Shri Naresh Maheshwari vs The Commissioner (Mcd) & Anr
2009 Latest Caselaw 3958 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 OMP 568/2009

%                     Date of decision: 25th September, 2009

SHRI NARESH MAHESHWARI                                      ....Petitioner
                  Through: Mr. Mr. S.K. Goyal, Advocate.

                                 Versus

THE COMMISSIONER (MCD) & ANR                               ... Respondents
                  Through: Ms. Mini Pushkarna, Advocate.




CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?   No

2.    To be referred to the reporter or not?       No

3.    Whether the judgment should be reported
      in the Digest?  No


RAJIV SAHAI ENDLAW, J.

1. The petitioner seeks interim measures with respect to an

agreement with the respondent Municipal Corporation of Delhi (for

short 'MCD') providing for arbitration. The petitioner has also

preferred Arbitration Petition No. 376/ 2009, also listed today, under

Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter

referred to as 'the Act'). Directions for appointment of arbitrator

have been issued in the said other petition.

2. The tender of the petitioner for operation of the parking site

near/outside the Maharaja Agarsain Hospital, Punjabi Bagh, Delhi

was accepted and a provisional offer letter dated 8th August, 2007

issued by the respondent. The petitioner pursuant thereto came into

management/occupation of the said parking site. However, disputes

arose between the parties, with the petitioner contending that 60%

of the area of the parking site was not available for parking owing to

restrictions placed by the Police Station in the adjoining property.

The petitioner thus claimed remission in the licence fee which he had

agreed to pay to the respondent MCD.

3. The counsel for the petitioner has contended that, in fact, the

respondent MCD also admitted that the entire area on the basis

whereof the bid had been submitted by the petitioner was not

available for parking but arbitrarily gave a remission of 25% only

and that too from the date on which such remission was sanctioned;

it is contended that there is no reason for not giving remission from

the date of the commencement of the contract of the petitioner i.e.

27th August, 2007. The said disputes led to the filing of the petition

aforesaid under Section 11 of the Act.

4. The present petition has been filed to restrain the respondent

MCD from, during the pendency of the arbitral proceedings,

cancelling/terminating the license agreement with the petitioner and

from taking any adverse action against the petitioner during the

pendency of the arbitration proceedings.

5. The counsel for the respondent MCD has appeared on advance

notice and has handed over in Court, the internal letter dated 29 th

January, 2009 of the MCD regarding the receipt of an advisory from

the traffic police authorities with respect to certain parking sites in

Delhi including the parking site in question; she has also handed

over a copy of the letter dated 18th September, 2009, issued by the

respondent MCD to the petitioner intimating to the petitioner that on

the basis of recommendations of the traffic police, the parking site in

question comes under the 'no recommended' category and as such

the parking contract with the petitioner cannot be renewed beyond

26th August, 2009 and cancelling the contract. She has also handed

over a copy of the show-cause notice dated 22nd July, 2009, earlier

issued to the petitioner for breach of the agreement by the

petitioner. The counsel for the respondent has also drawn attention

to the provisional offer letter dated 8th August, 2007 of the

respondent vide which the tender of the petitioner was accepted.

The said letter, inter alia provides that the Commissioner, MCD has

the sole discretion of terminating the contract at any time without

assigning any reason or without issuing any notice in public interest.

6. The counsel for the petitioner also admits that the petitioner

came into possession/management of the parking site only on 27 th

August, 2007. The standard form agreement containing the

arbitration clause and on the basis whereof this petition has been

filed, though provides duration period of the contract as five years

from the date of handing over of the site, however, provides that the

contract shall be renewed after the expiry of every one year with

enhancement in license fee and subject to the satisfactory

completion of the period of one year of the contract.

7. It has been put to the counsel for the petitioner as to what is

the right of the petitioner to continue in occupation/management of

the parking site.

8. The counsel for the petitioner has contended that the letter of

termination, copy whereof has been handed over in the Court today

has not been served on the petitioner and has been issued as a

counter blast to the petitioner having instituted this petition. He has

further contended that he is still in possession of the site and is

entitled to protection. It is also contended that the contract, in fact,

is for a term of five years. In response to the term for the provisional

offer letter aforesaid, it is contended that the Commissioner, MCD

cannot act arbitrarily.

9. The counsel for the respondent MCD in support of her

submissions has also relied upon Rajasthan Breweries Limited vs.

Stroh Brewery Company, AIR 2000 Delhi 450 wherein the

Division Bench has held that the specific performance of contracts

determinable by their very nature cannot be granted.

10. The counsel for the petitioner in response to the query as to

whether the contract has been renewed for the year commencing

from 26th August, 2009, has drawn attention to the letter dated 15 th

September, 2009, of the petitioner to the respondent enclosing a

cheque for Rs.6,31,128/- towards the license fee for the year 2009-10

in terms of the agreement. The counsel for the respondent, however,

states that the cheque aforesaid is still in the original file brought to

the Court today and will be returned to the petitioner.

11. Even otherwise, there is nothing to show that the respondent

has renewed the contract of the petitioner for the year 2009-10. The

contention of the counsel for the petitioner that such renewal is a

formality and the contract is, in fact, for five years is not found

correct on the interpretation of the term of the agreement. The

duration of five years is the maximum time for which the contract

can be renewed annually. The renewal is not only a formality;

discretion has been given to the MCD to renew the contract, subject

to satisfactory completion of the previous year.

12. In the present case, in the face of the show cause notice having

been issued to the petitioner prior to the date of renewal, it cannot

be said that the petitioner has satisfactorily completed the period of

the contract. Even otherwise, I find from the documents regarding

the advisory of the traffic police that the Commissioner, MCD has

become entitled to terminate the contract with immediate effect for

the said reason also which is found to be in public interest. Thus, it

cannot be said that the petitioner has a right to remain in

occupation/management of the parking site. In the absence of such

right, the petitioner has no prima facie case for grant of any interim

measure. Even otherwise, the petitioner, if at all able to make out a

case in the arbitration proceedings of the action of the respondent

MCD being illegal, can be compensated by damages. The balance of

convenience is also not found in favour of the petitioner or in

granting the interim measures claimed. The petition is, therefore,

dismissed. No orders as to costs.

IA No. 12526/2009 (for exemption) in OMP No. 568/2009

Allowed, subject to all just exceptions.

The application is disposed of.

RAJIV SAHAI ENDLAW, J

September 25th, 2009 sb