Sabre Glbl Inc. v. Air India Limited

16. The Petitioner submits that the AIL had issued an earlier tender in August 2020 for the same/ similar product/ services, wherein the Petitioner had complained regarding the weightage assigned to certain requirements, which resulted in giving unfair competitive advantage to Respondent No.2. Since AIL refused to revise the weightages, the Petitioner elected not to proceed with the bid of the earlier tender.

17. The Petitioner further submits that since Respondent No.2 was the only bidder in the erstwhile PSS tender, in accordance with the Indian Government Procurement Policy, AIL had to re-issue the PSS tender. The Respondent No.1 made no significant changes in the present Tender and, as per Petitioner, the technical requirements continued to be heavily skewed in favour of Respondent No.2. Despite this, the Petitioner decided to offer Respondent No.1 a favorable proposal, in an effort to win the present Tender.

18. The Petitioner submits that some of the weightages have been arbitrarily fixed to favour Respondent No.2, so that the Respondent No.2 W.P.(C) 6046/2021 scored higher in technical evaluation. Some of the requirements were given a weightage of 10, even though the same were not to be of any benefit to Respondent No.1’s operations.

19. As per the Petitioner, few blatant examples of favoritism and bias towards Respondent No.2 are as under:-

(i) Clause 2.[2] of the Tender Document gives weightage to large airlines migrated from SITA- (the existing service provider, which operates passenger processing systems for airlines) to Petitioner’s or Respondent No.2’s system in the last 3 years. As per the Petitioner, Respondent No.2 is the only vendor who has migrated a large airline in the last 3 years. In fact, the Petitioner has migrated many airlines larger than AIL, but not in the last 3 years.

(ii) System’s ability to host several airlines belonging to the same group within a single partition, while sharing a common host and a single PNR for passenger servicing across the group. The requirement specifically defines the functional architecture of Amadeus (single partition and single PNR). Petitioner has the ability to host several airlines within a single reservation environment (but not in a single partition) subject to sales being under a single carrier code. This again unjustly favours Respondent No.2, since this particular requirement does not deserve a weightage of 10 points, and further restricts the way the business objective can be achieved.

20. On 08.06.2021, AIL informed that Respondent No.2 was the successful bidder and the technical and financial bid of the Petitioner scored second highest aggregate score.

21. It is the case of the Petitioner that for a financially precarious airline, such as AIL to spend an additional Rs. 900 crores, is not only shocking but completely imprudent, especially when the product of the Petitioner is as good, if not superior than Respondent No.2. The Petitioner has been seeking the technical bid scores of the bidders from AIL, but the same has not been provided which itself smacks of mala fide, favoritism and lack of transparency in matters of public tenders.

22. The Petitioner submits that the 80 - 20 weightage given to technical and financial bid in the present Tender, is also a clear departure from the normal government tenders (where weightage given is 70:30) and the same has again been done only to favour Respondent No.2.

23. The AIL has filed a detailed counter affidavit through its Deputy General Manager (Commercial). As per AIL, the final score earned by both the bidders as per tender conditions is as follows:- Bidder Technical Bid Financial Bid Consolidated Score (Out of 100) Absolute Marks (out of 1514) % Marks Technical Bid Marks (on scale of 80) Total Bid Cost (in Rs. Crore) incl. of tax Financial Bid Marks (out of 20) 2021:DHC:3704-DB W.P.(C) 6046/2021 Sabre 935.86 61.81% 49.45 Rs. 1143.56

20.00 69.45 Amadeus 1436.58 94.89% 75.91 Rs.1956.30 11.69 87.60

24. Since the Petitioner did not take into account the tax component, it was added later, but this did not change the financial bid score of the Petitioner, which remained at 20 on account of its financial bid remaining the lower compared to that of Respondent No.2.

25. The Petitioner claims that the scores given during technical evaluation were based on assumptions and beliefs, and not on facts and reality.

26. The Respondent No.1 further submits that for a high impact and technology complex procurement, like that of PSS, AIL chose Quality-cum- Cost Based Selection (QCBS) which, according to AIL, is the most appropriate and balanced process. Weightage of 80- 20 was assigned to technical bid and financial bid evaluation respectively. The Respondent No.1 has sought to justify acceptance of the bid of Respondent No.2, even though it is more expensive than that of the Petitioner by an amount of Rs. 900 crores, on the ground that the system of Respondent No.2 is more advanced, scalable and enables the Respondent No.1 to provide an edge to its user which, in turn, will help in growth of business in the form of opportunity costs. The Petitioner cannot to dictate Respondent No.1 to settle for a system, which with less than optimum and advanced features, would result in unnecessary expenditures.

27. Out of total of 774 technical requirements, only 39 requirements were assigned a weightage of 10 points, constituting mere 5.04 % of the total. It W.P.(C) 6046/2021 has further been stated by the Respondent, that the Petitioner accepted the QCBS procedure and, now after having participated in the tender, it cannot challenge the tender process or tender conditions.

28. The evaluation of technical bids was carried transparently and objectively as per the terms of the conditions of the tender. Subsequently, the evaluation scores of each bidder were duly approved by the topmost management of Respondent No.1.

29. The AIL has advanced the following legal submissions:

I. THE PETITIONER CANNOT BE PERMITTED TO

CHALLENGE THE TENDER CONDITIONS/BID DOCUMENTS AFTER HAVING PARTICIPATED AND LOST IN THE TENDER PROCESS.

IN TECHNICAL MATTERS, THE EVALUATION

COMMITTEE’S DECISION CANNOT BE INTERFERED WITH, AS THE EMPLOYER IS BEST JUDGE OF HIS REQUIREMENTS.

SCOPE OF JUDICIAL REVIEW IN CASES OF

COMMERCIAL TRANSACTION IS LIMITED.

30. The Respondent No. 2, i.e. the successful bidder has also filed a counter affidavit wherein the submissions of Respondent No.2 are more or less on the same lines of Respondent No.1. As regards the background of Respondent No.2, it is submitted that Respondent No.2 is a pioneer and world leader in providing search, pricing, booking, ticketing and other processing services in real-time to travel providers and travel agencies through its Amadeus CRS distribution business. Respondent No. 2 also offers computer software that automates processes such as reservations, inventory management software and departure control systems. In the year 2020 itself, Respondent No. 2 was bestowed with numerous prestigious awards and accolades in recognition of its excellence in services including Best Technology Provider by Globe Travel Award, Winner of Best Technology Provider by Irish Travel Industry and the Vakantie Award for Innovation.

31. Respondent No.2 is a global leader in PSS industry and believes that it has 27.3% of all airlines on its Altea platform and an additional 17.3% of all airlines on its Navitaire platform. This is compared to an estimated of only 14.6% of all airlines being on the Petitioner’s PSS platform, a far cry from the total of 44.6% on Amadeus Group’s platforms. In fact, there have been several notable customers that have moved from the Petitioner’s PSS to Respondent No. 2’s PSS in recent years, and these include Southwest Airlines, Philippine Airlines and Bangkok Airways.

32. The market presence of the Amadeus Group can also be gauged from the fact that two thirds of all Global Alliance member airlines have selected Respondent No. 2’s PSS, and as many as 18 out of the 26 Star Alliance members are currently hosted on the Respondent No. 2’s Altéa PSS, including airlines such as Lufthansa, Air Canada, Austrian Airlines, Aegean Airlines, All Nippon Airways, Asiana, Avianca, Brussels Airlines, Croatia Airlines, Egyptair, EVA Air, LOT Polish Airlines, SAS Scandinavian Airlines, Swiss Airlines, South African Airways and TAP Portugal. Airlines hosted on the Altéa PSS carried as many as carried 372,272,759 passengers in the year 2019 alone.

33. After hearing the Parties, we on 14.07.2021, directed AIL to place true copies of the complete tender evaluation process in a sealed cover.

34. On 22.07.2021, we observed as under:-

35. On 03.08.2021, the Respondent No.1 placed, on record, copy of chain of emails relevant for consideration of the matter.

36. We have heard learned Sr. counsels appearing for the Petitioner and Respondent Nos.[1] and 2.

37. We have gone through the Minutes of the Technical Evaluation Committee (TEC) as well as the complete chain of emails exchanged between various officers of AIL. The submissions of the learned Sr. counsel for the Petitioner are as under:-

(i) The TEC had no authority to evaluate the technical bids of the bidders. To substantiate this argument, Mr. Sandeep Sethi, Sr. Advocate has taken us through the Air India’s Material Management Department Procurement Manual for Non-Aircraft Materials and Services (hereinafter called Air India Manual). The relevant Clauses which have been relied upon by the Petitioner are Clause 25.12 read with 33.3, to argue that the TEC, for a contract over Rs. 24 crore (present contract being more than Rs. 2000 crore), as per the Air India manual should have comprised of EDs of Materials Management Department (MMD), Finance Department and Commercial Department. In the present case, the TEC comprised of GM and DGM level officials, and evaluation of the present tender was well beyond their scope of authority. The learned counsel for the Petitioner has argued that the executive authority must be rigorously held to the standard by which it professes its actions to be judged, and it must scrupulously observe those standards (Ramana Dayaram Shetty v. The International Airport Authority of India & Ors., (1979) 3 SCC 489). It is submitted that the EDs have not evaluated the bids of the Petitioner and, EDs of MMD, Finance Department and Commerce Department have merely signed the Financial Bid Evaluation dated 28.05.2021, prepared by their subordinates. The inter- 2021:DHC:3704-DB W.P.(C) 6046/2021 departmental communication placed before us, showed that Commercial Director had circumvented the process laid down in the Air India Manual, and exerted pressure on Director (Finance) to agree to the illegal procedure adopted to evaluate the bids. It has been argued that Director (Finance) in his note of 03.06.2021 had questioned their methodology adopted for technical evaluation.

(ii) The Tender Evaluation Committee (TEC) followed an arbitrary and whimsical procedure for evaluating the technical bids, which makes the entire exercise tainted with illegality and mala fide. It has been submitted that the Technical Evaluation Report (TER) followed the procedure of splitting 14 areas between different Departments for evaluation of different aspects on their own, without there being any such directions or instructions of the Management. It has been submitted that the Passenger Service System (PSS) for which the tender was floated is a Technology Complex Procurement. But in the present case, the Commercial Department evaluated areas, which comprise of a score of 1459 out of a maximum of 1514, being 96.[4] % of the total evaluation. 159 marks were evaluated by Commercial and Finance Department personnel, comprising of 10.5% of the evaluation. Even though the tender was a Technology Complex Procurement, the IT Dept. evaluated only 55 marks i.e. 3.6%. Hence, it is argued that the Commercial Dept. has favoured Respondent No.2 at each stage of the tender process i.e. formulating tender conditions to W.P.(C) 6046/2021 constitution of an unauthorized TEC, to arbitrariness and splitting the areas of evaluation, to unfair evaluation of the technical bids.

(iii) The Petitioner has further cited arbitrariness even in evaluating the Petitioner’s technical bids.

(iv) It is further submitted that, the AIL tailored the terms and conditions of the tender and assigned weightage to certain technical and functional requirements, to unjustly favour Respondent No.2 so that Respondent No.2 scored higher marks in technical evaluation and, as a result, there was no competition in the bidding process. The 80:20 allocation (Technical vis-à-vis Financial) had the result that despite scoring full 20 marks in the financial bid, the Petitioner was rejected.

(v) It has also been argued that AIL failed to consider that despite it being in financial doldrums, it did not keep public interest in mind, as the bid of the Petitioner was almost Rs. 900 crores lower than that of Respondent No.2. In fact, ED (MMD) and ED (Finance) have even advised ED (Commerce) to negotiate with Respondent No.2 and after negotiation, the bid of Respondent No.2 is still Rs. 760 crore higher than that of the Petitioner. It has been argued that since AIL is in the process of disinvestment, there was no reason for the AIL to go into the present tender at such a huge expense.

(vi) The QCBS selection criteria was adopted for the PSS tender and was a departure from Air India’s usual practice and was only adopted to favour Respondent No.2. The QCBS selection criteria were never used by Air India prior to the 2020 tender.

38. Mr. Dayan Krishnan, learned Sr. counsel appearing for Respondent No.1, in response and at the outset, has relied upon the order dated 22.07.2021 to submit and argue that the process of scoring and evaluation, falls in the exclusive domain of the Tender Evaluation Committee (TEC). The scope of judicial review in respect of tender matters is very limited, and the Court should refrain from doing so, until and unless the decision-making process of the Tender Floating Authority is tainted with mala fide, arbitrariness, or Wednesbury principle of unreasonableness

39. He has further argued that mere suspicion has no role in the matter of judicial scrutiny of tender matters, and has raised preliminary objections to state that having participated in the tender, and having been declared unsuccessful, the Petitioner, now, cannot challenge the tender conditions. On merits, learned counsel for the Respondent has drawn our attention to Clause 9.1.2.1(iv) & (v) to highlight the procedure for scoring for compliant, partial compliant, compliant in future, and non-compliant aspects. They read as follows: “9.1.[2] The response to the technical and functional requirements of the technical bid will be evaluated as follows:

1. i. The Bids will be evaluated as per the Quality-cum-Cost Based Selection (QCBS) procedure with weightage of 80:20 to be given to the Technical and Financial Bids, respectively. W.P.(C) 6046/2021 ii. Each of the individual requirements (around 775 in number) mentioned in the RFP Technical and Functional Requirements document have been given a weightage ranging from 1 to 10. iii. For each of the individual requirements mentioned in the RFP Technical and Functional Requirements document, the Bidder’s response shall have two components, namely “Compliance status” and “Justification and description” iv. Compliance status: The Bidder has to evaluate his product against each technical and functional requirement mentioned in the RFP Technical and Functional Requirements document and rate its product and choose a compliance status from among the four namely ‘compliant’, ‘partially compliant’, ‘compliant in future ’or ‘not compliant’. These four compliance statuses shall carry marks as detailed below:- Compliance Marks = 1 Partially Compliant Marks = 0.[5] Compliance in future Marks= 0.25 Non Compliance Marks = 0 v. Wherever the Bidder is rating his product as Partially Compliant or compliant in future, the non-compliant portion or the gap in requirement must be delivered/fulfilled within a time period of 1 year from the cutover of Day 1/Phase -1 or Day 2 /Phase – 2, depending upon in whichever Day/Phase the said requirement falls into.” (emphasis supplied)

40. He has also drawn our attention at the Notice Inviting Bids to Tender to argue that the Commercial Dept. of AIL had floated the tender and not the MMD. He has further drawn our attention to Clause VII of the Air India Manual under the heading “Major contract not under the purview of the MMD” to show the contracts which are not under the purview of MMD. He W.P.(C) 6046/2021 further submits that despite the contract being outside the purview of MMD, the ED (MMD) has approved and signed the Technical Evaluation Report (TER).

41. Mr. Krishnan, learned counsel has submitted that the PSS system is required on urgent basis, since the existing service provider SITA has already intimated to AIL that it would stop providing services from June, 2022 and the transition to a new service provider will take approximately 12 months. He submits that even though the AIL is looking at disinvestment, the PSS system is required to remain competitive in the market.

42. Mr. Krishnan has further argued that one of the responsibilities of MMD is to ensure correct reflection of the TER in the Tender Committee (TC). As regards the arguments of the Petitioner that the TEC has not been properly constituted, the learned senior counsel for the Respondent has drawn our attention to Clause 25.[4] of Air India manual which reads as under:- “25.4. A convener of the user department would be responsible for carrying out technical evaluation of the bids. The Technical Evaluation Report (TER) would be submitted to the Materials Management Department duly approved by the Tender Committee (TC) member of the user department as per the delegation of the financial powers as per Annexure A - Column 2 or by an officer not less than a rank of Manager or equivalent level for non-TC cases. The TER should clearly identify the qualified and non-qualified bidders with justifications thereof.”

43. As regards the financial powers as per Annexure A, Mr. Krishnan has sought to draw a distinction between the Tender Processing Level/ Composition of Tender Committee, and Tender Evaluation Report. The W.P.(C) 6046/2021 financial requirements of upto Rs. 12 crores and above Rs. 24 crores is for composition of TC, and not for TER.

44. He submits that the TER is to be as per the rigors of Clause 25.[4] of Air India Manual. The opening of financial and technical bids was in accordance with the rigors of Clause 25.[4] of Air India Manual. Mr. Krishnan has further taken us through the Minutes of the Meeting to show that all EDs of the Departments have approved the bid of Respondent No.2 and the same has also been approved by the CMD. Hence, it is the submission of the Respondent that the evaluation process was in terms of the Air India manual, the evaluation and marks were assigned by the TER as per the process and documents before the TER.

45. It is submitted that TEC comprised of subject experts of areas which included representatives from Commercial, Financial and IT Dept. respectively. The TEC, in fact, comprised of Name Post Mr. Murlidhar Vidhakapet, GM (IT), Ms. Archana Sareen, DGM (Finance), Mr. Niket Garg DGM Commercial, Mr. Girish Kumar, DGM (O)-Commerce Mr. Naveen Chhabra Sr. AGM Commercial

46. It is further submitted that as per Clause 25.[4] of the Air India Manual, there is no requirement for the TEC to comprise of ED level officers. The requirement of ED level officer is only applicable to the composition of Tender Committee and not Tender Evaluation Committee. Assuming without admitting that the TEC was to comprise of ED level officers, there is tacit approval by ED (Finance), ED (MMRD) and ED (Commercial) with certain observations and noting. The concerns of ED (Finance) and ED (MMRD) were also addressed, and thereafter the entire evaluation process was approved by the Director (Commercial), Director, (Finance) and lastly by the CMD. The split in evaluation in 14 areas was raised by the Director (Finance) which was clarified to his satisfaction. The issues raised by the Director (Finance) (Mr. Vinod Hejmadi) as to how evaluation should be done.

47. It has further been the submission of the learned counsel for the Respondent that in judicial scrutiny, the Constitutional Court should refrain from comparing the marks granted to the Petitioner and Respondent No.2 during technical evaluation.

48. Lastly, the Respondent has argued that it is the Tender Floating Authority which is the best suited to interpret the terms of the Tender. The lawfulness of a decision can only be looked into if it is arbitrary, irrational, unreasonable, mala fide or biased. In matters of public interest, the Courts will not, in exercise of power under judicial review, interfere even if there is a procedural aberration or error in awarding the contract.

49. We have heard the learned counsels for the parties and gone through the documents placed on record.

(i) The relevant Clauses of the Air India Manual are extracted as under:- “25.

EVALUATION OF TECHNICAL BIDS

25.12. For multi user items the major user departments (preferably 2) may be associated for carrying out the technical evaluation of the bids in addition to a non-purchase Materials Management Department representative, who would be the convener. The level of the Technical Evaluation Committee would be as per the financial powers given in Annexure A - Column 2. …

33.

COMPOSITION OF TENDER COMMITTEE

33.1. Tender Committee will consist of appropriate level officers as given in Annexure A - Column 2 from MMD, Finance, and the user department.

33.2. The Tender Committee (TC) will evaluate the bids/response of tenders whose estimated value is ₹ 10.00 lakh and above.

33.3. Representation in the Tender Committee from the respective departments should be strictly as per the levels as specified at Annexure A - Column 2 and the same should not be diluted.

ANNEXURE A – FINANCIAL POWERS Estimated value of contract in INR or its equivalent in any foreign currency Tender processing level/ Composition of TC Authority Level for Final Award Authority Level for signing PO Column 1 Column 2 Column 3 Column 4 Upto Rs. 1 Lakhs Asst. Manager/ No TC Asst. Manager Asst. Manager Upto Rs. 2 Lakhs Asst. Manager/ No TC Dy. Manager Asst. Manager Upto Rs. 5 Lakhs Dy. Manager/ No TC Manager Dy. Manager Upto Rs. 10 Lakhs Manager/ No TC Sr. Manager Manager Upto Rs.35 Lakhs MMD: Manager Finance: Manager User Dept. Equiv. Level Sr. Manager Manager Upto Rs. 50 Lakhs MMD: Sr. Manager Finance: Sr. Manager User Dept. Equiv. Level AGM Sr. Manager Upto Rs. 1 Crores MMD: AGM Finance: AGM User Dept. Equiv. Level Sr.

AGM AGM Upto Rs. 3 Crores MMD: Sr. AGM Finance: Sr. AGM User Dept. DGM/ADGM DGM Sr. AGM Upto Rs. 6 Crores MMD: DGM Finance: DGM User Dept. Equiv. General Manager DGM 2021:DHC:3704-DB W.P.(C) 6046/2021 Level Upto Rs. 12 Crores MMD: GM Finance: GM User Dept. Equiv. Level Executive Director GM Upto Rs. 24 Crores MMD: ED Finance: ED Head of User Dept. Director – Finance/ Functional Director Executive Director Above Rs. 24 Crores MMD: ED Finance: ED Head of User Dept. Concurrence by Director – Finance Approval by Chairman & Managing Director Executive Director

(ii) A bare perusal of Clause 33 of the Air India Manual clearly shows that the Tender Committee will consist of appropriate level officers, as given in Annexure A - Column 2, from MMD, Finance, and User Department. As per Annexure A – Column 2, the Tender Committee is to compromise of all officers of the level of ED.

(iii) In the present case, the Committee which evaluated the bid comprised of:

Name Post Mr. Murlidhar Vidhakapet, GM (IT), Ms. Archana Sareen, DGM (Finance), Mr. Niket Garg DGM Commercial, 2021:DHC:3704-DB W.P.(C) 6046/2021

(iv) We have no hesitation that the same is a clear departure from the Air

India manual. The arguments sought to be raised by the learned counsel for Respondent No. 1 that there is a difference in TEC and TC, seems to us to be a misnomer. The whole purpose of a Tender Committee is to evaluate bids/ responses of the tender. Clause 33.[2] reads: “33.2. The Tender Committee (TC) will evaluate the bids/response of tenders whose estimated value is ₹ 10.00 lakh and above.”

(v) The distinction sought to be drawn by the learned Counsel for the

Respondent No.1, that the TEC comprised of subject experts in their respective domain areas, and there is no requirement for TEC to comprise of ED level officers, is misconceived. In this regard, it will be relevant to reproduce certain portions of emails exchanged between Director (Commercial)-Meenakshi Malik & Director (Finance) - Mr. Vinod Hejmadi. The operative portions of the emails reads as under: “From: “Girish Kumar” <girish.kumar@airindia.in> To: “V Hejmadi” <v.hejmadi@gmail.com> Sent: Wednesday, May 19, 2021 12:00:56 PM Respected Sir (Director Finance) & Ma’am (Commercial Director), …. … Three departments namely IT, Finance and Commercial were involved in the evaluation process, through their authorized nominees. IT department completed the evaluation for Technical areas namely (i) System Administration, (ii) Date Extraction, (iii) Integration and (iv) Support and SLA. Ms. Lata Gupta, GM-IT, the nominee in the evaluation committee was supported in the evaluation by the following IT officials:

1. Muralidharan Vadakkepat – GM

2. Vippan Dutt – AGM

3. Mukesh Kumar – DGM

4. Ritesh Kumar – AGM

5. Mini Krishnan – DGM FIN Department: Mrs. Archana Sareen, DGM-Finance carried out the evaluation for Revenue Accounting Support requirement of the tender. She was supported in the process by following Finance personnel.

1. Ajit Karmarkar – DGM

2. Vineeta Warikoo – Sr.AGM

3. Vrushali Dandekar – Sr.AGM

4. Mini Nair – Staff Commercial Dept. the main business user of the services was represented by Niket Garg-DGM, Girish Kumar-DGM (Offg.) and Naveen Chhabra- Sr.AGM The evaluation for core requirement modules namely, (i) Company History, (ii) PSS General Information, (iii) PSS Functional Req. (iv) E- Commerce, (v) Revenue Management and (vi) Loyalty Management was carried out by the above three committee members. Furthermore, given the shared and overlapping nature of requirements under the said module between Finance and Commercial, Girish Kumar also did the evaluation for Revenue Accounting Support representing Commercial. Maintenance & Enhancement and Governance modules with few requirements was evaluated by Girish Kumar alone. ……… …… … Submitted plz, for approval expeditiously, to open the FINANCIAL BID, as we are extremely constrained by tight time lines, one due to Disinvestment n secondly SITA product valid till June, 22. Migration on to new system has to start and finish as soon as possible and completing the same under the covid pandemic in itself is going to be a challenge. Regards Girish Kumar RMMA Commercial Dept. “From: “V Hejmadi” <v.hejmadi@gmail.com> To: “Girish Kumar” <girish.kumar@airindia.in> Sent: Thursday, May 20, 2021 9:24:36 AM Dear Girish, ……………………… Annexure A to the said manual states that for contracts above Rs 24 crores the composition of the tender committee would be ED MM, ED Finance and the Head of the user Department. Under column 2 of Annexure A, the authority for final award has to be concurred by Director Finance and Approved by CMD. The PSS tender is a multi user product with Commercial, Finance and IT departments involved, as evident from the fact that the task of technical evaluation has been split between Commercial Finance and IT departments. As per para 25.12 of the MMAO 715, the Technical Evaluation Report approved by all the three subject matter experts of the respective user departments is required to be submitted to the appropriate level – EDs of the user department/ ED MM and ED Finance, as the PSS tender is over Rs 24 crores. Further, you are aware that the PSS tender is based on a QCBS system of evaluation. I also find that while individual departments have given marks and evaluated their respective areas, the Passenger Revenue Accounting Support module has been evaluated by two departments individually. I also understand that except for you, as the convener, none of the other W.P.(C) 6046/2021 members know the marks awarded by the other tender committee members. How the two sets of marks given by you and finance representative for Revenue accounting will be used to reach the final score is not known. Therefore, the marks awarded by the Tender Committee to each of the bidders have to be frozen and agreed to by all, before we go to the next stage of the tender. ………. It is necessary that, the Technical Evaluation Report (TER) duly agreed by all is finalized, signed and frozen, we move to the next stage. ……….. However, we must follow all the rules as laid down in our manuals and it is essential that the entire process is transparent in all aspects and the MMD procedures are followed in letter and spirit. I also see that you have concluded that on submission of the evaluation report on the Revenue Accounting Support by the Finance representative, the Finance department’s role in technical evaluation comes to an end. This is not correct. The role of the finance nominee in the technical evaluation process ends only after the Technical Evaluation Report (TER) is signed and accepted by the appropriate level of officer (in this case the ED Finance, ED MM and ED Comm). As such, it is requested that in compliance of the laid down rules and regulations on tender, you urgently send the TER duly signed/ approved by the members of the Technical Evaluation Committee, along with the technical score arrived at for each bidder, to the Executive Director – Finance, MM, IT and Commercial for their approval and take the process further. Regards, Vinod Hejmadi From: “Commercial Director” <cd@airindia.in> To: “V Hejmadi” <v.hejmadi@gmail.com> Sent: Thursday, May 20, 2021 11:52:16 PM 2021:DHC:3704-DB W.P.(C) 6046/2021 Subject: Fwd: PSS Tender: AIL/21-22/PSS/01 dated 31.03.2021 Technical Evaluation and Financial Bid Opening Dear Vinod ……………

4. PSS Tender is a highly sensitive tender and we have seen 8 months ago when the tender was first uploaded last, how one interested party tried to influence the process by attempting to change our requirements through multiple petitions and letters to top management, even going to the extent of questioning and requesting change in the very basis of evaluation methodology of Quality cum Cost Basis (QCBS).

5. In this back drop and the need to take the process forward without further delay, we propose a date of Monday, 24th May, 21 at 1000 hrs in Board Room, Airlines House where all committee members can come together physically and view all the papers and sign in the presence of all Executive Directors of Finance, Commercial and MM. It will be ensured that nobody will be in a position to take copies of document leading to any leakage of information. Following this, we two departmental heads (Commercial and Finance Department) can give our consent to open Fin Bid (though my consent has already been given yesterday). The same day, the two bidders who have submitted the bids, can be called and financial bids be opened in their presence. …………………. Regards, Meenakshi Mallik Director Commercial From: “V Hejmadi” <v.hejmadi@gmail.com> To: “Commercial Director” <cd@airindia.in> Sent: Thursday, May 20, 2021 12:44:34 PM Dear Meenakshi, In my TM, I have just asked Girish to follow the laid down procedures. …….. I am of the opinion that we must follow the process laid down in our own manuals in all cases. Therefore, I recommend that as per the laid down guidelines, the Tender Evaluation Committee comprising of ‘subject matter experts’ must first finalize and sign the Technical Evaluation Report and put it up to the appropriate level as laid down in the guidelines, which is the level of Executive Director for their approval. As we are following the QCBS method of evaluation, the marks awarded to each bidder by the Technical Evaluation Committee, must be finalized at this stage itself. Once the TER is approved by the EDs, the financial bids can be opened and bidders can be invited. As per procedure, the EDs i.e. EDs of MMD, Finance and the user department can approve the opening of the financial bids. …….. Regards Director – Finance From: “Commercial Director” <cd@airindia.in> To: “V Hejmadi” <v.hejmadi@gmail.com> Sent: Thursday, May 20, 2021 2:13:58 PM Dear Vinod

1. We stand guided by the fact in your trailing mail, that after getting the technical evaluation report signed from the technical committee, EDs of concerned departments namely Commercial, Finance and MM can give consent for opening of Financial bid.

2. Accordingly, we will follow the timelines/ procedure mentioned in para 5 of my earlier mail of date (Time 1152 AM), with EDs giving approval to open fin bids.

3. Instructions will be passed on to the Commercial and IT representatives to be present on Monday, 24th May, 21 at 1000 hrs in Board Room at Airlines House, New Delhi, ED-Commercial will be present in office too.

4. Request suitable instructions are passed on to nominees on the Committee representing Finance and ED-Finance to be there at the above stated time. The presence of MMD Committee member & ED-MM to be there at Airlines house ( 24th May 2021 – 1000 hrs) is also requested so that W.P.(C) 6046/2021 final consent be taken from them to open the financial bid, on 24th May, 2021. ……

6. Request all concerned Committee Members and EDs to be present on 24th May, 2021 1000 hrs, Airlines House, New Delhi... Regards, From: “SK Singh <sk.singh@airindia.in> To: “Commercial Director” <cd@airindia.in> Sent: Thursday, May 20, 2021 5:01:56 PM Subject: Re: PSS Tender: AIL/21-22/PSS/01 dated 31.03.2021 Technical Evaluation and Financial Bid Opening Dear Madam, As you are aware, till now ED level committee has not seen any documents/ report of the working group. We do not want to miss out any important aspect and also want to ensure that the given task is completed at the earliest. Subject tender is a very complex tender which needs time to finalise report. We also understand that working group has not finalized the Technical Evaluation Report (TER) until now. Considering above, to expedite the process, we suggest following:

1) Let the working group meet online immediately to finalise the TER to be put up to ED level committee.

2) The TER of working group is given to ED level committee at the earliest by email, so that ED level committee come prepared for discussion for early morning meeting on 24th May, 2021.

3) Respective Department working group member to consult their ED for any guidance that they may need to finalise the TER latest by May 22, 2021.

4) Bidders should not be in the room when ED level committee is finalizing their report. Financial Bid to be opened only after all members of ED level committee has signed the report. Undersigned is available in my office at CAO today and can also be available tomorrow for any further requirement of Finance Department to expedite the process. Understand Mr. Girish Kumar is in Mumbai. He can visit my office to shown show any papers that he may want to show on the subject tender. Above schedule will help in ensuring ED level committee’s active participation on May 24, 2021 for finalizing TER. Regards Sangeeta K. Singh Executive Director – Finance Finance Department From: “Commercial Director” <cd@airindia.in> To: “V Hejmadi” <v.hejmadi@gmail.com> Sent: Thursday, May 20, 2021 6:25:43 PM Dear Vinod

1. We plan to go ahead with the process as detailed in my last mail sent to you. That mail had incorporated your suggestions on the Technical Evaluation Committee finalizing and signing the report after which the EDs of respective departments connected with the tender can provide their consent and approval for opening the financial bids.

2. There was a Tender Committee formed to carry out the PSS tender and a Technical Evaluation Committee to evaluate the submitted bids. Surprised to hear about a new ED level committee as suggested in the mail from ED-Finance.

3. Technical Evaluation Committee consisted to subject matter experts of their respective domain areas and you don’t expect cross functional knowledge/ expertise possessed by them which would make them eligible to evaluate and judge bid responses of requirements of areas/ departments other than theirs. Therefore a finance nominee is expected to evaluate bid responses for requirements coming under revenue accounting support and after finishing same is expected to share it with his / her ED or department head. Commercial nominee did the evaluation for revenue accounting support only because of the shared W.P.(C) 6046/2021 nature of these requirements between Finance and Commercial. But the Commercial nominee didn’t do any evaluation of requirement falling under the purview of IT Department as he is not fit to do that same. IT Department evaluated those requirements consisting of System administration, Data extraction, integration and support & SLAs and submitted the report to its department head.

4. These individual reports, which have been shared with respective department heads will be collated and presented for signatures to the Technical committee on Monday, 24th May 21 at 1000 hrs where they can see all the papers, not from the point of view of evaluating what others have done for which they don’t possess functional expertise but just to see there are no discrepancies and everything is in order. Same then will be given to the EDs of Finance, Commercial and MM for seeking consent to open the Financial bids as advised by you. The idea of an ED Level committee existing to whom all papers have to be given well in advance for their evaluation therefore is without purpose for the reasons stated above and it will only create opportunities of confidential papers leaking out and falling in wrong hands. Regards, From: >“V Hejmadi” <v.hejmadi@gmail.com To: >“Commercial Director” <cd@airindia.in Sent: Thursday, May 20, 2021 7:59:51 PM Dear Meenakshi, …. Any committee formed to evaluate the technical bid submitted is jointly responsible for the evaluation. So the committee members are required to apply their mind on the entire report whether they are experts in that field or not. The report is debated upon and then agreed. You have rightly said that the committee members have to ensure that there are no discrepancies and everything is in order, while finalizing the TER. …….. There is no new ED level committee formed. Since as per the MMAO manual any contract above Rs 24 crores needs to be approved by ED level officers the Technical Evaluation Report finalized by the Junior level officers needs to be approved by EDs. The Annexure A states that ED MMD, ED Finance and ED of the user department are authorized for contracts above this value. Hence the TER has to be approved by these ED level officers, as was done in the last exercise. It is just the approval process wherein the applicable level of officer has to finally approve the report. It is expected that the ED level officers would apply their minds and read the report placed before them and it is also possible that they may find discrepancies in the TER which would need to be corrected or resolved. After the approval of EDs, the next stage of opening of Financial bids is reached. It is at this stage that the bidders can participate in the opening of bids. The bidders will need to be suitably advised of the timings considering that initially the TER has to be finalized by the committee, signed by them and then placed before the EDs for their perusal deliberations and approval. ………. Regards Director – Finance From: “Commercial Director” <cd@airindia.in> To: “V Hejmadi” <v.hejmadi@gmail.com> Sent: Friday, May 21, 2021 12:44:40 PM Dear Vinod,

1. We will go ahead, as per the earlier detailed plan, of technical evaluation committee members congregating on Monday, 24th May in Airline’s House at 10am and signing the report. This will be in line with the laid down guidelines of an evaluation committee comprising of “subject matter experts” finalizing and signing the TER.

2. The Technical Evaluation Report can then be approved, same day, by ED level officers of the departments involved in the process. In this connection reference is drawn to PSS file NS-43, N-3 where there are notings from ED-MM dated 29thJul, 20 on the question of role of his department in the technical evaluation process and are being quoted below: “The technical evaluation is not within the scope of MMD & hence would be carried out by Commercial Dept., IT Department and Finance Team. This is as per the MMD manual. The Final contract would have to be executed by CD/ED-Commercial with the successful bidder.

3. The above clears the air about the composition of EDs required to provide the go ahead for opening the Financial Bid which is restricted to those representing Commercial, IT and Finance. ED-Commercial and ED-IT (represented by GM-IT) will be there to approve the report this Monday (presence confirmed) Request presence of ED-Finance also, to approve and provide the go head. …….. Director Commercial”

(vi) Concerns were flagged by the Director (Finance), Mr. Vinod Hejmadi and ED (Finance), Ms. Sangeeta K. Singh as taken note of hereinabove, with regard to the Committee of competent officers viz. ED (MM), ED Finance, and Head of the User Department not evaluating the bids. It appears to us that the issues were correctly flagged and evaluation of the Tender was not as per the Air India Manual. A bare perusal of the above-mentioned clauses clearly dictates that it is ED level officers who are to evaluate the Tender. The emails reproduced hereinabove show that there was no satisfactory response given to the issues highlighted by Mr. Vinod Hejmadi, Director (Finance) in his email of 20.05.2021, sent at 9:24:36 AM. The responses of the Commercial Director of the same day sent at 11:52:16 PM, 2:13:58, and 6:25:43 PM show that the endeavour was merely such to complete the formality of having the approval of the ED level officers recorded on the file. We can only say that the tone and tenor of the Director, Commercial in her emails to Mr. V. Hejmadi, Director (Finance) shows that it was pre-decided that the TER prepared by the subordinate officers would be approved by the ED level officers. As if, there was no scope for any discussion or dissent. Even when Mr. Vinod Hejmadi, Director (Finance) sent the subsequent email at 7:59:51 PM on 20.05.2021, the emphatic response of the Director Commercial contained in her email sent at 12:44:40 PM on 21.05.2021 is that “We will go ahead as per detailed plan of TEC members congregating on 24.05.2021 at 10 AM and signing the report.” Thus, it appears to us, that the independent evaluation by the ED level officers never took place, and the endeavour of Mr. Vinod Hejmadi, Director (Finance) to flag the issues of the competence of the Committee of subordinate staff to evaluate the tenders was stomped, rather dictatorially.

(vii) In the present case, the evaluation of the tenders has been done by:

Name Post Mr. Murlidhar Vidhakapet, GM (IT), 2021:DHC:3704-DB W.P.(C) 6046/2021 Ms. Archana Sareen, DGM (Finance), Mr. Niket Garg DGM Commercial, (viii)Although the ED level officers have agreed with their findings, there has been no independent appreciation by the ED level officers of Finance, MMD and the User Department i.e., Commercial, of the bids submitted by the bidders; the analysis of the literature supplied by the bidder; the responsiveness to the bid requirement, and, the marking. The evaluation by the ED level officer, at best, can be described as a tacit supervisory evaluation, and not, original evaluation as required by the Air India Manual. The Respondent Air India was obliged to follow the standards laid down by it for maintaining transparency and objective assessment of the bids for such high stake tenders.

(ix) Having said so, the next question arises for our determination is, whether at this stage, we should quash the tender for violation of Air India Manual and direct Respondent No.1 to go for a re-tender. To this, our answer is a “No,” for the following reasons: a) The scope of the Court’s jurisdiction under Article 226 of the Constitution of India is, in essence, a discretionary. This Court has to be satisfied that the facts of a particular case warrant this Court to exercise its extraordinary writ jurisdiction to correct a perversity, bias or malafides. It is, thus, a settled a position of law that courts ought to exercise their discretionary powers with caution and only in furtherance of public interest.. In Michigan Rubber (India) Ltd. v. State of Karnataka and Ors, (2012) 8 SCC 216, the Supreme Court, laid down the principles for when the interference under Article 226 is called for as follows: “23. From the above decisions, the following principles emerge: (a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;

(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;

(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.

24) Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”; and

(ii) Whether the public interest is affected.

If the answers to the above questions are in negative, then there should be no interference under Article 226.” In Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617, the Court examined the ambit of Judicial review: “7. ….The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations, the State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is W.P.(C) 6046/2021 found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.” In Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, the Supreme court specified that even if a procedural aberration or error in assessment is present, as long as the decision of contract is bona fide, the court will not exercise the power of judicial review. “22…Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes….” From the above, we can gather that the court would exercise the power of judicial review if the decision-making process, or the decision, is perverse and not merely irregular or incorrect or W.P.(C) 6046/2021 erroneous. The threshold of malafide, arbitrariness, perversity or favouritism must be met before this court can interfere with the action of the decision-making authority. Furthermore, there must also be room given by the court to the owner/ employer to give an interpretation to the tender, that though not acceptable to the constitutional courts, but is still a plausible view. b) As far as there was the departure in the evaluation process of the tender, the same was nevertheless duly approved by ED (Finance), ED (MM) and ED (Commercial) with certain observations and notings. Note sheet Nos.2,[5] & 7 read as under:- N-2 “AIR INDIA 24th May, 21 Headquarters, Commercial Dept. Air India Sub: PSS Tender: AIL/21-22/PSS/01 dated 31.03.2021- Technical Evaluation Report N-

1. Given below are the technical evaluation scores of both Sabre and Amadeus SABRE:

323.25 327.25 325.75 114.[5] 115 120 234 224.[5] 222.[5]

56.75 126.25 74.[5] 74.[5] 77 0.[5] 4.[5] 25.28 7.00 46.83 325.42 116.50 227.00 91.50 75.33 4.00 0.50 6.00 4.50 3.00 25.28 3.00 1514 935.86 2021:DHC:3704-DB W.P.(C) 6046/2021 Out of maximum possible marks of 1514, Sabre in the technical evaluation has earned total of 935.86 marks which represent meeting 61.81% of total technical and functional requirements. On a scale of 80, these marks get translated into a score of 49.4. AMADEUS

479.25 481.75 479.75 164 164 163.[5]

326.25 325.25 325.75 158.[5] 152 150 149 146.[5] 6.[5] 9.[5] 5.[5] 7.00 82.50 480.25 163.83 325.75 155.25 148.50 6.50 9.50 6.00 5.50 3.00 40.00 3.00 1514 1436.58 Out of maximum possible marks of 1514, Amadeus in the technical evaluation has earned total of 1436.58 marks which represent meeting 94.89% of total technical and functional requirements. On a scale of 80, these marks get translated into a score of 75.91.

2. The summary of marks earned by both bidders is again given below: Summary Bidder Absolute marks (out of 1514) % Marks On scale of SABRE 935.86 61.81% 49.45 AMADEUS 1436.58 94.89% 75.91

3. Both the bidders will carry the above score into the next round of Financial Bid opening. Marks earned in the financial bids (out of 20) will be added to the individual marks scored by the bidders on the scale of 80 to get the aggregate score.

4. The Technical Evaluation Committee hereby submits its Technical Evaluation Report (TER) N-2 and recommends opening of the Financial Bids of the two bidders. (sign) (sign) 2021:DHC:3704-DB W.P.(C) 6046/2021 Murlidharan Vadakkepat GM-IT (on mail) (Sign) Archna Sareen DGM-Finance Niket Garg DGM-Commercial Girish Kumar DGM-Commercial (O) (Sign) Naveen Chhabra Sr.AGM-Commercial ED-Commercial The committee has given the TER score in order to open the financial bid of the qualifying persons. ED-Finance GM-IT ED-IT