Airports Authority of India v. M/s Saptagiri Restaurant Private Limited

allegations levelled in the complaint were baseless, defendant-AAI proceeded to award tender to plaintiff insofar as tender floated in respect of Amritsar was concerned. In the interregnum, defendant-AAI initiated proceedings against plaintiff insofar as tender pertaining to Chennai Airport is concerned and issued a show cause notice dated 5th June 2023 asking plaintiff to show cause as to why action should not be taken against plaintiff on the ground of conflict of interest and material misrepresentation.

3.3. It is further case of plaintiff before Trial Court that similar allegations were levelled against plaintiff in show cause notice as were levelled against it in Amritsar. Upon receipt of show cause notice dated 5th June 2023, plaintiff tendered its reply dated 14th June 2023 in which allegations were strongly refuted and controverted.

3.4. Plaintiff has also averred in his plaint that an illegal order of debarring it in participating in any tenders floated by defendant-AAI at Chennai Airport was issued. Aggrieved whereof, plaintiff filed Writ Petition FAO no.13/2024 bearing no.23466 of 2023 before the High Court of Madras, assailing the action of defendant-AAI debarring plaintiff. Upon consideration of matter, the Madras High Court passed order dated 9th August 2023, directing defendant not to do anything in pursuance of the proceedings dated 26th July 2023 initiated by them and affect commercial activities of plaintiff in any way and stayed the order dated 26th July 2023, in terms whereof, plaintiff was debarred qua Chennai Airport.

3.5. Subsequently, defendant no.1 issued a show cause notice to plaintiff seeking reply with regard to issue of conflict of interest and plaintiff responded to show cause notice, but defendant no.1 issued order dated 8th August 2023, debarring plaintiff from participating in any tender floated by defendant no.1 at Amritsar Airport for three years, ostensibly, on the ground of conflict of interest and material misrepresentation. Aggrieved, plaintiff filed Civil Writ Petition no.17635 of 2023 before the High Court of Punjab and Haryana at Chandigarh. Plaintiff withdrew that petition with liberty to approach Dispute Redressal Committee (DRC). Plaintiff, accordingly, approached DRC.

3.6. It is also stated by plaintiff in his plaint that it upon acquaintance of the fact that defendants have also started to act prejudicial to its rights, debarring plaintiff to participate in Tender no.AAI/SXR/ COMML/ FnB /400/2023 titled “Short Term License to operate Food and Beverages outlets (SHA F/F and Arrival at Srinagar International Airport, Srinagar”, it approached court of 1st Additional District Judge, Budgam, with a Suit for Declaration, Perpetual and Mandatory Injunction, for declaring defendants’ action, debarring plaintiff from FAO no.13/2024 participating in tender floated by defendant no.1 in Srinagar in terms of aforesaid tender notice, as illegal and arbitrary. The said Court vide ad interim order dated 22nd August 2023, directed defendants to allow plaintiff to participate in aforesaid tender and not to finalize the tender without further orders of the court. Application for vacation of ad interim order was filed by defendants. The said Court issued order dated 8th September 2023, directing defendant no.3 to open bids including that of plaintiff and proceed in terms of relevant provisions of law taking into consideration rules applicable and conclude process. Against that order, appeal preferred by defendants was dismissed by a Bench of this Court vide order dated 13th October 2023.

3.7. According to plaintiff, in the interregnum another show cause notice dated 8th June 2023 was issued by defendants, which was replied by him on 16th June 2023. However, defendants issued order dated 20th December 2023, imposing prohibition on plaintiff for three years, precluding plaintiff’s participation in any forthcoming tenders including the ones in Srinagar, floated by AAI. Plaintiff in his plaint, sought quashing of order dated 20th December 2023, with a direction to defendants to restrain from debarring plaintiff from participating in any future tenders floated by AAI. Plaintiff also sought respondents to be directed to allow plaintiff to participate in all future tenders floated by AAI.

3.8. Trial Court vide its order dated 21st December 2023 kept in abeyance defendant no.2’s order dated 20th December 2023.

Appellants/defendants submitted their written statement and objections. FAO no.13/2024

4.1. In their written statement, it is averred by appellants that AAI is a statutory body constituted by an Act of Parliament viz. Airports Authority of India Act, 1994 and is enshrined with the responsibility of creating, upgrading, maintaining and managing civil aviation infrastructure in the country.

4.2. It is also stated by appellants in their written statement that the suit filed by respondent is liable to be dismissed as Trial Court lacks territorial jurisdiction on account of the fact that show cause notices were issued to plaintiff/respondent at its registered office at New Delhi. He replied to show cause notices from the same address and order of debarment was also served at its registered office at New Delhi. Besides, plaintiff/respondent has no office at Srinagar as he is operating his business from Delhi which is also reflected in the title of the case and has been debarred from participation in tenders at AAI Airports by way of debarment order falling outside the territorial jurisdiction of the Trial Court and cannot be allowed to institute the suit in absence of any specific cause of action against appellants at Srinagar.

4.3. Further submission of appellants in their written statement is that respondent while taking recourse of earlier orders passed by Trial Court in a pending suit which was upheld by the High Court on the pretext that debarment orders issued at Chennai Airport stands already stayed and same cannot be treated as debarment before the Trial Court, then one fails to understand as to why respondent has not challenged order dated 20th December 2023 before Madras High Court, where earlier writ petition is already pending either by way of fresh writ petition or initiating contempt proceedings against appellants and in spite of doing FAO no.13/2024 so why and under what circumstances plaintiff has chosen to file the suit against debarment order before Trial Court that too without having any cause of action or knowing the fact that Trial Court is not vested with territorial jurisdiction.

4.4. It is also stated by appellants that debarment order has been passed in accordance with law after examining the issue properly while giving full opportunity of being heard to respondent. Respondent was debarred by authorities at Chennai and Amritsar and was not allowed to participate in tendering process floated by appellants at Srinagar International Airport. Respondent has been found to have connection with M/s Syona Spa and M/s Mahesh Enterprises Pvt. Ltd., having strong understanding between Shri Bikram Singh and Shri Karan Singh, which indicated that there is complete collusive bidding/bid rigging practices by both entities in AAI tenders.

4.

It is also averred by appellants that contentions raised by respondent with respect to non-involvement of Shri Karan Singh in presence of his termination prior to issuance of debarment order will not principally be made basis for non-issuance of order as conflict of interest was found very much in all tenders, description of which is given in debarment order. All the procedures and norms have been followed.

4.

The Trial Court has passed order dated 8th August 2024, which is impugned in this memo of appeal.

5. It is the case of appellants that Appellant -Airports Authority of India is a Statutory Body constituted by the Act of Parliament, viz. The Airports Authority of India Act, 1994. FAO no.13/2024

5.1. It is also stated by appellants/defendants that respondent/plaintiff has been debarred by appellants from participating in future tenders/RFPs/ RFQs/NITs to be floated by AAI for a period of three years from the date of issuance of order dated 20th December 2023. What is mentioned in said order is worthwhile to be reproduced hereunder:

On perusal of the details of the participation of M/s Saptagiri Restaurant Pvt. Ltd (SRPL) in following e-tenders (NIETs) of AAI viz. (i) 2022_AAI_124765_1 at Raipur Airport (ii) 2022_AAI_127866_1 at Amritsar Airport (iii) 2022_AAI_127867_1 at Amritsar Airport (iv) 2022_AAI_131566_1 at Chennai Airport (v) 2022_AAI_131571_1 at Chennai Airport (vi) 2022_AAI_122611_1 at Ranchi Airport and (vii) 2022_AAI_128964_1 at Pune Airports, the bidding pattern indicated in the show-cause notice, examination of replies submitted to the show cause Notice and personal hearing held on 30.11.2023 in the O/o Member (HR) thereof, the following has emerged: a. During the personal hearing on 21.11.2023, M/s Syona Spa, represented by Shri Karan Singh, proprietor of M/s Syona Spa mentioned that he has worked with M/s Mahesh Sunny Enterprises Pvt. Ltd. for 18 to 19 years, and he does not know anyone in M/s SRPL. He also mentioned that after debarment of M/s Syona Spa by AAI, he is involved in Agriculture and Animal Husbandry activities at his native place around Gurgaon, Haryana.

In view of the forgoing, it can be comprehended that there is a long history of association between M/s Syona Spa and M/s Saptagiri Restaurant Pvt. Ltd that puts both the entities in position to have access/influence over each other. Therefore, said indicated pattern above leads to Collusive bidding/bid rigging practices by both entities in the above AAI tenders.

Therefore, it is to inform that, M/s Saptagiri Restaurant Pvt. Ltd. has violated Clause 9 (a) (vi) of General Information and Guidelines of e- Tender document / NIT.

4. Thus, as per clause 9(b) of the General Information and Guidelines of e-Tender document / NIT, M/s Saptagiri Restaurant Pvt. Ltd, with registered address L 322, Mahipalpur Extension, New Delhi – 110037, future tenders/RFPs/RFQs/NITs floated by AAI along-with forfeiture of EMD and performance security in the said tenders, for a period of (03) (Three) years from the date of issuance of this letter. Participating debarred hereby

5. This is issued without prejudice to any other rights or remedies that may be available to Airports Authority of India as per NIET / Tender document or any other law for the time being in force. FAO no.13/2024

6. Competent Authority of AAI has decided to restrain the agency “M/s Saptagiri Restaurant Pt. Ltd. L 322, Mahipalpur Extension, New Delhi – 110037” from participating in any future tenders for any work in AAI in any name and style for three (03) years from the date of issuance of this letter.

It is further notified that the above decision of AAI applied to all allied firms / partners / subsidiaries / JV (if any) of M/s Saptagiri Restaurant Pt. Ltd……

5.2. It is contention of appellants that issuance of debarment order had been felt only when appellants found that respondent had indulged in collusive bidding for tenders invited at Amritsar, Rajpur, Ranchi, Chennai and Pune Airports inasmuch as respondent falls under Clause 9(a)(vi) of General Information and Guidelines of E-tender by taking recourse of Clause 9(b) thereof. It has also been found by appellants that there existed a long history of association between respondent and M/s Sayona Spa which puts both entities in a position to have access/influence over each other, leading to collusive bidding/bid rigging practice in tenders invited by AAI.

5.3. According to appellants, the suit filed by respondent before the Trial Court is not maintainable against a Statutory action taken/initiated by a Statutory body and on a challenge under writ jurisdiction is available, more particularly when there is presence of an Alternate Dispute Mechanism Clause in the form of Mediation and Arbitration under the Manual of Contract 2019, the civil suit could not be entertained.

5.4. Appellants’ next contention is that respondent cannot avail multiple/ parallel remedies qua the same subject-matter before the Madras High Court, Dispute Resolution Committee (DRC) at Amritsar, and Declaration Suit before Trial Court and that statutory proceeding cannot be challenged in a suit as remedy under Statute is to be availed. When a consent was given by respondent before the High Court of FAO no.13/2024 Punjab and Haryana to appear before DRC qua its all grievances on the subject-matter, any other proceedings before different forums became infructuous and ought to be have withdrawn or dismissed.

6. Earlier, AAI through its Airport Director, Chennai Airport, issued Debarment Order dated 26th July 2023, against respondent debarring it for a period of three years. This Order of Debarment, challenged by respondent in a writ petition, was stayed by the Madras High Court, vide order dated 9th August 2023.

6.1. Respondent had also preferred a writ petition before Punjab and Haryana High Court against order dated 8th August 2023. There it was on consensus that respondent withdrew its writ petition so as to approach DRC at Amritsar Airport for redressal of its grievances. If that being the position, respondent has opted a choice to approach a particular forum for redressal of its grievances and as a consequence of which all other proceedings become infructuous.

7. It is AAI’s Main Office at Delhi, i.e., Corporate Headquarters, which by virtue of order dated 20th December 2023, has debarred respondent from participating in any future tenders with respect of any works in AAI, in any name and style for a period of 03 years from 20th December

7.1. Against Debarment Order dated 20th December 2023, respondent preferred to approach the Trial Court with a civil suit. The Trial Court vide its order dated 21st December 2023, stayed Debarment Order.

7.2. Against Trial Court ad interim order dated 21st December 2023, appellants had preferred an appeal, being FAO no.38/2023. A Bench of this Court, however, without expressing any opinion on merits of the FAO no.13/2024 case, directed them to file objections to interim application with a further direction to Trial Court to consider application/objections/ written statement, if any, to be filed by appellants and decide the application/objections and pass appropriate orders in the interim application after hearing both the parties.

7.3. The Trial Court by impugned order has made its ad interim order dated 21st December 2023 absolute. The result thereof is that Debarment Order dated 20th December 2023 has been kept in abeyance by the Trial Court till final disposal of main suit.

Learned counsel for appellants would contend that suit filed by respondent before Trial Court is not maintainable against statutory action taken by statutory body inasmuch as challenge thereto can be thrown under writ jurisdiction. He has placed reliance on Ghulam Abbas and other v. State of U.P. and others (1982) 1 SCC 71, in which it was observed that a suit cannot be filed against orders which are passed by statutory authorities under different Statutes and that if orders of statutory authorities passed under respective Statutes have to be challenged, then these can be only challenged under Article 227 and/or under Article 226 of the Constitution of India and not by way of a civil suit.

8.1. He further contends that in presence of an Alternate Dispute Mechanism Clause in form of Mediation and Arbitration under the Manual of Contract 2019, civil suit could not have been entertained by Trial Court. In addition to that, existence of a provision of appeal specifically mentioned qua subject matter, i.e., order of debarment under Manual of Contract 2019, civil suit could not have been FAO no.13/2024 entertained. Respondent could not avail multiple parallel remedies on same subject matter before Madras High Court, DRC at Amritsar and Declaration suit before Trial Court. Once consent was given by respondent before the Punjab and Haryana High Court to appear before DRC, all other proceedings initiated by appellant before other fora become infructuous and ought to have been withdrawn or dismissed.

8.2. It is being also averred that the Trial Court has erred to appreciate that debarment of respondent was done in exercise of procedure laid down in Clause 8.12.4 of Commercial Manual 2019 (Manual of Contract), which provide for “steps to be taken for debarring an agency”. And that Trial Court also erred to appreciate that in paragraph 26, respondent mentioned that procedure under Manual of Contract 2019 was followed by appellants before debarring respondent-agency. Trial Court also did not consider the fact that Manual of Contract is a self-contained manual, which prescribed procedure of dispute mechanism.

8.3. It is being vehemently stated that Trial Court has not appreciated the fact that respondent has approached it with unclean hands owing to the fact that on an Identical Debarment Letter, issued in Chennai and Amritsar, respondent had approached the High Courts under Article 226 of the Constitution, by stating therein that no appeal or revision lies against action of respondents and therefore respondent was left with no other alternative remedy except to invoke writ jurisdiction, whereas in the present case, he has approached the Civil Court.

8.4. It is being stoutly argued that respondents, by taking three separate recourses at the same time for identical and combining orders, has attempted to pollute stream of justice and it is a well settled principle FAO no.13/2024 of law in Dalip Singh v. UP and others that litigants who attempt to pollute the stream of justice are not entitled to any relief, interim or final. Pursuing of parallel remedies in respect of same subject-matter has been deprecated by the Supreme Court in Jai Singh v. Union of