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2026 Supreme(Mad) 1864

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DHANDAPANI, J.
Multi Star Metal Trading LLC – Appellant
Versus
Union of India through its Secretary, Ministry of Civil Aviation, New Delhi – Respondent
W.P. No. 5851 of 2026, W.M.P. Nos. 6369, 6370, 6371, 6372 of 2026
Decided On : 10-03-2026

Advocates Appeared:
For the Appellants : T. Gowthaman, Muthuchharan Sundresh
For the Respondents: A.R.L. Sundaresan, K. Srinivasamurthy, Ramasamy Meyyappan

Judicial review in tender matters is limited, emphasizing the principles of non-arbitrariness and fair play while maintaining the commercial discretion of tender authorities, especially in international commercial contexts.

Headnote:(A) Constitution of India - Article 226 - Writ petition challenging Request for Proposal (RFP) by Airports Authority of India for Duty-Free Shop at Chennai Airport - Petitioners, as prospective bidders, allege unconstitutional terms in RFP favoring AAI and seek modification of tender conditions. Court discusses judicial review limits in commercial matters, emphasizing non-arbitrariness and fair play (Paras 30-34).

(B) Judicial Review - Tender processes are subjected to limited judicial review and courts should not interfere with the commercial discretion of tendering authorities unless arbitrary or irrational (Paras 51-56).

(C) Currency Denomination - Requirement to quote concession fees in US Dollars is upheld; being global tender for international travelers (Paras 58-64).

(D) Annual Escalation in Concession Fee - Annual escalation provision is maintained; fixed on the basis of consumer price index (Paras 65-67). (E) Arbitration Clause - Pre-deposit requirement in arbitration clause is deemed a clog on arbitration and struck down; clause severable and does not invalidate entire RFP (Paras 74-78). (F) Set-off Clauses - Unilateral authority to set off amounts from earlier contracts deemed impermissible; needs equivalency in contracts for adjustments (Paras 79-84).

Result: Writ petition allowed in part.

Table of Content
1. formation of a consortium for a bidding process. (Para 1 , 2 , 3 , 4 , 5)
2. arguments on the calculation and fairness of the concession fee. (Para 6 , 7 , 8 , 9 , 10)
3. general defendant’s stance on petitioners' arguments. (Para 30 , 31 , 32 , 33 , 34)
4. discussion on arbitration clauses and deposit requirements. (Para 36 , 37 , 38 , 39)
5. petitioners' contentions on foreign currency usage. (Para 56 , 57)
6. court's review of currency choice in bidding. (Para 58 , 59 , 60)
7. justification for using us dollars in a global bid. (Para 62 , 63)
8. limitation on aai's power to adjust payments. (Para 79 , 80 , 81 , 82 , 83)
9. court's final determination and decision on the case. (Para 84 , 85)

ORDER :

1. Questioning the validity and constitutionality of the Request for Proposal dated 01.01.2026 calling for E-Bid for establishment of Duty Free Shop within the precincts of the airport, floated by the 3rd respondent, the present writ petition has been filed by the petitioner.

2. The brief facts leading to the filing of the present writ petition are as under:-

The petitioners 1 and 2 formed a consortium by entering into a Joint Bidding Agreement dated 10.02.2026 for the purpose of participating in the Request for Proposal (for short ‘RFP’) issued on behalf of the Airports Authority of India (for short ‘AAI’) by the 3rd respondent on the direct respondent for Development, Operation and Maintenance of Duty-Free Outlets at Chennai Airport.

3. It is the averment of the petitioners that RFP dated 01.01.2026 bearing E-Bid No.2026_AAI_261228_1, was floated inviting bids for Development, Operation and Maintenance of Duty-Free Outlets at Chennai Airport with a clear mention that queries could be submitted by the prospective bidders in the CPP portal by 30.01.2026. It is the further case of the petitioners that by email dated 16.01.2026, it was brought to the notice of AAI that the online tender portal was not allowing the 1st petitioner to submit queries and, therefore, the queries are being sent by email, to which reply email dated 19.01.2026 was issued by AAI expressing its inability to respond to the queries of the 1st petitioner as the timeline for resolving the queries had lapsed and pointing out that the reply submitted to the queries submitted by the other intending bidders could be used by the petitioners.

4. It is the further averment of the petitioner that Corrigendum-1 was issued by AAI dated 23.01.2026 along with revised timelines for submission of bids and opening of technical bids on 20.02.2026. Further, response to the queries of respondents 4 to 8 were also uploaded on 23.01.2026 by AAI. The 1st petitioner, through its mail dated 30.01.2026 sought extension of timelines for raising queries in view of the extension of timelines for submission of bids and by Corrigendum-2 dated 2.2.2026, AAI responded to the queries of the 1st petitioner. However, AAI, through the aforesaid communication had not meaningfully addressed the queries raised by the prospective bidders, inspite of the glaring constitutional, operational and commercial infirmities highlighted in the pre-bid queries relating to RFP. However, AAI refused to modify any material terms of the RFP, but the response of AAI has only been highhanded and evasive and the critical questions raised by the 1st petitioner have not been addressed, which clearly demonstrates that AAI is intent on proceeding the tender without addressing the fundamental viability concerns.

5. It is the further averment of the petitioners that even to the queries raised by the other bidders, viz., respondents 4 to 8, AAI has met the concerns raised with evasive and non-committal answers, which clearly shows that AAI has no intention of regularizing the RFP nor explain its position on the terms contained in the RFP. Therefore, left with no other viable alternative, the petitioners have been constrained to file the present writ petition.

6. Learned senior counsel appearing for the petitioners submitt

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