TMI Blog2014 (4) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of the proposed site was delivered to MPRTC on 22nd January, 1982 - The renewal clause in the lease subsequently provides that the renewal shall be with the consent of IDA. This consent by the IDA is not a mere formality. Appeal dismissed. - Civil Appeal No. 4896 of 2014 (Arising out of S.L.P.(C) No. 35001 of 2012), Civil Appeal No. 4897 of 2014 (Arising out of S.L.P. (C) No. 35017 of 2012), Civil Appeal Nos. 4898-4899 of 2014 (Arising out of S.L.P.(C) Nos. 35027-35028 of 2012) and Ors. - - - Dated:- 25-4-2014 - S.S. Nijjar And A.K. Sikri, JJ. and Civil Appeal No. 4900 of 2014 (Arising out of S.L.P. (C) No. 36887 of 2012) For the Appellant : R.F. Nariman, P.S. Patwalia and Sushil Kumar Jain, Sr. Advs., Puneet Jain, Christi Jain, Chhaya Kirti and Pratibha Jain, Advs. For the Respondents : Dushyant Dave, J.P. Cama and Krishnan Venugopal, Sr. Advs., Sanjay Kapur, Anmol Chandan, Priyanka Das, Lekha Vishwanath, Ashish Wad, AJayashree Wad, Tamali Wad, Kanika Baweja, Advs. for M/s. J.S. Wad and Co., Mishra Saurabh, V. Shukla and Ankit Lal, Advs. JUDGMENT S.S. Nijjar, J. 1. Leave granted. 2. The Civil Appeal 4896 of 2014 arising out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with all the qualified bidders. Accordingly, the Special Committee held negotiations with the qualified bidders on 7th July, 2003, wherein the Appellant's bid for the B.O.T. Scheme was found to be the highest. 6. MPRTC, after scrutiny of the financial bid and the proposal submitted by the Appellant for B.O.T. scheme, approved its bid vide Acceptance Letter dated 3rd October, 2003. In the Acceptance Letter, the Appellant was directed to deposit 25 per cent amount of the total premium amount of Rupees One Crore Sixteen Lac Thirty Seven Thousand Seven Hundred and Fifty (₹ 1,16,37,750/- ) within 15 days of the issuance of the Acceptance Letter. Accordingly, Appellant deposited the first installment of ₹ 1,16,37,750/-. The Appellant also have to pay a further sum of ₹ 7,33,320/- demanded by MPRTC as consultancy fees. 7. In pursuance of the Acceptance Letter, an Agreement dated 4th February, 2004 was entered into between the Appellant and the MPRTC. This agreement inter alia provided that the tender document with scope of work general conditions, special conditions, general specifications, list of brands and offer price bid shall form part of the agreement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicating therein that in respect of the proposed B.O.T. Project, premium as well as 15 years' lease rent had already been deposited. On the basis of the above, the IDA indicated that there shall be no objection, if land in question is mortgaged with any bank, financial institution or the Government. 14. In the meanwhile, there was a move by the State Government for closure of the MPRTC. In this context, the Government of India granted no objection to the State Government on 23rd March, 2005, subject to the condition that the State Government shall ensure and be fully responsible for ensuring compliance of any existing/future order(s) passed by various Courts, including Tribunals, in any/all matters relating to MPRTC. 15. The Appellant filed Writ Petition No. 636 of 2005 in the High Court seeking a direction to the MPRTC to immediately hand over possession of the land in question to the Appellant and grant permission to demolish the existing structure. On 5th August, 2005, the Writ Petition No. 636 of 2005 was disposed of by the High Court with the following directions: i. That Petitioner shall deposit the entire balance amount within a period of one month alongwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hya Pradesh. In this Contempt Petition, the Appellant moved an application for injunction on 11th November, 2005 (I.A. No. 1060 of 2005) restraining the MPRTC from handing over the possession of the proposed site to the State Government for establishing the Regional Transport Office. The High Court on 14th November, 2005, directed MPRTC to maintain status quo and not to handover the possession of the proposed site or to create any 3rd party interest. In spite of the aforesaid order, the possession of the proposed site was handed over by the MPRTC to the Transport Department on 16th November, 2005, for opening the R.T.O. A test centre for driving licences has been established on the land meant for the commercial complex. 18. In the meantime, State of Madhya Pradesh moved an application, MCC No. 1072 of 2005, before the High Court, seeking recall of the order dated 5th August, 2005 passed in Writ Petition No. 636 of 2005. The MPRTC also filed MCC No. 5 of 2006, seeking identical relief, i.e. recall of order dated 5th August, 2005. It was claimed that a decision had been taken by the M.P. State Government to wind up MPRTC. On 23rd March, 2005, MPRTC had been issued a notice of dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find that this Court should continue with the proceedings in the present Petition. I deem it appropriate to request the Chief Secretary, State of Madhya Pradesh, to take up the matter at his level and after holding a meeting with the Principal Secretary, Transport Department, Principal Secretary, Housing and Environment Department and the Managing Director of the M.P. Road Transport Corporation Ltd. take such further action, as may be deemed appropriate, in the facts and circumstances of the case. However, the Chief Secretary shall ensure that the officers of the State Government and various other instrumentalities of the State Government are not allowed to bring out their inter se disputes in public in future. 21. On 17th November, 2008, the Central Government, Department of Transport Highways informed the State Government of Madhya Pradesh that the request for permission for closure of MPRTC under the provisions of the Road Transport Corporation Act, for which earlier no-objection had been given, was being declined keeping in view the decision of Ministry of Labour Employment, and that it would now have to continue its current operations. 22. The Appellant submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l justice. The decision reached by the Chief Secretary directs that the entire amount paid by the Petitioner be returned to it with interest. The decision does not fix the rate of interest but we feel that 9% will be the proper interest having regard to all the circumstances. In view of the direction to return the amount with interest, as decided by us, there would be apparently no loss to the Petitioner. The Respondents are directed to return the amount with interest within four months from today. If the Petitioner still feels that there has been a breach of contract, it can pursue the remedy of specific performance or damages before a competent civil court. We, therefore, decline to interfere with the decision of the Chief Secretary except fixing the rate of interest, as indicated above. 26. In view of the aforesaid directions, the High Court also disposed of the Contempt Petition No. 469 of 2008, Review Application Nos. MCC No. 99 of 2009 and MCC No. 893 of 2008 without any further directions. 27. We have heard the learned Counsel for the parties. 28. Mr. R.F. Nariman and Mr. P.S. Patwalia, learned senior counsel, appearing for the Appellant submitted that the reasoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. The directions (III), (IV) and (V) are contrary to Directions (I) and (II) and were beyond the scope of the controversy raised in Writ Petition No. 6770 of 2007, which had been referred to the Chief Secretary by the High Court. The order of the Secretary has been passed without issuing any notice to the Appellant, even though in the writ petition, the Appellant was impleaded as Respondent No. 3. It is pointed out by the learned senior counsel that by way of abundant caution, the Appellant has challenged the order dated 11th December, 2007, passed in Writ Petition No. 6770 of 2007 in S.L.P.(C) No. 36887 of 2012. 30. Next it was submitted by the learned senior counsel that the actions of Madhya Pradesh Road Transport Corporation (Respondent No. 3) are in gross contempt of the orders dated 5th August, 2005, which have not been purged till date. The aforesaid order has become final after the dismissal of SLP (C) No. 20038 of 2005 on 7th October, 2005. It is submitted that the Review Petition MCC No. 99 of 2009 filed on 2nd January, 2006 after dismissal of the aforesaid SLP on 7th October, 2005 is an abuse of process and not maintainable. In support of this submission, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vash Chandra Dalui v. Biswanath Banerjee (1989) Supp (1) SCC 487 (Para 14) and State of U.P. v. Lalji Tandon. (2004) 1 SCC 1 (Para 13). 34. Further according to Mr. Nariman, the terms of the Agreement to Lease cannot be relied upon when a specific provision has been provided in the Lease Deed itself, which provides for extension of the lease. Clause (1) of the Lease enables the IDA to extend the lease for which neither the renewal nor permission of the State Government is necessary. 35. The argument of the Respondents that the Agreement of the MPRTC with the Appellant has been frustrated was sought to be countered by Mr. Nariman. It was submitted that self induced frustration cannot be a basis to frustrate a valid agreement. In this context, it was contended that the submission of the Respondents that MPRTC is being wound up is not tenable since such winding up is the result of an act of the Party itself. Reliance placed upon Boothlinga Agencies v. V.T.C. Poriaswami Nadar (1969) 1 SCR 65, at Page 79, wherein it was inter alia held that the doctrine of frustration of contract cannot apply where the event which is alleged to have frustrated the contract arises from the act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n IDA and Sri Ram Builders, i.e., the Appellant. Therefore, the High court has rightly granted liberty to the Appellant to file a Civil Suit, if so advised. (ii) The cancellation of the lease by IDA has become final. This has not been challenged by the Appellant. Therefore, no Mandamus can be issued to IDA, to permit the Appellant to construct the Bus Stand and commercial-cum-residential complex. Mr. Cama further submitted that the lease commences from 22nd January, 1982 when possession was handed over and expired on 21st January, 2012 upon completion of 30 years period of the lease. It is further submitted that MPRTC can not claim automatic renewal of the lease. It would be subject to the consent of IDA and the State Government. No application had been filed for such extension. In any event, the lease has come to an end by the efflux of time. Mr. Cama further submitted that IDA had given a lease in favour of MPRTC. Under the said lease, MPRTC had no authority to create further third party rights. Wrongly, according to Mr. Cama, MPRTC under the tender conditions/contract entered into with the Appellant had given it the right to sell proposed commercial premises, and to collect p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as there were no pleadings to this effect either in the original petition or in the grounds of SLP. In any event, according to the Respondents, the initial period of the lease was for 30 years. Furthermore, Paragraph/Clause 5(E) of the agreement to lease makes it clear that after termination of the lease period, it can be extended after renewal; that too only with the consent of MPRTC and IDA and further obtaining sanction of the State Government. According to Mr. Cama, two short questions would arise namely: (i) From what date, the period of 30 years is to be counted? (ii) Whether there is an automatic extension of lease? 41. It is according to Mr. Cama, admittedly possession of the property was given to MPRTC on 21st January, 1982. This premium, as well as the first lease rent had been deposited on 3rd October, 1980. It is also an admitted position that the lease rent for the entire period of 1982 onwards has in fact been paid by deposit of premium plus 15 years lease rent. It is reiterated by Mr. Cama that admitted date of actual possession by the lesser is 22nd January, 1982. Therefore, the first period of lease expired by efflux of time on 21st January, 2012. Wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. On 7th July, 2003, the bid of the Appellant was found to be the highest. The amount as mentioned in Para 6 earlier, was duly paid by the Appellant. A separate agreement was entered into between MPRTC and the Appellant on 4th February, 2004 which read alongwith the tender document provided as under: The successful promoters/builders will have the right to market the saleable space made available to him on different floors in the commercial complex, collect premium on such allotment from prospective buyers. 45. On 25th May, 2004, MPRTC deposited the lease rental with IDA. A formal lease was executed on 26th May, 2004. As noticed earlier, the lease was for 30 years. The leased land (plot) was to be used only for the bus terminal. It was specifically provided that the plot cannot be divided. The possession of the plot had been received on 22nd January, 1982. The lease also provided that the Rules published in the gazette on 16th December, 1977 shall be binding on the lessee. Rule 40 of the aforesaid Niyam/Rules read as under: The lessee may take possession of the plot on the date fixed or notified to him for taking over possession of the plot and the lease of the plot shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of this Court. In Kunhayammed (supra), this Court considered the effect of the dismissal of the SLP in limine. This Court reiterated the ratio laid down by this Court in Indian Oil Corporation Ltd. v. State of Bihar and Ors. (1986) 4 SCC 146. which considered the impact of the order dismissing the SLP with the following expression: The special leave petition is dismissed. Considering the aforesaid order of this Court in Indian Oil Corporation Ltd. (supra), it has been observed as follows: The effect of a non-speaking order of dismissal of a special leave petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that this Court had decided only that it was not a fit case where special leave should be granted. This conclusion may have been reached by this Court due to several reasons. When the order passed by this Court was not a speaking one, it is not correct to assume that this Court had necessarily decided implicitly all the questions in relation to the merits of the award, which was under challenge before this Court in the special leave petition. A writ proceeding is a wholly different and di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court on 5th August, 2005? Mr. Nariman has submitted that the order passed by the Chief Secretary on 11th December, 2007 even though on directions issued by the High Court in Writ Petition No. 6770 of 2007 cannot nullify the directions given by the High Court earlier. The order passed by the Chief Secretary in its executive capacity cannot have the effect of nullifying the order passed by the High Court on 5th August, 2005. On first blush, the submission made by Mr. Nariman seems to be very attractive, but factually it has to be noticed that much more water has flown under the bridge since the passing of the order dated 5th August, 2005. Subsequently, the lease to MPRTC was cancelled on 2nd November, 2007 by the IDA. The Appellant did not challenge the order dated 2nd November, 2007 passed by the IDA. The aforesaid order was challenged by MPRTC in Writ Petition No. 6770 of 2007. On 11th December, 2007, the High Court without issuing notice to the Appellant, who was impleaded as Respondent No. 3, disposed of the writ petition. The High Court noticed that two instrumentalities of the State have chosen to bring their disputes in open court. In such circumstances, the High Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tailed consideration of the parameters within which judicial review could be exercised, has culled out the following principles: 70. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down. *** 77. The duty of the court is to confine itself to the question of legality. Its concern should be: (1) Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellant with regard to the receiving of the premium on the constructed units sold to third party(ies). Even otherwise, the Appellant seems to be flogging a dead horse. Admittedly, the possession of the proposed site was delivered to MPRTC on 22nd January, 1982. The maximum lease period was for 30 years. By efflux of time the aforesaid lease period expired on 21st January, 2012. We do not accept the submission of Mr. Nariman that as the entire rent had been paid, MPRTC would be entitled to automatic renewal of the lease for 90 years. The renewal clause in the lease subsequently provides that the renewal shall be with the consent of IDA. This consent by the IDA is not a mere formality. We are, therefore, not inclined to accept the submission of Mr. Nariman that the term of the lease has to be understood to have commenced from 26.05.2004. 54. This apart, there is much substance in the submission of Mr. Cama that no application has been filed even for this formal renewal by MPRTC. In any event, MPRTC would not be in a position to continue with the lease as it is heavily indebted presently, to the tune of ₹ 3500 crores. The property of the corporation has been attached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited (1935) A.C. 524. The facts of that case, as narrated in Boothalinga Agencies (supra), would indicate that in that case, the Respondents chartered to the Appellants a steam trawler fitted with an otter trawl. Both the parties knew at the time of the contract that it was illegal to use an otter trawl without a licence from the Canadian government. Some months later the Appellants applied for licences for five trawlers which they were operating, including the Respondent's trawler. They were informed that only three licences would be granted, and were requested to state for which of the three trawlers they would like to have the licences. They named three trawlers other than the Respondent's trawler, and then claimed that they would not be bound by the trawler of the Respondent as it was frustrated. It was held by the Judicial Committee that the failure of the contract was the result of the Appellant's own election, and, therefore, no frustration of the contract. 57. This Court distinguished the aforesaid judgment and observed as follows: We think the principle of this case applies to the Indian law and the provisions of Section 56 of the Indian Contract Act cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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