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IN THE HIGH COURT OF GAUHATI (SHILLONG BENCH)
TINLIANTHANG VAIPHEI, J.
Larsing M. – Appellant
Vs.
Meghalaya Tourism Development Corpn. Ltd. and Anr. – Respondent
Decided On: 12.05.2008
Writ petition filed against the letter of intent (LOI) issued by the respondent No. 1 in favour of M/s Lessly Shylla, Nongrimbah, Bolck-K, Liatumkhrah, East Khasi Hills District, Shillong (the respondent No. 2), for finishing & furnishing, operating and maintaining the Crowborough Hotel-cum-Commercial Complex in Shillong.
Fact of the Case:
The petitioner, Centre Point Group Enterprises, represented by its Managing Director, is a consortium of hotel enterprises, which claims to be one of the leading hotels and hospitality chains of Meghalaya and also claims to run a network of business and luxury hotels including Centre Point Hotel, Royal Heritage Tripura Castle at Shillong and Ri Kynjal Resort at Umium. The respondent No. 1 has for the past two decades been dealing with the project for development of a hotel complex known as Crowborough Hotel ("the Hotel" for short) at Police Bazar, Shillong, but due to litigation problems, the project could not see light of the day. After finally settling the litigation, the respondent No. 1, in the year 2005, took a decision to re-develop the partially constructed structure of the Hotel, which had been lying idle for over two decades. A decision was accordingly taken by the respondent No. 1 proposing that the Hotel be re-developed by trying up with a developer/operator of national/international repute on Public Private Partnership (PPP) basis, which would undertake the exercise on build, operate and transfer (BOT) system. Towards this end, the respondent No. 1 vide the letter dated 22.1.2007 engaged M/s IL&FS Infrastructure Development Corporation Ltd., a consultancy firm, for selection of a private developer through transparent bidding process.
Finding of the Court:
The court found that the respondent No. 1 had not followed the proper procedure in awarding the contract to the respondent No. 2. The court held that the respondent No. 1 had not specified the financial criteria in the EOI, and that the Evaluation Committee had changed the financial criteria after the bids had been submitted. The court also found that the respondent No. 2 did not meet the eligibility criteria, as he was a coal dealer with no experience in the hotel industry.
Issues: 1. Whether the respondent No. 1 had followed the proper procedure in awarding the contract to the respondent No. 2? 2. Whether the respondent No. 1 had specified the financial criteria in the EOI? 3. Whether the Evaluation Committee had changed the financial criteria after the bids had been submitted? 4. Whether the respondent No. 2 met the eligibility criteria?
Ratio Decidendi: The court held that the respondent No. 1 had not followed the proper procedure in awarding the contract to the respondent No. 2. The court held that the respondent No. 1 had not specified the financial criteria in the EOI, and that the Evaluation Committee had changed the financial criteria after the bids had been submitted. The court also found that the respondent No. 2 did not meet the eligibility criteria, as he was a coal dealer with no experience in the hotel industry.
Final Decision: The court dismissed the writ petition, holding that the respondent No. 1 had not followed the proper procedure in awarding the contract to the respondent No. 2.
T. Vaiphei, J.
1. This writ petition is directed against the letter of intent (LOI) dated 23.6.2007 issued by the respondent No. 1 in favour of M/s Lessly Shylla, Nongrimbah, Bolck-K, Liatumkhrah, East Khasi Hills District, Shillong (the respondent No. 2), for finishing & furnishing, operating and maintaining the Crowborough Hotel-cum-Commercial Complex in Shillong.
2. The facts giving rise to the writ petition are that the Centre Point Group Enterprises represented by its Managing Director is a consortium of hotel enterprises, which claims to be one of the leading hotels and hospitality chains of Meghalaya and also claims to run a network of business and luxury hotels including Centre Point Hotel, Royal Heritage Tripura Castle at Shillong and Ri Kynjal Resort at Umium. The group is also stated to have a proven track record and expertise and experience in hotel and hospitality industry, and has strong financial resources in terms of net worth, solvency and turnover. The respondent No. 1 has for the past two decades been dealing with the project for development of a hotel complex known as Crowborough Hotel ("the Hotel" for short) at Police Bazar, Shillong, but due to litigation problems, the project could not see light of the day. After finally settling the litigation, the respondent No. 1, in the year 2005, took a decision to re-develop the partially constructed structure of the Hotel, which had been lying idle for over two decades. A decision was accordingly taken by the respondent No. 1 proposing that the Hotel be re-developed by trying up with a developer/operator of national/international repute on Public Private Partnership (PPP) basis, which would undertake the exercise on build, operate and transfer (BOT) system. Towards this end, the respondent No. 1 vide the letter dated 22.1.2007 engaged M/s IL&FS Infrastructure Development Corporation Ltd., a consultancy firm, for selection of a private developer through transparent bidding process. It would appear that the bidding process contemplated two stages, namely, the stage of Expression of Interest (EOI) and thence the stage of Request for Proposal (RFP) and that in the first stage, an advertisement was to be issued inviting prospective bidders to express their respective interests and submit their bids for shortlisting on the basis of defined technical and financial criteria. After EOI's were received, the technical and financial capabilities of the bidders were to be evaluated on the basis of such defined technical and financial criteria, and the bidders who were so short listed in this process would then be issued the RFP documents. The second stage, namely, RFP stage was to involve financial bidding by the short listed bidders. Thus, the respondent No. 1 through IL&FS accordingly started the bidding process of the contract by undertaking the following exercises:
Sl. No. Activity/Milestone Due Date
1. Issue of Request for Proposal 14.5.2007
2. Submission of Bid 07.6.2007
3. Opening of Bids (Financial Bids) 11.06.2007
4. Issue of Letter of Intent to the preferred bidder 18.6.2007
5. Receipt of Letter of Acceptance from preferred bidder. 25.6.2007
6. Signing of Lease Document After all formalities are completed.
3. The respondent No. 1 thereafter through their consultant (IL&FS) issued the advertisement for EOI in The Economic Times and The Telegraph dated 21.2.2007, with the following bidding criteria:
(a) Bidder may be reputed national/international hotel/hospitality/chain/companies/consortium (maximum two members) and preferably with participation of local party (s).
(b) In case of consortium between a developer and operator, there needs to be a valid management contract between them for operation and maintenance of the hotel for a minimum period of 10 years.
(c) The bidder would be required to utilize their own finances and resources to complete the building as a hotel and for its full operation, maintenance and management.
(d) Interested developers and/or operators willin
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