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2022 Supreme(Mad) 1689

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.R. SWAMINATHAN, J.
Rishi Ad Promoters, Rep. by its Founder, Kamaludeen Azad, Virudhachalam - Appellant
Versus
The Managing Director, Metropolitan Transport Corporation Chennai Ltd., Chennai - Respondent
W.P. Nos. 881, 888 & 891 of 2022 & W.M.P. Nos. 968, 975 & 977 of 2022
Decided On : 17-05-2022

Advocates appeared:
For the Petitioner:P. Chandrasekar, Advocate. For the Respondent: C. Sangamithirai, Special Government Pleader.

Headnote:

Advertisement License - Contractual Dispute - Indian Contract Act, 1872, Article 14 of the Constitution of India - Section 51, Section 54 - The court discussed the principles of fairness and reasonableness in the field of contract, the application of Article 14 of the Constitution of India in licensee-licensor relationship, and the concept of 'force majeure' under the Indian Contract Act, 1872. The court emphasized the obligation of the respondent to re-visit the quantum of license fee payable by the petitioner during the pandemic situation and held that the impugned communications of the respondent were unfair and violated the mandate of equality enshrined in Article 14.

Fact of the Case:

The petitioner, engaged in the business of promotion of advertisements, entered into three tender agreements with the respondent Corporation for the display of advertisements on buses. Due to the pandemic situation, the operation of the buses was affected, and the petitioner could not enjoy the fruits of the license fully. The petitioner sought waiver of license fee during the lockdown period and payment only for the utilized buses. The respondent's refusal led to the filing of writ petitions.

Finding of the Court:

The court found that the respondent's communications were unfair and violated the mandate of equality enshrined in Article 14 of the Constitution of India. It directed the respondent to issue a license to the petitioner for the second spell as per the terms of the agreements dated 26.02.2021 and revisit the liability of the petitioner for the first spell.

Issues: The issues involved the fairness and reasonableness of the respondent's actions, the application of Article 14 of the Constitution of India in the licensee-licensor relationship, and the impact of the pandemic situation on the contractual obligations.

Ratio Decidendi: The court held that the respondent's communications were unfair and violated the mandate of equality enshrined in Article 14 of the Constitution of India. It emphasized the obligation of the respondent to re-visit the quantum of license fee payable by the petitioner during the pandemic situation and directed the respondent to issue a license to the petitioner for the second spell.

Final Decision: The Writ Petitions were allowed, and the respondent was directed to issue a license to the petitioner for the second spell as per the terms under the agreements dated 26.02.2021. The liability of the petitioner for the first spell was to be revisited, and the petitioner was to be afforded an opportunity of personal hearing before final orders were passed.

JUDGMENT

(Prayer in W.P.No.881 of 2022: Writ petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the respondent in Letter No.04/13004/Advt.Rev./MTC/2021 dated 05.01.2022 and quash the same and direct the respondent to award the license for display of advertisement on 630 buses as per the agreement dated 26.02.2021.

W.P.No.888 of 2022: Writ petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the respondent in Letter No.03/13003/Advt.Rev./MTC/2021 dated 05.01.2022 and quash the same and direct the respondent to award the license for display of advertisement on 500 buses as per the agreement dated 26.02.2021.

W.P.No.891 of 2022: Writ petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the respondent in Letter No.02/13002/Advt.Rev./MTC/2021 dated 05.01.2022 and quash the same and direct the respondent to award the license for display of advertisement on 400 buses as per the agreement dated 26.02.2021.)

Common Order

1. The writ petitioner is engaged in the business of promotion of advertisements. It is a MSME firm. The respondent Corporation invited tenders for award of licenses to display advertisements on the buses run by them. The number of buses are 1530. They were split into three (500+630+400). The writ petitioner emerged as the successful tenderer. Three tender agreements were entered into with the writ petitioner. The license period was to be valid for 11 months starting from 26.02.2021 to 25.01.2022. This was described in the tender agreement itself as the first spell. The contract between the parties contemplated renewal for two subsequent spells of 11 months each subject to satisfactory performance by the licensee during the previous license period and prompt payment of licence fee and other charges. Due to pandemic situation, the operation of the buses was affected and the petitioner could not enjoy the fruits of licence fully. Yet, they were called upon to pay the monthly licence fee. The petitioner submitted representation dated 09.06.2021 to the respondent seeking the following reliefs:-

(a) Full waiver of license fee during the full lockdown period.

(b) Payment of license fee only for the utilized buses during the partial lockdown periods.

(c) Grant of 30 days grace period.

The petitioner sent a reminder on 16.06.2021 reiterating their request. Since there was no response, the petitioner filed W.P.No.13329 of 2021. By order dated 25.06.2021, it was disposed of and the respondent was directed to consider the petitioner's request. The respondent vide communication dated 16.07.2021 informed the petitioner that his request could not be considered and the petitioner was directed to remit a sum of Rs.69,87,960/- on or before 22.07.2021. It was made clear that in the event of failure on the petitioner's part, the tender would be cancelled. Questioning the same, the petitioner filed W.P.Nos.15378 and 16633 of 2021. The Writ petitions were disposed of on 01.10.2021 in the following terms:-

“9. In the given factual matrix, this Court, having regard to the circumstances under which the petitioner is due to pay the licence fees ie., pandemic situation on account of covid- 19 and also taking note of the fact that the petitioner has already paid Rs.1.7 crores by way of security deposit, which is lying with the respondent and other Transport Corporations granted some concession to the similarly placed companies, directs the respondent to consider the claim of the petitioner seeking waiver/reduction of the licence fees during the lockdown period and pass appropriate orders, within a period four weeks from the date of receipt of a copy of this order.”

Pursuant to the aforesaid direction, the respondent passed the order dated 17.11.2021 accepting the request for waiver of the lic

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