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2022 Supreme(Del) 1842
IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
South Delhi Municipal Corporation - Appellant
Versus
Pioneer Publicity Corporation Private Limited - Respondent
LPA 389 of 2021 & CM Appls. 37695-97 of 2021
Decided On : 06-10-2022
Ms. Beenashaw N. Soni, Standing Counsel with Ms. Mansi Bhatia, Advocate., for the Appellant; Mr. Prosenjeet Banerjee & Mr. Tarang Gupta, Advocates., for the Respondent
The principle of prevention of unjust enrichment and the obligations of parties under a contract were central to the judgment.
Headnote:
Unipole - Contractual Dispute - [Contract Act, Section 25, Section 73, Section 74] - The court discussed the principles of prevention of unjust enrichment and the obligations of the parties under the contract. It highlighted the failure of the Appellant to provide a commercially viable alternative site and the Respondent's right to remission of the licence fee for the period when the unipole could not be used for advertising.
Fact of the Case:
The Respondent sought a refund of its licence fee for a unipole used for advertising, which could not be used for the assigned purpose due to dismantling and unavailability of a suitable alternative site. The court found that the Respondent was deprived of its right to advertise on the unipole and granted the prayer for remission of the licence fee along with interest.
Finding of the Court:
The court found that the Appellant failed to provide a commercially viable alternative site and upheld the direction to remit the entire licence fee received for the period when the unipole could not be used for advertising.
Issues: The main issue was whether the Appellant was obligated to remit the licence fee for the period when the unipole could not be used for advertising.
Ratio Decidendi: The principle of prevention of unjust enrichment prohibits a party from deriving undue benefit from a contractual relationship. The Appellant's failure to provide a suitable alternative site led to the Respondent's deprivation of its right to advertise, justifying the remission of the licence fee.
Final Decision: The appeal was dismissed, and the direction to remit the entire licence fee received for the period from 03.05.2019 to 15.12.2020, along with interest, was upheld.
JUDGMENT
1. The parties in this appeal entered into a contract for the allotment of a unipole for the display of advertisements against the payment of a licence fee. The said unipole could not be used for the assigned purpose and the Respondent sought a refund of its licence fee, along with interest for the time period during which the fee was being duly paid and advertisements could not be displayed. The Appellant SDMC declined to refund the same.
That is the sum and substance of the small issue that arises for our consideration in this appeal.
2. Let us briefly explain the factual matrix of the case. On 06.11.2017, the Appellant SDMC, vide a tender notice bearing no. CO/Tender- 12/Advtt./SDMC/2017/NIT/D-1342 (Tender Notice/Contract Document), invited bids for operating a unipole falling under its jurisdiction and for allotment of advertisement rights through the same. On 04.01.2018, the Appellant issued an allotment letter to the Respondent granting advertisement rights to it for Cluster no. 10 for an initial period of three years. Thereafter, on 18.04.2019, the Public Works Department (PWD) issued a letter to the Respondent stating that the hoarding of "CREDAI Youth Icon-19" displayed at Bhairon Marg T- Junction R/S towards Purana Qila Road was required to be dismantled/shifted in light of the ongoing work of the Integrated Transit Corridor Development Plan in and around Pragati Maidan. Thereafter, the unipole stood dismantled on 02.05.2019. Meanwhile, the Respondent communicated the contents of the letter sent by PWD to the Appellant and requested it to suspend the licence fee of the unipole w.e.f. 03.05.2019 (the day after dismantling).
3. In accordance with the contract document, the Respondent was entitled to be offered an alternative site for operating the unipole. Accordingly, on 08.06.2019, a joint inspection was conducted by both the parties for the identification of an alternative site. During this visit, none of the sites was found to be commercially viable by the Respondent. Thereafter, on 05.10.2019, another inspection was carried out by the parties wherein a new location was identified as feasible. However, no formal allotment of the new site was made by the Appellant. Be that as it may, the Respondent then requested the Appellant to permit it to install the dismantled unipole at the newly identified site vide inspection report dated 05.10.2019. The Respondent also requested for the remission of the licence fee till reinstallation of the unipole at the new site. The same request was recommunicated on multiple occasions, i.e. on 03.02.2020, 03.03.2020, 19.03.2020, 08.05.2020, 08.06.2020, 01.07.2020 and lastly on 08.07.2020. Finally, vide letter dated 17.07.2020, the alternate site was formally allotted to the Respondent.
4. However, upon inspection of the new site for installation of the unipole, it was not found to be feasible as it had electrical cables running underneath it. The Appellant was informed about the same on 28.07.2020 through a letter. Thereafter, both the parties conducted a joint inspection of the new site and concurred regarding the presence of electrical cables/lines underneath the new site. The same can be substantiated from the joint inspection report dated 31.07.2020 which recorded the presence of heavy electrical cables. Thereafter, on 15.09.2020, a meeting was held between the parties for reconciliation of accounts. In this meeting, it was represented that advance against the licence fee had been duly paid by the Respondent. On 16.09.2020, the next day, the Respondent communicated a surrender notice to the Appellant, in terms of Clause 25 of the contract document, for surrendering the cluster allotted to it due to the prevalent pandemic situation coupled with market forces. In terms of the contract document, the Respondent gave an advance notice period of 90 days along with the submission of advance licence fee for 90 days in lieu of the same. Accordingly, the contract stood surrendered on 15.
