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#CaseBrief : Ramana Dayaram Shetty V. The International Airport Authority


AIR 1979 SC 1628


PETITIONER: Ramana Dayaram

                     v.

RESPONDENT: The International Airport Authority

 

DATE OF JUDGEMENT: 04/05/1979

 

BENCH: Bhagwati, P.N, Tulzapurkar, V.D, Pathak, R.S

 

COURT: Supreme court of India

 

FACTS OF THE CASE


·  The international airport authority released invitation for tenders to open a restaurant and two snack bars at the international airport of Bombay.

·  Around 6 applications were received in which the 4th respondent was accepted by the authority.

· The airport authority had a criteria which states that the tenders should have a 10 years of experience in the same field as a registered second class hotelier.

· This was clearly mentioned in the tender invitation.

· Which later was found out that the 4th respondent didn’t had a experience of 10 years

· The airport authority called the respondent to submit his documents for reconsideration.

· Although the respondents tender was reconfirmed as he had enough experience in the hotelier field without holding a second-class hotelier.

· Here the appellant who aspire to offer his quotation and dropped his wish as he didn’t sufficient experience criteria as mentioned in the tender invitation.

· After hearing the acceptance of the 4th respondent even without fulfilling the required criteria, the appellant file suit before the court the Bombay High Court under article 226 of the Indian constitution

· The case was dismissed in the high court.

· Wherefore the appellant appealed in the supreme court under article 136 of the Indian constitution.


Nature of the litigation:


·The litigation revolves around the arbitrary action of the International Airport Authority (IAA) in refusing to grant a no-objection certificate (NOC) to the petitioner, R.D. Shetty, for the operation of a duty-free shop at the Bombay International Airport.


Who is asking the particular for court for what?


R.D. Shetty, the petitioner, approached the court seeking relief against the arbitrary action of the IAA. The petitioner wanted the court to declare the refusal of the NOC  as arbitrary and violative of his fundamental rights under the Indian Constitution.


Why did they sue?


·  R.D. Shetty sued because the IAA's refusal to grant the NOC seemed arbitrary and was affecting his right to carry out his business. He believed that his fundamental rights, particularly the right to equality and right to carry out a trade or business, were being infringed upon by the IAA's actions.


Relevant laws in question:


· The main law in question was the Airports Authority of India Act, 1971, and the regulations framed thereunder. Additionally, the petitioner relied on the fundamental rights guaranteed under the Indian Constitution, particularly Articles 14 (Right to Equality) and 19(1)(g) (Right to Practice Any Profession or Occupation).


What has been already decided so far:


· As of last update in January 2022, the case had established important principles regarding the nature and scope of the State's powers, particularly in administrative decisions affecting individuals' rights. The Court held that the State, while exercising its powers, must act fairly, reasonably, and without arbitrariness. Any action that violates the principles of natural justice and fairness can be challenged in a court of law.


ISSUES:


1.  WHETHER THE INTERNATIONAL AIRPORT AUTHORITY IS STATE UNDER ARTICLE 12 OF THE INDIAN CONSTITUTION?

2. WHETHER THE TENDER CONFIRMED BY THE RESPONDENT IS CONSTITUTIONALLY VALID?

 

Contentions:

 

· R.D. Shetty contended that the arbitrary refusal of the NOC was causing harm to his business interests without any valid reason.

· The IAA, on the other hand, might have had its reasons for refusing the NOC, but those reasons were not clearly communicated or justified.

· This case highlighted the tension between the discretionary powers of administrative bodies and the fundamental rights of individuals. It sought to determine whether the IAA's action was arbitrary and if it violated Shetty's constitutional rights.

 

JUDGMENT


The court decided after hearing both parties, the first and main factor to be taken in consideration is that Whether The Respondent Is State within Article 12 of Indian constitution. This factor is important for the maintainability of the case as remedy of fundamental rights violation can be only claimed in case Only against state not against private authorities, After the Court examined the International Airport Authority Act of 1971, it became evident that the respondent is under the jurisdiction of Article 12 of the Constitution since the Central government has extensive and widespread authority over its administrative affairs.

 

Regarding the finalized tender's legitimacy, the Court determined that it constituted a blatant breach of Article 14's guarantee of equality. The Court offered the following justifications for its position:

 

· The offer did not address the feasibility of operating a second-class hotel; instead, it outlined requirements that must be met in order to meet the fundamental qualifying criteria, which the airport authorities cannot ignore.

·  The authorities' sole remaining option was to reject the tender offers outright and engage in direct talks with a dealer. However, in this instance, the tender offers were reviewed, and the fourth respondent was chosen. As a result, the invitation's reserved power is not applicable. Thus the tender was invalid.

 

Summary:

The case involved the termination of services of R. D Shetty, who was working as a canteen contractor at the Bombay Airport. The International Airport Authority (IAA) terminated his contract without providing him with an opportunity to be heard. Shetty challenged this decision, arguing that the principles of natural justice were violated as he was not given a fair hearing before termination.

 

The Supreme Court, in its judgment, emphasized the importance of the principles of natural justice in administrative proceedings. The court held that even in contractual matters, where the termination involves civil consequences, the principles of natural justice must be followed. It stated that the authority terminating the contract should provide an opportunity for the affected party to present its case and be heard.

 

Conclusion:


The case of R D. Shetty v. The International Airport Authority is significant as it solidified the application of principles of natural justice in administrative actions, extending their scope to contractual matters. The Supreme Court, in its decision, affirmed that fairness and justice must be upheld, even in contractual relationships, and individuals should be given a reasonable opportunity to present their side before adverse actions are taken against them.

 

This judgment has had a lasting impact on administrative law in India, reinforcing the need for fair procedures in governmental and administrative actions. It serves as a reminder that the principles of natural justice are fundamental and must be adhered to, ensuring that individuals are treated fairly and justly, even in contractual

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