Delhi High Court
Alankit Assignments Limited vs Union Of India on 9 September, 2020
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 11.08.2020
Date of Decision : 09.09.2020
+ W.P.(C) 2662/2020 & CMs 9246/2020, 11158/2020
ALANKIT ASSIGNMENTS LIMITED ..... Petitioner
Through: Mr.Rakesh Tiku, Sr. Adv. with
Mr.Rohan Sharma, Adv.
versus
UNION OF INDIA ..... Respondent
Through: Mr.Chetan Sharma, ASG &
Mr.Ripudaman Bhardwaj, CGSC
for UOI with Mr.Sahaj Garg, Adv.
and Mr.Pramil Gupta, Director
MEA.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. This petition, was filed by the petitioner originally on 05.03.2020,
praying for the following reliefs:
"(a) this Hon'ble Court further be pleased to issue any writ,
order or direction in the nature of Certiorari or any other
appropriate writ, order or direction in the nature thereof for
quashing letter dated 04.04.2019 bearing No. Abu/CW/386/7/2017
(ANNEXURE P-12) and communication dated 29.01.2020
(ANNEXURE P-15) issued by Respondent for reducing the term
of the Contract granted to the Petitioner in terms of the Request for
Proposal Document and the Letter of Intent dated 29.10.2018.
(b) this Hon'ble Court further be pleased to issue any writ,
order or direction in the nature of Certiorari or any other
WP(C)No.2662/2020 Page 1
appropriate writ, order or direction in the nature thereof for
quashing Advance Notice for floating tender for Pravasi Bhartiya
Sahayata Kendra dated 02.02.2020 (ANNEXURE P-17) and
Request for Proposal document issued by Embassy of India Abu
Dhabi dated 25.02.2020 inviting bids for establishing and
managing the Pravasi Bhartiya Sahayata Kendra at Dubai
(ANNEXURE P-18)."
2. In the hearing held on 11.03.2020, the learned senior counsel for
the petitioner made a submission that without prejudice to the rights and
contentions of the petitioner in the present petition, the petitioner would
participate in the new Request for Proposal (hereinafter referred to as
"RFP") that had been floated by the respondent on 25.02.2020. This
court by its order dated 11.03.2020 directed that any decision taken by
the respondent on the new RFP shall be subject to the outcome of the
present petition.
3. Unfortunately, before the petition could be taken up for further
consideration, due to outbreak of Covid-19 pandemic, the proceedings in
the petition were adjourned.
4. The petitioner thereafter filed an Application, being CM No.
11158/2020 (hereinafter referred to as the "application"), praying for the
following reliefs:-
"a) Pass ex-parte ad interim order to direct the Respondent to
continue to make payment of AED 1,00889.00 + Taxes to the
Applicant as per the terms of the Letter of Intent dated 29.10.2018,
till pendency of the present petition or expiry of terms of the
contract/Letter of Intent dated 29.10.2018, whichever is later;
b) Direct the Respondent to clear, the pending payments of the
Applicants for rendering their services upto April 2020 @ AED
WP(C)No.2662/2020 Page 2
1,00889.00 + Taxes per month for Dubai and Sharjah PBSK
Centres."
5. In the application it was asserted by the petitioner that the
respondent has cancelled the fresh RFP wherein the petitioner emerged as
an L-1 bidder and the respondent had extended the existing arrangement
with the petitioner for three more months till July, 2020 as per the rates
prevailing prior to November, 2018. The petitioner had also been called
upon to close the Sharjah Centre with effect from 01.05.2020. The
respondent, by an e-mail dated 06.05.2020, reiterated that the extension
shall be only for the Dubai Centre on a monthly remuneration of AED
67,700/- (Emirati Dirhams Sixty Seven Thousand and Seven Hundred
Only).
6. The above factual matrix has been narrated as a brief background
as to what has transpired in this petition since its filing.
7. As far as the Writ Petition is concerned, the petitioner asserted
that:-
(a) Sometime in the end of 2013, the respondent, through its
Community Affairs Wing, Embassy of India, Abu Dhabi had issued a
RFP document for selection of a Service Provider to establish and
manage an Indian Workers Resource Centre (IWRC) at Dubai, United
Arab Emirates. The petitioner participated in the said tender and was
issued a Letter of Intent dated 17.02.2014, informing the petitioner that it
had been selected as a Service Provider for a term of three years starting
from 01.03.2014, at a monthly retainer fee of AED 68,000/-. The parties
thereafter executed an Agreement on 21.05.2014.
WP(C)No.2662/2020 Page 3
(b) By the letter dated 29.03.2017, the Agreement was extended
till 28.02.2018 on the same terms and conditions.
(c) By a separate letter dated 29.03.2017, the respondent
awarded the work of setting up and management of IWRC, Sharjah to the
petitioner for the period from 01.04.2017 to 28.02.2018 on the terms and
conditions that were mentioned in the Agreement for Dubai Centre and
certain other conditions as mentioned in the said letter. The consideration
of the services was AED 49,000/-, being the additional monthly retainer
fee.
(d) By the extension letter dated 02.04.2018 and e-mail dated
30.08.2018, the Agreement with the petitioner was extended firstly from
28.02.2018 till 31.08.2018, and thereafter from 01.09.2018 till further
notice.
(e) In September 2018, the respondent issued a fresh RFP for
selection of a Service Provider to establish and manage the Pravasi
Bhartiya Sahayata Kendra (PBSK) at Dubai and Sharjah through the
Community Affairs Wing, Embassy of India, Abu Dhabi. Clause 5 of the
RFP document provided that the Contract would be valid for three years
and could get extended for another year.
(f) The petitioner participated in the tender and was issued a
Letter of Intent dated 29.10.2018, informing the petitioner of its selection
as a Service Provider as per the terms and conditions mentioned in the
RFP. The monthly retainer fee was agreed as AED 1,00,889/-.
WP(C)No.2662/2020 Page 4
(g) The petitioner accepted the terms of the Letter of Intent by
e-mail dated 30.10.2018. In turn, the respondent vide e-mail dated
31.10.2018, directed the petitioner to start the operations of the PBSK at
Dubai and Sharjah from 01.11.2018 and sought clarification as to how
the petitioner would submit the Performance Bank Guarantee as required
in the Letter of Intent.
(h) The petitioner by its e-mail dated 01.11.2018, confirmed the
start of the operation of the PBSK at Dubai and Sharjah.
(i) By the Impugned Communication dated 04.04.2019,
however, the petitioner was informed by the respondents that the
Competent Authority has given its approval for the selection of the
petitioner as the Service Provider for a period of one year only, that is
from 01.11.2018 to 31.10.2019, at a monthly retainer fee of AED
1,00,889/-. The petitioner protested against the same vide its letter dated
12.04.2019.
(j) On expiry of the period of the offer contained in the
Communication dated 04.04.2019, the petitioner by an e-mail dated
30.10.2019 and 14.11.2019, requested the respondent for further
extension. The respondent, by e-mail/letter dated 29.01.2020, extended
the period of arrangement till 30.04.2020.
(k) On 02.02.2020, the respondent issued an "Advance Notice
For Floating Tender For establishing and managing Pravasi Bharatiya
Sahayata Kendra" and thereafter issued a fresh RFP document.
WP(C)No.2662/2020 Page 5
8. As noted hereinabove, the petitioner filed the present petition
challenging the Communication dated 04.04.2019 curtailing the period of
the Contract from three years to one year; Communication dated
29.01.2020 that extended the period of the Contract till 30.04.2020; and
the decision of the respondent to issue the fresh RFP dated 25.02.2020.
9. The learned senior counsel for the petitioner submits that the
respondent has issued the RFP for award of contract for a period of three
years. The Letter of Intent dated 29.10.2018 issued to the petitioner,
therefore, awarded the Contract for a period of three years. The
respondent has acted arbitrarily by issuing the Impugned Communication
dated 04.04.2019 and thereby taking a unilateral decision to curtail the
period of the contract to only one year. He submits that pursuant to the
RFP and the Letter of Intent, the petitioner had made investments and it
is only after a gap of almost six months that the respondent sought to
curtail the period of the contract thereby acting in an arbitrary and a
whimsical manner.
10. Placing reliance on the judgments of the Supreme Court in ABL
International Ltd. & Anr. vs. Export Credit Guarantee Corporation of
India Ltd. & Ors. 2004 (3) SCC 553 and Union of India & Ors. vs.
Tantia Construction Pvt. Ltd. 2011 (5) SCC 697, the learned senior
counsel for the petitioner submits that even in the matters of contract, the
respondent has to act fairly and reasonably. It cannot unilaterally alter the
terms of the Contract. He submits that even in the matters of Contract and
monetary claims, a Writ is maintainable where the respondent has acted
in an arbitrary manner.
WP(C)No.2662/2020 Page 6
11. On the other hand, the learned ASG submits that in the present
case only a Letter of Intent has been issued to the petitioner. This does
not result in a binding Contract between the parties. Placing reliance on
the judgment of the Supreme Court in Dresser Rand S.A vs. Bindal Agro
Chem Ltd. and K.G. Khosla Compressor Ltd. 2006 (1) SCC 751, he
submits that until a regular Contract was executed between the parties,
the same cannot bind either party. A Letter of Intent merely indicates a
party's intention to enter into a Contract with the other in future.
12. He also places reliance on the judgment of the Supreme Court in
Rajasthan Cooperative Dairy Federation Ltd. vs. Maha Laxmi
Mingrate Marketing Service Pvt. Ltd. & Ors. 1996 (10) SCC 405, to
submit that a Letter of Intent can be withdrawn at any stage.
13. Placing reliance on the judgment of the Supreme Court in Joshi
Technologies International Inc vs. UOI & Ors. 2015 7 SCC 728, the
learned ASG submitted that this Court should refuse to entertain the
petition as it relates to contractual matters and raises a monetary claim.
He submits that the remedy of the petitioner, if any, would lie in a Suit
for specific performance or damages.
14. The learned ASG further submits that in the present case, the bid
of the petitioner pursuant to the RFP of 2018 was examined for approval.
The expenditure related to the PBSK at Dubai and Sharjah is met from
Indian Community Welfare Fund (ICWF). It came to notice of the
Competent Authority that the indicated running expenses for the PBSK
were more than 40% of the funds collected under the ICWF in the last
year. As per the Government Guidelines on the expenses, the expenses
WP(C)No.2662/2020 Page 7
should not exceed more than 15% of total ICWF collection of the
previous financial year. This has been done to ensure that adequate funds
are available for welfare of the Indian Community Workers and to extend
financial help at the time of distress, problems faced by the workers and
community members. The petitioner was further found charging
additionally for service of experts (legal, financial and physiological)
despite the fact that these experts were providing their services on a pro-
bono basis. It was for this reason that the competent authority granted its
approval for the appointment of the petitioner as a Service Provider only
for a period of one year. The petitioner was accordingly informed by the
Communication dated 04.04.2019. He submits that therefore, the
respondents have not acted arbitrarily.
15. As far as the new RFP is concerned, the learned ASG submitted
that the rate quoted by the petitioner again exceeded the cap put by the
guidelines. He places reliance on paragraph 6 of the reply submitted to
the application, which reads as under:
"6. That the averments made in para 6 of the application under
reply are wrong and hence denied, except for what is matter of
record. It is submitted that as per Ministry's guidelines the
expenditure from the Indian Community Welfare Fund (ICWF) for
permissible items cannot be more than 15% of the ICWF
collections in the previous financial year. The ICWF collections
for 2018-19 were Rs.7,54,64,088/-. The expenditure for
permissible items including PBSKs in Dubai and Sharjah for 2019-
20 comes to Rs.3,51,22,236/- which is approx. 46.54% of the
ICWF collections of 2018-19 and hence hugely exceeds the
permissible guidelines. This has been done to ensure that
adequate funds are available for welfare of Indian community
workers and extend financial help in time of distress, problems
WP(C)No.2662/2020 Page 8
faced by workers and community members. M/s Alankit's quote in
the New Request for Proposal was approx. Rs.2,72,16,000/- (this
exceeds the permissible guidelines by 21% which is meant for
many other services other than PBSK). Hence it was decided to
cancel the RFP. Ministry is reviewing the whole process of PBSKs
as per guidelines."
16. As far as the decision to continue the services only for Dubai
Centre and discontinue the same for Sharjah, as also the fixation of
charges for the same, the learned ASG submitted that though PBSK
Sharjah was set up in August, 2017, even after more than two and a half
years of its existence, it was found that the same had not taken off.
Accordingly, the petitioner was asked to close the PBSK Sharjah with
effect from 01.05.2020. He submitted that even the Letter of Intent dated
29.10.2018 empowered the Embassy to conduct Quarterly Review
meetings to oversee the functioning of the two PBSKs and therefore, the
respondent was entitled to take such a decision. As PBSK Sharjah was
directed to be closed, it was decided that the petitioner shall be paid AED
67,700 for PBSK Dubai for the period May - July, 2020, in the same ratio
that was paid for PBSK Dubai and PBSK Sharjah prior to November,
2018 (ratio was 8/13) when two separate bills for PBSK Dubai and
Sharjah were being submitted by the petitioner.
17. I have considered the submissions made by the learned counsels
for the parties.
18. The Supreme Court in Joshi Technologies (supra), summarized
the law in relation to the jurisdiction of this Court in contractual matters
entered by the State or State authorities as under:
WP(C)No.2662/2020 Page 9
"69. The position thus summarized in the aforesaid principles has
to be understood in the context of discussion that preceded which
we have pointed out above. As per this, no doubt, there is no
absolute bar to the maintainability of the writ petition even in
contractual matters or where there are disputed questions of fact
or even when monetary claim is raised. At the same time,
discretion lies with the High Court which under certain
circumstances, it can refuse to exercise. It also follows that under
the following circumstances, "normally", the Court would not
exercise such a discretion:
69.1 the Court may not examine the issue unless the action has
some public law character attached to it.
69.2 Whenever a particular mode of settlement of dispute is
provided in the contract, the High Court would refuse to exercise
its discretion under Article 226 of the Constitution and relegate the
party to the said mode of settlement, particularly when settlement
of disputes is to be resorted to through the means of arbitration.
69.3 If there are very serious disputed questions of fact which are
of complex nature and require oral evidence for their
determination.
69.4 Money claims per se particularly arising out of contractual
obligations are normally not to be entertained except in
exceptional circumstances.
70. Further, the legal position which emerges from various
judgments of this Court dealing with different situations/aspects
relating to contracts entered into by the State/public Authority with
private parties, can be summarized as under:
70.1 At the stage of entering into a contract, the State acts purely
in its executive capacity and is bound by the obligations of
fairness.
70.2 State in its executive capacity, even in the contractual field,
is under obligation to act fairly and cannot practice some
discriminations.
WP(C)No.2662/2020 Page 10
70.3 Even in cases where question is of choice or consideration
of competing claims before entering into the field of contract, facts
have to be investigated and found before the question of a violation
of Article 14 of the Constitution could arise. If those facts are
disputed and require assessment of evidence the correctness of
which can only be tested satisfactorily by taking detailed evidence,
involving examination and cross-examination of witnesses, the
case could not be conveniently or satisfactorily decided in
proceedings under Article 226 of the Constitution. In such cases
the court can direct the aggrieved party to resort to alternate
remedy of civil suit etc.
70.4 Writ jurisdiction of the High Court under Article 226 of the
Constitution was not intended to facilitate avoidance of obligation
voluntarily incurred.
70.5 Writ petition was not maintainable to avoid contractual
obligation. Occurrence of commercial difficulty, inconvenience or
hardship in performance of the conditions agreed to in the contract
can provide no justification in not complying with the terms of
contract which the parties had accepted with open eyes. It cannot
ever be that a licensee can work out the license if he finds it
profitable to do so: and he can challenge the conditions under
which he agreed to take the license, if he finds it commercially
inexpedient to conduct his business.
70.6 Ordinarily, where a breach of contract is complained of, the
party complaining of such breach may sue for specific
performance of the contract, if contract is capable of being
specifically performed. Otherwise, the party may sue for damages.
70.7 Writ can be issued where there is executive action
unsupported by law or even in respect of a corporation there is
denial of equality before law or equal protection of law or if it can
be shown that action of the public authorities was without giving
any hearing and violation of principles of natural justice after
holding that action could not have been taken without observing
principles of natural justice.
WP(C)No.2662/2020 Page 11
70.8 If the contract between private party and the
State/instrumentality and/or agency of the State is under the realm
of a private law and there is no element of public law, the normal
course for the aggrieved party, is to invoke the remedies provided
under ordinary civil law rather than approaching the High Court
under Article 226 of the Constitution of India and invoking its
extraordinary jurisdiction.
70.9 The distinction between public law and private law element
in the contract with State is getting blurred. However, it has not
been totally obliterated and where the matter falls purely in private
field of contract, this Court has maintained the position that writ
petition is not maintainable. The dichotomy between public law
and private law rights and remedies would depend on the factual
matrix of each case and the distinction between public law
remedies and private law field, cannot be demarcated with
precision. In fact, each case has to be examined, on its facts
whether the contractual relations between the parties bear insignia
of public element. Once on the facts of a particular case it is found
that nature of the activity or controversy involves public law
element, then the matter can be examined by the High Court in
writ petitions under Article 226 of the Constitution of India to see
whether action of the State and/or instrumentality or agency of the
State is fair, just and equitable or that relevant factors are taken
into consideration and irrelevant factors have not gone into the
decision-making process or that the decision is not arbitrary.
70.10 Mere reasonable or legitimate expectation of a citizen, in
such a situation, may not by itself be a distinct enforceable right,
but failure to consider and give due weight to it may render the
decision arbitrary, and this is how the requirements of due
consideration of a legitimate expectation forms part of the
principle of non-arbitrariness.
70.11 The scope of judicial review in respect of disputes falling
within the domain of contractual obligations may be more limited
and in doubtful cases the parties may be relegated to adjudication
of their rights by resort to remedies provided for adjudication of
purely contractual disputes."
WP(C)No.2662/2020 Page 12
19. Therefore, there is no complete embargo on the court, in exercise
of its Writ jurisdiction, to entertain a petition that relate to a contract
entered into by the State or Statutory Authority. It is a matter of
discretion that is primarily guided by as to the nature of the contract and
as to whether there are highly disputed questions of facts that need to be
determined. The nature of violation alleged also determines the
discretion.
20. Applying the above tests to the facts of the present case, as far as
the effect of the Letter of Intent dated 29.10.2018 is concerned, the same
informed the petitioner as under:
"With reference to your technical and financial bid to establish
and manage the Pravasi Bharatiya Sahayata Kendra (PBSK) at
Dubai and Sharjah for a period of three years, we are pleased to
select you as the Service Provider as per the terms and conditions
as mentioned in the RFP which have already been accepted by
you. More specifically it is pertinent to mention the following
important conditions, though they are already in the RFP.
(Emphasis supplied)
21. The above letter further informed the petitioner that the said letter
was issued with the approval of the Ambassador and required the
petitioner to convey its Acceptance by 30.10.2018. Therefore, unlike in
the case of Dresser Rand S.A (supra), the Letter of Intent did not make
itself subject to a formal contract being entered into between the parties.
22. In Dresser Rand S.A (Supra), the Supreme Court held as under:
WP(C)No.2662/2020 Page 13
"39. It is now well settled that a Letter of Intent merely indicates
a party's intention to enter into a contract with the other party in
future. A Letter of Intent is not intended to bind either party
ultimately to enter into any contract. This Court while considering
the nature of a Letter of Intent, observed thus in Rajasthan Co-
operative Dairy Federation Ltd. V. Maha Laxmi Mingrate
Marketing Service Pvt. Ltd. [1996 (10) SCC 405]:
" The Letter of Intent merely expressed an intention to enter
into a contract...There was no binding legal relationship
between the appellant and Respondent 1 at this stage and
the appellant was entitled to look at the totality of
circumstances in deciding whether to enter into a binding
contract with Respondent 1 or not."
40. It is no doubt true that a Letter of Intent may be construed as a
letter of acceptance if such intention is evident from its terms. It is
not uncommon in contracts involving detailed procedure, in order
to save time, to issue a letter of intent communicating the
acceptance of the offer and asking the contractor to start the work
with a stipulation that the detailed contract would be drawn up
later. If such a letter is issued to the contractor, though it may be
termed as a Letter of Intent, it may amount to acceptance of the
offer resulting in a concluded contract between the parties. But the
question whether the letter of intent is merely an expression of an
intention to place an order in future or whether is a final
acceptance of the offer thereby leading to a contract, is a matter
that has to be decided with reference to the terms of the letter.
Chitty on Contracts (Para 2.115 in Volume 1- 28th Edition)
observes that where parties to a transaction exchanged letters of
intent, the terms of such letters may, of course, negative
contractual intention; but, on the other hand, where the language
does not negative contractual intention, it is open to the courts to
hold that the parties are bound by the document; and the courts
will, in particular, be inclined to do so where the parties have
acted on the document for a long period of time or have expended
considerable sums of money in reliance on it. Be that as it may."
(Emphasis supplied)
WP(C)No.2662/2020 Page 14
23. From the reading of the above, it is clear that the Letter of Intent
has to be read for its true meaning and intent ; though termed only as a
Letter of Intent, it may in certain cases amount to acceptance of the Offer
resulting in a concluded contract between the parties. The question
whether the Letter of Intent is merely an expression of an intention to
place an order in future or whether is a final acceptance of the Offer
thereby leading to a contract, are matters that have to be decided with
reference to the terms of the Letter of Intent.
24. In the present case, the terms of the Letter of Intent clearly reflect
that it was in the nature of an Offer made to the petitioner for its
acceptance. The petitioner claims to have accepted the same by its
communication dated 30.10.2018, which reads as under:
" In response to your „Letter of Intent‟ for Setting up Letter
"Pravasi Bhartiya Sahayata Kendra (PBSK)" vide your letter no.
Abu/CW/386/7/2017 dated 29th October 2018. We Sincerely thank
you for giving us another chance to continue our services to the
Indian Community in UAE; your continued trust, is the testimony
that our efforts are in the right direction in making PBSK as a
hallmark of „grievance redressal‟ for Indian community in UAE.
We humbly accept the terms stated in the "Pravasi Bhartiya
Sahayata Kendra (PBSK)" bid and assure the embassy that, we
will continue to create higher benchmarks of services to the Indian
Community in UAE.
Regarding the „point xiii‟ of your letter of intent for appointment of
CPIO, in our communication dated 2nd August 2018 by Mr. Anish
Chaudhary, we had submitted that;
"Alankit Assignment limited, is a retainer contractor as a private
company to run the IWRC, UAE and works under the direct
control and supervision of Indian Embassy/Counsellor at UAE. It
WP(C)No.2662/2020 Page 15
does not act as independent Public Authority. We, therefore,
submit that, Alankit Assignment Ltd / IWRC, UAE is not covered
under the ambit of RTI Act 2005. In view of this, the appointment
of a Senior Official of Alankit at UAE, as CPIO under the RTI act
does not seems to be correct".
The appointment of a CPIO was not part of the scope of this RFP
as well.
Hence, through this letter we submit our acceptance to your LOI
and also request the embassy to consider excluding the „point xiii‟
of the „letter of intent‟ from the contract."
(Emphasis supplied)
25. A reading of the above would clearly show that this was not an
unconditional Acceptance of the petitioner to the Letter of Intent. The
petitioner sought exclusion of Clause xiii of the Letter of Intent "from the
contract".
26. A formal decision on the above request of the petitioner was never
taken by the respondent, though the petitioner was called upon to start the
operation of the PBSK at Dubai and Sharjah from 01.11.2018. Was this
therefore, an acceptance by the respondent of the request of the petitioner
for deletion of the above condition or was the communication dated
30.10.2018 of the petitioner treated as its unconditional acceptance to the
Letter of Intent, etc., are the questions that would arise and would require
the parties to lead evidence. These cannot appropriately be considered in
writ jurisdiction.
27. As far as the decision to curtail the period of the contract to one
year, the learned ASG has also submitted before this Court the relevant
File Notings leading up to the decision of 04.04.2019. The same shows
WP(C)No.2662/2020 Page 16
that the file had been forwarded by the Embassy of India, Abu Dhabi,
UAE seeking approval of the Competent Authority in India for the
selection of the petitioner as the new Service Provider for PBSK Dubai
and PBSK Sharjah. Taking note of the fact that the running expense of
the two Centres was almost 40% of the funds collected under ICWF in
the last year, the Competent Authority recommended the approval for
only one year. The file was thereafter forwarded for seeking approval of
the Competent Authority being AS(OE)&PGE and JS(OIA-I). The file
was thereafter sent to the Finance Department for approval of one year
tenure. The Finance Department in the Ministry of External Affairs gave
its concurrence to the proposal for a one year extension observing that the
mission had not followed the prescribed guidelines for tendering.
28. The learned senior counsel for the petitioner had contended that the
decision to curtail period of the Contract to one year was arbitrary. The
above Notings, however, do not sustain such argument and, in fact,
shows that a considered decision based on germane considerations was
taken by the respondent for curtailing the period of the Contract of the
petitioner to only one year. Once the decision is not found to be actuated
by malice or found to be arbitrary or unreasonable, it is not for this court
to sit in appeal over the same in exercise of its Writ jurisdiction or find
fault in the same on the ground that adoption of some other course could
have been better.
29. The effect and consequence of such decision of the respondent on
the contract and the contractual claims, if any, in form of damages or
specific performance, by the petitioner, can again be best determined by
WP(C)No.2662/2020 Page 17
resorting to contractual remedies in form of arbitration, if available, or in
form of a civil suit. Writ Court would not be a proper forum to adjudicate
on such claims and they would necessarily involve highly contentious
and disputed questions requiring assessment of evidence, the correctness
of which can only be tested satisfactorily by taking detailed evidence,
involving examination and cross-examination of witnesses.
30. As far as the cancellation of the subsequent RFP, as noted
hereinabove, there is no specific challenge to the same in the present
petition barring there being made a reference of the same in the
application filed by the petitioner, being CM no.11158/2020. The
grounds for cancellation of the new RFP therefore, do not arise for
consideration of this Court in the present petition. However, taking note
of the contents of paragraph 6 of the reply to the application filed by the
respondents and quoted herein above, the same again does not appear to
be suffering from vice of arbitrariness or unreasonableness. In any case,
no right is created in favour of the petitioner merely because it was the
lowest tenderer.
31. As far as the decision of the respondent to order closure of PBSK
Sharjah, it is to be noted that even in the RFP dated 25.02.2020 issued by
the respondent, which was made the cause of action for filing of the
present petition, proposals were invited only for PBSK at Dubai and not
for PBSK at Sharjah. The File Notings that have been produced before
this Court, clearly show that the proposal to shut down the PBSK at
Sharjah was taken much prior to the issuance of the new RFP and based
on the following observations:
WP(C)No.2662/2020 Page 18
"7. The Mission in its latest communication dated 16th October,
2019 at FR, has recommended for fresh tendering upon one year of
completion. In the new RFP they intend to have services through
one centre only, namely, Dubai because PBSK Sharjah has not
taken off after more than one year of its existence as expected with
a small number of daily footfall. They intend to go for fresh
tendering process of PBSK after receipt of revised RFP duly
vetted. Also the PBSK Sharjah is offering limited services
compared to PBSK Dubai (only walk-ins).
8. But the period of approval for hiring services for the PBSKs
has been completed on 31.10.2019. The Mission will send more
detailed justifications for closing PBSK Sharjah."
(Emphasis supplied)
32. In a subsequent Note, further justification given by the
Ambassador in UAE, was noted as under:
"4. A message from our Ambassador in UAE at FR has brought
out the reasons why the centre at Sharjah should be closed down,
after more than an year of experience by our mission there, and
how a one robust centre in Dubai, close to the consulate would
serve the requirements of Indian community better, both in Dubai
and Sharjah. Reasons for closure of Sharjah Centre are as follows:
(a) PBSK Dubai has facility of walkins from 3 pm to 7
pm on all weekdays while PBSK Sharjah has walkins
from 8 am to 8 pm on all weekdays.
(b) PBSK Dubai walkins data shows that around 2
walkins are served per hour per day by the centre
whereas PBSK Sharjah walkins data shows that
around 1 walkin is served per hour per day by the
centre.
(c) PBSK Dubai and PBSK Sharjah both provide legal,
financial and personal counselling by experts.
WP(C)No.2662/2020 Page 19
(d) PBSK Dubai manages 24X7 toll free helpline
providing assistance in five languages, verifies the
UAE work visa and genuineness of job offers,
conducts 4-5 awareness campaigns in labour camps
on monthly basis, handles website, twitter handle
and facebook of PBSK, emails and SMSs of Indian
Nationals in distress, liaison with Embassy and
consulate on various issues related to Indian
nationals in distress. PBSK Sharjah does not provide
these services.
(e) The time taken to reach CGI Dubai from PBSK Dubai
and PBSK Sharjah is same (25 mins.). The Mission has
suggested to divert traffic of PBSK Sharjah to PBSK
Dubai to ensure more optimal utilization of resources
mainly funding through ICWF. "
33. The above File Notings shows that the decision to discontinue the
operations of PBSK at Sharjah has been taken after due deliberation and
for reasons which cannot be termed as arbitrary or whimsical. In any
case, these would be matters of Policy and unless found to be perverse,
this Court would not interfere in such matters. In Villianur Iyarkkai
Padukappu Maiyam v. Union of India and ors., (2009) 7 SCC 561, the
Supreme Court held that:
"167. In the matter of policy decision and economic tests the scope
of judicial review is very limited. Unless the decision is shown to
be contrary to any statutory provision or the Constitution, the
Court would not interfere with an economic decision taken by the
State. The court cannot examine the relative merits of different
economic policies and cannot strike down the same merely on
ground that another policy would have been fairer and better.
WP(C)No.2662/2020 Page 20
168. In a democracy, it is the prerogative of each elected
Government to follow its own policy. Often a change in
Government may result in the shift in focus or change in economic
policies. Any such change may result in adversely affecting some
vested interests. Unless any illegality is committed in the execution
of the policy or the same is contrary to law or malafide, a decision
bringing about change cannot per se be interfered with by the
court.
169. It is neither within the domain of the courts nor the scope of
judicial review to embark upon an enquiry as to whether a
particular public policy is wise or whether better public policy can
be evolved. Nor are the courts inclined to strike down a policy at
the behest of a petitioner merely because it has been urged that a
different policy would have been fairer or wiser or more scientific
or more logical. Wisdom and advisability of economic policy are
ordinarily not amenable to judicial review. In matters relating to
economic issues the Government has, while taking a decision, right
to "trial and error" as long as both trial and error are bona fide
and within the limits of the authority. For testing the correctness of
a policy, the appropriate forum is Parliament and not the courts.
170. Normally, there is always a presumption that the
Governmental action is reasonable and in public interest and it is
for the party challenging its validity to show that it is wanting in
reasonableness or is not informed with public interest. This burden
is a heavy one and it has to be discharged to the satisfaction of the
court by proper and adequate material. The court cannot lightly
assume that the action taken by the Government is unreasonable or
against public interest because there are large number of
considerations, which necessarily weigh with the Government in
taking an action."
WP(C)No.2662/2020 Page 21
34. As far as the payment for the extended period is concerned, the
respondent by its e-mail dated 06.05.2020 had informed the petitioner as
under:
"As conveyed in the said email at point b. With regard to PBSK
Dubai, we will be able to pay for its running from May-July 2020
in the same proportion as your running cost of PBSK Dubai to
your overall cost of running PBSK Dubai and Sharjah prior to
November 2018 i.e. 8:5. The figure in this regard will be approx.
AED 67,700(110,000*8/13) in the 8:5 ratio of the monthly average
bill of PBSK since November 2018 of approx. AED 1,10,000."
35. Clearly, it was an Offer made by the respondent to the petitioner
for continuation of the PBSK at Dubai at the given rates. The petitioner
has challenged the same by way of an application before this Court.
36. In BSNL And Anr. v. BPL Mobile Cellular Limited And Others
(2008) 13 SCC 597, the Supreme Court has held that the Government or
Governmental Authority cannot vary the terms of Contract unilaterally.
Even if the respondent had decided to shut down PBSK at Sharjah, the
rate payable to the petitioner were matters of negotiation between the
parties. The respondent could not have unilaterally thrust a rate on the
petitioner without any negotiations. As noted hereinabove, the petitioner
by filing the application, has not accepted the said rate.
37. In view thereof, the services provided by the petitioner during the
pendency of the present application would be covered by Section 70 of
the Indian Contract Act, 1872. The fair compensation for the same,
however, cannot be determined by this Court in the present proceedings
WP(C)No.2662/2020 Page 22
inasmuch as it would again involve recording of evidence, with
examination and cross examination of witnesses.
38. In view of the above, I find no merit in the present petition. The
same is dismissed, however, granting liberty to the petitioner to pursue its
claims, in accordance with law. There shall be no order as to costs.
NAVIN CHAWLA, J
September 09, 2020
RN
WP(C)No.2662/2020 Page 23
