M/S Shakti Developers Private ... vs The Commissioner
2022 Latest Caselaw 9020 Kant

                            1




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 17TH DAY OF JUNE, 2022

                         BEFORE

           THE HON'BLE MR.JUSTICE R. NATARAJ

           W.P. NO.3230 OF 2020 (LB - BMP)

BETWEEN:

M/S. SHAKTI DEVELOPERS
PRIVATE LIMITED.,
NO.35/16, 2ND FLOOR,
LANGFORD ROAD CROSS,
BANGALORE - 560 025.
                                            ...PETITIONER

(BY SRI.K.N.PHANINDRA, SENIOR ADVOCATE A/W
    SRI.K.VIJAYA KUMAR, ADVOCATE)


AND:

1.     THE COMMISSIONER
       BRUHAT BENGALURU MAHANAGARA PALIKE,
       HUDSON CIRCLE, K.R.ROAD,
       BENGALURU - 560 001.

2.     THE EXECUTIVE ENGINEER (SPL),
       SPECIAL DIVISION (RI) TEC SECTION,
       ROOM NO.9, ANNEX-3,
       N.R.SQUARE,
       BENGALURU MAHANAGARA PALIKE,
       BENGALURU - 560 002.

3.     THE BRANCH MANAGER,
       INDIAN OVERSEAS BANK,
       EAST END MAIN ROAD,
       NO.42/166, EAST END MAIN ROAD,
                            2




     9TH BLOCK, JAYANAGAR,
     BANGALORE - 560 069.
                                             ...RESPONDENTS

(BY SRI.ARAVIND M NEGLUR, ADVOCATE FOR R1 AND R2;
    NOTICE TO R3 IS DISPENSED WITH VIDE ORDER
    DATED 15.03.2022)

     THIS W.P. IS FILED UNDER ARTICLE 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
ORDER DATED 23.12.2019 PASSED BY THE COMPETENT
AUTHORITY OF THE R-2 AND ORDER DATED 07.01.2020
ISSUED BY THE R-2 IS PRODUCED AS VIDE ANNEXURE - A AND
B AND ETC.,

      THIS W.P. COMING ON FOR PRELIMINARY HEARING IN
'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

                         ORDER

The petitioner has sought for a writ in the nature of

certiorari to quash an order dated 23.12.2019 passed by

the respondent No.2 and the order dated 07.01.2020

passed by the respondent No.2, by which, the entrustment

of development of a skywalk was cancelled.

2. The petitioner claims that respondent No.1

invited bids for installation of skywalk at Satellite Bus

Stand, Bengaluru-Mysuru Road from Satellite Bus Stand to

Ramani Timber Mark on Design, Build, Finance, Operate

and Transfer basis for a period of 30 years, in terms of a

tender notification dated 20.12.2016. The petitioner was

the successful bidder whose bid of Rs.1,39,165/- was

accepted on 29.06.2017 by the council of the respondent

No.1. Later, an agreement was executed in favour of the

petitioner authorizing him to operate the facility for a

period of 30 years. The petitioner is stated to have

furnished a bank guarantee for a sum of Rs.25,00,000/-,

which is renewed from time to time which was to be

released after completion of the skywalk as per the design

submitted. The agreement provided that the installation of

the skywalk will be completed within 270 days from the

date of agreement. The respondent No.2 issued a work

order on 24.08.2017 which stipulated a period of 9 months

for completion. The petitioner submitted a detailed plan to

the respondent No.2 for approval on 05.10.2017. The

respondent No.2 approved the plan on 21.07.2018 after a

lapse of 11 months, by which time, the petitioner had

already incurred substantial sums of money towards

structural design and drawing of the skywalk etc. The

petitioner is stated to have availed the services of a Geo-

Technical Team for investigation of soil strength to bear

the weight of the skywalk. The petitioner is stated to have

procured the vertical lifts and other paraphernalia for the

installation of the skywalk. The petitioner has also obtained

an insurance policy which was valid from 12.07.2018 to

11.11.2018. The petitioner claims that the ground

breaking ceremony for the installation of the skywalk was

held on 16.03.2018. When the work was under progress,

the Divisional Control of KSRTC addressed a

communication to the respondent No.1 raising objections

against installing the skywalk and requested the

respondent No.1 to install the skywalk at a different spot.

The respondent No.2 addressed a letter dated 04.09.2018

to the Assistant Commissioner of Police Traffic, Bengaluru

informing him that the work of installation of the skywalk

within the time specified cannot be achieved in view of the

white topping work of Mysuru Road. It also informed the

Police Officer that the KSRTC had permitted the skywalk to

be installed adjacent to a subway of BMTC entrance. This

was followed by a 'No Objection Certificate' issued by the

Commissioner of Police on 11.10.2018 in favour of the

petitioner to start construction. On 25.09.2019,

respondent No.2 issued a fresh work order in favour of the

petitioner to put up the skywalk at the fresh spot identified

and gave 4-5 months to complete the project. After the

petitioner completed all the formalities and ventured to put

up the skywalk, he realized that a major sewage water

channel ran below the TT Room of KSRTC. In view of this,

the officials of the KSRTC agreed to give space inside the

bus terminal and parking area and requested to change

the staircase positions from dog legs to straight legs

towards the landing towards the KSRTC building. After final

marking, the drawings were modified, which was informed

to the Chief Engineer of the respondent No.1 in terms of

the letter dated 28.11.2019. The petitioner claims that it

had undertaken the work on a war footing with a mission

to complete it within 70 days. However, the respondent

No.2 did not approve the plan in respect of the compound

wall to be constructed. When things stood thus, on

22.11.2019 and 21.12.2019, the KSRTC issued a 'No

Objection Certificate' to the petitioner to shift the Police

Chowki and Traffic Controller Room temporarily with a

condition to rebuild the same after completion of skywalk

work. When the installation of the work was under

progress, the respondent No.2 issued an order dated

23.12.2019 that the Competent Authority had directed to

cancel the agreement executed in favour of the petitioner

and forfeited the bank guarantee furnished by the

petitioner for not executing the work in time. Following

this, an order dated 07.01.2020 was passed canceling the

agreement and forfeiting the bank guarantee.

3. Being aggrieved by the aforesaid, the

petitioner is before this Court.

4. Learned Senior Counsel appearing for the

petitioner contended that once the agreement was entered

into, a concluded contract resulted and the respondents

could not have unilaterally terminated the contract.

Learned Senior Counsel further submitted that the

documents placed on record indicated that it was the

respondent No.1 and other state agencies which placed

obstacles in the way of executing the contract and

therefore, the petitioner cannot be held responsible for the

delay. He submitted that since the delay is attributable to

the respondents, the contract entrusted to the petitioner

cannot be terminated.

5. On the other hand, learned counsel for the

respondents submitted that the petitioner was required to

execute the work within 4-5 months from 25.09.2019 but

the petitioner did not take any effective steps in that

regard and therefore, the respondents were within their

right to rescind the contract as per the agreement. The

learned counsel relied upon the judgment of the Hon'ble

Apex Court in the case of TATA CELLULAR VS. UNION

OF INDIA reported in (1994) 6 SCC 651 to contend that

the Courts cannot judicially review commercial decisions

taken by the respondents.

6. Learned Senior Counsel for the petitioner on

the other hand relied upon the judgment of the Hon'ble

Apex Court in the case of ABL INTERNATIONAL LTD.

AND ANOTHER VS. EXPORT CREDIT GUARANTEE

CORPORATION OF INDIA LTD. AND OTHERS. reported

in (2004) 3 SCC 553 and contended that the Courts

under Articles 226 of the Constitution of India are not

handicapped to deal with the situation where a State acts

beyond the scope of the contract.

7. I have considered the contentions raised by

the learned counsel for the parties.

8. A perusal of the letter dated 25.09.2019

addressed by the respondent No.2 clearly indicates that

the respondent No.2 had shifted the location of the

skywalk from what was agreed under the agreement dated

24.08.2017. The respondents had substituted the period of

completion of the skywalk by 4-5 months from

25.09.2019. It is evident that even after 25.09.2019, the

petitioner was confronted with issues that were raised by

the KSRTC, which is evident from the letter dated

21.12.2019. Therefore, it is clear that the delay in

establishment of the skywalk was not attributable to the

petitioner but was solely attributable to the respondents

and other state agencies. The respondents ought to have

foreseen these issues before concluding to invite tender.

The petitioner after having taken steps by furnishing a

bank guarantee for a sum of Rs.25,00,000/- and investing

money for procuring the vertical lifts etc. cannot be put to

a disadvantage at the mere whim of the respondents. A

perusal of Annexure-A dated 23.12.2019 indicates that

there was no conscious decision taken by the respondents

before terming that the petitioner was responsible for the

delay in implementation of skywalk.

9. The respondent No.2 has claimed that the time

fixed for the completion of skywalk was 16.12.2019, which

is belied by the letter dated 25.09.2019. Even otherwise, it

is imperceivable for any person to put up a skywalk with so

many State agencies revolting against the establishment of

skywalk. It is relevant to note that the petitioner was

responsible to put up the skywalk based on design, build,

finance, operate and transfer basis for a period of 30

years. Therefore, the respondents were not affected

commercially in any way and the delay in establishment of

the skywalk would only eat into the profits of the

petitioner. A perusal of Annexure-D which is an order

passed by the respondent No.2 indicates that there was no

commercial call taken by the respondents to terminate the

contract. Hence, the reliance placed by the learned counsel

for the respondent on the judgment in TATA CELLULAR

(Supra). On the contrary, it was based on a direction

issued by the Commissioner of the respondent No.1 to

cancel the contract for non-implementation of the project

within time. The respondents have blissfully ignored the

problems faced by the petitioner in establishing the

skywalk and have cancelled the contract at their mere

whims and fancies. The State and its agencies are bound

to conduct its activities in a non-arbitrary manner and

taking into account the difficulties faced by the petitioner

in implementation of the project. It is evident from the

record that the petitioner was not at fault in not executing

the contract within time and it was State agencies who

were entirely responsible for delaying the project.

10. In that view of the matter, the respondents are

bound to permit the petitioner to execute the project

within a time framed that may be fixed. Therefore, this

writ petition is allowed. The impugned orders passed by

the respondent No.2 dated 23.12.2019 and 07.01.2020

are hereby quashed. The respondent No.3 is directed to

permit the petitioner to install the skywalk as per the letter

dated 25.09.2019 (Annexure-T) within a period of four

months from the date of receipt of the certified copy of this

order. If the petitioner fails to implement the project within

the stipulated time, the respondents are at liberty to take

steps to terminate the contract without any further notice

to the petitioner. The bank guarantee furnished by the

petitioner shall stand restored and shall be released after

the petitioner completes the installation of the skywalk in

all respects. In order to expedite the installation, the

following directions are issued:

(i) That the petitioner shall install the skywalk at

the location shown in the letter dated 04.09.2018 issued

by the respondent.

(ii) That the work of installation shall not be

hampered/obstructed/objected by any agency of the State.

(iii) That the jurisdictional Police shall take proper,

effective and immediate steps to stop any

nuisance/obstruction by any person whomsoever against

the installation of the skywalk.

(iv) The skywalk shall be installed as per the

design furnished and approved by the respondent No.2.

The petitioner shall ensure that the vertical lifts shall

always be functional 24 X 7 X 365 days.

(v) The respondent No.2 shall conduct periodical

checks to assess the safety of the skywalk and the side

bars and whether the vertical lifts are service regularly.

Sd/-

JUDGE NR/-