GMR moves HC against termination of airport modernisation contract

Staff Reporter :

Contract was cancelled due to change of Government, alleges petitioner company

The decision to cancel the contract of development of Nagpur airport awarded to GMR Infrastructure by MIHAN India Limited (MIL) has landed before Nagpur bench of Bombay High Court. GMR Infrastructure’s subsidiary GMR Airports Limited (GAL) has filed a petition in this regard. The petitioner has accused MIL and State of Maharashtra of abruptly terminating the award without any cogent reason and after entire tender process was over, and sought stay to issuance of any fresh tender.

The petitioner has made a serious allegation that only due to change of Government in Maharashtra, the letter of award has been annulled. Also, it has questioned the legality and logic behind derailing the airport development works on flimsy grounds. Senior Counsel Jugalkishor Gilda appearing for the petitioner-company stated that letter dated March 19, 2020 terminating the formal letter of award without award of contract at the behest of State Government on superfluous grounds was in breach of all canons of law related to award of tender by public bodies. MIL had shortlisted GMR Infra for development, operations and management of Dr Babasaheb Ambedkar International Airport, Nagpur.

The award is at a revenue share of 14.49 per cent of gross revenues. State Government was of the view that the revenue share quoted by GMR was on lower side and there was scope for enhancing its revenue share. MADC also had decided to float fresh tender for development of Dr Babasaheb Ambedkar International Airport, Nagpur. The petitioner has wondered as to why during pandemic when the entire economic activity has come to standstill, MADC and State Government want to rush with tender process. The petitioner-company sought stay to such abrupt termination of contract.

The bidding process was over, the petitioner company took substantial steps in furtherance of award only to get a rude shock on March 19 that a validly awarded contract was annulled at the behest of State Government on grounds that are not germane, it stated. Adv Rahul Bhangde appearing for MADC opposed grant of any relief and claimed that the petitioner was projecting a misleading picture before the court. A division bench consisting of Justice Sunil Shukre and Justice Anil Kilor, while issuing notice made returnable on June 12, made it clear that fresh tender process would be subject to outcome of the petition. Senior Counsel Jugalkishor Gilda and Adv Charuhas B Dharmadhikari appeared for the petitioners. Adv R M Bhangde (MADC) and AGP Nivedita Mehta (State) represented the respondents.