Madhya Pradesh High Court
M/S Sawariya Seth Advertisers Through ... vs Municipal Corporation, Gwalior on 22 May, 2024
Author: Milind Ramesh Phadke
Bench: Milind Ramesh Phadke
1
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE RAJENDRA KUMAR-IV
&
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
WRIT PETITION No. 11352 of 2024
BETWEEN:-
M/S SAWARIYA SETH ADVERTISERS THROUGH PROP.
RAJENDRA KUMAR SHARMA S/O SRI RAM SAHAI
SHARMA, AGED ABOUT 36 YEARS, R/O SHOP NO 06 3RD
FLOOR SAI APARTMENT OPPOSITE MARATHA
BOARDING JAYENDRAGANJ LASHKAR GWALIOR
(MADHYA PRADESH)
.....PETITIONER
(BY SHRI ARVIND DUDAWAT - SENIOR ADVOCATE WITH SHRI ARUN
DUDAWAT - ADVOCATE)
AND
1. MUNICIPAL CORPORATION, GWALIOR THROUGH
COMMISSIONER CITY CENTER GWALIOR MP
(MADHYA PRADESH)
2. ADDITIONAL COMMISSIONER, MUNICIPAL
CORPORATION R/O CITY CENTER GWALIOR
(MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI GAURAV MISHRA - ADVOCATE)
Reserved on : 01/05/2024
Pronounced on : 22/05/2024
--------------------------------------------------------------------------------
This petition coming on for hearing this day, Justice Milind Ramesh
Phadke passed the following:
ORDER
The present petitioner has approached this Court by invoking Article
226 of the Constitution of India challenging the order passed by Additional
Commissioner, Municipal Corporation, Gwalior i.e. Respondent No. 2 dated
24.04.2024, whereby the contract for construction, operation and maintenance
of unipoles and on BOT basis as detailed in RFP against advertisement rights
for a license period of 10 years was cancelled and the security deposit was
forfeited.
2. The aforesaid order has been assailed on the ground that the same was
passed in total derogation of principles of natural justice, as no show cause
notice for termination was issued nor any opportunity of hearing was provided
to the petitioner and though reply was submitted on behalf of petitioner but
without considering the contents of the reply the the impugned order had been
passed, which is per se illegal and unsustainable in the eyes of law, therefore,
deserves to be quashed.
3. Subject matter in brief is that State Government in exercise of powers
conferred under Section 68(1) read with Section 433 of the M.P. Municipal
Corporation Act, 1956 has framed rules for regulating the media advertisement
known as Madhya Pradesh Outdoor Advertisement Rules, 2017 (for brevity
here-in-after referred as "Rules of 2017").
4. A Request for Proposal (RFP) was issued by the
respondent/Corporation to allocate contracts for displaying advertisements on
unipolls within the various zones of the municipal limit known as
CONSTRUCTION OPERATION AND MAINTENANCE OF UNIPOLE
AND MAINTENANCE OF UNIPOLE AND ON BOTBASIS, grouped into
different packages leveled as package No. 1 to 8. The petitioner/firm submitted
tenders for respective packages and their offers were accepted by the
respondents/Corporation for packages no. 02, 03 and 07, allowing them to
display advertisements through unipoles at specified location outlined in their
allotment letters. These allotments obliged the tenderers to pay the precribed
license fee to the respondent/Corporation and adhered to the terms and
conditions of the alltment. Consequent to the allotment an agreement was
executed between the parties for all the three packages separately and in
pursuance to the terms and conditions of the agreement, the petitioner
deposited the security amount in the shap of FDR to the tune of Rs. 4,83,000/-
for package no. 02, Rs. 2,14,667/- for package no. 03 and Rs. 3,15,150/- for
package no.07. Thereafter work order for packages No. 2, 3 and 7 were issued
to the petitioner/firm vide work orders dated 19.07.2022 for package no.02,
10.04.2022 for package no.03 and 19.07.2022 for package no.07. Additionally,
the entire project of package no. 02, 03 and 07 were got insured by the
petitioner consolidately, and after the approval of the respondents the places of
installation of unipoles and after according satisfaction of location of said
unipoles were updated in software of the respondents and they started
regulating/collecting the tax over the same.
5. Though, precisely, each and every unipoles has duly been installed/erected
after obtaining due approval of the respondents, inspite of it, just because of
change of office bearer new directions were issued to the petitioner and
thereafter without issuing any show cause notice or providing any opportunity
of hearing on the basis of rectification notices, the contract of all the three
places were terminated vide common order, which is impugned herein dated
24.04.2024 and vide impugned order the security deposited lying with the
respondents was further directed to be forfeited. While referring to the judgment
of Hon'ble Apex Court in the matter of Kranti Associates Private Limited v.
Masood Ahmed Khan, (2010) 9 SCC 496; it was contended that the said
order passed by the respondent/Corporation is an unreasoned and non
speaking order and had been passed without considering the reply of the
petitioner, thus, the entire decision making process is vitiated and contrary to
law.
6. On 26.04.2024, notices were issued in the matter and Advocate Shri
Gaurav Mishra, who usually appears for the respondent/Corporation had taken
notices on their behalf and had sought time to seek instructions and to file reply
in the matter and accordingly matter was directed to be listed on 30.04.2024.
On 30.04.2024, learned counsel for the respondent had raised preliminary
objection that since the valuation of agreement which was under challenge, was
more than Rs. 50 Lacs, therefore, the matter is required to be heard by the
Division Bench of this Court. On the said objection, this Court directed the
office to verify the said aspect and list the matter before appropriate Bench on
01.05.2024. After verification, this matter has come up before this Court for its
hearing.
7. With the consent of parties, the matter is heard finally.
8. Learned counsel for the petitioner had vehemently argued that several
terms and clauses of the agreement, which were incorporated by the
respondent/Corporation were in their favour and to the prejudice of the
petitioner. Since the petitioner was in a weaker position, it could not raise any
objection at the time of entering into the said agreement and as several terms
and clauses are mostly arbitrary and unilateral in nature, leaving no scope of
either raising any objection or to make any bargain thereof are unreasonable,
unconscionable, unfair and injurious to the public performance and public
interest.
9. It was further contended that the foundation of the purported order of
termination is malafide and respondent/corporation could not have issued the
purported order of termination as per the clauses of agreement which in fact
were arbitrary, unfair and unreasonable and oppose to public policy. It was also
contended that such step is contrary to the Constitutional provisions and
guarantees enshrined in Chapter-III of the Constitution and in particular Article
14 of the Constitution of India.
10. It was also contended that the respondent/Corporation having taken
the advantage of superior position in view of Article 14 of the Constitution of
India cannot and could not have entered into any agreement with the citizens
having unfair, unreasonable and unconscionable clauses, which offend the
constitutional protections conferred upon the citizens under Chapter-III of the
Constitution of India rendering the purported order of termination to be struck
down in limit.
11. It was further contended that the order of termination being violative
of principles of natural justice and procedural justice, as no opportunity was
afforded to the petitioner of being heard before such step was taken, therefore,
is violative of principle of natural justice under Article 14 and 16 of the
Constitution. In the aforesaid regard, learned Senior counsel had placed reliance
in the matter of Om Prokash Pariwal and Anr. Vs. Union of India and Ors.
reported in AIR 1988 Calcutta 143.
12. On the point of violation of principle of natural justice, as no show
cause notice was issued to the petitioner nor any opportunity of hearing was
granted to it, learned Senior counsel has placed reliance in the matter of
Chandrakanta Bai Vs. State of M.P. & Ors. reported in ILR (2015) MP
1657; in the matter of State Bank of India and Ors. Vs. Rajesh Agarwal
and Ors. reported in (2023) 6 SCC 1. Learned Senior counsel had placed
reliance in the matter of Kranti Associates Private Limited v. Masood Ahmed
Khan (Supra). On the basis of aforesaid arguments, it was submitted that the
present petition deserves to be allowed and the impugned order of termination
is required to be quashed. Further, the matter deserves to be remitted back to
the respondent/Corporation and directions are required to be issued to the
respondent/Corporation not to interfere in the working of the petitioner pursuant
to the awarded contract.
13. Reply has been filed in the matter on behalf of
respondent/corporation and on the basis of the aforesaid reply, learned counsel
for the respondent/Corporation has primarily raised an objection that the instant
writ petition in wake of availability of efficacious alternative remedy is not
maintainable, as admittedly the sphere of outdoor advertisement is regulated by
Rules of 2017 and as per Rule 21 of the said Rules, there is a provision of filing
of an appeal against any decision of competent authority to the Appeal
Committee, as constitute under Section 403 of M.P. Municipal Act, 1996 and
since the very Appeal Committee is functioning, therefore, the present writ
petition deserves to be thrown out at its very threshold.
14. Further, an objection has been raised that very contention of the
counsel for the petitioner that no show cause notice has been issued to the
petitioner and no opportunity of hearing has been granted before passing of the
impugned order, is wholly misconceived and is factually incorrect, as during
certain inspection on 25.05.2023, when it was discovered that the petitioner/firm
had not set up unipoles at the designated location, by a notice dated 28.05.2023
the petitioner/firm was instructed not to install the unipoles without inspection
by the Deputy Commissioner (Advertisement Department) of Municipal
Corporation, Gwalior.
15. Thereafter, through letters dated 3.07.2023 and 26.07.2023, the
petitioner/firm was notified that they had breached the terms of the contract and
had violated the rules of the M.P. Outdoor Advertisement Media Rules 2017 by
installing unipoles on medians /dividers between roads and a list of these
unipoles was also provided with an instruction to the petitioner/firm to remove
them.
16. It was further submitted that in response to the aforesaid notices, the
petitioner/firm submitted its explanation on 14/09/2023 and in the said
explanation, it had not deny the fact that it had not established the unipoles on
dividers/medians, rather it was stated that the unipoles were established with the
permission of the authorities of the respondent/Corporation.
17. It was further submitted that as the explanation provided by the
petitioner/firm was found unsatisfactory, a letter dated 3/10/2023, was issued,
whereby the said explanation was rejected. The petitioner/firm was once again
instructed to remove the aforementioned unipoles within a period of three days,
though the said notice was served upon the petitioner, it failed to comply with
the directions, therefore, a subsequent notice dated 15.12.2023 was again issued
with same instructions.
18. It was further contended that in pursuance to the aforesaid notice,
only on 06.02.2024 the agent of the petitioner/firm appeared in person and
reiterated that unipoles will be removed within a period of three days but as
even after giving an undertaking the petitioner/firm failed to comply with the
earlier notices, another notice dated 15.02.2024 was issued by the
respondent/Corporation and subsequently an Inspection Committee was
constituted to assess the unipoles established on dividers/medians on
15.03.2024, which confirmed that they are in violation of terms of contract and
Rules of 2017 and immediately on 18.03.2024 a show cause notice was again
served upon the petitioner/firm to provide a response, if any permission had
been granted by any authority to install unipoles at locations other than those
specified in the contract.
19. It was further submitted that the petitioner/firm responded to the letter
dated 18.03.2024, on 22.03.2024, wherein it undertook to remove the
aforementioned unipoles, which were wrongly installed but since the said
unipoles were still not removed on 05.04.2024 another reminder letter was sent
to the petitioner to promptly remove the said unipoles, illegally installed but even
after that since the petitioner/firm did not comply with the directives, a letter
dated 08.04.2024 was issued and it was informed again that the petitioner/firm is
in utter violation of the Rules of 2017 and conditions numbered 20, 28, and 43
of the contract, thus, in a shape of final opportunity the petitioner/firm was
directed to remove the illegal unipoles within a period of three days and in the
event of failure to do so, the petitioner/firm shall be liable for imposition of
penalties and termination of the contract.
20. It was further contended that since the petitioner/firm had failed to
comply with the directions even after repeated notices, vide order dated
24.04.2024 the contract of the petitioner/firm was terminated, thus, it cannot be
said that no show cause notice or opportunity of hearing has been granted to
the petitioner.
21. Lastly, it was contended that so far as challenge to the various terms
and clauses of the agreement/contract is concerned, it is not required to be gone
into, as in the entire petition no ground challenging the said terms and clauses
had been raised by the petitioner/firm and as it is not a legal issue which could
be decided even in absence of any pleadings, thus, in that regard the
contentions of the counsel for the petitioner/firm has no force.
22. In contra, learned counsel for the respondent/Corporation while
placing reliance in the matter of Pimpri Chinchwad Municipal Corporation
and Ors. Vs. Gayatri Construction Company and Ors. reported in (2008)8
SCC 172 had contended that the contract between the parties if is under the
realm of private law, governed by the provisions of the Contract Act and the
dispute is relating to interpretation of the terms and conditions of such a
contract, cannot be agitated in a writ petition. Thus, it was submitted that the
present petition be dismissed.
23. Heard learned counsel for the parties and perused the record.
24. The controversy which had been raised by the petitioner is all around
the realm of a contract executed on 24.02.2023 between the petitioner and
Municipal Corporation, Gwalior and as per clause 14 of the terms and
conditions of the contract, it was incumbent upon the successful bidder to had
complied with the rules, as provided under the Madhya Pradesh Outdoor
Advertisement Media Rules, 2017 (in short 'the Rules of 2017') and it is alleged
while terminating the contract that petitioner had violated the provisions of rules
of 2017, in not setting up the unipoles in accordance with rule 28, it could be
said that the terms of the contract so far as it relates to establishment of
unipoles are concerned, would be governed by Rules of 2017 and as per rule 21
of the Rules of 2017, any owner/agency whose rights are affected by a decision
of a Competent Authority in terms of or for the purposes of these Rules, may
appeal against that decision to the "Appeal Committee" appointed by the
Competent Authority in terms of the Section 403 of the Madhya Pradesh
Municipal Corporation Act, 1956, by lodging an appeal, specifying the grounds
of appeal within thirty (30) days of the date on which he or she was notified of
that decision.
25. Admittedly, the present petition has been directed against an order
dated 24.04.2024 passed by the Additional Commissioner, Advertisement
Branch Nagar Nigam, Gwalior, whereby an agreement to secure due
performance of the contract for construction/operation and maintenance of
unipoles on BOT basis had been cancelled.
26. Since the factum of terms and conditions entered into between the
parties being governed by Rules of 2017 has not been disputed by either of the
parties, therefore, this Court finds that there is availability of an alternative
remedy to the petitioner to assail the order of termination of the agreement as
per Rule 21 to the Appeal Committee appointed by the competent authority in
terms of Section 403 of Madhya Pradesh Municipal Corporation Act, 1956 and
as it has been informed by the counsel for the respondent/Corporation that the
Appeal Committee is very much functioning, this Court finds that the alternative
remedy available to the petitioner is very much efficacious and since the said
remedy has not been availed by the petitioner and directly it had approached
this Court, this Court deems it fit to relegate the petitioner to the Appeal
Committee as provided under Rule 21 of Rules of 2017.
27. Since, this petition has been disposed of in the wake of availability of
efficacious alternate remedy and the merits of the matter had not been touched,
therefore, all the questions which have been raised before this Court shall be
open for the parties to raise before the appeal committee.
28. With the aforesaid, the present petition stands disposed of.
(RAJENDRA KUMAR-IV) (MILIND RAMESH PHADKE)
JUDGE JUDGE
neetu
NEETU
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SHASHANK
Date: 2024.05.22 17:06:21 -07'00'
