Delhi High Court
Muskan Dental Care vs Director-Medical-Delhi & Ors. on 12 January, 2022
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 12.01.2022
+ W.P.(C) 2286/2021
MUSKAN DENTAL CARE ..... Petitioner
Through: Mr. Tanmaya Mehta, Mr. Vinod
Kumar Kaushik, Advs.
versus
DIRECTOR-MEDICAL-DELHI & ORS. ..... Respondents
Through: Mr. Vikram Jetly, CGSC for R-4/
UOI, Mr. Yakesh Anand, Mr. Akshay
Thakur, Advs. for R-1 to 3 (ESIC)
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MR. JUSTICE JASMEET SINGH
JUDGMENT
: VIPIN SANGHI, J (ORAL)
1. The petitioner has preferred the present writ petition to seek the
setting aside of the order dated 07.10.2020 issued by respondent No.3,
cancelling the E-Tender No. 111-V/17/11/Dental/ 2016/ Med-1, wherein the
petitioner had been found to be the successful bidder.
2. The brief background facts are that in response to the tender invited
by the respondent Nos. 1, 2 and 3 for setting up Single Dental Chairs at 7
dispensaries, the petitioner's bid was accepted and the petitioner was issued
the communication dated 30.01.2017, asking the petitioner to deposit
performance guarantee amount of Rs. 7 lakhs i.e. 1 lakh per dispensary for 7
locations within 15 days.
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3. The petitioner on 03.02.2017 conveyed its acceptance and stated that
it would deposit the performance guarantee amount of Rs. 7 lakhs within 15
days of the receipt of the respondent's aforesaid communication.
4. On 13.02.2017, the petitioner then submitted the performance
guarantee of Rs. 7 lakhs.
5. On 16.02.2017, the respondents required the petitioner to make an
upfront premium payment of Rs. 2.53 crores before signing of the MoU.
6. On 17.02.2017 i.e. the very next day, the petitioner was
communicated that the Director General of the respondent ESIC had put on
hold the establishment of PPP Dental Care Services in 7 ESIC dispensaries
in Delhi till further orders. This communication was issued by the
respondent, since there were allegations made by the unsuccessful bidders,
of irregularities in the matter of award of the tender/letter of intent to the
petitioner.
7. On 03.03.2017, competent authority of the ESIC withdrew the order
to put on hold the services in question, which were to be provided by the
petitioner on PPP Model. The petitioner was again required to make a
deposit of Rs. 2.53 crores towards upfront premium vide the said e-mail
dated 03.03.2017.
8. The petitioner sent a communication on 20.03.2017 requiring the
respondent to allot space for establishment of the Single Chair Dental setup
within the dispensary premises.
9. While the position stood thus, a civil suit was preferred being CS No.
311/2017 by one of the unsuccessful bidders, wherein the Civil Court
directed maintenance of status quo regarding the subject matter of the suit-
which was the tender/ contract in question.
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10. With the injunction coming on as aforesaid, the matter could not
proceed. The respondent communicated the said order of status quo to the
petitioner on 26.04.2017. Eventually, the stay order granted by the Civil
Court lapsed on 27.05.2019 i.e. after nearly 25 months of it being granted
with the dismissal of the suit in default. In the meantime, the respondent
ESIC had preferred a Civil Appeal against the grant of the order of status
quo before the Court of the District Judge, being RCA No. 86/2017.
11. On 01.06.2019, the petitioner sent a communication that the petitioner
was willing to commence the work under the contract. Petitioner states that
since there was no response from the respondent ESIC, the petitioner issued
a legal notice to the respondents on 26.07.2019 stating that the petitioner had
suffered on account of the delay, and the petitioner sought cancellation of
the letter of intent and refund of the amount of Rs. 7 lakhs deposited by it.
12. The petitioner points out that even when this communication was
issued, the stand of the respondent was that no decision could be taken on
the petitioner's request. Mr. Mehta submits that the stand taken by the
respondent was that till the said miscellaneous appeal RCA No. 86/2017 is
disposed of, the respondent ESIC could not proceed in the matter. He
submits that this stand was completely misconceived inasmuch, as, with the
dismissal in default of the suit itself, the said appeal also became
infructuous.
13. In any event, on 31.10.2019 the petitioner withdrew its request for
cancellation of the letter of intent, before its acceptance.
14. The aforesaid RCA No. 86/2017 was also withdrawn on 01.02.2020.
15. In this background, the submission of Mr. Mehta is that for no fault of
the petitioner, the petitioner has been deprived of the right to work the
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contract. He submits that the reason assigned by the respondent for the said
cancellation is not adequately disclosed in the impugned communication
dated 07.10.2020. However, the reasons were communicated by the
respondent in their e-mail communication dated 09.04.2020, wherein the
respondent stated that the tender related to Single Dental Chair Unit was
valid for the period from March 2017 to March 2020 (3 years). Mr. Mehta
submits that when the said e-mail was issued, requiring the petitioner to
collect the amount of Rs. 7 lakhs deposited by it towards performance
guarantee, the petitioner had repeatedly asserted its right to proceed with the
contract.
16. Mr. Mehta has drawn our attention to Clause 4.1 of the RFP, which
stipulates that the lock-in period under the RFP is 5 years. He submits that
the reason for cancellation is therefore, ex-facie wrong. He further submits
that another reason now taken by the respondent is that the petitioner did not
deposit the premium amount of Rs. 2.53 crores. In this regard, he submits
that soon after making the demand of Rs. 2.53 crores, respondent had itself
put the process on hold, and thereafter the injunction intervened. He submits
that the premium amount had to be submitted simultaneously with the
execution of the MoU. Since no MoU was executed, the petitioner was not
obliged to pay the said amount earlier.
17. In support of his submission that the petitioner should be awarded the
contract and should be allowed to work for the same for a period of 5 years
now, he has placed reliance to the judgment of the Supreme Court in Beg
Raj Singh vs. State of U.P., [(2003) 1 SSC 726] and, in particular, Paras 7
and 8 thereof wherein the Supreme Court observed as follows:
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"7. Having heard the learned counsel for the petitioner, as also
the learned counsel for the State and the private respondent, we
are satisfied that the petition deserves to be allowed. The
ordinary rule of litigation is that the rights of the parties stand
crystallized on the date of commencement of litigation and the
right to relief should be decided by reference to the date on
which the petitioner entered the portals of the court. A petitioner,
though entitled to relief in law, may yet be denied relief in equity
because of subsequent or intervening events i.e. the events
between the commencement of litigation and the date of decision.
The relief to which the petitioner is held entitled may have been
rendered redundant by lapse of time or may have been rendered
incapable of being granted by change in law. There may be other
circumstances which render it inequitable to grant the petitioner
any relief over the respondents because of the balance tilting
against the petitioner on weighing inequities pitted against
equities on the date of judgment. Third-party interests may have
been created or allowing relief to the claimant may result in
unjust enrichment on account of events happening in-between.
Else the relief may not be denied solely on account of time lost in
prosecuting proceedings in judicial or quasi-judicial forum and
for no fault of the petitioner. A plaintiff or petitioner having been
found entitled to a right to relief, the court would as an ordinary
rule try to place the successful party in the same position in
which he would have been if the wrong complained against
would not have been done to him. The present one is such a case.
The delay in final decision cannot, in any manner, be attributed
to the appellant. No auction has taken place. No third-party
interest has been created. The sand mine has remained
unoperated for the period for which the period of operation falls
short of three years. The operation had to be stopped because of
the order of the State Government intervening which order has
been found unsustainable in accordance with stipulations
contained in the mining lease consistently with GO issued by the
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State of Uttar Pradesh. Merely because a little higher revenue
can be earned by the State Government that cannot be a ground
for not enforcing the obligation of the State Government which it
has incurred in accordance with its own policy decision.
8. For the foregoing reasons, the appeal is allowed with costs.
The impugned order of the High Court, dismissing the petition
filed by the appellant, is set aside. Instead, it is directed that the
petitioner shall be allowed to operate the mine for a full period
of three years subject to adjustment for the period for which he
has already operated. The appellant shall remain liable to pay
royalty and make other payments to the State Government in
accordance with the terms of the lease."
18. On the other hand, Mr. Anand, who appears for respondent Nos. 1,2
and 3 submits that even the period of 5 years starting February, 2017 is
nearly over, inasmuch as we are already on 12.01.2022. He submits that the
respondents may not be even interested in issuing a fresh tender of the same
nature, since the respondent has set up its own Dental College. He further
submits that with the passage of time, even if a fresh tender were to be
floated, the respondent is likely to get much higher rates as nearly 6 years
have elapsed, since the last tender was invited, when the petitioner had
participated. He further submits that the petitioner was also recalcitrant and
not very serious in following up the judicial proceedings. The petitioner had
left it entirely to ESIC to pursue the litigation and to have the stay vacated,
even though the petitioner was also a party. In its own interest, the petitioner
should have pursued the proceedings diligently to have the stay vacated,
which was not done. The legal notice issued by the petitioner on 26.07.2019,
was issued after nearly 2 months of the stay order passed by the Civil Court
getting dissolved on 27.05.2019. Even if the submission that the respondent
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ESIC should not have waited for disposal of RCA No. 86/2017 to proceed
with the execution of the contract were to be accepted, the petitioner should
have agitated the said aspect soon after the stay was vacated/ got dissolved
on 27.05.2019, and not waited for the withdrawal of the RCA aforesaid,
which happened on 01.02.2020. He further submits that the respondent
corporation works for the benefit of its registered beneficiaries, and has to
generate revenues to meet its objectives. Therefore, the decision in Beg Raj
Singh (Supra) would not be attracted. In fact, he places reliance on same
passage on which Mr. Mehta had placed reliance to submit that this not a fit
case where the Court should direct grant of contract to the petitioner at this
belated stage at the same rate, in respect of an entirely different/ later five
year period.
19. Having heard learned Counsels, we are of the view that in the present
facts and circumstances, the petitioner is not entitled to the revocation of the
cancellation at this belated stage, when the term of the contract - even if it is
taken as 5 years, is practically over. The rates that were bid by the petitioner
were so bid in the year, 2016, when the tender was invited. To now allow
the petitioner to work the contract for a period of 5 years on the same rates
which were quoted 6 years earlier, will not be fair to the respondent, even if
the respondent decided to avail of the services under the same PPP Model in
today's date. If the respondent ESIC were to invite a fresh tender, they are
likely to get enhanced rates on account of the general inflation which has
taken place over a span of 5 to 6 years. Evidently, the respondent ESIC
invited the tender in question to be able to provide dental services to its
beneficiaries, with the twin object of also generating revenue for itself, to
meet its objectives. That objective of the respondent would be jeopardised if
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they were required to grant the contract to the petitioner for a period of five
years now at the same rates at which the letter of intent was issued to the
petitioner. This distinction persuades us to distinguish the present case from
Beg Raj Singh (supra).
20. The petitioner could have approached the Court when the term of the
contract was not over. Petitioner could have actively followed up the civil
suit, wherein the order of status quo was passed. Petitioner could have also,
itself, appealed against the said order. The petitioner could have approached
the Court even after vacation/dissolution of the order dated 27.05.2019, in
case, it found the respondent/ESIC was unjustifiably waiting for the disposal
of RCA No. 86/2017. However, the petitioner did not do anything of that
sort. In fact, the petitioner itself proceeded to issue the legal notice dated
26.07.2019 seeking termination of the Letter of Intent. No doubt, the same
was subsequently withdrawn on 31.10.2019, but this all meant that there was
wastage of time.
21. Pertinently, the intention of the respondent not to proceed with the
tender became known to the petitioner, as early as on 09.04.2020. The
petitioner did not approach the Court then. In these circumstances, we are
not inclined to grant the relief as sought by the petitioner. The decision in
Beg Raj Singh (supra), in our view, does not come to the aid of the
petitioner.
22. We, therefore, dismiss this petition. At the same time, we leave it
open to the petitioner to avail of other civil remedies, in case the petitioner is
so advised. The respondent shall however proceed to refund the amount of
Rs. 7 lakhs deposited by the petitioner within the next 2 weeks. We make it
clear that the observations made by us, hereinabove, have been made for the
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purpose of deciding the present petition and shall not come in the way of
either party, in case the petitioner were to lay a civil claim.
VIPIN SANGHI, J
JASMEET SINGH, J
JANUARY 12, 2022/ dm
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