Ms. Klass Associates vs India Tourism And Development ...
2000 Latest Caselaw 872 Del

ORDER

Manmohan Sarin, J.

1. Counsel for both the parties have been heard at length at admission stage.

With the consent of the parties, the petition is taken up for disposal.

1. The petitioner, a licensee for running the popular Chinese Restaurant, "Jewel of the East" at Ashoka Hotel, Chanakayapuri, New Delhi for the last 7 years, has filed this writ petition. Petitioner seeks a writ of certiorari for quashing the decision of respondent No.1 in awarding the licence for running "Jewel of the East" in favour of respondent No. 2. Petitioner also seeks a writ of mandamus for a direction to respondent No. 1 to consider the bid of the petitioner firm and call the petitioner for negotiations.

2. Respondent No.1 had invited a tender for running of the restaurant "Jewel of the East" on 15.5.2000. The bidders were required to give their technical bid as well as a financial bid in a sealed cover. The technical bid was to be opened first followed by opening of the financial bid of those, who were found technically suitable.

3. (i) Learned counsel for the petitioner has very persuasively urged before me that respondent No.1, which is a Government undertaking, has acted arbitrarily and against public interest in awarding the licence to respondent No. 2 and not calling the petitioner for negotiations while holding negotiations with the respondent No. 2.

(ii) Another grievance of the petitioner is that respondent No.1, with a view to accommodate respondent No.2 has permitted breach of Clauses 13 and 15 of the tender conditions, which enjoin upon the successful bidder to furnish the security deposit in cash or in the form of a Bank guarantee within 10 days of the issue of the letter of intent. In the instant case the letter of intent was issued on 7.8.2000 and the respondent No. 2 as per the petitioner was required to deposit security by 10th day from the date of issuance of the letter of intent i.e. by 17th or at best the 18th August, 2000. Respondent No. 2, however, deposited the security by way of bank guarantee on 24.8.2000. Learned counsel contends that respondent No.1 had no power to condone this delay and this was a singular breach which dis-entitled the respondent No.2 from the award of the licence.

(iii) Lastly, learned counsel for the petitioner fervently urged that as per his information undue favour is sought to be shown to respondent No.2 by providing him the benefit of renovation of premises contrary to the tender notice terms, wherein the premises were to be handed over on "as is wherein the premises were to be handed over on "as is where is" basis.

4. Learned counsel for the respondent has also been heard in opposition to the petitioner's submissions. As per the averments in the writ petition he the petitioner had bid Rs.3,50,000/- as the minimum guarantee monthly amount or 45% of the monthly food sale, whichever was higher. The bid of respondent No.1 in comparison was Rs.4,50,000/-, as minimum guarantee monthly amount and food sales at 41%.

The petitioner's submission was that since the food sale percentage offered by the petitioner was mere than the food sale percentage offered by the respondent, the petitioner deserved to be called for negotiations. The petitioner's bid being higher in one put of the two elements or components of the bid.

Learned counsel for the respondent on the other hand urged that based on the experience of the last 7 years and particularly that of the last year 50% of the monthly food sales did not exceed Rs.3,00,000/- per month. Keeping this in mind the bid of respondent No.2, where a minimum guaranteed monthly amount of.Rs.4,50,000/- as offered was more attractive and found favour with the respondent No.1.

5. Learned counsel for the respondent has handed over in court, the bid given by the petitioner. It is noticed that the amount of bid was Rs.3,05,799/- and not Rs.3,50,000/- as stated in the writ petition. Learned counsel for the petitioner submitted that it was possibly a typographical error. However, it is noticed that the amount of Rs.3,05,799/- is mentioned both in numerals and words, which renders the explanation not a plausible one. Learned counsel for the respondent urged that this mis-representation in writ petition itself was sufficient to non suit the petitioner.

6. Considering all aspects and especially that the minimum guaranteed amount being offered by respondent No.2 was Rs.4,50,000/- and the actual payment to respondent No.1 on 50% of food sales, for the last year being less than Rs.3,00,000/- monthly, I do not think respondent No.1 can be faulted with in these circumstances for not calling the petitioner for negotiations. Moreover the respondent No.1 has drawn my attention to a letter dated 30.6.2000, written by the petitioner on the day when the financial bids were to be opened. An extract from the said letter would show that the petitioner was seeking assurances and counter guarantees from respondent No.1 :- "In view of the above facts, before our financial bid is opened, we seek a written assurance from the management. guaranteeing full 3 working years as per the proposed agreement, even after dis-investment or an appropriate amount in compensation, in case of new management cancelling the agreement."

Petitioner made this demand on account of his apprehension that upon Government going through with its policy of dis-investment of equity in undertakings, a new management would take over the Hotel and may cancel the agreement. This could be an additional factor for respondent No.1 not to entertain the petitioner's bid.

7. Petitioner submits that respondent No.2 by breach of the tender terms had rendered himself ineligible for the award of the licence. The breach alleged is failure to furnish the security bid on time i.e. by 18th August, 2000 and furnishing the same on 24th August, 2000. Reference is invited to Clause No.13, 15 and 28 of the Tender Conditions, which read as under:-

"13. The tender will deposit and keep deposited with the company a sum equivalent to licence fee of three months in cash OR in the form of Bank Guarantee to be kept as interest free security deposit valid for a period of 39 months (i.e. three months extra over the licence period) The monthly licence fee will be the minimum guaranteed share of the Hotel for the purpose of working out the amount of security deposit.

15. On the award of licence through letter of intent, the tenderer will ensure deposit of security amount as per Clause 13 above within 10 days, sign the licence agreement and take possession of the restaurant within 20 days and start the actual operations of the restaurant (including trial run) within 30 days from the date of receipt of the letter of intent.

28. The successful tenderer shall start the operations of the restaurant within a period of 30 days (including trial run) from the date of receipt of letter of intent. The licence fee will be payable with effect from 31st day of receipt of letter of intent. In case the Company allows time extension for start of operations of the restaurant beyond 30 days from the date of receipt of letter of intent by the tenderer, the licence fee for one month at the rate of the minimum guarantee amount must be paid in advance by 35th day from the date of receipt of letter of intent. In case the advance of licence fee is not deposited as stated above by 35th day by the licensee from the date of the receipt of the letter of intent, it will be prerogative of the hotel authorities whether to allow to start operations of the restaurant thereafter or to withdraw allotment and forfeit the security deposit. In case the Company allows any extension, the licence fee will be received monthly in advance.

8. On a harmonious reading of the Clauses, it would be seen that respond- ent No.1 has the right to grant extension even with regard to the commence- ment of the running of the Restaurant, which is the object sought to be achieved. There is a prescribed period for each of the steps/stage culmisnating in commencement of operation of running a restaurant. The respondent No.1 has the power to extend the date of actual operations therefore, the acceptance of security bid on an extended date would not vitiate the entire tender process. Moreover, it would be noticed that there is no prohibitive stipulation or a stipulation making it an essential condition for the breach of which consequences are spelt out.

9. Counsel for the petitioner urged that the respondent No.1 is favouring respondent No.2 in as much as while the petitioner was denied even the basic maintenance facilities, extensive renovations for benefit of respond- ent No.2 are proposed. Learned counsel for respondent No.1 states on instructions that the premises shall be handed over on "as is where is" basis.

10. In view of the foregoing discussion, especially the factum of respondent No.2's being higher than that of the petitioner as assessed by respondent No.1, I do not think is a fit case warranting interference in the exercise of discretion under Article 226 of the Constitution of india.

The writ petition is dismissed.

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