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2018 Supreme(Del) 889
IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT, S.P. GARG, JJ.
Honshu Buildcon Private Limited – Petitioner
Versus
North Delhi Municipal Corporation – Respondent
W.P. (C) Nos. 5891, 7135 of 2016, C.M. Application Nos. 24246, 29365 of 2016
Decided On : 18-01-2018
For the Petitioners: Sh. Rajesh Gupta, Sh. Harpreet Singh.
For the Respondents: Ms. Mini Pushkarna, Ms. Vasundhara Nayyar, Ms. Anushruti, Ms. Renu Jagdev.
Headnote:
Tender Bid - Bids - Terms and condition - Judicial review - Scope of - State invites tender bids - It ought to adhere to the terms of the NIT - Terms of the NIT are the guidelines that enable the procedure of conducting the tender process - In order to ensure that the same is conducted efficiently, they should not be digressed from, as far as applicable - Public and state contracts involve expenditure of substantial public money - It is quite crucial to ensure that no anomaly arises - Petitioners were found to have relations with black-listed companies - It not only violates the clauses of the NIT, but also emerge as red flags to the safe.
Tender Bid - Letters of intent - Cancellation of - Withdrawal the LoIs - Violation of the conditions of the NIT - Engaging in business relationships with black-listed companies in violation of the conditions of the NIT - Terms of the NIT cannot be ignored neither can be their violation - Such violation of the NIT conditions tempered the decision of withdrawal of the LoIs by the NDMC - There is no reason to interfere with the decisions of the NDMC - Decision to award a public contract is not premised merely on fulfilment of technical qualification and financial viability of the offer of a given bidder - Larger public interest is a necessary condition which invariably informs every decision of the executive authority or agency that is to award the contract - NDMC thus had a vital interest in ensuring that the group of individuals - Cancellation of the letters of intent by NDMC and rejecting the tender bids of the Petitioners cannot be accepted to be arbitrary - Decision is based on concrete grounds - Writ petitions are dismissed.
S. RAVINDRA BHAT, J.
Facts and Contentions
1. The writ petitions (W.P. (C) No. 5891/2016 and W.P. (C) No. 7135/2016) relate to similar issues and will be dealt with as connected matters. The brief facts and issues arising from these writs are as follows.
2. Honshu Buildcom Private Limited (“Honshu”) is a company incorporated under the Companies Act, 1956 having its registered office at 148, Bazar Matia Mahal, Gali Gokul Shah. Delhi-110006, Mr. Mohsin Anwar is its Director. The North Delhi Municipal Corporation (“NDMC”) is a local National Capital territory (NCT) statutory corporation formed that provides and maintains civic amenities and inter-alia, maintains various parking lots, advertisement sites etc within its jurisdiction in the NCT of Delhi.
3. The NDMC, through a Notice Inviting Tenders (NITs)/E-Auction Notice dated 22.04.2016 invited e-tenders for allotment for cluster-wise display of advertisement in its jurisdiction on payment of an advance monthly licence fee on quarterly basis for a period of three years (further extendable). Thereafter, the NDMC on 02.05.2016 issued a corrigendum and amended certain conditions of the NIT/e-auction. Honshu, being desirous of displaying the advertisement on cluster basis as above, submitted its bid in respect of Civil Line Zone Cluster No. 04 and deposited the requisite EMD amounting to 20% of the minimum reserved price as stipulated in NIT/E-auction Notice. Honshu also deposited the requisite amount towards the cost of the e-tender form as well as offered a monthly licence fee (“MLF”) of Rs. 18,50,000/-. After the closing of the e-bidding process by the NDMC on 13.05.2016, it issued a Letter of Intent (“LOI”) bearing No. ADC (Advtt.)/ NDMC/2016/D-3021 dated 17.05.2016 to Honshu, being the successful (H1) bidder in respect of e-auction for allotment of advertisement rights for various advertisement sites of NDMC on Cluster Basis as described previously and requested Honshu to download the Letter of Intent, sign the same in acceptance and upload it to the portal as a token of acceptance within 07 days of issue of letter, not later by 24.05.2016. This was to be submitted alongwith the auction processing fee being equivalent to 1.25% of the MLF quoted by the Petitioner No. 1 and was to be paid through online mode, these terms were subsequently complied with by Honshu.
4. By means of the LOI, the NDMC also requested Honshu to pay an amount equivalent of two months’ MLF towards the security deposit alongwith three months’ licence fee payable in advance, within a period of 05 days from the date of acceptance of the LOI, but not later than on 31.05.2016. By the said LOI dated 17.05.2016 issued by NDMC, Honshu was also requested to execute a licence agreement within 10 days of the offer with the NDMC, in the prescribed format and the allotment letter was to be issued to the petitioner only after completion of the formalities.
5. Honshu cites clause 22 of the terms and conditions of the NIT/E-auction issued by the NDMC, which is as follows:
“Existing display of media will be allowed up to date of maturity of existing contract. At the time of bidding, it will be assumed that all the sites are vacant and MLF of the existing contract shall be deducted from the MLF amount of successful bidder of clusters. After the maturity of existing contract, the MLF as per existing contract will be started to be paid by the cluster holder.”
6. Honshu, thereby, alleges that its Directors i.e. Mr. Mohsin Anwar and Mr. Akram Khan by their letters dated 30.05.2016 informed the NDMC that 22 Unipole sites had been previously allotted to them in their individual capacity on a quarterly licence fee basis by the Respondent through e-auction dated 25.02.2016 and in respect thereof, the security deposit/licence fee had been paid. The period of allotment of the 22 Unipole sites was to expire on 16.06.2016. Both of them, i.e. Mr. Anwar and Mr. Khan requested for adjustment of the security amount of Rs. 72,09,330/- tow
