Ramana Dayaram Shetty v. The International Airport Authority & Others

DATE OF JUDGMENT: 04/05/1979

COURT: Supreme Court of India

JUDGES: P.N. Bagawathy, V.D. Tulzapurkar, R.S. Pathak

REFERENCE: 1979 AIR 1628

PARTIES

Petitioner: Ramana Dayaram Shetty

Respondent: The International Airport Authority

SUBJECT: The judgment revolves around the question of whether the International Airport Authority is “State” under Article 12 of the Constitution and the validity of a tender accepted by the respondents.

FACTS: The International Airport Authority called for tenders to put up a second-class restaurant and two Snack bars at the International Airport Bombay. The tender of the 4^th respondent was accepted by the authorities; however it was later found that he did not satisfy the condition of having at least 5 years’ experience as a registered second class hotelier as mentioned in the tender invitation. Therefore, the Airport authorities called the 4^th respondent to submit his documents and evidence for reconsideration. However, his tender was reconfirmed as he had sufficient experience with reputed clients though not a registered as a second-class hotelier. The appellant who desired to offer his quotation to the tender dropped his thought as he did not fulfil certain conditions as mentioned in the invitation of the Airport authorities. Upon hearing that, the 4^th respondent was a successful bidder despite of him not fulfilling the required conditions, the appellant filed a case before Bombay the High Court under Article 226 of the Constitution but the case was dismissed.

Therefore, he appealed to the SC under Article 136 of the Constitution.

IMPORTANT PROVISIONS:

The Indian Constitution:

• Article 14: The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India
• Article 136(1): Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India

ISSUES:

1. Whether the International Airport Authority is State under Article 12 of the Indian Constitution?
2. Whether the tender confirmed by the respondents is constitutionally valid?

JUDGEMENT:

The petitioner contended that,

• The tender granted to the 4^th respondent is not valid as he did not completely fulfil all the conditions mentioned under the tender invitation.
• It was mandatory for the Airport authorities to abide by the invitation
• Had he known that compulsory adherence to the rules was not mandatory he would have also given his tender offer.
• The arbitrary procedure followed by the Airport authorities is violative of Article 14 to the Constitution.

The respondents contended that,

• The Bombay Municipal Corporation ranks a hotel or restaurant depending on the ability of the organisation and not the owner being a registered hotelier or not.
• Since the invitation given by the respondents do not have statutory force a deviation from the conditions would not hamper the process
• As per the invitation the decision of the Airport authorities would be final as they reserved the authority to accept or reject the offers made.

Upon hearing the parties to the case, the Court held that, the first question to be considered is whether the respondent is State within the meaning of Article 12 of the Constitution. This question comes into picture to determine the maintainability of the petition, as a remedy for fundamental right violation can be claimed only against the State and not private authority. The Court upon verifying the International Airport Authority Act, 1971 was clarified that, the Central government exercises deep and pervasive control over the administrative affairs of the respondent therefore it is State within the ambit of Article 12 of the Constitution.

Moving on with the validity of the concluded tender, the Court held that it was a clear violation of equality under Article 14. The Court justified its stand on the following grounds:

• The tender never mentioned about the capability of running a second-class hotel but laid down conditions to be fulfilled which is the basic eligibility criteria and the same cannot be disregarded by the Airport authorities.
• The power reserved by the authorities was only to completely reject the tender offers and enter into a direct negotiation with a dealer. But in the present case the tender offers were taken for consideration out of which 4^th respondent was selected. Therefore, the power reserved in the invitation does not apply.

Hence the concluded tender was invalid.