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IN THE HIGH COURT OF JUDICATURE AT PATNA
SANJAY KAROL, CJ and PARTHA SARTHY, J.
CWJC No.9345 of 2022
(22.12.2022)
M/s Patliputra Entertainment
Pvt. Ltd. & Anr. ... Petitioners
vs.
Bihar State Tourism Development
Corporation Ltd. Beer Chand
Patel Path, Patna & Ors. ... Respondents
Government Contract – Scope of judicial review depends on facts and circumstances of each case – Parameters of judicial review must be clearly defined and never exceeded – Dimensions of judicial review must remain flexible – Exercising power of judicial review, it is open for Court to review decision maker's evaluation of facts – Court will intervene where facts as a whole could not have warranted decision taken – If facts point overwhelmingly in one direction, a decision going opposite way cannot be upheld – Duty of Court is to confine itself to question of legality – If authority has faltered in its wisdom, Court cannot act as super auditor – Power of judicial review is supervisory in nature. (Paras 42, 43, 44, 45 and 51)
Government Contract – Scope of Judicial Review – Violation of each and every provision does not furnish a ground for Court to interfere – Every person before an authority, exercising adjudicatory power has a right to know evidence used against him – If prejudicial allegations are to be made against a person, he must be given particulars of that before hearing so that he can prepare his defence – Minor deviation from explicit terms of NIT would not be sufficient in itself in absence of mala fide for Court to set aside tender at behest of an unsuccessful bidder – Mere disagreement with decision making process of decision of administrative authority is no reason for a constitutional court to interfere. (Paras 52 to 57)
Arbitration and Conciliation Act, 1996 – Section 11 – Constitution of India – Article 226 – Enforcing remedies under an arbitration clause and entertaining a writ are not always mutually exclusive – Decision taken by Corporation to only waive interest arising out of delayed payment, is not one for Court to substitute with its own judgment – From an equity standpoint, allowing for Corporation to be once again saddled with such a lessee would be against demands of justice as the same would run squarely counter to interest of Corporation as a commercial entity – Petition dismissed. (Paras 116, 117 and 118)
Sanjay Karol, CJ.—Primarily, the following questions arise for consideration of this Court.
(i) Whether the present writ petition is maintainable in light of the arbitration clause 54 of the agreement entered into on 27.08.2019 between the petitioner and the respondent- Corporation?
(ii) Contingent upon the above, whether the conduct of the petitioner, post filing of the present writ petition entitles him to have the possession of the Hotel in question restored to itself?
(iii) As a result of the second NIT, what right, if any, towards the Hotel in question vests with respondent no.6?
(iv) Whether the claim of the petitioner that the agreement entered into with the Corporation would begin from the date of signing of the agreement, is sustainable in law?
SEQUENCE OF EVENTS
2. Petitioner M/s. Patliputra Entertainment Private Limited and its Director seeks setting aside of orders dated 01.04.2022 (Annexure-11, Page- 93) and 23.05.2022 (Annexure-10, Page-73) rejecting his request for reconsideration of cancellation of agreement dated 01.04.2022; grant of stay upon proceedings arising out of cancellation and consequential order of blacklisting by respondent no.1 namely the Bihar State Tourism Development Corporation Limited (hereinafter referred to as the “Corporation”); continuation of the agreement dated 27.08.2019 (Annexure-5, Page-37) for the agreed period of ten years; calculation of rental of the leased property in question, i.e. Hotel Vishnu Vihar, Gaya (“Hotel”) from the date of agreement, in terms of Clause 37 thereof and Clause 6 of the Notice Inviting Tender dated 09.03.2018 (Annexure-1, Page-24) and not from 15.06.2018, i.e. the date of issue of LOI or 20.06.2018 the date of taking over possession of the “Hotel”; condonation of the rent to be paid in respect of the Hotel for the period of lockdown (Pandemic Covid-19) in the years 2020, 2021 and 2022; directing the respondents to address all disputes before a learned Arbitrator as according to clause 54 of the agreement (Page 44).
3. Petitioner No.1, namely M/s. Patliputra Entertainment Private Limited is a Company and petitioner no.2 namely Sri Niranjan Kumar is its Director.
4. Respondent-Corporation issued an advertisement inviting tenders on 09.03.2018 for running a Hotel (Annexure-1, Page-24).
5. Having undergone the tender process, a letter of award dated 04.04.20218 (Annexure- R/1, Page-156) was issued in favour of Hotel Patliputra Exotica a unit of the above stated Company, being the successful bidder, wherein it was asked to deposit (i) bid amount for the 1st year, i.e. Rs.81,25,000.00 plus G.S.T amounting to Rs.14,62,500.00; (ii) security deposit equivalent to the amount of the licence fee, i.e. Rs.81,25,000.00; and (iii) submission of non-judicial Stamp of Rs.1,000/- for the purposes of executing an agreement, post which, an order of allotment was to be issued followed by signing of an agreement.
6. Even though on 04.05.2018 petitioner deposited only part of the licence fee plus GST totalling to Rs.95,87,500.00 as acknowledged by letter dated 12.05.2018 of the Corporation (Annexure R/4, Page-159), yet the Hotel was allotted for a period of ten years vide allotment letter dated 15.06.2018 (Annexure-2, Page-31) with the condition for the petitioner to deposit licence fee and security amount. On the assurance of furnishing a bank guarantee lest, post dated cheques issued by the petitioner to be encashed are not honoured, possession of the Hotel was handed over on 20.06.2018 (Annexure-R/6, Page-161).
7. However, failure to furnish Bank Guarantee led to deposit of the post dated cheque, which was returned uncashed on 31.07.2018, which fact petitioner was informed of vide letter dated 09.08.2018 (Annexure-R/7, Page-162), affording three days’ time to deposit the required bank guarantee.
8. The petitioner partly deposited the security fee on 12.09.2018 (Rs.40,00,000/-) (Anne
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