M/S. Naman Broadcasting & ... vs North Delhi Municipal ...
2019 Latest Caselaw 1913 Del

$~48
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+    O.M.P. (I) (COMM.) 66/2019

                                       Date of Decision : 8th April, 2019

      M/S.    NAMAN        BROADCASTING             &
      TELECOMMUNICATION PVT. LIMITED
                                      ..... Petitioner

                           Through:     Mr.Kirti Uppal, Sr. Adv. with
                                        Mr.Nitin Mittal & Mr.Aditya
                                        Awasthi, Advs.

                           versus

      NORTH DELHI MUNICIPAL CORPORATION

                                                           ..... Respondent

                           Through:     Ms.Mini Pushkarna, Standing
                                        Counsel for NDMC with Mr.
                                        Ashwini Mathul & Ms.Swagata
                                        Bhuyan, Advs.
      CORAM:
      HON'BLE MR. JUSTICE NAVIN CHAWLA
      NAVIN CHAWLA, J. (Oral)

1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner inter alia praying for the following relief:-

"(a)Pass an order of injunction restraining the Respondent by itself, its officers, employees, servants/agents or any other person whosoever, from interfering, damaging, removing in any manner whatsoever in the display of commercial

O.M.P. (I) (COMM.) 66/2019 Page 1 advertisement boards/displays displayed by the Petitioner in terms of the Contract on the waterless urinals and to give any effect to the cancellation notice dated 13.02.2019 and further restraining the Respondents from creating any third party rights/interests therein by allotting the same to any other person/company or agency or to proceed with in terms of the said cancellation order dated 13.02.2019 in any manner."

2. The disputes between the parties are in relation to the letter of Cancellation of Contract (hereinafter referred to as the 'Impugned Termination Notice') dated 13.02.2019 by which the Contract for the work of Maintenance of Waterless Urinals in Lieu of Advertisement Rights on License fee basis in Rohini, Narela, Sadar, Paharganj and Karol Bagh Zone in the jurisdiction of North Delhi Municipal Corporation on Cluster Basis granted by the respondent to the petitioner vide Allotment Letter dated 21.12.2016 was terminated by the respondent.

3. The learned senior counsel for the petitioner submits that the the Impugned Termination Notice does not give any reason for termination/cancellation of the Contract. Relying upon the following paragraph of the notice, he submits that mere statement that the reply has not been found to be satisfactory does not comply with the requirement of giving reasons for termination of the contract:-

"Whereas the firm has not removed/rectified the deficiencies/discrepancies and no report to this effect has been submitted by the firm till date despite issuing

O.M.P. (I) (COMM.) 66/2019 Page 2 various notices. Further, the reply submitted by the firm vide letter dated 02.11.2018 has not been found to be satisfactory."

(Emphasis Supplied)

4. He places reliance on the Judgment of this Court in Mekaster Trading Corporation v. Union of India and Others, 2003 (71) DRJ 376, in support of this submission.

5. He further submits that the Impugned Termination Notice as well as the Show Cause Notice dated 31.10.2018 had made reference to the earlier notices dated 11.04.2018, 18.05.2018 and 02.07.2018 purportedly issued by the respondent to the petitioner pointing out certain discrepancies/deficiencies in the work carried out by the petitioner. The petitioner in its reply dated 02.11.2018 specifically denied the receipt of these notices. However, the respondent in its Impugned Termination Notice dated 13.02.2019 did not make any reference to this denial and infact, with the reply filed to the present petition, has only alleged that these notices have been served on the petitioner through e-mails. The petitioner denies the receipt of these e- mails. Infact, the alleged notice dated 11.04.2018 has not even been annexed by the respondent alongwith the reply filed to the petition.

6. The learned senior counsel for the petitioner further submits that the respondent being a Government Authority cannot act at its whims and fancies and therefore, the mere fact that the Contract was terminable on the respondent giving one month's notice, would not lead to denial of protection to the petitioner against such arbitrary

O.M.P. (I) (COMM.) 66/2019 Page 3 termination of the Contract. He places reliance on the Judgment of this Court in Pioneer Publicity Corporation v. Delhi Transport Corporation & Anr., 2003 SCC OnLine Del 207.

7. On the other hand, the learned counsel for the respondent drawing reference of this Court to Clause 17.10 of the Terms and Conditions for award of work of maintenance of waterless urinals in lieu of advertisement rights on MLF basis, submits that any continuous neglect or lapse on part of the licensee to clean and maintain the said waterless urinals in proper condition shall entitle the respondent to terminate the Agreement. She further places reliance on Clause 17.29 of the said Conditions to submit that where the work of the petitioner is not found satisfactory, the respondent was entitled to terminate the Agreement. She further submits that even otherwise, the Contract could be terminated by the respondent by issuing one month's notice and therefore, the petitioner is not entitled to any relief in the present petition as that would amount to grant of specific performance of the contract.

8. As far as the service of earlier notices is concerned, she submits that these notices were served on the petitioner at the e-mail address given in the Allotment Letter as well as on the letter heads of the petitioner and therefore, would be deemed to have been served on the petitioner.

9. As far as the not giving of reasons is concerned, she submits that not only the reply submitted by the petitioner would suggest that the petitioner had accepted the deficiency in the work but also, the

O.M.P. (I) (COMM.) 66/2019 Page 4 Impugned Termination Notice itself records that the petitioner has not removed/rectified the deficiencies/discrepancies and any report to this effect has not been submitted by the petitioner till date in spite of issuing various notices. She further submits that even from other correspondences exchanged between the parties, including the letter dated 27.09.2018 addressed by the petitioner to the respondent seeking withdrawal of the earlier surrender of the Contract, the petitioner has accepted the deficiency in the performance of work under the Contract.

10. I have considered the submissions made by the learned counsels for the parties. It is first to be noted that the Contract in question between the parties is clearly determinable in nature. It can be terminated for breach of the obligations on part of the petitioner in maintenance of the Waterless Urinals in proper condition under Clause 17.10 read with Clause 17.29 of the Agreement, which are reproduced hereinbelow:-

"17.10 That any continuous neglect or lapse on the part of licensee to clean and maintain the said waterless urinals in proper condition, shall entitle the North DMC to terminate the agreement.

xxxxxxx

17.29 North DMC shall have the right to cancel/terminate the agreement at any stage in case of breach of any of the stipulated terms and conditions by the bidder/licensee or in case their performance is not

O.M.P. (I) (COMM.) 66/2019 Page 5 found satisfactory. North DMC shall be entitled to terminate the agreement in case of any neglect or lapse on the part of the bidder/licensee in respect of the regular maintenance of the waterless urinals in neat, clean and hygienic conditions. The bidder/licensee shall to keep the waterless urinals in a state of good repairs, if any required at site, at the cost of bidder/licensee. The licensee may also be terminated if the advertisement is displayed in violation the OAP, 2007 or breach of any other terms & conditions."

11. It is also of relevance to note the contents of the reply addressed by the petitioner to the Show Cause Notice dated 31.10.2018. In its reply dated 02.11.2018, though the petitioner denies the receipt of the earlier notices addressed by the respondent, it also gives the following justifications for being unable to maintaining the Waterless Urinals:-

"• The waterless urinals allotted to us were built just before the Common Wealth Games 2010. At that time, due to time bound work, some of the work were completed in haphazard manner with the civil construction part only completed in most locations. • In these urinals in many locations, the sewages were not laid and they were not connected to any pipelines. • When the public started using these urinals, the urine and other dirty things began flowing on to the roads. • Connecting to the waste pipes or laying of sewage is not part of our work. It is the work of North Delhi Municipal Corporation to complete this and give. • Despite these inherent shortcomings, our maintenance team is doing very sincere work.

• They wash the floors everyday and maintain the toilets two times in all locations and in some busy locations

O.M.P. (I) (COMM.) 66/2019 Page 6 maintenance and cleaning is done three times everyday. This fact your staff can inspect every day.

• But the peculiar problem we face is that the general public do not differentiate between waterless urinals and the general urinals that are maintained by NDMC itself, with the result the bad situation of the general urinals are imagined to be that of the contractor like us and we are blamed for that also.

• Since you have the list of locations where the waterless urinals are located and general urinals are located, we strongly urge you to depute some senior officials to inspect the waterless urinals maintained by us and the other general urinals and see for themselves the difference in the two sets of urinals.

• However, even now we would like to request you to point out any specific shortcoming in any waterless urinals that are maintained by us, we will immediately undertake corrective measures.

• In the end, the maintenance of these waterless urinals are done by us as a CSR initiative by our organization and not just a commercial venture like any other work. You can very well see that 98% locations of urinals have no advertisement displays, which give us revenue."

12. In the earlier correspondences, specially the one relied upon by the counsel for the respondent dated 27.09.2018, the petitioner had asserted as under:-

"This refers to our personal meeting with Hon'ble Commissioner at his chamber on 26th Sept 2018. He was very kindly heard our problems on following points:

1. Waterless Urinals were constructed by MCD Engineering Department at the time of CWG within a short span.

O.M.P. (I) (COMM.) 66/2019 Page 7

2. Since it was required very urgently therefore contractors didn't care about availability of sewer, water, drainage etc.

3. At many locations the system is same and we could not take such type of corrective measures.

4. At some locations, we regularly install new Urinals pots & partitions between pots, but in these area drug addictive remove or damage them. However we regularly install new items.

5. Since, you were getting complaints about maintenance we offered to surrender our both Clusters No. 2 & 3 vide our Letter No. NBTPL/NDMC/JUL/18-19/025 dated 26/07/2018.

6. In last 3 months, our team has worked very hard to maintain the Urinals. On many locations, we have installed new pots, repaired the floors even cleaned the Sewer.

7. We are sure, you would have not received so much complaints in these last 3 months. Under these circumstances we hereby withdraw our surrender notice.

8. Further, we would like to suggest small changes in some urinals wherever pots are regularly broking by people.

a) We shall remove the Urinal pots completely and make the walls neat and clean. On floor, we shall make a single brick wall with drain. People will use wall instead of urinal pot.

b) This concept is used at many 5 star hotels in India & abroad.

Kindly allow us to withdraw the surrender and please don't take any coercive action against us."

O.M.P. (I) (COMM.) 66/2019 Page 8

13. At this stage, it is neither possible nor is it advisable to conclude with finality that the petitioner was indeed in default of its obligations under the Letter of Allotment and the terms thereof, however, atleast at a prima facie consideration it does appear to be so.

14. As far as not giving of reasons for the Impugned Termination Notice is concerned, the respondent has stated in the Notice that the deficiencies that have been pointed out in the earlier notices have not been removed/rectified and no report to this effect has been submitted by the petitioner. Therefore, the Impugned Termination Notice does give reasons for the decision to terminate the Contract. This is quite distinct from the case of Pioneer Publicity Corporation (Supra) relied upon by the learned senior counsel for the petitioner.

15. Whether the earlier notices have been duly served on the petitioner or not would also require evidence to be led before the Arbitrator. Again, only on a prima facie consideration, the e-mails have been addressed to the e-mail address given in the Allotment Letter as well on the letter heads of the petitioner. This atleast at a prima facie stage shows due service of these notices on the petitioner. Even otherwise, the correspondences exchanged between the parties clearly show that the petitioner has been duly and repeatedly informed by the respondent of the non-maintenance of the Waterless Urinals. The petitioner has been justifying the same on various grounds. Atleast at this stage, it would not be feasible or advisable for this Court to accept such justifications. If the termination is found to be incorrect on reasons, the petitioner would be entitled to compensation

O.M.P. (I) (COMM.) 66/2019 Page 9 in terms of damages suffered by it due to the termination of the contract. At the same time, as maintenance of these Waterless Urinals is in public interest, the public cannot be made to suffer due to the contractual relationship and disputes between the petitioner and the respondent.

16. In view of the above, I find no merit in the present petition, the same is dismissed, with no order as to cost.

17. Post script I must add that the learned senior counsel for the petitioner has submitted that the petitioner has already invoked the Arbitration Agreement between the parties. I must clarify that any observations made in the present order would not in any manner influence the Arbitral Tribunal while adjudicating the disputes between the parties on merits. I again reiterate that the observations made in the present order are only prima facie in nature.

                                                NAVIN CHAWLA, J



APRIL 08, 2019/rv




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