The Single Bench of the Delhi High Court in the case of Sanjay Yadav vs North Delhi Municipal Corporation consisting of Justice Manoj Kumar Ohri while dismissing a writ petition observed that in exercise of power under Article 226 of the Constitution of India, the Court would not interfere in a tender/contractual matter even if a procedural aberration or prejudice to a tenderer is made out, as long as the award of contract and/or the tender process was carried out bonafide and in public interest.
Facts
The petitioner is a parking contractor while the respondent is North Delhi Municipal Corporation, which is stated to have issued a notice inviting e-tender for licensing of various parking sites falling under its jurisdiction on payment of advance Monthly License Fee basis (‘MLF’). The parking site in question was with total area of the site being 42,667.851 sq. m., out of which the parking area was only 38,015.62 sq. m. The minimum reserve price (‘MRP’) was kept at Rs.9,45,000/-. Against the MRP of Rs.9,45,000/-, the petitioner submitted a bid for Rs.36,51,000/-. A provisional allotment letter was provided along with certain conditions. Almost after one year, he was declared successful bidder and LOI was communicated to him through e-mail. The petitioner sought more time to deposit the balance amount after taking physical possession of the site. The physical possession of the parking site was handed over to the petitioner on 18.11.2021.
Procedural History
After the site was handed over to the petitioner, he was prevented from operating the complete tendered area of 38,015.62 sq. m. and was restricted to a significantly reduced area of 5,005 sq. m. Pursuant to a letter sent by the petitioner, the DDA supplied the petitioner with a physical possession slip which stated that an area measuring 5,005 sq. m. was handed over to Deputy Commissioner, R.P. Cell, North Delhi Municipal Corporation. The DDA also communicated the same to the respondent, however, on inspection it had come to notice that excess area was being used at the site in unauthorised manner. The petitioner requested the respondent to take up the issue with the DDA and Traders Welfare Association. Thereafter, a joint inspection of the parking site in question was conducted and as per its report, the DDA had handed over only 5,005 sq. m. area to the respondent for parking purposes. Later, the respondent put the aforesaid parking site for retender. Aggrieved by the said action, the petitioner had earlier approached this Court, however, in view of the letter furnished on behalf of the respondent during the hearing, the said petition was withdrawn with liberty to file a fresh petition also assailing the aforesaid letter.
Contentions Made
Petitioner: The principles of legitimate expectation and promissory estoppel bind the respondent and execution of the contract remained only a paper formality. Issuing tender for 38,000 sq. m. and asking to pay higher MLF for smaller area was arbitrary as respondent was all along aware about the actual size of the parking area available with it. Respondent surreptitiously, without cancelling the first tender, called for retender of the parking site by issuing a corrigendum/addendum.
Respondent: The LOI and provisional allotment letter were subject to the conditions mentioned therein and the petitioner failed to fulfil the same. Not only was the said allotment letter issued on provisional basis, but the petitioner also failed to deposit the entire security deposit by the last date. From the joint inspection of the parking site, it came to fore that only 5,005 sq. m. parking area was available with the respondent, which amounted to change of basic conditions of the tender. Faced with the aforesaid situation, the respondent had no option but to issue a corrigendum/addendum for the parking site in question for area of 5,005 sq. m. only. The petitioner had no legal right over the parking site/area in question, especially when no final formal contract was signed by the parties. The respondent has the right to determine the MLF and the appropriate remedy for the petitioner is to approach the Civil Court. The petitioner is at liberty to participate in the fresh process under the corrigendum/addendum.
Observations of the Court
The Bench observed that the petitioner’s right to seek redressal of his legal injury, if any, due to respondent’s faulty actions in inviting tender for a parking site, which it did not fully own, as well as was incompetent to tender, and the right of the respondent to retender the site, are mutually exclusive.
It was further observed that the respondent’s decision to retender the parking site cannot be faulted with since the subject matter of tender has fundamentally changed. A larger parking site may attract lesser number of participants and similarly, a smaller parking site may attract an increased number of participants in the tender. Hence, the terms and conditions of the offer may completely change. The petitioner’s legal remedy is by way of seeking specific performance of the LOI or Provisional Allotment letter, if at all the same is still made out in law on the facts of the case, and not by way of a writ petition.
Relying on certain judgments, it was observed that in exercise of power under Article 226 of the Constitution of India, the Court would not interfere in a tender/contractual matter even if a procedural aberration or prejudice to a tenderer is made out, if the award of contract and/or the tender process was carried out bonafide and in public interest.
Judgment
The Bench directed that in case the petitioner was desirous of participating in the retender issued by way of corrigendum/addendum, the respondent may permit him to do so, subject to fulfilment of conditions thereof. The respondent was directed to issue an appropriate NOC, to enable the petitioner to participate in the retender, if he so desires. The petition was accordingly dismissed.
Case Name: Sanjay Yadav vs North Delhi Municipal Corporation
Citation: W.P.(C) 6454/2022, CM APPL. 19522/2022 and CM APPL. 19523/2022
Bench: Justice Manoj Kumar Ohri
Decided on: 29th April 2022
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