The R D Shetty vs The International Airport Authority of India (1979)

August 1, 2024
PLEA BARGAINING CRPC

An appeal against the ruling of the Hon’ble High Court of Bombay was filed in the matter of Ramana Dayaram Shetty vs. The International Airport Authority of India (1979) before the Hon’ble Supreme Court of India. The appellant had filed a writ suit against the International Airport Authority of India and others before the latter on the basis of arbitrary action in awarding the contract for managing a restaurant in an international airport in Bombay through the system of tender submission.

rd shetty vs the international airport authority of india Case Facts

  • For the construction of two snack bars and a second-class restaurant at the International Airport in Bombay, the international airport authority of india issued an invitation to tender. The bid made by the fourth party that responded was approved.
  • The fourth respondent, it was subsequently found, did not fulfil the tender requirement of having at least five years of experience as a registered second-class hotelier. Despite this, even though the fourth responder was not a registered second-class hotelier, the Airport Authority upheld his tender, citing his substantial experience with reputable clients.
  • The appellant, Ramana Dayaram Shetty, first thought about making a bid but decided against it since he didn’t fulfil the requirements in the invitation.
  • Shetty petitioned the Bombay High Court under article 226 of the indian constitution after discovering that the fourth respondent’s tender was accepted in spite of not meeting the requirements. After the petition was denied, Shetty filed an appeal under article 136 of the indian constitution with the Supreme Court.

rd shetty vs the international airport authority of india Issues

  • What does “Registered IInd Class Hoteliers” mean? Which group of people fits the definition of this description?
  • Is the first respondents’ acceptance of the fourth respondent’s tender void and subject to set aside at the appellant’s request?

Contentions by the Parties

Petitioner:

  • Due to his partial compliance with the tender rules, the fourth respondent’s tender was deemed invalid.
  • The terms stated in the invitation to tender were binding on the Airport Authority.
  • Shetty would have filed a tender if he had realized that rigorous adherence to the requirements was not required.
  • article 14 of the indian constitution was broken by the Airport Authority’s capricious acts.

Respondent:

  • The Bombay Municipal Corporation classifies a hotel or restaurant based on the organization’s capabilities, not the owner’s registration as a hotelier.
  • Variations from the terms would not render the procedure illegal because the invitation to tenders lacked legislative authority.
  • According to the terms of the invitation, the Airport Authority retained the right to accept or reject any tender, and its decision was final.

rd shetty vs the international airport authority of india Judgment

  • The Court determined in this case that the Bombay Municipal Corporation only grades hotels or restaurants, not IInd grade hoteliers. As a result, the notice’s requirement that the tender be a registered IInd grade hotelier was meaningless and could not be interpreted as establishing any eligibility requirements.
  • Because the fourth respondent’s experience meets the requirements outlined in the notice, the first respondent accepted their tender. The contract expressly stated that the first respondent is not required to accept all of the offers, thus there is no statutory or administrative legislation forcing them to award contracts only through tenders. Instead, they might have awarded the contract to the fourth respondent directly. However, they continued to withhold the tender.
  • Despite being a complete stranger and failing to offer anything to the first respondent, the appellant filed a writ petition. For the petition to be maintained, there was no locus standi. This implies that the appellant should not be impacted if he chose not to participate in the competition by submitting a tender.
  • The complaint was that the first respondent accepted the fourth respondent’s tender and claimed that the notice stated that not meeting eligibility requirements would not prevent a tender from being considered. The appellant claimed not to be aware of this and with that reason he chose not to submit the tender because eligibility requirements were not met.
  • The right to equality, guaranteed by article 14 of the indian constitution, was broken.  Now, the court had to determine whether or not this was warranted by law.
  • According to the court, the international airport authority of india, which is also the entity that issued the notice, is the government’s authority to grant licenses or accept tenders. After the court denied the writ petition, he filed an appeal with the High Court, but it was also denied.

In Ramana Dayaram Shetty v. The International Airport Authority & Others, the Supreme Court ruled that the International Airport Authority had violated Article 14 by acting in an arbitrary and discriminatory manner. The Authority was required to uphold the values of equality and non-arbitrariness because it was a tool of the State. It was decided that the acceptance of the tender from the fourth responder was invalid, underscoring the need of openness and justice in State business.

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