Writ Petition No. 15777 of 2016 and W.M.P. Nos. 13689, 17205, 33437 and 33590 of 2016. Case: Flemingo Duty Free Shop Pvt. Ltd. Vs Airports Authority of India (Southern Region) and Ors.. High Court of Madras (India)

Case NumberWrit Petition No. 15777 of 2016 and W.M.P. Nos. 13689, 17205, 33437 and 33590 of 2016
CounselFor Appellant: P.S. Raman, Senior Advocate for L. Murali Krishnan, Adv. and For Respondents: Vijaynarayan, Senior Advocate for Parthiban, Adv.
JudgesB. Rajendran, J.
IssueConstitution of India - Article 226
Judgement DateMarch 23, 2017
CourtHigh Court of Madras (India)

Order:

B. Rajendran, J.

  1. In this writ petition, the petitioner calls in question the legality and/or validity of the order dated 24th March 2016 passed by the first respondent in and by which the first respondent rejected the objections raised by the petitioner with regard to the documents submitted by the second respondent pursuant to the tender floated by the first respondent for awarding duty free outlets at Madurai Airport.

  2. The petitioner company claims to be the first private entity in India to be engaged in the business of operation and management of Duty Free Shops which sell duty free goods at Airports and Seaports in India. According to the petitioner, they are operating such Duty Free Shops in International Airports at Chennai, Calicut, Mangalore, Goa, Kolkatta, Trichy and Ahmedabad. The petitioner also claims to be operating 28 such duty free shops at various Airports and Seaports in India. While so, during August 2015, the first respondent floated the Request for Proposal (RFP) for Madurai International Airport to design, built, operate and maintain duty free outlets. The petitioner as well as the second respondent participated in the RFP Subsequent to the tender notification issued during August 2015, the first respondent has also issued various corrigendum. Thereafter, during September 2015, the first respondent cancelled the tender itself which was floated during August 2015 with an intention to float a fresh tender. Accordingly, on 23.09.2015, a paper publication was effected by the first respondent inviting tender applications for running duty free shops in 14 Airports, including Madurai Airport. On the next day namely 24.09.2015, the first respondent issued a second tender notification and it was followed by atleast two corrigendums issued by the first respondent.

  3. As far as the petitioner company is concerned, they have participated in the pre-bid meeting, As per the tender conditions and the corrigendums issued thereof, the petitioner made on-line submission of the bids (technical as well as financial) in the e-tender portal before 18th January 2016, the last date indicated by the first respondent for submission of the bids. On 18.02.2016, the petitioner was informed that the financial proposal will be opened on 19.02.2016 at the office of the first respondent.

  4. In the meantime, the first respondent issued a similar Request for Proposal (RFP) during September 2015 to design, build, operate and maintain duty free shops at Trivandrum International Airport and after evaluating the bids of the tenderers, the first respondent awarded the tender in favour of the second respondent herein. Challenging the same, the petitioner has filed WP (C) No. 861 of 2016 before the Kerala High Court and obtained an interim stay. The writ petition was filed before the Kerala High Court by specifically contending that the second respondent does not fulfil the threshold eligibility criteria indicated in RFP. On the basis of such pleading, the Kerala High Court directed the first respondent to produce the documentary records of the second respondent to examine the claim of the petitioner. Ultimately, the Kerala High Court dismissed the writ petition on 12.02.2016 against which the petitioner has filed W.A. No. 354 of 2016 before the Division Bench of the Kerala High Court and the appeal is pending.

  5. As far as the present tender notification is concerned, after the financial bids were opened, the first respondent, by an order dated 29.02.2016, selected the second respondent as the highest bidder for running duty free shops at Madurai Airport. The petitioner objected to the selection of the second respondent on the ground that in the website of TEWA, which is the world's biggest duty free and travel retail association, the name of the second respondent is mentioned only as an "Agent/Distributor" and not as a duty free retail operator. On the other hand, the petitioner regularly participates in the Summits held during 2013, 2014 and 2015 and the name of the petitioner is prominently mentioned as a Duty Free and Travel Retail Operator in the relevant visitor list. Further, the second respondent is operating only a duty free retail business at one Seaport namely the Pasir Gudant Ferry Terminal in Malaysia and in the other locations, the second respondent operates only as a distributor, wholesaler and ship-chandelier but not as a duty free retailer as required in the RFP. Further, based on the outcome of enquiry conducted by the petitioner, they have submitted an internal analysis report which would clearly reveal that the second respondent has not fulfilled any of the conditions laid down in RFP. Therefore, the petitioner has raised objections objecting to the entertaining of the bid submitted by the second respondent inasmuch as the second respondent is ineligible for awarding the contract. However, the objections raised by the petitioner has been rejected by the first respondent by the communication dated 24.03.2016. Challenging the order of rejection dated 24.03.2016 of the first respondent, the present writ petition has been filed by the petitioner.

  6. Mr. P.S. Raman, learned Senior counsel appearing for the petitioner would vehemently contend that as per the RFP issued by the first respondent, the second respondent is not eligible for being considered for award of the tender in their favour. While so, the first respondent, with an oblique motive, has accepted and considered the tender of the second respondent as valid instead of invoking the threshold eligibility criteria to reject the tender of the second respondent. According to the learned Senior counsel for the petitioner, the second respondent has misrepresented the facts and submitted documents which were clearly in contradiction of the conditions laid down in RFP, however, such application of the second respondent has been accepted by the first respondent which would expose the bias attitude on the part of the first respondent. Thus, according to the learned Senior counsel for the petitioner, the first respondent, without examining the documents submitted by the second respondent properly as to it's authenticity has erroneously awarded the tender in their favour. Such action on the part of the first respondent is nothing but a malafide and arbitrary action intended to favour the second respondent, while depriving the legitimate claim of the petitioner for getting the contract awarded in their favour.

  7. The learned Senior counsel for the petitioner has invited the attention of this Court to the documents submitted by the second respondent to contend that the term annual turnover indicated in RFP would mean the total turnover from sale of duty free items to ultimate consumers less applicable sales tax or value added tax. In other words, "turnover from duty free business" means the turnover for the last three financial years. The first respondent ought to have gone into the fact that the second respondent could not have fulfilled the financial annual turnover criteria of US dollar 80,500 from duty free retail business. On the contrary, the second respondent does not have the requisite annual turnover from duty free retail business and what was indicated therein is inclusive of the distribution and sale of retail items. Therefore, the turnover indicated by the second respondent is not the one generated from duty free business alone. It is further contended that the second respondent, while submitting the bid, had altered the format prescribed in respect of annual turnover and that by itself is a sufficient ground to reject the tender of the second respondent. Further, the documents submitted by the second respondent relating to their experience is not on par with requisite standards as specified in RFP. The learned Senior...

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