Bombay High Court
Roadway Solutions India Infra Limited ... vs Brihanmumbai Municipal Corporation on 17 January, 2024
Author: G.S. Patel
Bench: G.S. Patel
2024:BHC-OS:885-DB 904-OSWPL-31718-2023.DOC
Wadhwa
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 31718 OF 2023
WITH
INTERIM APPLICATION (L) NO. 34633 OF 2023
IN
WRIT PETITION (L) NO. 31718 OF 2023
Roadway Solutions India Infra Ltd & Anr ...Petitioners/
Applicants
Versus
Brihanmumbai Municipal Corporation ...Respondent
Mr Janak Dwarkadas, Senior Advocate, with Chirag Mody, Parag
Khandhar, Prachi Garg & Mahek Shah, i/b DSK Legal, for the
Petitioners/ Applicants.
Mr Ranjit Thorat, Senior Advocate, with Joel Carlos, Sunil
Sonawane, Pallavi Thakur & Pooja Yadav, i/b Sunil Sonawane,
for the Respondent-BMC.
Mr Manish Kumar Patil, Chief Engineer (Roads) & Mr Jagdale,
Executive Engineer(Roads) City - present.
CORAM G.S. Patel &
Kamal Khata, JJ.
DATED: 17th January 2024
PC:-
1. The Petition was before us on 30th November 2023, when,
after a brief hearing, we passed an order granting limited relief in
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terms of prayer clause (f )(i) of the Petition staying the termination
notice, notice of intent to terminate and the show cause notice
issued by the Municipal Corporation of Greater Mumbai
("MCGM"). These were issued to the Petitioners in relation to
what we will call compendiously its road concreting mega-contract.
This involved concreting almost every road in Mumbai. At this
stage, further details are not necessary.
2. At that time, we believed it was not necessary to grant relief in
regard to the award of a fresh tender. The matter came before us
again on 14th December 2023. On that date, on an interim
application we did stay temporarily the issue of a fresh tender.
3. Mr. Thorat tells us that the fresh tender has been now
cancelled.
4. This is the factual background at its broadest level.
5. We do not think it is necessary to address the various
contentions on merits on either side. The reason is, to our minds,
apparent because we find from a narrative of only a few dates that
although, in the peculiar facts and circumstances of the case, the
Petitioners were offered a hearing, their application for a short
accommodation because their officers were engaged elsewhere with
tax authorities, was rejected and ultimately the impugned orders of
cancellation of the Petitioners contract came to be passed without
hearing the Petitioners. This is the limited point to which we
address ourselves.
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6. Mr Thorat has instructions to submit that the relevant clause
13 of the contract does not have an express provision for a hearing
on a show cause notice. It only requires that an opportunity be given
to reply to the show cause notice and which the Petitioners did.
Leaving aside the question about whether as a matter of public law a
hearing is or is not mandatory in all cases, especially when it is
submitted that such a termination has severe civil, commercial and
contractual consequences, the peculiarity of this case is that
notwithstanding whatever Mr Thorat's instructions may now be, the
MCGM had in fact offered a hearing but no such hearing did
actually take place. That seems to us to be unacceptable.
7. We do not think it is prudent to foreclose the contentions on
either side in regard to the termination.
8. The e-tender in question was of 21st November 2022 and the
letter of acceptance/work order is of 18th January 2023. This tells
us that everything that has happened is in a fairly compressed time
frame. The show cause notice in question (and we are fast
forwarding through the list of dates) is of 9th October 2023. The
reply to the show cause notice is of 16th October 2023. The notice
of intent to terminate to work order is of 1st November 2023 and it
is this notice that says that the Petitioners reply to the show cause
notice is not necessary.
9. But in that reply the Petitioners had sought an opportunity of
a personal hearing and -- this is now critical -- on 2nd November
2023, the MCGM conceded to this request. It wrote to the
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Petitioners asking them to attend a meeting in the chamber of the
Chief Engineer (Roads and Traffic) on 3rd November 2023 at 3:00
pm. The Petitioners sought an adjournment to 8th or 9th November
saying that they were attending matters before the GST Authorities
in Vapi on the hearing date. The assertion was that the Director of
the Petitioners who was handling this contract was already in Vapi at
that time. This request was not accepted. On 9th November 2023
came the termination notice from the MCGM to the Petitioners
terminating the work order or the contract.
10. We are not even on the question of whether a cure notice was
necessary or whether there was substantial compliance with it or
whether previous notices could be fairly said to have served the
purpose of that contractual provision. We do note however that the
show cause notice proposed several consequences of termination
including the forfeiture of the entirety of an Earnest Money Deposit
in excess of Rs 12 crores, the forfeiture of a contract deposit of over
Rs 30 crores and other consequences.
11. It is in these peculiar facts and circumstances that we do find
that the MCGM's refusal to accommodate the Petitioners by a few
days and to afford it a hearing despite first offering it to the
Petitioners (irrespective of what the contract may or may not
expressly say) is unjustified. We dare say that if we applied this
standard to MCGM Advocates before us, there would be a great
deal of protest.
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12. Consequently, we require the Municipal Commissioner to
nominate an officer of sufficiently high rank to hear the Petitioners
on the show cause notice, the notice of intent to terminate and the
termination notice itself on merits. It is for the Commissioner or his
nominated officer to decide when that hearing is to take place but, in
any view of the matter, we expect it to be done before 31st January
2024. From the Petitioners we accept an undertaking that they will
not seek an adjournment for any reason whatsoever.
13. As to the matters before the nominated officer, we dispense
with the requirement of any fresh filings. This Petition, with its
annexures and charts, is itself is already in four volumes. If that is
enough for us, it is surely enough for any Municipal Officer. There is
also a compilation by Mr Thorat. There are Affidavits already filed.
All this material that is before us along with the notices and the
reply to the show cause notice are sufficient for a decision.
14. As to the decision itself, we make it clear that we are not
expecting, as indeed we cannot expect, a judgment properly so
called. But we note that there are many defences taken by the
Petitioners including that on certain matters in respect of which
there is an alleged default by the Petitioners there is on the contrary
compliance or demonstrable compliance. They also may have a case
that if there is a default, the MCGM either extended time for
performance or dispensed with strict compliance with any particular
condition. The record before us indicates that the previous decision
was a simple one-line finding that the Petitioners' response to the
show cause notice was unsatisfactory. That will not do. The show
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cause notice lists individual items. The notice of termination
mentions specifics. The Petitioners replied to these individual
items. We expect at least some form of a proper decision displaying
application of mind to the various matters in controversy.
15. To be perfectly clear, it is not a requirement of our order or
even on law that the MCGM must find against the Petitioners on
every single item in the show cause notice. It may well be that a
single default by the Petitioners, if so found by the officer concerned
on any one issue, might well be sufficient to justify the termination
of the entire contract. That is for the officer to decide in the first
instance. We are only highlighting this lest it be argued that unless
the MCGM finds against the Petitioners on every count in the show
cause notice it is somehow stopped from terminating the contract.
That is not the position in law.
16. The present Petition will not survive. There is no question of
granting a stay against any further tender because there is none as
yet. All contentions are, at the cost of repetition, expressly kept
open.
17. The present injunction in regard to the show cause notice, the
notice of intention to terminate and the termination notice will
continue until the three are decided by the nominated officer or 31st
January 2024, whichever is later. It goes without saying that once a
date and venue is fixed and the officer is nominated, the Petitioners
Advocates will be given 48 hours' notice.
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18. At Mr Thorat's request, we clarify that our order requiring a
hearing is not based on an interpretation of the contract at all but
simply because the MCGM had itself accepted the Petitioners'
request for a hearing and had called the Petitioners to a hearing
which ultimately never took place.
19. The Petition is disposed of in these terms.
20. There will be no orders as to costs.
(Kamal Khata, J) (G. S. Patel, J)
17th January 2024
