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2024 Supreme(Online)(Ker) 75675
IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.S. DIAS, J
GROUND HANDLING ASSOCIATION – Appellant
Versus
UNION OF INDIA – Respondent
RP 511/2024
For the Appellants/Petitioners: HARISH GOPINATH, SURUMI NAZAR
For the Respondents: KRISHNA T C, AARON ZACHARIAS BENNY, GEORGE G.POOTHICOTE, M.RISHIKESH SHENOY, ANN MARY.V.I, D.PREM KAMATH, TOM THOMAS, K.R.PAUL, CLINT JUDE LEWIS, BENNY.P.THOMAS
Ground handling agencies must operate independently from airline operators to ensure fair competition, and modifications to tender conditions by airport operators are permissible unless proven arbitrary.
Headnote:(A) Airport Authority of India Act, 1994 - Section 42 - Aircraft Act, 1934 - Sections 5 and 5A - Writ petitions filed by ground handling agencies challenging the addendum to a tender notification by Cochin International Airport Limited, allowing scheduled airline operators to participate in ground handling tenders, which was previously restricted - The court held that CIAL is not an authority under Article 12 of the Constitution and that the addendum did not violate existing regulations. (Paras 6, 8.1, 11.1)
(B) The eligibility criteria for ground handling agencies must ensure independence from airline operators to maintain fair competition. (Paras 8.2, 9.2)
Facts of the case:
The petitioners challenged the modification of eligibility criteria in a tender notification which originally barred scheduled airline operators from participating. The addendum allowed their participation, raising concerns over conflict of interest.
Findings of Court:
The court found no merit in the petitions, affirming CIAL's right to modify tender conditions and rejecting claims of arbitrariness.
Issues: Whether CIAL is an instrumentality of the State and if the addendum is liable to be quashed.
Ratio Decidendi: The court concluded that the addendum promotes competition and does not contravene the applicable regulations, emphasizing the discretion of airport operators in tender processes.
Result: Writ petitions dismissed.
| Table of Content |
|---|
| 1. petitioners challenge modifications in tender conditions. (Para 5) |
| 2. respondents defend the legality of the addendum. (Para 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 airl
