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2015 Supreme(Del) 2839

IN THE HIGH COURT OF DELHI
VED PRAKASH VAISH, J.
VFS GLOBAL SERVICES PRIVATE LIMITED - Petitioner
Versus
SOUTH DELHI MUNICIPAL CORPORATION - Respondent
W.P. (C) No.9407/2015 & C.M. APPL. No.21967/2015
Decided on : 11.12.2015

Advocate Appeared:
Ms. Maninder Acharya, Sr. Advocates with Mr. Samar Singh, Advocates
Mr. Sanjay Poddar, Sr. Advocate with Mr. Mukesh Gupta, Advocate.

The State, even in contractual matters, must act fairly, justly, and reasonably, and contracts entered into by concealment, suppression, and fraud are voidable.

Headnote:

Parking Sites - License Agreement - Delhi Municipal Corporation Act, 1957 - Article 226 of the Constitution of India

Fact of the Case:

The petitioner sought directions against the respondent for immediate possession of 52 parking sites, citing numerous problems and rival claims preventing utilization of the sites. The respondent issued show cause notices pointing out shortcomings in the petitioner's operation of the sites.

Finding of the Court:

The court held that the respondent, as a public statutory body, is obligated to provide parking facilities and act fairly, justly, and reasonably in its contractual dealings. The court found that the respondent failed to fulfill its public and statutory duties, including its obligation under the Delhi Municipal Corporation Act, 1957, and directed the respondent to clear encroachments and rival claims from the parking sites within three months.

Issues: Disputed questions of fact, breach of contract, and failure to fulfill public and statutory duties.

Ratio Decidendi: The court established that the State, even in contractual matters, must act fairly, justly, and reasonably, and that the writ petition under Article 226 of the Constitution of India to enforce contractual obligations of a State or its instrumentality by an aggrieved party is maintainable. The court also emphasized that contracts entered into by concealment, suppression, and fraud are voidable.

Final Decision: The court directed the respondent to clear encroachments and rival claims from the parking sites within three months. If the respondent fails to comply, the parking contracts in respect of those sites shall stand cancelled, and the petitioner shall be entitled to a refund of the bank guarantee and security deposit.

JUDGMENT

VED PRAKASH VAISH, J.

1. By way of present petition the petitioner seeks directions against the respondent for immediately taking all possible steps to ensure that the petitioner is forthwith placed in vacant and peaceful possession of 52 parking sites allotted to it, and also to ensure that no rival/contesting claims shall arise in respect to the said sites. The petitioner also prayed that in the event respondent is unable grant the aforesaid relief, then it may treat the licenses as cancelled forthwith, as void and nonest, and return to the petitioner the total amount paid by it along with interest @ 15% per annum from the date of payment till refund, deducting therefrom any amount the petitioner may have received in excess of its right under the licenses, after deducting the expenses incurred. The petitioner also seeks direction to quash various show cause notices sent by the respondent.

2. Briefly stated, the case of the petitioner is that pursuant to tender notice dated 10.04.2015, issued by the respondent for allotment of 71 authorized parking sites, the petitioner applied for allotment of the same. The petitioner emerged as a successful bidder for 52 parking sites and separate agreements were executed by the respondent in the month of May, 2015. The petitioner furnished the Bank Guarantee in the sum of Rs.5,60,51,430/- (Rupees Five Crores Sixty Lakhs Fifty One Thousand Four Hundred Thirty only), issued security deposit in the sum of Rs.3,55,25,715/- (Rupees Three Crores Fifty Five Lakhs Twenty Five Thousand Seven Hundred Fifteen only) and furnished 37 post-dated cheques in respect of monthly license fee, being Rs.3.05 crores per month (approximately) in favour of the respondent. The petitioner paid license fees for the months of June, July, August and September, 2015, four post dated cheques have been returned to it and 33 post dated cheques for a sum of Rs.100.73 crores approximately are lying with the respondent. Thereafter, it was discovered that there are numerous problems on virtually each and every site including rival claims being raised qua the respondent’s right, title and interest to the sites being licensed to the petitioner. The problems being encountered by the petitioner were brought to the notice of the respondent vide letters dated 18.06.2015, 22.06.2015 and 27.07.2015. However, the respondent instead of taking steps to rectify the problems took the stand that it is the petitioner’s problem to sort out with the various authorities.

3. According to the petitioner none of the parking sites can be utilized in the manner contemplated which is the sole and fundamental purpose of the license agreement. The petitioner has alleged that with respect to 17 sites, the rival claims prevented the petitioner taking over the site and operating thereon in a hindrance free manner. At one of the sites the rival claims prevented the petitioner from taking over the site and operating thereon to the extent of 95% and at 13 other sites the rival claims prevented petitioner from taking over the site and operating thereon to the extent of 75-94%, at 9 other sites the rival claims prevented petitioner to the extent of 65-74%, at 11 sites the rival claims prevented the petitioner to the extent of 52-64% and with respect to one site the rival claims prevented petitioner to the extent of 40%. The rival claims included the claims being raised by the Delhi Metro Rail Corporation (DMRC). Other instances include rival claims raised by RWA’s/local market associations, etc. claiming either that the land does not belong to the respondent or that it does not have any right to collect parking charges, inter alia, on account of prior vested rights. Aurobindo Place Market Association filed a writ petition being W.P.(C) No.7924/2015 wherein the respondent was directed not to grant any fresh contract for parking in the concerned area without considering the proposal of the said market association. The respondent went ahead with the ten













































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