Termination of agreement by Vishakhapatnam Port Trust will not disqualify Adani in future tenders floated by public bodies: Supreme Court

The Supreme Court on Wednesday granted relief to Adani Ports holding that order of the Andhra Pradesh High Court which had upheld the termination of a concession agreement between Adani and the Vishakhapatnam Port Trust (VPT) will not act as disqualification for Adani in future tenders floated by public bodies [Adani Ports and Special Economic Zone Limited v. Board of Trustees of Jawaharlal Nehru Port Authority & Ors.].A bench of Justices MR Shah and Krishna Murari also said that Adani is free to move the Bombay High Court challenging a clause in the tender document of Jawaharlal Nehru Port Authority (JNPA) by virtue of which Adani Ports was disqualified from bidding for the upgradation of the Port Authority's container terminal in Navi Mumbai.The clause in question, clause 2.2.8 provided that disqualification / termination from any project or contract by any public entity in the last three years would act as a disqualification to bid for the tender. Based on this clause, Adani's termination by VPT was cited as a ground by JNPA to disqualify its bid."The disqualification arising from termination of tender by VPT shall not bar or act as disqualification for the Petitioner for future tenders floated by public bodies. Since clause 2.2.8 in the tender document impugned in the writ was not challenged before the High Court, the petitioner shall be at liberty to challenge the same afresh before the High Court," the Court said..The judgment was delivered in a plea by Adani Ports challenging a judgment of the Bombay High Court, which had imposed costs of ₹5 lakh while dismissing Adani's plea against disqualification of its bid in connection with a tender for upgradation of the Jawaharlal Nehru Port Authority's container terminal in Navi Mumbai.Adani had also moved a separate writ petition challenging clause 2.2.8 of the tender document. .JNPA had issued a global invitation calling for applications from interested parties for operation and maintenance of their container terminal for a period of 30 years.Before the procedure for bidding could begin, the Board sent a notice to the company asking them to show cause why they should not be disqualified from said tender.The basis for this notice was an order of the Andhra Pradesh High Court they came across by which the High Court had upheld the termination of a concession agreement by the Vishakhapatnam Port Trust (VPT).Adani responded to the notice, and was granted personal hearing by the Board. After such hearing, Adani requested for a 'without prejudice' participation in the bid.However, the Board on May 2, addressed a letter to Adani that as VPT has issued termination letter to them, it has been disqualified from participating in the present tender process.Adani then moved the Bombay High Court challenging the same, which was dismissed by a Bench of the Chief Justice Dipankar Datta and Justice MS Karnik."The decision of JNPT to disqualify the petitioner (Adani) after having once declared it as qualified, to our mind, conforms to the settled law that JNPT was bound by the tender terms and conditions, which amounts to a representation to the public, and that any deviation would have amounted to a fraud on public," the High Court ruled.It also held that since Adani brought an unmeritorious case for adjudication, it shall bear the costs of the proceeding, assessed at ₹5 lakh.This led to the present appeal before the apex court.The Court in its judgment today also said that is at liberty to challenge any such clause of similar nature before the high court, un-influenced by the observations contained in the Bombay High Court judgment. Since Adani had given up on the challenge to its disqualification by JNPA, the petition was disposed of as withdrawn.