IN THE HIGH COURT OF ORISSA : CUTTACK
VINEET SARAN & B.R. SARANGI, JJ.
M/s. Enkon Pvt. Ltd. – Petitioner
Versus
Bhubaneswar Smart City Ltd. and others – Opposite Parties
W.P.(C) No.19563 of 2016
Decided On : 07-02-2017
Legal ramification of the MOU is, an MOU signals a legal contract is imminent - An MOU itself is not legally defensible but should still clearly outline specific points of an undertaking - An MOU should describe who the parties are, what the project is that they are agreeing on, the scope of the document, each party's roles and responsibilities and more - An MOU forces the participating parties to reach a semblance of a mutual understanding, and in the process, the two sides naturally mediate and figure out what is most important in moving towards an eventual future agreement with benefits both sides - Petitioner to approach the appropriate common law forum to ventilate its grievances, in view of the availability of alternative remedy in a contractual matter. (Paras - 15, 16 and 21).
JUDGMENT :
B.R. SARANGI, J.
M/s. ENKON Private Limited, which is a company incorporated and registered under the Companies Act, 1956, has filed this application seeking for direction to the opposite parties not to re-allot the sites, already allotted to the petitioner under Annexure-2, 3 and 4 series, to any third party till completion of the term of the contract under Annexure-2, and further not to proceed with the Request For Proposal (RFP) dated 28.10.2016 in Annexure-9.
2. The factual matrix of the case is that the petitioner company deals in establishing and operating traffic signals as well as advertisements by way of glow signs on the traffic signal posts. It has its operations in several parts of the country and has been running arrangements for establishment and operation of traffic signals. A Memorandum of Understanding (MOU) was executed on 23.12.2008 vide Annexure-2 between the petitioner and the Commissionerate of Police-opposite party no.4 for erection of traffic signals at 11 places in the township of Bhubaneswar. The said places are set out in Annexure-A to the MOU.
3. Consequentially, the petitioner undertook the construction, operation and maintenance of the traffic signals at all the 11 places for a period of 10 years, i.e., from 2008 to 2018. In lieu thereof, it was given the exclusive rights to display advertisement on the poles of the traffic signals to cover up the cost of installation and maintenance. For carrying out such function, the petitioner invested a huge amount, which it has decided to recover by giving advertisement rights over a period of 10 years. As such, on the basis of Public Private Partnership (PPP) mode, when the petitioner invested a substantial amount, an amount of Rs. 5,00,650.00/- was collected from it by Bhubaneswar Municipal Corporation in the shape of tax on advertisement, and the petitioner also deposited a sum of Rs. 4,20,000.00/- as per the direction of the Commissionerate of Police with the Indian Red Cross Society, Regional Branch, Police Commissionerate, Bhubaneswar. Due certificate was also granted by the Bhubaneswar Municipal Corporation for the years 2010-2013 with regard to successful installation, maintenance and operation of the traffic signals of the 12 areas allotted to it (11 areas earlier granted and subsequently one area at A.G. Square).
4. While it was so continuing, Expression of Interest (EOI) was floated by the Bhubaneswar Municipal Corporation vide EOI No. 24190 dated 25.11.2013 to construct traffic signals in various parts of the city, and upgrade the existing traffic signals with intelligent video surveillance system, those also include 12 sites, which were allotted in favour of the petitioner. The petitioner approached this Court by filing W.P.(C) No. 390 of 2014 stating that, when the MOU between the parties is subsisting, without terminating the same, the Bhubaneswar Municipal Corporation could not have issued such EOI. While entertaining such writ application, this Court passed an interim order on 29.01.2014 to the extent that the Bhubaneswar Municipal Corporation may proceed with tender, but will not finalize the tender work in respect of 11 locations covered by the agreement with the petitioner. Finally, by order dated 02.05.2014, this Court disposed of the said writ application in view of the joint memo filed by the petitioner and the Bhubaneswar Municipal Corporation.
5. Thereafter, opposite party no.1 issued a Request for Proposal (RFP) vide reference no. BSCL-28/2016/49 dated 20.06.2016 for “supply, installation, testing, commissioning of traffic signaling system, blinkers and pelican signals at selected road junctions and locations with solar powered adaptive system in Bhubaneswar City and subsequent maintenance for 6 years post-defect liability period of one year”. The RFP also intends to re-allot the 12 sites of the petitioner once again. There
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