Once the norms and standards are laid down by any executive authority he cannot go back from the standards established

Ravikiran Shukre | Manikchand Pahade Law College, Aurangabad | 20th January 2020

Ramanna Dayaram Shetty V. The International Airport Authority (AIR 1979 SC 1628)

Facts of the case: 

1. The International Airport Authority of India invited tenders by public notice for putting up and running a second class restaurant and two snack bars at the International Airport, Bombay. 
2. THE NOTICE STATED THAT: 

PARAGRAPH (1): Tenders were invited from registered second class hoteliers having at least five years’ experience for putting up and running a second class restaurant and two snack bars at Bombay International Airport. 

PARAGRAPH (8): Acceptance of the tender would rest with the Airport Director who does not bind himself the right to reject all or any of the tenders received without assigning any reasons thereof. 

• Out of the six tenders that were received, only the tender of 4^th respondents were complete and had offered the highest amount as license fee. All the other tenders were rejected because they were incomplete. 
• The conditions of the paragraph (1) of the tender notice were not satisfied by 4^th Respondent. He was thereof called upon by authorities for the production of documentary evidence. 
• The 4^th restated that it had considerable experience of catering for various reputed commercial houses, clubs, messes, and banks and that they had Eating Houses Catering Establishment (Canteen) License. Satisfied with the information given by the 4^th respondents, the 1^st respondent accepted their tender on the terms and conditions prescribed in the letter.     

Judgment: 

1. Arguments of Appellants: The Airport Authority was bound to give effect to the most important condition of eligibility and acceptance of tender by the first respondent was in violation of standard of eligibility set up by first respondent. 
2. Once the norms and standards are laid down by any executive authority he cannot go back from the standards established. It is the most important principle of the administrative law which has been laid taken from the enunciation of Mr. Justice Frankfurter in Viteralli v. Seton where learned judge has held that “an executive agency must be rigorously held to the standards by which it professes its action to be judged.” This principle was later accepted by Supreme Court in case of S. Ahluwalia v. Punjab.
3. Every action of the executive government must be informed with reason and should be free from arbitrariness. 
4. Matthew J. in Punnan Thomas v. state of kerala held that, “a government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal.”    
5. When government is dealing with the public, whatever by way of giving jobs or entering into contract, or granting license or quotas or other forms of largesse, it cannot act arbitrarily at its sweet will but it has to follow according to norms and standards which is not arbitrary, irrelevant and irrational. The power and discretion of the government in awarding jobs and granting licenses, quotas, etc. must be in conformity with the rational, relevant and non – discriminatory norms and standards, and if the government departs any time its action is liable to be struck down unless it is proved that the action of govt. based on some valid principle which is not irrational, unreasonable and discriminatory.