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2024 Supreme(Online)(Ker) 75674
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.S. DIAS, J
GROUND HANDLING ASSOCIATION – Appellant
Versus
UNION OF INDIA – Respondent
RP 453/2024
For the Appellants/Petitioners: HARISH GOPINATH, SURUMI NAZAR, S.RAMESH BABU (SR.)
For the Respondents: KRISHNA T C, AARON ZACHARIAS BENNY, GEORGE G.POOTHICOTE, D.PREM KAMATH, TOM THOMAS, CLINT JUDE LEWIS, BENNY.P.THOMAS
The court upheld the legality of modifying tender conditions for ground handling services, emphasizing the airport operator's discretion and the need for competitive bidding without conflict of interest.
Headnote:(A) Airport Authority of India Act, 1994 - Section 42 - Aircraft Act, 1934 - Section 5 and Rule 92 - Writ petitions challenging addendum to tender notification for ground handling services - The court found that the addendum allowing scheduled airlines to participate did not violate existing regulations and was within the authority of the airport operator to modify tender conditions. (Paras 8.1, 9.1, 11.1)
(B) Conflict of Interest - The court clarified that the eligibility criteria for bidders must ensure a competitive environment without conflict of interest, as defined in the National Civil Aviation Policy. (Paras 2.3, 10.1)
Facts of the case:
The petitioners, comprising ground handling agencies, challenged an addendum that modified eligibility criteria in a tender notification, arguing it allowed conflict of interest by permitting scheduled airlines to bid.
Findings of Court:
The court ruled that the addendum did not violate regulations and was legally permissible, emphasizing the airport operator's discretion in managing tender conditions.
Issues: The main issues were whether the addendum created a conflict of interest and whether the airport operator had the authority to modify the tender conditions.
Ratio Decidendi: The court concluded that the addendum was valid and did not infringe on the regulatory framework, affirming the right of the airport operator to ensure broader participation in the tender process.
Result: Writ petitions dismissed.
| Table of Content |
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| 1. court hears arguments from both sides. (Para 5 , 6) |
COMMON JUDGMENT
The writ petitions are filed by existing ground handling agencies challenging Ext.P4 addendum published by the Cochin International Airport Limited, modifying the conditions in Ext.P3 tender notification. The petitioner in W.P (C) No.29297/2024 is a society of eight ground handling agencies, and the petitioners in W.P (C) No.29700/2024 are three existing ground handling companies. The respondents in the writ petitions are (1) the Ministry of Civil Aviation, (2) the Directorate of Civil Aviation, and (3) the Cochin International Airport Limited (‘CIAL’, in short), a scheduled commercial international airport. The fourth respondent has got itself impleaded in the writ petitions stating that they propose to participate in the tender.
As the parties are the same and disputes are common, the writ petitions are consolidated, jointly heard, and disposed of by this common judgment.
2. Petitioners’ case
2.1. The common case of the petitioners in the two writ petitions are as follows:
2.2. CIAL had published Ext.P3 tender notification on 10.7.2024, inviting bids from eligible agencies to be appointed as second and third ground handling agencies to provide third- party ground handling services at their airport.
2.3. Clause 5.5 of Ext.P3 tender notification lays down the eligibility criteria for the bidders. Clause 5.5.2 stipulates that the bidder shall not have any conflict of interest affecting the bidding process. A bidder is deemed to have conflict of interest if, (a), the bidder is a ground handling agency providing self-handing services to airlines as defined in the National Civil Aviation Policy 2016, (b) the bidder is a scheduled and/or non-scheduled air carrier or any entity in which a scheduled/non-scheduled air carrier or its promoter directly or indirectly holds any interest or is otherwise an Associate of a scheduled air carrier and (c) a constituent of a bidder is also a constituent of another bidder.
2.4. However, by Ext.P4 addendum, CIAL deleted sub- clause (b) of clause 5.5.2 of Ext.P3 tender, thereby allowing scheduled and/or non-scheduled air carrier/helicopter operator, its entity, promoter or Associate to participate in the tender.
2.5 Ground handling is a critical activity. The terms ‘ground handling’, ‘ground handling agency’ and ‘self-handling’ have been defined by the second respondent in Aeronautical Information Services Circular No.3/2022 (‘Ext.P5 AIC’, for brevity). In light of the above definitions, CIAL cannot appoint a domestic scheduled airline/helicopter operator, its subsidiary or company as a ‘ground handling agency’. It was to achieve the above purpose that clause 5.5.2 (b) was originally incorporated in Ext.P3 notification.
2.6. The regulation under Section 42 of the Airport Authority of India Act was made applicable to airports managed by the Airport Authority of India (‘AAI’, in short). Ext.P5 AIC lays down the eligibility criteria for undertaking ground handling services at non-AAI airports like CIAL.
2.7. AAI has framed the Airport Authority of India (Ground Handling Services) Regulations 2018 (‘2018 Regulations’, for brevity) ― (Ext.P9). Later, AAI promulgated the Airport Authority of India (Ground Handling Services) Amendment Regulations 2023 (‘2023 Regulations’, for brevity) ― (Ext.P12). Likewise, the second respondent issued Exts.P10 and 11 circulars dated 25.10.2018 and 28.10.2019, respectively.
2.8 Exts.P9 and 10 have limited the right of the airline operators to engage only in self-handling services. There is a total embargo for airline operators to provide ground handling services at airports, including civil enclaves. The Regulations and Circulars have been issued to promote and sustain healthy competition, to ensure the independence of ground handling and that there is no conflict of interest between the ground handling agency and the airline operator.
2.9 Other than for CIAL, all the AAI and non-AAI airports have
