\024 (emphasis supplied)

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    Therefore,  to arrive at a decision on \023reasonableness\024

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

relevant  factors or taken into account irrelevant  factors.

The  decision of the administrator must have been within the

four  corners  of  the law, and not one  which  no  sensible

person  could have reasonably arrived at, having  regard  to

the  above principles, and must have  been a bona fide  one.

The  decision  could  be one of many  choices  open  to  the

authority but it was for that authority to decide  upon  the

choice and not for the Court to substitute its view.

                                          The  principles  of  judicial review of  administrative

action  were further summarized in 1985 by Lord  Diplock  in

CCSU   case   as  illegality,  procedural  impropriety   and

irrationality. He said more grounds could in  future  become

available,  including the doctrine of proportionality  which

was  a  principle followed by certain other members  of  the

European Economic Community. Lord Diplock observed  in  that

case as follows:

                               \023....Judicial  review  has  I                think,  developed to a stage  today                when,   without   reiterating   any                analysis of the steps by which  the                development has come about, one can                conveniently classify  under  three                heads    the   grounds   on   which                administrative action is subject to                control  by  judicial  review.  The                first    ground   I   would    call                \021illegality\022,      the       second                \021irrationality\022   and   the   third                \021procedural impropriety\022.  That  is                not to say that further development                on  a case-by-case basis may not in                course of time add further grounds.                I  have  in  mind particularly  the                possible adoption in the future  of                the  principle of \021proportionality\022                which   is   recognized   in    the                administrative law  of  several  of                our  fellow members of the European

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              Economic Community.\024

Lord Diplock explained \023irrationality\024 as follows:

              \023By \021irrationality\022 I mean what can                by now be succinctly referred to as                Wednesbury  unreasonableness\022.   It                applies to a decision which  is  to                outrageous in its defiance of logic                or of accepted moral standards that                no  sensible person who had applied                his  mind  to  the question  to  be                decided could have arrived at it.\024                                                     In  other  words,  to characterize a  decision  of  the

administrator  as \023irrational\024 the Court  has  to  hold,  on

material, that it is a decision \023so outrageous\024 as to be  in

total  defiance  of  logic or moral standards.  Adoption  of

\023proportionality\024 into administrative law was left  for  the

future.

       In  essence, the test is to see whether there is any

infirmity  in  the decision making process and  not  in  the

decision itself. (See Indian Railway Construction Co.Ltd. v.

Ajay Kumar (2003 (4) SCC 579)

    Wednesbury  principles  of  reasonableness   to   which

reference has been made in almost all the decisions referred

to hereinabove is contained in Wednesbury\022s case (supra). In

that case Lord Green MR has held that a decision of a public

authority  will  be liable to be quashed in judicial  review

proceeding  where the court concludes that the  decision  is

such  that  no  authority properly directing itself  on  the

relevant law and acting reasonably could have arrived it.

    The standards of judicial review in terms of Wednesbury

is now considered to be \021traditional\022 in England in contrast

to  higher  standards under the common law of human  rights.

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Lord  Cooke  in  R  v.  Secretary  of  State  for  the  Home

Department, ex parte Daly, (2001) 3 All ER 433 observed:

         \023And  I think that the day will come when  it           will  be  more  widely  recognized  that  the           Wednesbury    case   was   an   unfortunately           retrogressive     decision     in     English           administrative law, in so far as it suggested           that  there  are  degrees of unreasonableness           and that only a very extreme degree can bring           an   administrative   decision   within   the           legitimate  scope  of judicial  invalidation.           The   depth  of  judicial  review   and   the           deference  due  to administrative  discretion           vary with the subject matter. It may well be,           however,  that the law can never be satisfied           in  any  administrative  field  merely  by  a           finding that the decision under review is not           capricious or absurd.\024                       It  is  further observed that this does not mean that  there

has  been  a  shift to merits review. On the  contrary,  the

respective   roles   of   judges  and   administrators   are

fundamentally  distinct and will remain so. To  this  extent

the  general  tenor of the observations in  R  (Mahmood)  v.

Secretary  of State for the Home Dept. (2000)1 WLR  840  are

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

in Mahmood\022s case \023that the

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

subject matter in hand\024.

                             (underlined for emphasis)

      In  Huang  & Ors v. Secretary of State for  the  Home

Department, (2005) 3 All ER 435 it is observed:

         \02350....the depth of judicial review  and  the           deference  due  to administrative  discretion           vary  with the subject matter. Can we find  a           principled  approach to give this proposition           concrete  effect  in  cases  such  as   these           appeals? In R  (on the application of ProLife           Alliance)  v BBC (2003 (2)  All ER 977,  Lord           Hoffmann said:                                      \021My   Lords,  although   the   word                \023deference\024 is now very popular  in                describing the relationship between                the judicial and the other branches

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              of  government, I do not think that                its  overtones  of  servility,   or                perhaps  gracious  concession,  are                appropriate  to  describe  what  is                happening. In a society based  upon                the  rule of law and the separation                of   powers,  it  is  necessary  to                decide  which branch of  government                has  in any particular instance the                decision-making power and what  the                legal  limits  of that  power  are.                That  is a question of law and must                therefore   be   decided   by   the                courts.\024                      (underlined for emphasis)

     Section  9 of the Judicial Review Procedure Act,  1996

(Canada) states that the Court may reject an application for

judicial  review of a statutory power of decision, if  there

is mere irregularity in form or a technical irregularity, or

if  the  court  feels that there has been no miscarriage  of

justice.

    Chapter  5 of the US Code 41 also talks about  judicial

review   of   administrative  decisions   regarding   public

contracts. It states that the courts would not interfere  in

an  award  process  unless  it is  shown  to  be  manifestly

fraudulent, capricious and so grossly erroneous as to  imply

bad faith.

    While exercising power of judicial review courts should

not proceed where if two views are possible and one view has

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

taking  one  of  the views cannot be a ground  for  judicial

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

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

Court observed as follows:

         \0239.  The  Asian  Development Bank  came  into           existence  under  an  Act  called  the  Asian

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         Development  Act, 1966, in  pursuance  of  an           international agreement to which India was  a           signatory. This new financial institution was           established  for  accelerating  the  economic           development  of Asia and the Far East.  Under           the  Act the Bank and its officers have  been           granted  certain  immunities,  exemption  and           privileges.  It  is well  known  that  it  is           difficult  for the country to go  ahead  with           such  high cost projects unless the financial           institutions like the World Bank or the Asian           Development  Bank grant loan or  subsidy,  as           the   case   may  be.  When  such   financial           institutions  grant  such  huge  loans   they           always insist that any project for which loan           has  been sanctioned must be carried  out  in           accordance with the specification and  within           the  scheduled  time and  the  procedure  for           granting  the award must be duly adhered  to.           In  the  aforesaid premises  on  getting  the           evaluation   bids   of  the   appellant   and           Respondent-1  together with the  consultant\022s           opinion after the so-called corrections  made           the  conclusion  of the Bank  to  the  effect           \023the     lowest    evaluated    substantially           responsive  bidder  is  consequently  AFCONS\024           cannot  be  said  to be either  arbitrary  or           capricious   or  illegal  requiring   Court\022s           interference  in the matter of  an  award  of           contract. There was some dispute between  the           Bank  on one hand and the consultant who  was           called  upon to evaluate on the other on  the           question whether there is any power of making           any  correction to the bid documents after  a           specified   period.   The   High   Court   in           construing   certain  clauses  of   the   bid           documents  has  come to the  conclusion  that           such   a  correction  was  permissible   and,           therefore, the Bank  could not have  insisted           upon  granting the contract in favour of  the           appellant.  We are of the considered  opinion           that it was not within the permissible limits           of   interference  for  a   court   of   law,           particularly   when   there   has   been   no           allegation  of malice or ulterior motive  and           particularly when the court has not found any           mala  fides  or favouritism in the  grant  of           contract in favour of the appellant. In  Tata           Cellular v. Union of India (1994 (6) SCC 651)           , this Court has held that:                        \023The  duty  of the court is to  confine             itself  to  the question  of  legality.             Its concern should be:                           1.    Whether    a    decision-making                authority exceeded its powers,                                2. committed an error of law,                                3. committed a breach of the rules of                natural justice,                                4.   reached  a  decision  which   no                reasonable   tribunal   would    have

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              reached or,                                5. abused its powers.                           Therefore,  it  is  not  for  the  Court   to           determine  whether  a  particular  policy  or           particular  decision taken in the  fulfilment           of  that policy is fair. It is only concerned           with the manner in which those decisions have           been  taken.  The extent of the duty  to  act           fairly  will vary from case to case.  Shortly           put, the grounds upon which an administrative           action  is  subject  to control  by  judicial           review can be classified as under:                           (i)  Illegality: This means the decision-maker must                understand correctly the law that regulates his decision-                making power and must give effect to it;                           (ii) Irrationality, namely, Wednesbury unreasonableness.                           (iii) Procedural impropriety.            

         The  above are only the broad grounds but  it           does not rule out addition of further grounds           in course of time.\024

         10.   Therefore,  though  the  principle   of           judicial review cannot be denied  so  far  as           exercise  of contractual powers of government           bodies  are concerned, but it is intended  to           prevent arbitrariness or favouritism  and  it           is exercised in the larger public interest or           if  it  is brought to the notice of the court           that  in  the matter of award of  a  contract           power  has  been exercised for any collateral           purpose.  But  on  examining  the  facts  and           circumstances  of  the present  case  and  on           going  through  the records  we  are  of  the           considered opinion that none  of the criteria           has   been   satisfied   justifying   Court\022s           interference  in  the grant  of  contract  in           favour  of the appellant. We are not entering           into  the controversy raised by Mr Parasaran,           learned  Senior Counsel that the  High  Court           committed  a factual error in coming  to  the           conclusion  that Respondent-1 was the  lowest           bidder  and the alleged mistake committed  by           the   consultant  in  the   matter   of   bid           evaluation  in not taking  into  account  the           customs  duty  and  the  contention  of   Mr.           Sorabjee, learned senior counsel that it  has           been conceded by all parties concerned before           the High Court that on corrections being made           respondent-1 was the lowest bidder. As in our           view  in  the  matter of a  tender  a  lowest           bidder may not claim an enforceable right  to           get   the  contract  though  ordinarily   the           authorities  concerned  should   accept   the           lowest  bid. Further we find from the  letter           dated   12.7.1996  that  Paradip  Port  Trust           itself has come to the following conclusion:

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              \023The  technical capability of any  of                the  three  bidders to undertake  the                works is not in question. Two of  the                bids  are  very similar in price.  If                additional   commercial   information                which   has  now  been  provided   by                bidders  through Paradip Port  Trust,                had  been  available at the  time  of                assessment, the outcome would  appear                to favour the award to AFCONS.\024                           11.   This   being  the  position,   in   our           considered  opinion, the High Court  was  not           justified  in interfering with the  award  by           going  into  different  clauses  of  the  bid           document  and  then coming to the  conclusion           that the terms provided for modifications  or           corrections even after a specified  date  and           further   coming   to  the  conclusion   that           Respondent  1  being the lowest bidder  there           was no reason for the Port Trust to award the           contract  in  favour  of  the  appellant.  We           cannot  lose sight of the fact of  escalation           of  cost in such project on account of  delay           and  the  time  involved  and  further  in  a           coordinated   project  like  this,   if   one           component  is  not  worked  out  the   entire           project gets delayed and the enormous cost on           that  score  if rebidding is done.  The  High           Court  has  totally lost sight of  this  fact           while   directing  the  rebidding.   In   our           considered   opinion,   the   direction    of           rebidding  in the facts and circumstances  of           the  present  case instead of  being  in  the           public  interest would be grossly detrimental           to the public interest\024.

     It  is also to be noted that there was no stand before

the  High Court that the appellant wanted to match the  bid.

Even  if it is accepted for the sake of argument,  that  was

so urged it would have no consequence.

    A very attractive argument was advanced that as GMR has

been allowed to match the financial dealing of appellant for

Mumbai  airport, the same modality should have been  adopted

for the other bidders. Though the argument is attractive, at

first  flush,  it cannot be accepted for the  simple  reason

that when bench mark is crossed, financial consideration  is

the determinative factor because of revenue sharing.

    It is to be noted that though emphasis was led that the

constitution  of Committees of non technical  persons  could

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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 EC\022s decision.

     Expression  of  different  views  and  discussions  in

different meetings really lead to a transparent process  and

transparency in the decision making process. In  the  realms

of  contract, various choices were available. Comparison  of

the  respective  merits, offers of choice and  whether  that

choice  has been properly exercised are the deciding factors

in the judicial review.

     As  has been rightly submitted by learned counsel  for

the  Union  of  India, the RFP has to be considered  in  the

context  of other documents like substantial document  OMDA,

execution of the agreements culminating to the final  master

plan.  Initial development plan is nothing but a  projection

which  has  to  be broadly in line with OMDA.  Undisputedly,

OMDA is prepared by the GOI and AAI. One of the documents in

the transaction documents is OMDA.

     It  is  to be noted that if no one was qualified,  two

alternatives were available either to scrap or  abandon  the

process  and  second  to re-conduct the  tenders.  As  noted

above,  the  practical  compulsion  which  made  the  choice

avoidable   cannot   be  termed  as  perverse   or   lacking

rationality.

     The  safety  valve  is the OMDA. The  ranking  becomes

irrelevant after the bidders have come to the arena and then

finally the financial bid which determines the ultimate bid.

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     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.  GETE\022s

job  was  not  the evaluation but verifying  the  evaluation

process.  GETE\022s examination was restricted to  see  whether

alignment with RFP was correctly done. GETE was not expected

to give fresh opinion and no evaluation was necessary.

     Weightage introduces subjectivity.  GETE has  gone  by

objective  standards. The criterion adopted by GETE  appears

to  be  more rational. It proceeded with the idea that  more

objectivity was necessary. So it has called the  process  to

be validation process.

      It   is  pointed  out  by  learned  counsel  for  the

respondents   that  parameters  for  judicial   review   are

different  in  the matters of contract for  normal  case  of

tenders.   In  case  of  commercial  contracts  the   normal

contractual  matters are excluded. It is  pointed  out  that

there  is  no  overwhelming public interest  involving  such

matters. GETE had only touched the fallacious approach of EC

to  make  the  process  transparent. The  view  taken  is  a

possible view supported by reasons and there should  not  be

any interference.

     In  the ultimate, the question would be whether in the

process of selection the Government had adopted  transparent

and fair process.

     While balancing several claims a rational approach  is

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necessary and that is to be formed in line with the scope of

judicial interference.

     It  is  to  be  noted that Clause 5.5.  deals  with  a

situation  of the same bidder being the highest  bidder  for

both the airports. It proceeds on the basis that there would

be another eligible bidder for the other airport and on that

basis  the  procedure to be adopted has been prescribed.  In

such a situation the bidder who would be successful i.e. the

highest  bidder would be asked to take the airport when  the

difference  between  his  bid and the  next  higher  bid  is

greater.  Such a procedure could be followed where there  is

second valid bid at the final phase. This procedure does not

deal  with  a situation where there is only one bidder  with

valid  bids  for both the airports. In such a  situation  he

becomes  the  highest bidder for both the airports  and  for

that  reason alone, the question of evaluation of  financial

bid arises.

     If  the  RFP  was to consider at the  final  phase  of

evaluation  there  would be only one bid  for  each  of  the

airports.  In  that  event, there would be  no  question  of

finding out difference between the various bids or comparing

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

RFP or to award one of the airports to GMR and to cancel the

process  for  the second or cancel the entire process.   The

latter course would not have been in larger public interest.

Therefore, the EGOM exercised its option.

     In final analysis, what the EGOM has done is to accept

the report of EC subject to validation done by GETE.

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     The extent of judicial review in a case of this nature

where  the  texture cannot be matched with one  relating  to

award  of contract, the observations of this Court in Raunaq

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

(1999  (1)  SCC  492)  are relevant.   It  was  observed  as

follows:

         \02313.   Hence  before  entertaining  a  writ           petition and passing any interim orders  in           such  petitions, the court  must  carefully           weigh  conflicting public  interests.  Only           when it comes to a conclusion that there is           an    overwhelming   public   interest   in           entertaining the petition, the court should           intervene.\024

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

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

SCC 138).

     In  the Queen\022s Bench decision in R. v. Department  of

Constitutional Affairs (2006 All ER (D) 101) it  was  inter-

alia held as follows:

                    \023It  is  not every wandering from the precise           paths of best practice that lends fuel  to  a           claim for judicial review.\024            

    Same  would be available only if public law element  is

apparent  which  would arise only in  a  case  of  \023bribery,

corruption, implementation of unlawful policy and the like\024.

In the case of commercial contract, the aforesaid view about

wandering  was  noted. In paras 50 and 51 it  was  noted  as

follows:

                          \023It  does  not  have  the  material  or           expertise  in this context to \023second  guess\024           the  judgment of the panel. Furthermore, this           process is even more clearly in the realm  of           commercial judgment for the defendant,  which           judgment  cannot properly be the  subject  of           Public  Law challenge on the grounds advanced

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         in the evidence before me.\024            

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

and  the  GETE  wherever subjectivity criteria is  involved,

GETE has not dealt with the same.

     The  mandate  of  EGOM  was to  validate  and  not  to

invalidate.  It  was  a process for overall  validation  and

calibration to apply the correct standard. It is the texture

of  the  tendered document which is of paramount importance.

EC  has  changed the texture whereas GETE did not do it.  It

needs  no  emphasis  that  uneven  denomination  breaks  the

integrity and textures.

    Perverseness in connection with a finding of fact is an

aspect  of mistake of law. Linked with the question  whether

GETE\022s constitution was legal, other question is whether the

jurisdiction conferred on GETE has been properly  exercised.

Examination of the second question alone would be  necessary

since we have held that constitution of GETE does not suffer

from any infirmity.  In R (Iran) v. Secretary of State (2005

EWCA Civ 982 at para 11) it was  observed as follows:

                    \023It   is   well   known   that   \023perversity\024           represents a very high hurdle. In Miftari  v.           SSHD  (2005  EWCA  Civ 481) the  whole  court           agreed  that the word meant what it said:  it           was  a demanding concept. The majority of the           court  (Keene and Maurice Kay LJJ) said  that           it embraced decisions that were irrational or           unreasonable in the Wednesbury sense (even if           there  was  no wilful or conscious  departure           from  the  rational), but it also included  a           finding  of  fact that was wholly unsupported           by  the  evidence, provided always that  this           was a finding as to a material matter.\024       

      Opinions may differ as to when it can be said that in

the  \023public law\024 domain, the entire proceeding  before  the

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appropriate authority is illegal and without jurisdiction or

the defect or infirmity in the order goes to the root of the

matter  and makes it in law invalid or void. The matter  may

have to be considered in the light of the provisions of  the

particular  statute  in   question  and  the  fact-situation

obtaining  in  each case. It is difficult to  visualise  all

situations hypothetically and provide an answer. Be that  as

it   may,   the   question   that  frequently   arises   for

consideration,  is,  in  what   situation/cases   the   non-

compliance  or error or mistake, committed by the  statutory

authority  or  tribunal, makes the decision  rendered  ultra

vires  or  a  nullity  or one without jurisdiction?  If  the

decision   is  without  jurisdiction,  notwithstanding   the

provisions  for obtaining reliefs contained in the  Act  and

the \023ouster clauses\024, the jurisdiction of the ordinary court

is  not excluded. So, the matter assumes significance. Since

the   landmark  decision  in   Anisminic  Ltd.  v.   Foreign

Compensation Commission  [(1969) 1 ALL E.R. 208], the  legal

world   seems  to  have  accepted that  any  \023jurisdictional

error\024 as understood in the liberal or modern approach, laid

down  therein, makes a decision ultra vires or a nullity  or

without  jurisdiction and the \023ouster clauses\024 are construed

restrictively, and such provisions whatever their  stringent

language be, have been held, not to prevent challenge on the

ground that the decision is ultra vires and being a complete

nullity, it is not a decision within the meaning of the Act.

The  concept  of jurisdiction has acquired \023new dimensions\024.

The  original  or  pure  theory of jurisdiction  means  \023the

authority  to  decide\024  and  it  is  determinable   at   the

commencement  and not at the conclusion of the enquiry.  The

said approach has been given a go-by in Anisminic case as we

shall  see  from the discussion hereinafter [see  De  Smith,

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Woolf  and Jowell \027 Judicial Review of Administrative Action

(1995 Edn.) p. 238; Halsbury\022s Laws of England (4th Edn.) p.

114, para 67, footnote (9)]. As Sir William Wade observes in

his book, Administrative Law (7th Edn.), 1994, at p. 299:

         \023The tribunal must not only have jurisdiction           at  the outset, but must retain it unimpaired           until it has discharged its task.\024                       The  decision in Anisminic case (supra) has been cited  with

approval  in a number of cases by this Court.(See: Union  of

India  v.  Tarachand Gupta & Bros. [(1971) 1 SCC 486],  A.R.

Antulay  v.  R.S.  Nayak (1988 (2) SCC 602),  R.B.  Shreeram

Durga  Prasad  and  Fatehchand  Nursing  Das  v.  Settlement

Commission  (IT & WT) ( 1989 (1) SCC 628), N.  Parthasarathy

v.   Controller  of  Capital  Issues  (1991  (3)  SCC  153),

Associated Engineering Co. v. Govt. of AP (1991 (4) SCC 93),

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

161).  In M.L. Sethi v. R.P. Kapur, (1972 (2) SCC 427) legal

position after Anisminic case (supra) was explained  to  the

following effect:

         \02312\005\005  The  word \021jurisdiction\022 is  a  verbal           coat of many colours. Jurisdiction originally           seems to have had the meaning which Lord Reid           ascribed  to it in Anisminic Ltd. v.  Foreign           Compensation    Commission,    namely,    the           entitlement  \021to enter upon  the  enquiry  in           question\022.  If  there was an  entitlement  to           enter upon an enquiry into the question, then           any  subsequent error could only be  regarded           as an error within the jurisdiction. The best           known formulation of this theory is that made           by  Lord Darman in R. v. Bolton (1841)  1  QB           66. He said that the question of jurisdiction           is  determinable at the commencement, not  at           the  conclusion of the enquiry. In  Anisminic           Ltd., Lord Reid said:                                    \021But   there  are  many  cases   where,              although  the tribunal had jurisdiction              to  enter  on the enquiry, it has  done              or   failed  to  do  something  in  the              course of the enquiry which is of  such              a   nature  that  its  decision  is   a

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            nullity.   It   may  have   given   its              decision  in  bad faith.  It  may  have              made  a decision which it had no  power              to  make.  It  may have failed  in  the              course  of  the enquiry to comply  with              the  requirements  of natural  justice.              It  may  in  perfect  good  faith  have              misconstrued the provisions  giving  it              power  to  act  so that  it  failed  to              deal  with the question remitted to  it              and  decided  some question  which  was              not   remitted  to  it.  It  may   have              refused    to   take   into     account              something  which  it  was  required  to              take  into  account. Or  it   may  have              based   its  decision  on  some  matter              which, under the provisions setting  it              up,  it  had  no  right  to  take  into              account. I do not intend this  list  to              be exhaustive.\024

In the same case, Lord Pearce said:

         \023Lack  of  jurisdiction may arise in  various           ways.  There  may  be  an  absence  of  those           formalities  or  things which are  conditions           precedent   to   the  tribunal   having   any           jurisdiction to embark on an  enquiry. Or the           tribunal may at the end make an order that it           has  no  jurisdiction  to  make.  Or  in  the           intervening stage while engaged on a   proper           enquiry,  the  tribunal may depart  from  the           rules  of  natural justice;  or  it  may  ask           itself  the wrong questions; or it  may  take           into   account  matters  which  it  was   not           directed  to take into account.   Thereby  it           would step outside its jurisdiction. It would           turn  into  its  enquiry into  something  not           directed  by Parliament and fail to make  the           enquiry which Parliament did direct.  Any  of           these   things  would  cause  its   purported           decision to be a nullity.\024                     The  dicta of the majority of the House of Lords,        in  the  above case would show the extent to  which        \021lack\022  and  \021excess\022  of  jurisdiction  have  been        assimilated or, in other words, the extent to which        we  have moved away from the traditional concept of        \021jurisdiction\022.  The effect of the  dicta  in  that        case   is   to   reduce   the  difference   between        jurisdictional  error  and  error  of  law   within        jurisdiction   almost  to  vanishing   point.   The        practical effect of the decision is that any  error        of  law  can  be  reckoned as jurisdictional.  This        comes  perilously  close to saying  that  there  is        jurisdiction if the decision is right  in  law  but        none if it is wrong. Almost any misconstruction  of        a  statute  can  be  represented as  \021basing  their        decision on a matter with which they have no  right        to  deal\022,  \021imposing an unwarranted condition\022  or        \021addressing  themselves to a wrong  question\022.  The        majority  opinion  in the case leaves  a  court  or

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      tribunal  with virtually no margin of legal  error.        Whether  there is excess of jurisdiction or  merely        error within jurisdiction can be determined only by        construing the empowering statute, which will  give        little  guidance. It is really a  question  of  how        much latitude the court is prepared to allow....\024                                                               In the subsequent Constitution Bench decision in Hari Prasad

Mulshanker  Trivedi  v. V.B. Raju and Ors.   (1974  (3)  SCC

415), it was held as follows:

         \023... Though the dividing line between lack of           jurisdiction or power and erroneous  exercise           of  it  has become thin with the decision  of           the  House  of  Lords in the  Anisminic  case           (i.e.  Anisminic Ltd. v. Foreign Compensation           Commission (1967) 2 All E.R. 986), we do  not           think  that the distinction between  the  two           has  been completely wiped out. We are  aware           of   the   difficulty   in   formulating   an           exhaustive rule to tell when there is lack of           power and when there is an erroneous exercise           of  it. The difficulty has arisen because the           word \021jurisdiction\022 is an expression which is           used  in  a  variety of senses and takes  its           colour from its context, (see per Diplock, J.           at p. 394 in the Anisminic case). Whereas the           \021pure\022  theory of jurisdiction  would  reduce           jurisdictional control to a vanishing  point,           the  adoption  of  a narrower  meaning  might           result  in  a more useful legal concept  even           though  the formal structure of law may  lose           something of its logical symmetry. \021At bottom           the  problem  of  defining  the  concept   of           jurisdiction  for purpose of judicial  review           has been one of public policy rather than one           of  logic\022. [S.A. Smith, \021Judicial Review  of           Administrative Action, 2nd Edn., p. 98. (1968           Edn.)\024                 The  observation of the learned author, (S.A. De Smith)

was  continued in its 3rd Edn. (1973) at p.98 and in its 4th

Edn. (1980) at p. 112 of the book. The observation aforesaid

was based on the then prevailing academic opinion only as is

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

observation is omitted from the latest edition of  the  book

De   Smith,   Woolf   and  Jowell  \027  Judicial   Review   of

Administrative Action \027 5th Edn. (1995) as is  evident  from

p.  229;  probably due to later developments in the law  and

the  academic opinion that has emerged due to the change  in

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the perspective.

    After 1980, the decision in first Anisminic\022s case came

up  for  further  consideration before the House  of  Lords,

Privy  Council and other courts. The three leading decisions

of  the  House  of  Lords  wherein Anisminic  principle  was

followed   and  explained,  are  the  following:  Re   Racal

Communications Ltd.,   (1980) 2 All E.R. 634; O\022  Reilly  v.

Mackman  (1982)  3  All. E.R. 1124; Re. v.  Hull  University

Visitor (1993) 1 All E.R. 97. It should be noted that Racal,

in  re  case (supra) the Anisminic principle was held to  be

inapplicable  in  the  case of (superior)  court  where  the

decision  of the court is made final and conclusive  by  the

statute. (The superior court referred to in this decision is

the  High Court) [1981 AC 374 (383, 384, 386, 391).  In  the

meanwhile,   the  House  of  Lords  in  CCSU  case   (supra)

enunciated  three  broad  grounds for  judicial  review,  as

\023legality\024,  \023procedural propriety\024  and  \023rationality\024  and

this  decision had its impact on the development of the  law

in  post-Anisminic period. In the light of  the  above  four

important  decisions of the House of Lords, other  decisions

of  the  Court of appeal, Privy Council etc. and  the  later

academic  opinion in the matter the entire case-law  on  the

subject  has  been reviewed in leading text  books.  In  the

latest   edition   of  De  Smith  on  Judicial   Review   of

Administrative Action-edited by Lord Woolf and Jowell,  Q.C.

[Professor  of  Public Law, 5th Edn. 1995],  in  Chapter  5,

titled  as \023Jurisdiction, Vires, Law and Fact\024 (pp.223-294),

there    is   exhaustive   analysis   about   the    concept

SJurisdiction\024  and  its  ramifications.  The  authors  have

discussed  the  pure theory of jurisdiction, the  innovative

decision  in Anisminic case, the development of the  law  in

post-Anisminic  period, the scope of the \023finality\024  clauses

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(exclusion  of jurisdiction of courts) in the statutes,  and

have laid down a few propositions at pp. 250-256 which could

be  advanced on the subject. The authors have concluded  the

discussion thus at p. 256:

                    \023After Anisminic virtually every error of law           is  a  jurisdictional  error,  and  the  only           place  left for non-jurisdictional  error  is           where the components of the decision made  by           the  inferior body included matters  of  fact           and policy as well as law, or where the error           was  evidential (concerning for  example  the           burden  of  proof or admission of  evidence).           Perhaps   the  most  precise  indication   of           jurisdictional error is that advanced by Lord           Diplock  in  Racal  Communications,  when  he           suggested that a tribunal is entitled to make           an  error when the matter  \021involves, as  may           do  interrelated questions of law,  fact  and           degree\022.  Thus  it was for the  county  court           judge  in  Pearlman  to  decide  whether  the           installation of central heating in a dwelling           amounted   to   a  \021structural,   alteration,           extension  or addition\022. This was  a  typical           question of mixed law, fact and degree  which           only  a  scholiast would think it appropriate           to  dissect into two separate questions,  one           for decision by the superior court, viz., the           meaning of these words, a question which must           entail  considerations  of  degree,  and  the           other  for  decision by a county court  viz.,           the  application of words to  the  particular           installation, a question which  also  entails           considerations of degree.                                      It  is,  however, doubtful  whether  any           test   of  jurisdictional  error  will  prove           satisfactory.    The   distinction    between           jurisdictional  and non-jurisdictional  error           is ultimately based upon foundations of sand.           Much   of   the  superstructure  has  already           crumbled.  What remains is likely quickly  to           fall  away as the courts rightly insist  that           all  administrative action should be, simply,           lawful,   whether   or  not  jurisdictionally           lawful.\024                                                     

    The jurisdictional control exercised by superior courts

over subordinate courts, tribunals or other statutory bodies

and  the  scope and content of such power has  been  pithily

stated  in  Halsbury\022s Laws of England - 4th Edn. (Reissue),

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

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                    \023The   inferior   court  or  tribunal   lacks           jurisdiction if it has no power to enter upon           an  enquiry  into a matter  at  all;  and  it           exceeds   jurisdiction  if  it   nevertheless           enters   upon  such  an  enquiry  or,  having           jurisdiction in the first place, it  proceeds           to  arrogate an authority withheld from it by           perpetrating a major error of substance, form           or procedure, or by making an order or taking           action   outside   its   limited   area    of           competence. Not every error committed  by  an           inferior  court  or tribunal or  other  body,           however,  goes to jurisdiction.  Jurisdiction           to decide a matter imports a limited power to           decide that matter incorrectly.                           A  tribunal lacks jurisdiction if (1) it           is   improperly  constituted,  or   (2)   the           proceedings  have been improperly instituted,           or (3) authority to decide has been delegated           to  it  unlawfully,  or  (4)  it  is  without           competence to deal with a matter by reason of           the  parties,  the area in  which  the  issue           arose, the nature of the subject-matter,  the           value  of  that subject-matter, or  the  non-           existence  of  any other pre-requisite  of  a           valid adjudication. Excess of jurisdiction is           not  materially distinguishable from lack  of           jurisdiction and the expressions may be  used           interchangeably.                           Where the jurisdiction of a tribunal  is           dependent  on  the existence of a  particular           state  of affairs, that state of affairs  may           be described as preliminary to, or collateral           to   the   merits  of,  the  issue,   or   as           jurisdictional. (p. 114).                                There  is  a  presumption in  construing           statutes   which   confer   jurisdiction   or           discretionary powers on a body, that if  that           body  makes  an error of law while purporting           to   act  within  that  jurisdiction  or   in           exercising  those  powers,  its  decision  or           action will exceed the jurisdiction conferred           and will be quashed. The error must be one on           which  the  decision  or action  depends.  An           error  of  law going to jurisdiction  may  be           committed by a body which fails to follow the           proper procedure required by law, which takes           legally   irrelevant   considerations    into           account,  or  which fails  to  take  relevant           considerations into account,  or  which  asks           itself  and answers the wrong question.  (pp.           119-120)                           The  presumption that error of law  goes           to   jurisdiction  may  be  rebutted  on  the           construction of a particular statute, so that           the   relevant  body  will  not  exceed   its           jurisdiction   by   going   wrong   in   law.           Previously,  the courts were more  likely  to           find   that   errors  of  law   were   within           jurisdiction;  but with the  modern  approach

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         errors  of law will be held to fall within  a           body\022s   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.\024 (pp.121-           122)                 

    H.W.R.   Wade  and  C.F.  Forsyth  in  their   book   \027

Administrative  Law, 7th Edn., (1994) \027 discuss the  subject

regarding   the   jurisdiction  of  superior   courts   over

subordinate   courts   and   tribunals   under   the    head

\023Jurisdiction over Fact and Law\024 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:

                    \023Jurisdiction 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:           

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                      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.\024                                    (emphasis supplied)

     The  above position was highlighted by this  Court  in

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

(1997 (5) SCC 536).

     Stand  of  respondents about appellant\022s objectionable

conduct needs consideration.

               Para 1.3 of RFP reads as follows:

         \0231.3. 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\024.                       Para  6.13  speaks  of  the  \021Contract  Points\022  and  in  no

uncertain terms provides as follows:

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         \023\005\005..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.\024                             Learned  counsel for the appellant submitted that  the

expression \021contract\022 obviously means an illegal attempt for

bribery  etc.  and cannot stand on the way of submission  of

documents  for consideration. The plea is clearly untenable.

Though,  there  is no penal clause for such breach  it  goes

against  a  very  concept of fairness  in  the  process  and

evaluation  of bids. Whatever documents are to be  submitted

are clearly stipulated. Any attempt to take advantage of any

newspaper  report, clearly falls foul of  the  mandate  that

there shall not be any contract with any person involved  in

the process of selection. It is unusual that the RFP did not

make such a contract is a factor for disqualification.  This

is to be kept in view in future tenders.

     The  inevitable conclusion is that the appeal is  sans

merit, deserves dismissal, which we direct. Costs made easy.