While setting aside the judgment passed by the Delhi High Court, the bench of Justice MR Shah and Krishna Murari ruled that the terms of tender are not open to judicial scrutiny unless they are arbitrary, discriminatory, or Malafide. 

Justice Shah delivering the judgment for the bench held that the High Court has committed a serious error by entertaining a writ petition filed by an NGO who is a third party when none of the GHAs challenged the tender conditions. The top court observed that the NGO Centre for Aviation Policy, Safety & Research (CAPSR) did not have locus standi to file the writ petition before the High Court challenging the terms of the tender. 

While considering the various judgment of the Supreme Court passed on such issues the Supreme Court observed that "Even otherwise, even on merits also, the High Court has erred in quashing and setting aside the eligibility criteria/tender conditions mentioned in the respective RFPs, while exercising the powers under Article 226 of the Constitution of India. As per the settled position of law, the terms and conditions of the Invitation to Tender are within the domain of the tenderer/tender-making authority and are not open to judicial scrutiny, unless they are arbitrary, discriminatory, or mala fide. As per the settled position of law, the terms of the Invitation to Tender are not open to judicial scrutiny, the same being in the realm of contract. The Government/tenderer/tender-making authority must have a free hand in setting the terms of the tender.

The Apex Court considered the earlier decisions passed in the cases of " Maa Binda Express Carrier v. North-East Frontier Railway, (2014) 3 SCC 760 (para 8); Directorate of Education v. Educomp Datamatics Limited, (2004) 4 SCC 19 (para 12); Meerut Development Authority v. Assn. of Management Studies, (2009) 6 SCC 171 (paras 26 & 27); and Michigan Rubber (India) Limited v. State of Karnataka, (2012) 8 SCC 216".

Case Details:-

CIVIL APPEAL NOS. 6615-6616 OF 2022
Airport Authority of India …Appellant
Versus
Centre for Aviation Policy, Safety & Research
(CAPSR) & Others …Respondents

Read the Complete Judgment:-

https://main.sci.gov.in/supremecourt/2021/25000/25000_2021_7_1503_38707_Judgement_30-Sep-2022.pdf