JUDGEMENT
ARIJITPASAYAT, J. -
(1.)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.
(2.)ACCORDING to the appellant, the project has to be grounded because of several major defects which would render the projects 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 RAL), Airports Authority of India (in short AAI), Government of India (in short GDI), GMR Infrastructures Ltd. (in short GMR), GVK Industries Ltd. (in short GVK).
Background facts sans unnecessary details are as follows:
1]. As a part of the GOIs 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 JV) route and constituted Empowered Group of Ministers (in short EGOM) 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 Governments approval. An Inter Ministerial Group (in short IMG) 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 and FC in short respectively). They were Airport Planning Ply Ltd., Amarchand, Mangaldas and Suresh A. Shroff and Co. and ABN AMRO Asia Corporate Finance (I) Pvt. Ltd (in short Airplan, AMSC and ABN AMRO respectively). The Consultants prepared the Invitation To Register An Expression of Interest (shortly called ITREOI) 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 ECRQ) and a Request for Proposal (in short RFP). 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.
2]. 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 Evaluation Committee (in short EC).
3]. The technical bids were opened on 22.9.2005. On 10.10.2005 Government Review Committee (in short GRC) was constituted to undertake an independent review of evaluation report of bids of two airports and re-structuring process prepared by the Evaluation Committee/ Advisers. The Consultants submitted their evalution report. GRC held its meeting on 23.11.2005 and 24.11.2005 to review the Consultants Evaluation Reports. GRC endorsed the views expressed in the Consultants 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 evaluation with GRCs 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 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.
4]. On 21.12.2005 EGOM met to consider the views of the IMG. It decided that a Committee of Secretaries (in short COS) 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 and Mr. Sevadasan (hereinafter described as Sreedharan Committee or Group of Eminent Technical Experts (in short GETE) 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 appointed to review the Consultants Evaluation Report (in short CER) on 27.12.2005. RAL wrote to the Ministry of Civil Aviation (in short MCA) asking that copies of its letters dated 20.12.2005 be forwarded to the GETE.
5]. 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 GETEs 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.
6]. 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 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.
7]. 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.
8]. On 1.3.2006 Special Purpose Vehicle (in short SPV) 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) 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. 9]. By the impugned order, RALs writ petition before the Delhi High Court was dismissed by order dated 21.4.2006.
(3.)THE primary stand of the appellant is that the EGOIW GDI 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 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. GETEs evaluation of appellants bid was wrong and it should not have interfered with ECs 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. GETEs 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.