Ramana Dayaram Shetty vs Airport Authority of India
BENCH: P.N. Bhagwati, V.D. Tulzapurkar, R.S. Pathak FACTS
The International Airport Authority, respondent 1, is a corporate body which was formed by the International Airport Authority Act, 1971 issued a notice inviting tenders for running a second-class restaurant and two snack bars at the International Airport at Bombay. It was mentioned that the period of the contract was 3 years and the eligibility was a registered second-class hotelier with a minimum of 5 years of experience in the restaurant business. Further, the acceptance was completely the discretion of the airport director whchi had complete rights to accept or reject.
Respondent 1, the authority, received 6 tenders only one of which by Respondent 4 complied with the terms and conditions. Respondent 4 had experience of 10 years in the catering business in running canteens but no experience in restaurants and did not match the eligibility. The respondent 1 accepted the tender by respondent 4 and entered into a contract. A petition under article 136 was thus filed challenging the decision. ISSUES
Whether International airport authority of India a 'State' under article 12?
Whether the decision of respondent 1 to accept the tender of respondent 4 despite not qualifying eligibility invalid?
Whether respondent 1 have the authority to reject all tenders and directly negotiate with Respondent 4?
LAWS INVOLVED
Article 12 defines what is "State". JUDGEMENT
The Hon'ble Supreme Court ruled that the acceptance of tender despite it not satisfying the eligibility was invalid. Such a practice violated Article 14 as it denied equal opportunity to the appellants and others. Respondent 1 did not have an arbitrary authority to accept any tender and non non-fulfilment of criteria disqualified Respondent 4.
The test of instrumentality was applied and it was found by the court that Respondent 1 is an instrumentality of the agency of the government and therefore falls in the definition of Article 12 of the constitution.
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