Bombay High Court Dismisses Petitions Challenging Security Clearance Denial for Navi Mumbai Infrastructure Projects
The Bombay High Court on Saturday firmly stated that it "cannot second guess" the Union government's denial of security clearance on national security grounds. The court dismissed two interconnected petitions, including one filed by a joint venture company partnered with an Azerbaijan-based entity that had bid for City and Industrial Development Corporation (CIDCO) road infrastructure projects worth nearly ₹3,500 crore in the Navi Mumbai airport influence zone.
Petition Details and Project Scope
Thakur Infraprojects Private Limited, based in Navi Mumbai and the lead partner of M/s Thakur-EVRASCON Joint Venture, filed a petition last year challenging the requirement and subsequent denial of security clearance. The company had bid for two major CIDCO road-infrastructure projects and argued that the Centre's refusal was "arbitrary" and based on geopolitical and national security concerns.
The two bids in question were for constructing roads and bridges over 20 metres wide across five town planning schemes in Navi Mumbai. The projects were valued at ₹1,568 crore and ₹1,908 crore respectively, making the total bid value approximately ₹3,476 crore.
Court's Rationale and National Security Emphasis
In its judgment, pronounced by Justices MS Karnik and Sharmila Deshmukh, the High Court emphasized that once security clearance is denied, the judiciary cannot question the Union of India's assessment regarding potential violations of national security. "No doubt, the principles of natural justice are sacrosanct; however, national security will take precedence over enjoyment of commercial rights," the court stated.
The judgment further clarified that prior clearances for ongoing contracts do not guarantee automatic clearance for subsequent projects. The court observed that the Government of India, in refusing security clearance to EVRASCON (the Baku-based company), considered Azerbaijan's stance on the Kashmir issue and its strategic alliances with Pakistan and Turkey.
"Hence it may not be prudent from a security point of view to get this strategic project executed through a joint venture that has EVRASCON as a partner," the High Court noted, quoting the government's position.
Executive Authority and Dynamic Security Considerations
The court underscored that the executive branch, not the judiciary, possesses the necessary knowledge of India's geopolitical relationships to assess actions in the national interest. Justice Karnik, who authored the judgment, explained: "In our opinion, the issue of national security is a dynamic concept. It may not be possible to foresee a situation as to what act constitutes a threat to national security. The executive must have the latitude and necessary flexibility to take decisions which are in national interest."
The High Court highlighted several critical factors considered in security clearance decisions:
- The timing of the clearance sought
- The nature of the project
- The location of the project (particularly significant given its proximity to the new Navi Mumbai airport influence zone)
The court affirmed that security clearance is a "Mandatory Eligibility Criterion" which CIDCO rightly insisted the petitioner JV comply with.
Legal Arguments and Constitutional Grounds
During proceedings, senior counsel CA Sundaram, representing Thakur Infraprojects, argued that the security clearance requirement was contrary to the Notice Inviting Bids dated July 23, 2024, and that CIDCO's action was not maintainable. He contended that the clearance denial was arbitrary, invoking constitutional grounds under Article 77 for the first time to ensure government accountability.
Additional Solicitor General of India Anil Singh, representing the Centre, submitted that security clearance was rejected in November after thorough consideration of national security aspects and the project's location. Senior counsel Chetan Kapadia justified CIDCO's action as legally mandatory and in the national interest.
The court ultimately rejected the plea for a stay of its judgment, balancing what it described as "the private commercial interest of a foreign entity, a JV partner of the petitioner, against the safety and security of the entire country."
