RELIANCE AIRPORT DEVELOPERS PVT. LTD. v. . AIRPORTS AUTHORITY OF INDIA AND ORS.

A on the mandate given to them by the IMG. On query from the GETE, they fonned 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 Infonnation or submission of additional documents. EC stated that the assignment of marks for technical evaluation was done B 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, C 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 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 infonned that the EC 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-AMROs 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 Govemme.nt and kept sealed, the possibility of these being changed during the course of evaluation cannot be ruled out. H

RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.) 441

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.

3Copy pinpoint3. Scrutiny of the evaluation procedure adopted by EC.:

3.1.1 We (GETE) did not call for the technical bid 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 D 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's) report on their meeting dated 23rd/24th November, 2005). This is not in conformity to RFP. 0 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. H

442 SUPREME COURT REPORTS [:2006) SUPP. 8 S.C.R.

A 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 a~omalies have been observed in the allocation of the 'weightages. B While .equal weightage has been allocated to most of the sub- factors; un- equal allo~ation)1~s· been done in two case~ (1.²::2 ll.i.³ 3. 1f³. l.²). The ·& i'. justific(lti~~ give~ ·by EC that the~e s~b-facto.rs are ~f diffe(e~t i~portance. is 1

I . I 1 1 " t" . : "I" tj

not consideredL sa~isf~ctory and convi~cing besav~f .;;u'~h a l~gic can· apply to many other sub-factors1 as ,well. Since weightages of these sub- factors wer~ ~ot mentioned in RF Pand allocation- of~qu~l weightage 'itas ~been done C in ~ajority of s~b-factors, we feel the sam~ c~-n~ept of eq~al weightage should have been adopted for these two sub~factors also. By assigning different weightages there is ro~m to suspect that so~e of the bidders h~ve been.favoured. ,. , ,.. '· - - ' I) 4.⁴. In sub-factor 1.1.⁶, the assessment of performance of commercial operations of. major. airp~rts covering retaii" propert/and .. ,, · I ~ther ' .commercial operations was to be done focusing on Airports having non-aeronautical revenue. of 40% or more of total. revenu~. Though, non~ aeronautical, earnings of bidder "E" are only 37%, but they have been g'i~~n °75% marks. This ·is considered to be in non-conformity of the XFP. The explanation of EC that E wording of the Clause did not make the 40% mandatory is not convincing. In any case, since ~the. non-aeronautical earnings _of. '-'E" 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%.

F 4.⁵. In sub-factor l.l .8, the assessment of operating in non-OECD countries was.to be as per the RFP. Bidder "E" 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 coµntries like Ecuador, Uruguay G and Guatemala, is not considered convincing. Our considered opinion is the "track record in improved performance" 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. • r i" '

4.⁶. In sub-factorJ. l'.² (proportion of AAI Staff targeted for absorption H into JVC by year 3), EC has awarded SO% marks for minimum 40% absorption

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.]44~

and remaining 50% on prorata basis between 40% to I 00% absorption. Since A 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 ....to l 00% absorption.

4Copy pinpoint4. 7. If moderation of marks for the above mentioned items is done, B following reduction in the score of bidder 'E' will take place: Sr.No. Item Mumbai Delhi {i) If equal weightage is 1.1 l.l given to. sub-factors l.².² & l.².³. c (ii) If equal weightage is 0.⁵ 0.⁶ given to sub-factors 3.l.l & 3.1.². D (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%. E (iv) If score of sub-factor 2.1 2.1 l. l .8 given for experience in an OECD country, is excluded. F (v) If marking system of 1.⁶ 1.9 sub-factor 3. l.² as modified keeping 'O' for 40% absorption and '5' for l 00% absorption. G

Total (i) to (vi) 6.0 6.⁴

Resultant score of 'E' 75.0 74.⁶ for criteria 4.1. l.

444 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A From the above, it is clear that the above moderation clearly disqualifies bidder E in criteria 4.1. l.

4.8. Modernization exercise attempted above will not make any material difference in the position of bidders 'A', 'C', 'D' and 'F' who will remain still disqualified. In regard to bidder 'B' 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 deficiencies in the developmental plans pointed out by AAI, we feel the marking of bidder 'E' 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 B vis-a-vis marks scored by bidder 'E' in regard to Delhi Airport as brought out under:- Maximum Score Score of B Score ofE Delhi 44.⁵ 302 43.0 E 4.10. Admittedly b.idder B has better credentials, for airport development and such vast difference in marks scored by bidder 'E' over bidder B cannot be easily explained. We feel that if the rational approach has been adopted bidder 'E' who now gets qualified by 0.³ marks for Mumbai and by l.l marks F for Delhi would have been disqualified.

4.11. Since in any case in our view bidder 'E' gets disqualified on the basis of our assessment contained in Para-4.7 above, we are of the opinion that qualifying bidder E technically is not correct.

G SECOND REPORT OF GETE DATED 13th JANUARY, 2006

xx xx xx xx

Based on the methodology adopted by GETE for moderating the marks of bidder 'E', we have now moderated the scores of all other bidders as well. H Based on this exercise, the marks secured by the different bidders are given

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 445

in a tabulated form separately for Delhi and Mumbai Airports. A A- Table showing moderated scores of all the bidders in criteria 'A' (Management Capabilities) for Mumbai Airport

SI. No. Weightage A B c D E F B I.I. 25.0 6.7 22.⁵ 17.l . 19.7 19.⁶ 172

/ Total 100 35.⁶ 84.8 732 57.l 812 76.1

Score as per shift 35.⁵ 84.r 73.l 57.0 81.0 76.0 E '

Moderation due to

(i) If equal weightage 0.96 021 02 --0.² -1.09 --0.23 is given to sub-factor F 1.².² and 1.².³ (ii) If equal weightage +1.85 --0.81 +o.35 --0.32 --0.49 --0.81 is given to sub-factor 3.1.1and³.1.² G (iii) If the marks 0.0 0.0 0.0 0.0 --0.70 0.0 of sub-factor 1.1.⁶ given to 'E' for non- aeronautical revenue less than 40% are H'

446 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

,'A reduced from-75«!(o to;~ I '. 50% -others no ch<irige.· • ~ '.. J . "I ~ T .. t ' ,-tr [ "' rl• "-• I

I .. (iv) If score Of sub- 0.0 • 0.0 -' 0.0 0.0 -2.I 0.0 factor 1.1.8 given for ;.B ' experience in OECD - country-to 'E' is. excluded - others -no, change.: (v) If !Ilar~i~g-syst~~ 0.0 -1.98 -0.17 -3.13 -1.82 -1.98 c of sub-factor 3. l.2is mod_ified ~eepi~g 'O' for 40% absorption and '5' for 100% absorption. Total variation +2.81 -3.00 +o.16 -3.47 -6.20 -3.² Revised score 38.³ 8i.7 73.³ 53.⁵ 74.8 73.0 .n- B - Table showing moderated scores of all the bidders in criteria 'A' - (Management Capabilities) for Delhi Airport

SL No. Weightage A B c D- E

E I.I 25.0 6.7 22.⁵ 17.1 - 19.7 19.⁶

2.l 12.⁵ 7.⁵ 7.l 11.7. 6.7 9.⁶ F 22 12.⁵ 5.0 10.0 11.³ 5.0 11.³

Total 100 37.7 84.8 732 57.l 81.0

- RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OFINDIA [PASA YAT, J.J447

Score as per shift 37.⁶ 84.7 73.l 57.0 80.9 A Moderation due to (i) If equal weightage +-0.% -0.21 -0.² -0.² -1.09 is given to sub-factor 1.².² and l .².³ B (ii) If equal weightage +l.85 -0.81 +-035 -032 -0.60 is given to sub-factor

3. l.l and 3.1.² (iii) If the marks of sub- 0.0 0.0 0.0 0.0 -0.70 factor l. l .⁶ given to E for non- c aeronautical revenue less than 40% are r~duced from 75% to 50% -others no change. D (iv) If score of sub- 0.0 0.0 0.0 0.0 -2.1 factor l.1.8 given for experience in OECD country to 'E' is excluded - others no E change. (v) If marking system 0.0 -1.98 -0.17 -3.13 -l.60 of sub-factor 3. l.² is modified keeping 'O' for 40% absorption and 5 F for l 00% absorption. Total variation +2.8 -3.00 +-0.16 -3.47 -6.09 Revised score 40.⁴ 81.7 733 53.⁵ 74.8

As rightly pointed out by learned counsel for the respondents that if G 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 H

448 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. .,.__ A group of experts to examine the matter.

The details relating to the marks allotted to the bids are as follows:

RELi. AIRPORT DEVELOPERS PVT. LTD. t'. AIRPORTSAUTH.OFINDIA[PASAYAT,J.J 449

Learned counsel for the respondents have emphasized that a curious D 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% noR aeronautical revenue and had a partner from an OECD country. E The GETE's 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 exclus~on 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's case, though it has been submitted that after opening the bids, EC made the variations and beneficiary was the appellant.

GETE's 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 H

450 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 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's 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 any of the bidders while assigning marks, with reference to the RFP. While making such examination, the issues raised by the members of IMG w.ere 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 ipark of 80% in respect of both the bids while others did· not.

E 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 appellants stand that if none was found eligible on the basis of F 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 20 I 0 Common wealth Games. G The scope for juc..iicial 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 decisions. Administrative action is H

· RELL AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 451

stated to be referable to broad area of Governmental activities in which the A 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 UP. and Ors. v. Renusagar Power Co. and B 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 "Judicial Review of Administrative Action" 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 C 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. rn 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 cons·iderations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. These several principles can conveniently be grouped in two main categories: (i) failure to exercise a discretion, and (ii) excess or abuse of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires.

The present trend of judicial opm1on is to restrict the doctrine of immunity from judicial review to those class of cases which relate to deployment of troupes, entering into international treaties, etc. The distinctive features of some of these recent cases signify the willingness of the Courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is 'illegality' the second 'irrationality', and the third 'procedural H

452 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A impropriety'. These principles were highlighted by Lord Diplock in Council ofCivil 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 B 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 "Applications for Judicial Review, Law and Practice" thus: c "There 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, D which the Courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's 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 Hquse of Lords in council of Civil Service E 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 F 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 Generals's prerogative to decide whether to institute legal proceedings G on behalf of the public interest."

(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 H

... RELi. AIRPORT DEVELOPERS PVT LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT, J.J453

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 "The Wednesbury's case" is treated as the landmark so far as laying down 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 C p. 682). It reads as follows:

" ..... .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 'unreasonable' D 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 E. consider. If he does not obey those rules, he may truly be said, and ofteri is said, to be acting 'unreasonably.' Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers the authority ... .ln 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."

Lord Greene also observed (KB p. 230: All ER p. 683)

... .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. " (emphasis supplied) H

454 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A Therefore, to arrive at a decision on 'reasonableness' the Court has to find out ifthe administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four comers 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 Lo!d 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:

" .... .Judicial review as 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 'illegality', the second irrationality and the third 'procedural impropriety'. 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 'proportionality' which is recognized in the administrative Jaw of several of our feIJow members of the European Economic Community." F Lord Diplock explained "irrationality" as follows:

"By irrationality I mean what can by now be succinctly referred to as Wednesbury unreasonableness. It applies to a decision which is so 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."

In other words, to characterize a decision of the administrator as "irrational" the Court has to hold, on material, that it is a decision so outrageous as to be in total defiance of logic or moral standards. Adoption of

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.J 455

proportionality into administrative law was left for the future. A 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 Wednesburys 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 traditional in England in contrast to higher standards under the common law of human rights. Lord Cooke in R. v. Secretary of State/or the Home Department, ex parte Daly, [2001) 3 All ER 433 observed:

"And 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 E 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, hewever, that the law can never be satisfied in any administrative field merely by a finding that the decision F under review is not capricious or absurd."

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,. G (2000)1 WLR 840 are correct. And Laws L.J. (at 847 (para 18) rightly emphasized in Mahmood's case that the intensity of review in a public law case will ... depend on the subject matter in hand' .

(underlined for emphasis) H

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A In Huang & Ors. v. Secretary ofState for the Home Department, [2005] 3 All ER 435 it is observed:

"50 .... 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 B such as these appeals? In R (on the application of Prolife Alliance) v. BBC, [2003] 2 All ER 977, Lord Hoffmann said:

"My Lords, although the word "deference" is now very popular in describing the relationship between the judicial c and the other branches of government, I do not think that its overtones of servility, or perhaps gracious concession, are appropriate to describe what is happening. Jn 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 D what the legal limits of that power are. That is a question of law and must therefore be decided by the courts.

(underlined for emphasis)

E 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 ma/a fide taking one of the views cannot be a ground for judicial review. In Asia Foundation & Construction Ltd. v. Trafalgar House Construction (!) Ltd. and Ors., [ 1997] l SCC 73 8 this Court observed as follows:

H "9. The Asian Development Bank came into existence under an Act

RELi. AIRPORT OEVEWPERS PVT.LTD. i·. AIRPORTS AUTH.OF INDIA [PASAYAT, J.] 457

called the Asian Development Act, 1966, in pursuance of an international agreement to which India was a signatory. This new financial institution was established for accelerating the economi~ 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 ot 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- I together with the consultant's opinion after the so-called corrections , made the conclusion of the Bank to the effect "the lowest evaluated substantially responsive bidder is consequently AFCONs" cannot be said to be either arbitrary or capricious or illegal requiring Court's 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 ,E 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 F 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 65 l , this Court has held that: G The duty of the court is to confine itself to the question of legality. Its concern should be:

l. Whether a decision-making authority exceeded its powers,

2. committed an error of law, H

458 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 3. committed a breach of the rules of natural justice,

4. reached a decision which no reasonable tribunal would have reached or,

5Copy pinpoint5. abused its powers. B Therefore, it is not for the Court to determine whether a particular policy or partic!-Jlar 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 c 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 D must give effect to it;

(ii) Irrationality, namely, Wednesbury unreasonableness.

(iii) Procedural impropriety.

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

I 0. 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's 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- I was the lowest bidder and the alleged mistake committed by the consultant in the matter of bid evaluation in not

RELi.AiRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OFINDIA [PASAYAT,J.1'459

taking into account the customs duty and the contention of Mr. A Sorabjee, learned senior counsel that it has been conceded by all parties concerned before the High Court that on correctibns being made respondent- I 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 its~lf has come to the following conclusion:

"The technical capability of any of the three bidders (o unde1take the works is not in question. Two of the bids are very 3imilar 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." .

11. This being the position, in our considered opinion, the High D 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 I 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". G

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. H

460 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 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 shoulcl 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 B 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 net 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 C EC's 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 D 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.

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

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTSAUTH.OF INDIA[PASAYAT, J.] 46.1

answer stating that same was done before allotting marks. GETE's job was not the evaluation but verifying the evaluation process. GETE's 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 B 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 c 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 interferP-nce. D In the ultimate, the question would be whether in the process of selection the Government had adopted transparent and fair process.

While balancing several claims a rational approach is necessary and ( that is to be formed in line with the scope of judicial interference. E 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 H

462 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A bids. That left no option with.the EGOM but to either vary RFP or to award one of the airf)orts 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.

B In final analysis, what the EGOM has done is to accept the report of EC subject to validation done by GETE.

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. /. V.R. Construction Ltd and C Ors., [1999] I SCC 492 are relevant. It was observed as follows:

"13. 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 D should intervene."

The view was re-iterated in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd and Anr., [2005] 6 SCC 138.

E In the Queen's Bench decision in R. v. Department of Constitutional Affairs, [2006] All ER (D) l 0 I it was inter-alia held as follows:

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

F . Same would be available only if public law element is apparent which would arise only in a case of"bribery,corruption, implementation of unlawful policy and the like." In the case of commercial contract, the aforesaid view about wandering was noted. In paras 50 and 51 it was noted as follows:

"It does not have the material or expertise in this context to G "second guess" 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 in the evidence before me.

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

RELL AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 463

wherever subjectivity criteria is involved, GETE has not dealt with the same. A 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's 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 I I) it was observed as follows:

"It is well known that "perversity" represents a very high hurdle. In D 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 E. unsupported by the evidence, provided always that this was a finding as to a material matter.

Opinions may differ as to when it can be said that in the "public law domain, the entire proceeding before the 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 provisiens for obtaining reliefs contained in the Act and the "ouster clauses", the jurisdiction of the ordinary court is not excluded. So, the matter assumes H

464 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A 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 "jurisdictional error" as understood in the liberal or modern approach, laid down therein, makes a decision ultra vires or a nullity or without jurisdiction and the "ouster clauses" 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 "new dimensions". The original or pure theory of jurisdiction means the authority to decide 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, Woolf and Jowell - Judicial Review of Administrative Action (1995) Edn. p. 238; Halsbury's 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: D "The tribunal must not only have jurisdiction at the outset, but must retain it unimpaired until it ha• discharged its task."

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 & E Bros., [1971] l 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. Gov,: ofAP, [1991] 4 SCC 93, Shiv Kumar Chadha v. Municipal Cc,rpn. of Delhi [1993] F 3 SCC 161. In ML. Sethi v. R.P. Kapur, [1972] 2 SCC 427 legal position after Anisminic case (supra) was explained to the following effect:

12 The word 'jurisdiction' 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, G the entitlement to enter upon the enquiry in question. 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 H

RELL AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH. OF INDIA [PASAYAT, J.J 465

question of jurisdiction is determinable at the commencement, not at . A the conclusion of the enquiry. In Anisminic Ltd., Lord Reid said:

'But 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 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." D In the same case, Lord Pearce said:

"Lack 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 jurisdictim.. It would tum 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." ·

The dicta of the majority of the House of Lords, in the above case would show the extent to which 'lack' and 'excess' of jurisdiction have been assimilated or, in other words, the extent to which we have moved away from the traditional concept of 'jurisdiction'. 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 H

466 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 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 'basing their decision on a matter with which they have no right to deal', 'imposing an unwarranted condition' or 'addressing B themselves to a wrong question'. The majority opinion in the case leaves a court or 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 c much latitude the court is prepared to allow .... "

In the subsequent Constitution Bench decision in Hori Prasad Mulshanker Trivedi v. V.B. Raju and Ors., [1974] 3 SCC 415, it was held as follows:

" ... 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 clifficulty has arisen because the word 'jurisdiction' 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 'pure' 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. 'At bottom the problem of defining the concept of jnrisdiction for purpose of judicial review has been one cf public policy rather than one of logic'. [S.A. Smith, Judicial Review of Administrative Action, 2nd G Edn., p. 98. (1968 Edri.)

The observation of the learned author, (S.A. De Smith) was continued in its 31d 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 H

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.J 467

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 Judicial Review of Administrative Action - 5th Edn. (1995) as is evident from p. 229; probably due to later deveiopments in the law and the academic opinion that has emerged due to the change in the perspective.

468 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A 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 'involves, as may do interrelated questions of law, fact and degree'. Thus it was for the county court judge in Pearlman to decide whether B the installation of central heating in a dwelling amounted to a 'structural, alteration, extension or addition'. 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 c 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 ofjurisdictional error will prove satisfactory. The distinction between jurisdictional and non- D 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.

E 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 's Laws of England - 4th Edn. (Reissue), 1989 Vol. 1(1), p. 113 to the following effect:

F "The 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. G 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 (I) it is improperly constituted, or (2) the proceedings have been improperly instituted, or (3) authority H

RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [PASA YAT, J.]469

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 tr~bunal is dependent on the existence of a particular state of affairs, that state of affairs may be described 11 as· preliminary to, or collateral to the merits of, the issue, or as jurisdictional. (p. 114). C There is a presumption in construing statutes which confer jurisdiction or discretionary powers on a body, that ifthat 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 r~butted on the construction of a particular statute, so that the relevant · body will not exceed its jurisdiction by going wrong in law. Previously, F the courts were more likely to find that errors of law were within jurisdiction; but with the modem approach errors of law will be held to fall within a body's 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). G 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 H

470 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A to oapply 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." B (pp.121-122)

H.W.R. Wade and C.F. Forsyth in their book Administrative Law, 7th Edn., ( 1994), discuss the subject regarding the jurisdiction of superior courts over subordinate courts and tribunals under the head "Jurisdiction over Fact and Law" in Chapter 9, pp. 284-320. The decisions before Anisminic and those in the post - Anisminic period have been discussed in detail. At pp. 319- 320, the authors give the Summary of Rules thus:

Jurisdiction over fact and law: Summary

At the end of a chapter which is top-heavy with obsolescent material, it may be useful to summarise the position as shortly as possible. The overall picture is of an expanding system struggling to free itself from the trammels of classical doctrines laid down in the past. It is not safe to say that the classical doctrines are wholly obsolete and that the broad and simple principles of review, which clearly now commend themselves to the judiciary, will entirely supplant them. A summary can therefore only state the long-established rules together with and broader rules which have now superseded them, much for the benefit of the law. Together they are as follows:

Errors of fact F 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 G (b) found on the basis of no evidence; or

( c) wrong, misunderstood or ignored.

Errors of law H

RELi. AIRPORT DEVELOPERS PVT. LTD. v. AIRPORTS AUTH.OF INDIA [PASAYAT, J.J 471

Old rule: The court would quash only if the error was - A (a) jurisdictional; or

(b) on the face of the record.

New rule: The court will quash for any decisive error because all B errors of law are now jurisdictional."

(emphasis supplied)'

The above position was highlighted by this Court in Ma/at/a/ Industries Ltd and Ors. v. Union of India and Ors., [1997] 5 SCC 536. C Stand of respondents about appellant's objectionable conduct needs , consideration.

Para 1.³ of RFP reads as follows: ·.n "1.³. Confidentiality - PQB receiving this RFP must have completed and returned the required, duly executed Confidentiality Deed.

PQB are reminded that infonnation provided in this RFP and the accompanying documentation package is covered by the terms of the E Confidentiality Deed and the Disclaimer set out herein. PQB are also reminded that they are not to make any public statements about the Transaction process or their participation in it.

Para 6.13 speaks of the 'Contract Points' and in no uncertain terms provides as follows: F " ....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 G, of AAI or other GOI agencies or airport customers except as arranged through ABN AMRO as part of the Transaction process."

Learned counsel for the appellant submitted that the expression 'contract' obviously means an illegal attempt for bribery etc. and cannot H

472 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A 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 B 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. c KAPADIA, J. Although, I respectfully agree with the conclusion contained in the opinion of brother, Arijit Pasayat, the importance of the scoring system in the tender process has impelled me to elucidate and clarify certain crucial aspects. Hence, this separate opinion.

D The basic controversy in the present case is: whether the E.C. had exceeded its authority in the assessment of technical pre-qualification.

In the scoring system objectivity has an important role to play (Clause 5.⁴). In the scoring system the identification of factors (including sub-factors), E allocation of marks to each of these factors (including sub-factors) and giving of marks are three distinct and different stages. Clause 5.⁴ dealt with assessment of technical pre-qualifications. Under that clause a scoring system was to be applied based on the assessment of the Terms of the Offer against the Technical Pre-qualification criteria. It further stipulated that assessment shall be on F absolute basis and not relative as between the offers. Under the said system, each factor had to be allocated certain marks. Objectivity had to be provided in the allocation of marks (and not in giving of marks) to each factor (including sub-factors). This was not done. For example, RFP required certain marks to 1

be allocated for absorption of existing staff. Greater the absorption, higher the marks to be given. In the present case, the E.C. changed the factor, namely, G "absorption of employees" to the overall approach. This led to change in priority. Similarly, in the RFP, the factor earmarked was "property development" which E.C. compared to "infrastructure development". Experience in property development is different from experience in infrastructure development. Similarly, RFP had given weightage to aeronautical revenue whereas in allocation of marks, E.C. obliterated the difference between aeronautical and non-aeronautical

RELi. AIRPORT DEVELOPERS PVT.LTD. v. AIRPORTS AUTH.OF INDIA [KAPADIA, J.] 473

revenues. The above examples are given only to show that objectivity which was the underlying principle underlying clause 5.⁴ is completely lost either by expanding the enumerated factors like aeronautical revenue, overall capability vis-a-vis capacity to absorb existing work-force and comparison df property development with infrastructure development or by allocating un- even marks to sub-factors. In my view, E.C. had no business to expand or narrow down the scope of any of the above factors as it was beyond its authority and contrary to the scoring system.

With these words, I agree with the conclusion contained in the opinion of brother, Arijit Pasayat. c RP. Appeal dismissed.