Calcutta High Court (Appellete Side)
Flemingo Dutyfree Shop Private Limited vs Airports Authority Of India on 5 March, 2026
S/L 22
05.03.2026
Court. No. 25
Sourav
WPA 3830 of 2026
Flemingo Dutyfree Shop Private Limited
Vs.
Airports Authority of India
Mr. Krishnaraj Thakkar, Sr. Adv.
Mrs. Nasrin Sultana
Mr. Rahul Singh
... for the petitioner.
Mr. Dipankar Das
Mr. Mridutpal Bhattacharyya
... for the Airports Authority of India.
1. The affidavit-of-service filed in Court today be taken on
record.
2. The petitioner has filed the present writ application
challenging the Clause 2.2.1 (d), 2.2.3 (A) (i) and 7.3.1 of
the tender notice dated 20.01.2026 for the work to
Develop, Operate and Maintain Duty-free Outlets at Netaji
Subhas Chandra Bose International (NSCBI) Airport.
3. The petitioner submits that as per the Clause 2.2.1 (d), the
petitioner has to furnish an additional bank guarantee
equivalent to 50% of the value of the disputed amounts in
addition to the security deposit already available with the
authority as per the terms and conditions of the existing
licence/concession.
4. He submits that the condition imposed by the authorities
is violative of Article 14 of the Constitution of India. He
further points out that as per Clause 2.2.3 (A) (i) no
experience of duty free business is required but the same is
in violation of the GFR, 2017 Rule 173(b) wherein it is
provided that the criteria for eligibility and qualifications
to be met by the bidders such as minimum level of
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experience, past performance, technical capability,
manufacturing facilities and financial position etc. or
limitation for participation of the bidders, if any.
5. Learned counsel for the petitioner submits that Clause
7.3.1, the terms and conditions of the tender document is
also creates a mechanism for cross contract recovery by
permitting the respondents to appropriate security deposit
or Bank guarantee furnished under the Kolkata Airport
Concession in respect of alleged dues under entirety
independent contracts at other airports. Learned counsel
for the petitioner has relied upon the judgment in the case
of Icomm Tele Limited Vs. Punjab State Water
Supply and Sewerage Board and Another, reported
in (2019) 4 SCC 401 and submits that in the said case
also the authorities have put the condition to furnish a
deposit at call for ten per cent of the amount claimed on a
scheduled bank in the name of the arbitrator by his official
designation who shall keep the amount in deposit till the
announcement of the award.
6. The petitioner submits that the said clause was challenged
before the Hon’ble Supreme Court and the Hon’ble
Supreme Court has struck down the Clause 25(viii) of the
notice inviting tender. The petitioner has further relied
upon the judgment in the case of Vinishma
Technologies Pvt. Ltd. Vs. State of Chhattisgarh
and Another reported in 2025 SCC OnLine SC 2119,
wherein he submits that the principle of non-
discrimination is embodied in Article 14 of the
Constitution of India. He further submits that the doctrine
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of level playing field is an important concept while
construing Article 19(1)(g) of the Constitution of India. He
further submits that the doctrine of level playing field
provides the space within which equally placed
competitors are allowed to bid so as to sub-serve larger
public interest.
7. Learned counsel for the petitioner further relied upon the
judgment passed by this Court in the case of Tirupati
Agro Seed Distributors Pvt. Ltd. and Another Vs.
State of West Bengal and Others reported in 2026
SCC OnLine Cal 1250 and submits that this Court has
also held that it is settled law that the terms of the
invitation to tender cannot be open to judicial scrutiny but
it is also settled law if the Court finds that the terms and
conditions imposed by the authorities are arbitrary and
against the law, the Court can very well interfere with the
terms and conditions of the tender documents.
8. Learned counsel for the petitioner also relied upon an
unreported order passed by the Kerala High Court in the
case of WP (C) 2303 of 2026 dated 20th January, 2026
and submits that in the said case also the similar clause
has been challenged before the Kerala High Court and the
Kerala High Court has passed an interim order allowing
the contractor to participate in the tender subject to
outcome of the result of the writ application.
9. Learned counsel for the petitioner has also handed over
the minutes of the meeting of the arbitral proceeding held
on 05.01.2026 with regard to the pending arbitral
proceeding and submits that in the said case the arbitrator
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has directed the parties to exchange their claims and
objections and it is pending before the arbitrator for
adjudication.
10. Per contra, learned counsel appearing for the Airport
Authority of India submits that the authorities have
imposed the condition in the tender document as per the
Commercial Instruction No. 20/2021 dated 01.01.2021. He
submits that as per the said commercial instruction, the
authorities have imposed the said conditions. He further
submits that the petitioner has participated in other three
tenders at Amritsar, Visakhapatnam and Goa Airports
wherein the similar condition was imposed in the tender
document, the petitioner has not challenged the said
condition but the petitioner has challenged the said
condition in the present writ application and thus, the
petitioner has seized his right to challenge the said
condition.
11. The respondent has relied upon the judgment in the case
of Air India Limited Vs. Cochin International
Airport Ltd. and Others reported in (2002) 2 SCC
617 and submits that the State, its corporation and bodies
acting as instrumentalities and agencies have the public
duty to be fair to all concern even some defects respond in
the decision making process and 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
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own terms of invitation to tender and that is not open to
judicial scrutiny.
12. Heard the learned counsel for the respective parties.
13. Perused the materials on record.
14. This Court finds that in Clause 2.2.1, the Airport
authorities have imposed the following conditions:
“(d) A Bidder shall be liable for disqualification for
submission of its Proposal on the Proposal Due Date
if such Bidder or its Affiliate(s) have any amounts
including interest outstanding and payable to
Authority (the “Outstanding Dues”) in respect of
commercial licenses held at airports fully controlled
and operated by the Authority as on the Proposal
Due Date. The bidder intending to participate in
response to this RFP should have “NIL” Undisputed
Outstanding Dues at all the Units of Authority where
the participating party’s having current/past
Concessions up to 30/09/2025 in respect of all
airports under its control.
However, the disputed amounts which are referred
for conciliation/arbitration shall not be considered
as Outstanding Dues provided the Bidder has
furnished an additional bank guarantee equivalent
to 50% of the value of the disputed amounts in
addition to the Security Deposit already available
with Authority as per the terms and conditions of the
existing license/concession. The period of this
Security Deposit of disputed dues under arbitration
shall be minimum 2 years from the date of
DRC/Arbitration and further renewable.
Provided further, that in the event of an order from
a judicial court/arbitral tribunal
staying/withholding the realization of certain dues
the adherence to the above conditions will be
exempted and regulated in accordance with those
orders. Proof to this effect has to be submitted by the
Bidder, along with other technical documents.”
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15. This Court finds that as per the said Clause if the disputed
amounts which are referred for conciliation/arbitration
shall not be considered as outstanding dues provided the
bidder has furnished an additional bank guarantee
equivalent to 50% of the value of the disputed amounts in
addition to the security deposit already available with
authority as per the terms and conditions of the existing
license/concession. This Court prima facie is of the view
that the earlier tender against which the arbitration
proceeding is pending in the said proceeding already the
petitioner might have been deposited the performance
guarantee when the work was awarded. Again the
authorities have imposed the condition for depositing 50%
of the value of the disputed amount this Court is of the
prima facie view that the same is not in accordance with
law.
16. As regard, Clause 2.2.3 (A)(i), the authorities is of the view
that no prior experience of duty free business is required,
subject to the condition that the selected H-1 bidder shall
obtain all the requisite statutory/regulatory/permissions/
approvals but as per GFR, 2017, Rules 173(b), the criteria
for eligibility and qualifications to be met by the bidders
such as minimum level of experience, past performance,
technical capability, manufacturing facilities and financial
position but in the present case, the Court prima facie is of
the view that the petitioner has not followed the GFR
173(b) by incorporating the condition that no prior
experience duty free business is required.
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17. Considering the above, this Court finds that the petitioner
has made out a prima facie case and balance of
convenience and inconvenience in favour of the petitioner.
Accordingly, the respondent authority is directed to allow
the petitioner to participate in the said tender without
imposing the condition as prescribed in Clause 2.2.1 (d) as
stated above.
18. It is made clear that if the petitioner will participate in the
said tender and the work is awarded in favour of the
petitioner, the same shall be abide by the result of the writ
application. It is further made clear that whatever
observation made by this Court above, i.e., the prima facie
view and this Court will consider the validity of the terms
and conditions as challenged by the petitioner only after
exchange of the affidavit.
19. Let the affidavit-in-opposition be filed within a period of
two weeks. Reply, if any, thereto be filed within two weeks
thereafter.
20. List this matter on April 8, 2026.
21. The petitioner is directed to communicate the gist of this
order to the respondent and the respondent is directed to
act as per the communication made by the petitioner, if
any.
(Krishna Rao, J.)