Madras High Court
Skyrams Outdoor Advertising India ... vs The Greater Chennai Corporation on 25 September, 2024
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
W.P.No.13739 of 2024 etc.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 22.08.2024
PRONOUNCED ON : 25.09.2024
CORAM:
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
W.P.Nos.13739, 13742, 14099 & 14104 of 2024
and W.M.P.Nos.14905, 14906, 14908, 14910,
15296, 15297, 15289 & 15291 of 2024
Skyrams Outdoor Advertising India Private Ltd.,
Rep by its authorised signatory N.Balaji,
No.MF-7, Cipet Girls Hostel, Main Road,
Thiru Vi. Ka. Industrial Estate,
Ekkatuthangal, Chennai – 600 032. ... Petitioner in W.P.Nos.
13739 & 13742 of 2024
Laqshya Media Ltd.,
Rep by its Authorised Signatory
B.Thameem,
Laqshya House,
Next to Rameshwar Temple,
Saraswathi Baug, Society Road,
Jaogeshwari (East),
Mumbai – 400 060. ... Petitioner in W.P.Nos.
14099 & 10104 of 2024
-Vs-
1. The Greater Chennai Corporation
Rep. by its Commissioner,
Greater Chennai Corporation,
Rippon Building,
Chennai – 600 003.
2. The Superintending Engineer,
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Page 1 of 12
W.P.No.13739 of 2024 etc.
Bus Route Roads Department,
Greater Chennai Corporation,
Amma Maligai, Rippon Building,
Chennai – 600 003. ...Respondents in all WPs.
Common Prayer: Writ Petitions filed under Article 226 of the
Constitution of India for issuance of a Writ of Certiorari, calling for the
records of the first respondent in tender dated 18.03.2021 bearing No.
RFP Ref.BRR.C.No. B4/0971/2024 and RFPRef.BRR.C.No.
B4/0972/2024 respectively, and quash the same.
In all W.Ps.
For Petitioners : Mr.P.J.Rishikesh
For Respondents : Mr.R.Ramanlal
Additional Advocate General
Assisted by Mr.D.B.R.Prabhu
Standing Counsel
COMMON ORDER
These writ petitions have been filed challenging the tender
notifications issued by the first respondent dated 18.03.2024, thereby
floated two tenders to renovate, operate, maintain and transfer of 363 &
402 modern bus shelters in Chennai Corporation area.
2. The first respondent originally floated tender for
construction, operation and maintenance of modern bus shelters in
Chennai Corporation Area on Build, Operate and Transfer (hereinafter
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W.P.No.13739 of 2024 etc.
after referred to as “BOT”) basis. It was divided into three packages and
each package has 50 bus shelter, thereby the first respondent desired to
replace the existing bus shelters and construct new bus shelters with eco-
friendly designed shelters. It was for a period of 15 years. As per the
tender conditions, the tenderer shall construct modern bus stops within a
period of three months and shall maintain it for 15 years. The tenderer
have right to collect revenues from advertisements out of each bus shelter
and shall remit a portion of the revenue to the respondents as annual
concession fee.
3. The petitioners were successfully awarded the contract at the
rate of Rs.1,85,300/- per bus shelter for one year. Thereafter, it was fixed
as Rs.1,85,800/-. On negotiation, the final quote was fixed at the rate of
Rs.2,11,580/- per bus shelter per year. Accordingly, the petitioners and
the respondents had entered into Letter of Acceptance and executed an
agreement on 31.12.2015. The petitioners have to pay the concession fee
of Rs.2,11,580/- per bus shelter per year which would increase at the rate
of 5% per year for the first ten years and 15% for the remaining five
years. Accordingly, the petitioners constructed bus shelters and are
paying concession fee every year. During Covid-19 pandemic situation,
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W.P.No.13739 of 2024 etc.
the petitioners sought for waiver of payment of concessionaire fees and
the same was not considered by the first respondent. Due to which, a
dispute arose between the petitioners and the first respondent and the
arbitration proceedings are under process with regard to payment of
concession fee.
4. While being so, the first respondent floated an another
tender notification on 23.02.2023, for renovation, operations and
maintenance of 844 bus shelters divided into 12 corridors. The contract
was awarded for the sum of Rs.11,843/- per month for 844 bus shelters.
It was lower than the price fixed by the first respondent insofar as the
petitioners as concession fee and as such the petitioners approached this
Court in W.P.No.7962 of 2023, challenging the tender notification dated
23.02.2023. However there were no bidders in the tender and as such it
was not acted upon and the writ petition was also disposed of. The
petitioners also filed application under Section 9 of the Arbitration and
Conciliation Act, to restore the economic balance under the contracts
executed between the petitioners and the first respondent dated
31.12.2015. It was also closed, since there was no bidders for the tender
notification dated 23.02.2023. While being so, the first respondent now
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W.P.No.13739 of 2024 etc.
floated the tender notification dated 18.03.2024 for renovation, operation,
maintenance and transfer of 402 & 363 modern bus shelters in two
packages. Challenging the said tender notifications the petitioners filed
the present writ petitions.
5. The learned counsel appearing for the petitioners submitted
that as per the tender documents, the concessionaire fee was fixed at
Rs.14.50 crores per year for each of the 402 & 363 bus shelters
respectively. It is paltry and lower than the rate which was fixed at the
petitioners in the year 2015. The monthly concessionaire fee comes
around Rs.30,058/- for one bus shelter. It also includes the statutory
license fee which is levied by the Municipal Administration and Water
Supply Department. The license fee is Rs.6,600/- per sq.mtr and the new
tenders are floated for bus shelter of a standard size of 22 sq.mtr.
Therefore, the license fee payable per bus shelter is Rs.1,45,200 /- sq.
mtr., per year, which comes to Rs.12,100/- per month for one bus shelter.
Therefore, actual concessionaire fee is less than Rs.18,000/- which is
40% approximately less than the concessionaire fee being paid by the
petitioners, as per the earlier contract executed between the petitioners
and the first respondent in the year 2015. It would create huge disparity
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W.P.No.13739 of 2024 etc.
and would be contrary to the terms of the contract entered between the
petitioners and the first respondent. It is clear discrimination and against
the principles of equality enshrined under Article 14 of the Constitution
of India. It would also impacts the business of the petitioners and also
would cause huge loss to the first respondent also.
5.1. He further submitted that during the terms of the agreement
the use of bus stops for advertising purposes is made impossible or loses
its value by reason of matters outside the control of the petitioners herein
than the petitioners had a right to require an amendment of the agreement
ensure that they restore the economic balance of the contract. The first
respondent has the obligation to ensure that it does not prejudicially
affect the earning capacity of the petitioners qua the bus shelters operated
by them. As per the present tender notification for the paltry sum the
petitioners' capacity to earn revenue from advertisement would virtually
become zero. The petitioners' investment is huge and it continues to pay a
high concessionaire fee. But if the respondents issue the present tender
fixing a paltry fee then the petitioners would have no other choice but to
suffer huge losses with virtually no income. This is the legitimate
expectation of the petitioners who had invested huge monies and are
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W.P.No.13739 of 2024 etc.
awaiting to complete the contract to break even. Therefore, floating the
tender notification is against the legitimate expectation of the petitioners
to in giving cooperation to complete the contract. If the tenders are
allowed to be floated then it would spoil the entire business of the
petitioners. In support of his contention, he relied upon the several
judgments.
6. Heard the learned counsel appearing on either side and
perused the materials placed before this Court.
7. The second respondent filed counter and on the submission
made by the learned Additional Advocate General revealed that the
petitioners have not participated in the tender and as such they have no
locus to challenge the tender notification, since the petitioners neither
interested nor affected party. The petitioners cannot challenge the tender
conditions without even participating in the tender notification. The
petitioners stated that there will be huge monetary loss to the respondents
corporation. It is premature and even as per the petitioners, the tender
notification dated 18.03.2024 projected base monthly concessionaire fees
is higher to the concessionaire fees of the petitioners' existing contract
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W.P.No.13739 of 2024 etc.
dated 31.12.2015. The petitioners awarded for Rs.17,631/- per month per
bus shelter and it comes around Rs.2,11,580/- per year per bus shelter.
8. Further the contract, which was executed between the
petitioners and the respondents, is a Built, Operate and Transfer (BOT)
model and as per the present tender notification dated 18.03.2024, it is a
Renovate, Operate, Maintain and Transfer (ROT) model. Therefore, both
tenders are completely different from each other and substantial
investment made under the BOT model, compared to the absence of
capital expenditure required under the ROT model, highlights the
fundamental differences between these approaches. Therefore, both
models are unique circumstances and financial implications.
9. That apart, the tender conditions cannot be challenged in the
light of the judgment of the Hon'ble Supreme Court of India reported in
2022 SCC Online SC 113 in the case of Agmatel India Private Limited
Vs. Resoursys Telecom and ors., which held that the author of the tender
document is taken to be the best person to understand and appreciate its
requirements and if its interpretation is manifestly in consonance with the
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W.P.No.13739 of 2024 etc.
language of the tender document or sub serving the purchase of the
tender, the Court would prefer to keep restraint. However, particular
product was to be treated as similar category product, could not have
been a matter of interpretative exercise by the Court, particularly when
the view taken by the tender inviting authority and its evaluation
committee has not been shown to be absurd or irrational or suffering
from malafide.
10. Further, the tender notification cannot open for judicial
scrutiny unless establish a case on the grounds of arbitrariness, malafide
or irrationality. In this regard, it is relevant to rely upon the judgment
reported in 2023 Live Law (SC) 467 in the case of Tata Motors Limited
Vs. Brihan Mumbai Electric Supply and Transport Undertaking., in
which the Hon'ble Supreme Court of India held as follows :-
"No judicial review in commercial matters unless
a case of arbitrariness, malafide or irrationality is
made out. The Court should not ordinarily interfere in
matters relating to tender or contract. A writ court
should refrain from imposing its decision over the
employer with respect to whether or not to accept the
bid of a tenderer, unless something very gross or
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W.P.No.13739 of 2024 etc.
palpable is pointed out. The courts must realize their
limitations and the havoc which needless interference in
commercial matters can cause. In contracts involving
technical issues the courts should be even more
reluctant because most of us in Judge's robes do not
have the necessary expertise to adjudicate upon
technical issued beyond our domain. The Courts should
not use a magnifying glass while scanning the tenders
and make every small mistake appear like a big
blunder. In fact, the courts must give "fair play in the
joints" to the government and public sector
undertakings in matters of contract. Courts must also
not interfere where such interference will cause
unnecessary loss to the public exchequer.”
In the case on hand, the petitioners failed to establish a case or
arbitrariness, malafide and irrationality.
11. That apart, challenging the notification is premature on the
sole ground that it is only tender notification and without knowing the
price quoted by the bidders, the petitioners cannot say that the price
inducted in the tender notification is less than the price which was
allotted in favour of the petitioners in the year 2015 and caused monetary
loss. Further, the petitioners had not participated in the tender notification
and no persons who participated in the tender have challenged the tender
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W.P.No.13739 of 2024 etc.
notification. Therefore, there is no question of legitimate expectation of
the petitioners and the judgment relied upon by the petitioners are not
helpful to the case on hand.
12. In view of the above, this Court finds no infirmity or
illegality in the tender notifications floated by the first respondent and all
the Writ Petitions stand dismissed. Consequently, connected
miscellaneous petitions are closed. There shall be no order as to costs.
.09.2024
Index : Yes/No
Speaking/Non Speaking order
Neutral Citation : Yes/No
rts
G.K.ILANTHIRAIYAN. J,
rts
To
1. The Commissioner,
Greater Chennai Corporation
Greater Chennai Corporation,
Rippon Building,
Chennai – 600 003.
2. The Superintending Engineer,
Bus Route Roads Department,
https://www.mhc.tn.gov.in/judis
W.P.No.13739 of 2024 etc.
Greater Chennai Corporation,
Amma Maligai, Rippon Building,
Chennai – 600 003.
PRE DELIVERY COMMON ORDER IN
W.P.Nos.13739, 13742, 14099 & 14104 of 2024
and W.M.P.Nos.14905, 14906, 14908, 14910,
15296, 15297, 15289 & 15291 of 2024
.09.2024
https://www.mhc.tn.gov.in/judis
