Delhi High Court
M/S Neptune India Ltd vs New Delhi Municipal Council on 23 December, 2021
$~30
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 23.12.2021
+ W.P.(C) 3061/2021& CM APPLS. 9263/2021, 28894/2021
M/S NEPTUNE INDIA LTD ..... Petitioner
versus
NEW DELHI MUNICIPAL COUNCIL .....Respondent
Advocates who appeared in this case:
For the Petitioner: Mr. Sudhanshu Batra, Senior Advocate with Mr. Rishi
Manchanda, Mr. Siddharth Kaushik, Mr. Siddharth Mullick
and Ms. Bharti, Advocates.
For the Respondent: Ms. Kanika Agnihotri, Advocate.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner seeks a restraint on the respondent from terminating
agreement dated 09.08.2017 for not furnishing the performance
guarantee. Further petitioner seeks a restraint on the respondent from
recovering the license fee for the month June-July, 2020 and a
reduced license fee for the period August, 2020 to December, 2020
and to adjust the encashed performance guarantees against the
outstanding amount payable.
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 1
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
2. Petitioner had submitted a bid for being appointed as a
concessionaire for design, development, implementation, operation
and maintenance of smart parking solution for on street, off street and
indoor parking spaces in NDMC area on Public Private Partnership
model. On 10.07.2017 letter of acceptance of tender was issued to the
petitioner. As per the petitioner there were certain shortages of
equivalent car space allotted to the petitioner than what was tendered.
3. As per the terms of the agreement petitioner had to pay 61% of
the gross revenue or Rs.75 lakhs per month whichever is higher which
was liable to be increased periodically and accordingly on 01.07.2019
it became Rs.76,85,985/-.
4. Disputes have arisen between the parties. As per the
respondent, petitioner has short paid the license fee and has been
irregular in the payments of the monthly license fee.
5. The case of the petitioner is that during the period of lockdown
some concession should have been granted to the petitioner in terms
of the Force majeure clause of the contract.
6. Since the petitioner allegedly delayed the payments and further
delayed performing his obligations under the contract, respondents
invoked the performance guarantee. The invocation is disputed by the
petitioner inter alia on the ground that they have counter claims.
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 2
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
7. It may be noticed that the contract has not been terminated till
date and petitioner is still servicing the contract.
8. It is contended on behalf of the respondents, that though they
are entitled to terminate the contract, as the contract has not yet been
terminated, petitioner is liable to replenish the performance bank
guarantees and continue to pay the regular license fee in accordance
with the terms of the contract.
9. Learned counsel appearing for the respondent submits that since
the present petition was pending and in deference to the Court they
did not exercise the right to terminate the contract and have filed an
application (CM APPL.32231/2021) seeking permission of the Court
to exercise the right of termination.
10. On 08.03.2021, when the petition was listed before this Court
for the first time, a statement was made on behalf of the petitioner that
Petitioner shall, within a period of three months, replenish the
performance bank guarantees in the sum of Rs.4.054 crores that had
been invoked by the respondents and shall also continue to pay the
regular license fee as per the contract.
11. On 31.08.2021 a submission was made by the counsel for the
respondent that despite three months' time being granted to the
petitioner and even till that date, the performance bank guarantees
have not been replenished and the regular license fee was also not
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 3
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
paid.
12. Thereafter respondents filed the application (CM
APPL.32231/2021) seeking leave of the Court to terminate the
contract on account of petitioner's default in honoring the statement
given to this Court on 08.03.2021.
13. On 10.11.2021, once again it was pointed out by learned
counsel for the respondent that the statement given to this Court on
08.03.2021, that petitioner shall replenish the bank guarantees in the
sum of Rs.4.054 crores and continue to pay the regular license fee,
had still not been complied with.
14. On 10.11.2021, petitioner was given one last opportunity to
comply with the statement before the next date of hearing i.e.
30.11.2021 failing which it was ordered that respondent would be at
liberty to proceed in accordance with law.
15. Even on 30.11.2021 the statement was not complied with,
however, petitioner came with certain proposals to amicably resolve
the disputes.
16. Thereafter, the petition was taken up on 01.12.2021,
09.12.2021, 14.12.2021 and 22.12.2021. On each of the said dates it
was the stand of the petitioner that they had been approaching and
having meetings with the officers of the respondent for an amicable
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 4
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
resolution.
17. Even yesterday, when the matter was taken up a statement was
made by learned senior counsel, under instructions, that the
representative of the petitioner was in the office of the respondents for
a meeting. Accordingly, the matter was adjourned to today.
18. Learned counsel appearing for the respondent disputes that
regular meetings took place between the representative of the
petitioner and the respondent as alleged. She submits that a meeting
had taken place last week. But, as per her instructions, no meeting
took place yesterday and the statement that the representative of the
petitioner was in the office of the respondent is incorrect.
19. Learned counsel for the respondent submits that no remission
has been granted to any contractor during the period of lockdown. She
further submits that in view of the defaults of the Petitioner, petitioner
is even otherwise not entitled to any remission.
20. Be that as it may, petitioner had categorically assured on
08.03.2021 that petitioner shall replenish the encashed performance
bank guarantees in the sum of Rs.4.054 crores and continue to pay the
regular license fee as per the contract. A period of three months was
granted to fulfill the statement, which expired on 08.06.2021.
However, the statement given to the Court was not honored.
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 5
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
21. Thereafter when on 31.08.2021 the default was once again
brought to the notice of the Court, petitioner again failed to comply
with the statement. On 10.11.2021, despite petitioner breach in breach
of the statement twice over, further opportunity was granted to the
petitioner to replenish the bank guarantee within 20 days but even that
order was not complied with.
22. Admittedly even till date neither the performance bank
guarantee has been honoured nor, as per the respondent, petitioner has
paid the regular license fee in accordance with the terms of the
contract.
23. This is disputed by learned senior counsel for the petitioner
who submits that for the month of November, 2021, Petitioner has
paid Rs. 76,85,985/- which was the higher of the two i.e. 61% of the
gross collection or minimum reserve amount per month.
24. Learned senior counsel for the petitioner without prejudice
submits that today petitioner is willing to replenish the bank guarantee
of Rs.4.054 crores and pay a sum of Rs.5.48 crores as allegedly
claimed by the respondents towards the license fee.
25. This Court is unable to accept the offer of the petitioner, as it is
too late in the day to make such an offer.
26. As noticed hereinabove repeatedly time was granted on
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 6
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
assurances given to the Court but the assurances given to the Court
were not honored. No further indulgence can be granted to the
petitioner.
27. Coming to the merits of the petition, petitioner was granted a
license to design, develop, implement, operate and maintain smart
parking solution.
28. Section 14 of the Specific Relief Act, 1963 stipulates that where
compensation in terms of money is an adequate relief for non
performance of a contract, court would not direct specific
performance of the contract.
29. In case ultimately it is found that termination was bad in law or
contrary to the terms of the agreement or to any understanding
between the parties or for any other reason, the remedy of the
petitioner would be to seek compensation for wrongful termination
and not a claim for specific performance of the agreement.
Accordingly, no injunction can be issued preventing a party from
terminating a license.1
30. Further it may be noticed that several disputed questions of fact
are being raised in the petition inter alia with regard to the
applicability of the Force majeure clause or the invocation thereof by
1 M/s. Sai Associates vs. Delhi Wakf Board, (2017) 164 DRJ 344
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 7
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
the petitioner or the liability to pay contractual amount and remission
from payment of license fee on account of the lockdown.
31. As noticed above, the subject contract also provides for an
alternative dispute resolution mechanism by way of Arbitration.
32. In view of the above, I am not inclined to entertain the petition
any further and hold that the petition is not maintainable and is
accordingly dismissed.
33. It is however, clarified that this Court is neither considering nor
commenting on the merits of the case of either parties. All rights and
contentions of parties are reserved.
CM APPL. 32231/2021 (for liberty to terminate the contract)
34. Since the writ petition has been dismissed, no further directions
are required to be passed in the application.
35. Application is disposed of.
SANJEEV SACHDEVA, J.
DECEMBER 23, 2021
rk
Signature Not Verified
W.P(C) 3061/2021 Digitally Signed 8
By:JUSTICE SANJEEV
Digital Signed By:KUNAL SACHDEVA
MAGGU Signing Date:23.12.2021
Signing Date:24.12.2021 11:00:13 22:17
This file is digitally signed by PS
to HMJ Sanjeev Sachdeva.
