IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P. CHALY, J.
Flemingo Travel Retail Limited - Appellant
Versus
Kannur International Airport Limited - Respondent
W.P.(C) No.30645 of 2019
Decided On : 20-12-2019
Constitution of India- Article 226 - Fair play principle -The parties may be bound by the Head of Terms, but that will not saddle the master of the contract to have negotiated terms and to make a flexible shift without compromising the fundamental requirements of the contract
Statement of facts:
Writ petition is filed by the petitioner, a company incorporated under the Companies Act, 1956, engaged in the business of operating duty free shops at various Airports, seeking to quash the letter of award issued by the 1st respondent, i.e., the Kannur International Airport Limited, to the 3rd respondent, i.e., GMR Airports, who is also a business operator of duty free shops at various Airports.
Finding of the court:
Petitioner was a beneficiary of the private negotiation held. Petitioner was also well aware that, in the negotiation, the party who makes the best offer would be selected to establish, maintain and operate the duty free shops-Clear procedure was adopted in the matter of selection by the consultant, which is not under challenge at all, and seems to be fair and reasonable, ruling out any interference of this Court.
Result: Writ Petition Dismissed
JUDGMENT :
1. This writ petition is filed by the petitioner, a company incorporated under the Companies Act, 1956, engaged in the business of operating duty free shops at various Airports, seeking to quash the letter of award issued by the 1st respondent, i.e., the Kannur International Airport Limited, to the 3rd respondent, i.e., GMR Airports, who is also a business operator of duty free shops at various Airports. The 2nd respondent is the consultant of the 1st respondent. Basic material facts for the disposal of the writ petition are as follows:
2. Respondent No.1, i.e., Kannur International Airport Limited (KIAL), a Public Sector Undertaking operating the Kannur International Airport commissioned on 09.12.2018, and built on Public Private Partnership model, has apparently appointed the 2nd respondent as the consultant for negotiations and allied activities for the improvement of the Kannur International Airport. Kannur International Airport Limited is functioning under the control of the Government of Kerala with the Chief Minister of the State of Kerala as its Chairman and Ministers on its Director Board, evident from Ext.P2. The case put forth by the petitioner is that, the 1st respondent illegally rejected the proposal of the petitioner for developing, operating and maintaining duty free outlets at the Airport, and has illegally and for ulterior motives awarded it to the 3rd respondent in a non-transparent manner.
3. It is also the case of the petitioner that, as early as in 2016, the Government of Kerala had taken a decision that all works and activities relating to the establishment, development, implementation, integration, operation and maintenance of the Airport and its allied services shall be based solely on the tendering process, strictly on the lines of the Tender Guidelines issued by the Central Vigilance Commission. Therefore, right from the inception, all contracts pertaining to all works and services in connection with the establishment and operation of the Airport and its allied services was being undertaken after calling tenders from interested participants, and to the best of knowledge of the petitioner, as many as 30 major tenders have been floated by the 1st respondent till date in relation to major works and services at the Kannur International Airport.
4. In the month of November, 2017, 1st respondent floated a Request for Proposal to develop, operate and maintain duty free outlets. According to the petitioner, the said tender was concession based model under the terms of which the successful tenderer would be handed over the entire retail area of duty free shop, and in lieu of this grant of concession, the successful tenderer will pay revenue share to the 1st respondent. Petitioner participated in the first tender and was the sole bidder in the said process. However, the selection process was stalled, and according to the petitioner, the first tender was cancelled by the 1st respondent at the instance of some interested persons who had challenged the conditions of tender before this Court.
5. Thereafter, the 1st respondent floated yet another tender during February, 2018, on similar lines as that of the first tender, however, relaxing certain conditions of eligibility. In the said process, two tenderers participated, i.e., the petitioner and M/s. Plus Max Duty Free Pvt. Ltd. Anyhow, even according to the petitioner, it was decided not to proceed further on the second tender, instead, it was decided to float Request for Proposal (RFP) for selection of Joint Venture partner for Developing, Operating and Maintaining Duty Free Outlets.
6. Thereupon, in the month of December, 2018, the 1st respondent floated a Request for Proposal (RFP) for selection of Joint Venture partner for Developing, Operating and Maintaining Duty Free Outlets at Kannur International Airport. It is the case of the petitioner that, as
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