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2022 Supreme(SC) 435

SUPREME COURT OF INDIA
VINEET SARAN, J.K. MAHESHWARI, JJ.
Mihan India Ltd. - Appellant
Versus
GMR Airports Ltd. & Ors. - Respondents
Civil Appeal No. 3699 of 2022 [Arising Out of Special Leave Petition [C] No. 15556 of 2021]
With
Airport Authority of India - Appellant
Versus
GMR Airports Ltd. - Respondent
Civil Appeal No. 3701 of 2022 [Arising Out of Special Leave Petition [C] No. 5686 of 2022] Diary No. 23479 of 2021
With
Government of Maharashtra - Appellant
Versus
GMR Airports Ltd. - Respondent
Civil Appeal No. 3702 of 2022 [Arising Out of Special Leave Petition [C] No. 16737 of 2021]
With
Union of India - Appellant
Versus
GMR Airports Ltd. - Respondent
Civil Appeal No. 3700 of 2022 [Arising Out of Special Leave Petition [C] No. 5687 of 2022] Diary No. 23477 of 2021
Decided On : 09-05-2022

Advocates Appeared:
For the Appellant :Dushyant Dave, Rahul Bhangde, Advocate, Satyajit A. Desai, Siddharth Gautam, Neha Sangwan, Neha Sangwan, Satya Kam Sharma, Anagha S. Desai, K.M. Natraj, Nikilesh Ramachandran, Shubham Sethi, Advocates.
For the Diary No.23477/2021 : Aishwarya Bhati, Shailesh Madiyal, Vinayak Sharma, B.L.N. Shivani, Nitin Pavuluri, Manvendra Singh, Aman Sharma, Shivika Mehra, Amrish Kumar, Vaibhav Sabharwal, Neha Jain, Raj Bahadur, Shyam Divan, Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Shwetal Shepal.
For the Respondent:Abhishek Manu Singhvi, Mahesh Agarwal, Milanka Chaudhury, Naina Dubey, Nishant Rao, Harshita Agarwal, Swet Shikha, E.C. Agrawala Advocates.
For the Diary No. 23479/21 :Maninder Singh, Nikilesh R., Shubham Settu, Mahesh Agarwal, Milanka Chaudhury, M.S. Ananth, Naina Dubey, Nishant Rao, Harshita Agarwal, Swet Shikha, E.C. Agrawala Advocates.
For the SLP (C) 16737/2021 & Diary No. 23477/21 :Parag P. Tripathi, Mahesh Agarwal, Milanka Chaudhury, Naina Dubey, Srinivasan, M.S. Ananth, Nishant Rao, Harshita Agarwal, Swet Shikha, E.C. Agrawala Advocates.

Headnote:(A) Concession Agreements - Principles of Law relating to Public Procurement - Arbitrariness in Annulment of Bidding Process - High Court set aside annulment of bidding process, directing execution of Concession Agreement due to successful bid acceptance, emphasizing constitutional principles of fairness and non-arbitrariness (Paras 12, 18, 26).

(B) Contract Law - Letter of Award as Binding Contract - Court held that a Letter of Award, if accepted and acknowledged, constitutes a binding contract and should not be annulled arbitrarily (Paras 24, 34).

(C) Public Interest in Bidding Processes - Authority must justify annulments of bids without reasons. The benefits to public cannot negate procedural fairness and due process (Paras 35, 46).

Facts of the case:
The appeals arise from challenges to an annulment of bidding process for MIHAN airport project. The Nagpur Bench of the Bombay High Court found that the respondent had a vested right arising from the Letter of Award for the airport's development that was arbitrarily revoked by the appellants (represented by MIL, GoM, UoI, and AAI).

Findings of Court:
The court affirmed the High Court's conclusion that annulling the bidding process was arbitrary, unjust, and violated principles of equality before the law (Article 14).

Issues: Whether the Letter of Award constituted a binding contract; whether annulment was arbitrary; and whether other Government entities were necessary parties.

Ratio Decidendi: The court emphasized that once a legitimate bidding process is completed, the authority cannot cancel the outcome without justified reasoning. The Letter of Award must be recognized as a binding contract (Paras 21, 22).

Result: Appeals dismissed; the High Court's order allowing the Writ Petition is upheld.

Table of Content
1. overview of appeals against high court judgment. (Para 2 , 3 , 4)
2. background facts regarding nagpur airport transfer and bidding process. (Para 5 , 6 , 7 , 8)
3. parties’ arguments regarding annulment and implications. (Para 10 , 11 , 12 , 13)
4. court's observations on issues arising for consideration. (Para 14 , 15 , 16)
5. court analysis on the legality of annulment and bidding process. (Para 24 , 45)
6. final ruling and conclusion of the court. (Para 52)

JUDGMENT :

1. Leave granted.

2. These four appeals have been filed challenging the judgment dated 18.08.2021 of the Nagpur Bench of the Bombay High Court whereby the Writ Petition of the respondent No. 1- GMR Airports Limited (for short 'GAL') and GMR Nagpur International Airport Limited (for short 'GNIAL') filed against MIHAN India Limited (for short 'MIL') and Government of Maharashtra (for short 'GoM') has been allowed. The High Court set-aside the impugned communication of annulling the bidding process and directed to take further necessary steps as per prayer clause (b) of the Writ Petition.

3. The appeal arising out of Special Leave Petition (C) No. 15556 of 2021 has been filed by MIL (which was the respondent no. 1 before the High Court) and appeal arising out of Special Leave Petition (C) No. 16737 of 2021 has been filed by the GoM (which was the respondent No.2 before the High Court). The other two appeals arising out of Diary No. 23479 of 2021 and Diary No. 23477 of 2021 have been filed by the Airports Authority of India (for short 'AAI') and Union of India (for short 'UoI') respectively, which were not the party before the High Court and hence applications for permission to file the special leave petitions have been filed, which are granted in both the special leave petitions.

4. Since, the order under challenge in all the appeals is the same and the facts in the said appeals are common, however Special Leave Petition No. 15556 of 2021 titled MIHAN India Limited versus GMR Airports Limited & Ors. is being treated as the lead petition.

5. Briefly, the facts relevant for the purpose of the appeals are that the Nagpur International Airport (for short 'Nagpur Airport') was being run by the AAI. On the initiative of GoM to develop a multi-modal international passenger and cargo hub airport at Nagpur, for brevity sake referred as 'MIHAN', in coordination with Government of India (for short 'GoI'),Ministry of Civil Aviation (for short 'MoCA'), AAI and Indian Air Force through Ministry of Defence has prepared the report for MIHAN project. On 18.12.2006, GoI through MoCA and AAI on one side; and GoM and Maharashtra Airport Development Company (for short 'MADC') on the other side, entered into a Memorandum of Understanding (for short 'MoU') for the purpose of establishing a Joint Venture Company (for short 'JVC') and transferring the Airport to the said JVC to develop it into MIHAN. As per the said MoU, MADC shall have 51% of the equity and AAI 49% equity of the JVC. Pursuant to the MoU, the AAI and MADC entered into a Joint Venture Agreement (for short 'JVA') on 22.02.2009 for the purpose of incorporating a JVC, which is known as MIL. As per the terms and conditions of the MoU dated 18.12.2006 and the JVA dated 22.02.2009, MIL took over the Airport from AAI on 07.08.2009.

6. As per the instructions of GoI, it was thereafter, decided that for the upgradation, modernization, operation and maintenance of the Airport (subsequently named as Dr. Babasaheb Ambedkar International Airport, Nagpur) global tenders were to be called by MIL by inviting bids from private parties as per the Request for Qualification (for short 'RFQ') for selection of private developers, through public private participation (for short 'PPP') on Design, Build, Finance, Operate and Transfer (DBFOT) basis. On 11.12.2017, GoM constituted a High-Powered Project Monitoring and Implementation Committee (for short 'PMIC') consisting of eleven Members, being officers of GoM, GoI, MADC and AAI and the C


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