TaxTMI 
TaxTMI 
TaxTMI 
2006 (12) TMI 521
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....f C&EC'. Appellant No. 1, pursuant whereto and in furtherance whereof, entered into a Memorandum of Understanding (MoU) with M/s. Larsen & Toubro Ltd. (L&T) for setting up such a complex. It also conducted conference of investors therefore. It submitted its tender on 7.4.2003, highlighting: a) Entire ground of 75,000 sq.m. would be required for international standard C&EC. b) They have formed a consortium for bidding for the said project and giving the names of the members of the consortium as including L&T and IMAG (Germany). c) Letters of acceptance from L&T was also annexed to show its participation. d) The Authority was offered equity participation to the extent of 5% of the total equity base. Several other companies also submitted their tenders. 3. The tenders were to be considered at three stages and thus, three different covers were to be submitted along with tenders. The first cover contained compliance with minimum eligibility criteria, the second cover contained financial bid and the third one contained technical and business proposals. The technical bid was opened on 7.5.2003. The financial bid was thereafter opened which was contained in second cover, on 8....
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....ct starts getting yield only after 12 years from date of commencement of construction. (ii) It has also been the contention of the company to relocate the asset base of the company on account of core competency of the company in the field for more than 50 years and intending to continue to command on industry. iii) As per the press release for a commercial block bidding invited by the Authority, it was awarded at Rs. 25,000/- per square meter in spite of having a total flexibility to exploit the commercial aspect vis-a-vis an offer given by the company for the reserved plot for convention center at the rate of Rs. 14,642/- per square metre. iv) Company also expressed that the projects of such type are always being given land at very concessional rate. Statistics indicates that world over such exhibition centers are either funded by way of concessional land price or absolute government contribution by way of land to make the project to early break even. 7. The expertise of L&T and IMAG in setting up Exhibition centers was again highlighted by a letter dated 20.10.2002, therein it was alleged: a) The Authority had informed in the presence of other bidders that the consortium....
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....ably unfairly or in an unjust manner. F. The Authority consisting of people possessing expertise and skill in the field its decision to develop the property as a C&EC by itself cannot be faulted with. G. It is not a case where Article 14 can be said to have been infringed. H. It cannot be said the facts which are pleaded are not based on evidence or materials which are not annexed to the counter affidavit. I. Reasons in such matters can be gathered from files/records maintained by the authorities. A review petition filed there against was dismissed. Appellants filed the special leave petition on 29.10.2004 against the order dated 20.1.2004 as also against the order dated 11.10.2004 dismissing the review petition. 10. In its counter affidavit filed before this Court the Authority, inter alia, disclosed that the rate of premium for the commercial properties was increased from Rs. 25,000/- per square metre to Rs. 42,500/- per square metre. It was further disclosed that the Authority called for fresh tenders for development of 5.5 hectares as C&EC and 2.0 hectares for a commercial complex, in terms whereof the bidders were required to quote separately for C&EC and Real Estat....
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....was impleaded as a party to this appeal thereafter. 11. Mr. R.F. Nariman, learned Senior Counsel appearing on behalf of Appellant in support of this appeal would contend that - i) the purported major shift in the policy by the Authority was impermissible in law; ii) rejection of the bid offered by the Authority was wholly illegal as the Executive Committee alone was the sole judge in relation thereto; iii) in accepting the bid of Reliance Industries Ltd., the offer of the appellants that they would pay @2 1/2% per year from the annual turnover from the 21st year had not been considered; iv) in rejecting the tender of the appellant, the Executive Committee/Mumbai Metropolitan Region Development Authority was required to assign sufficient and valid reason; and the same having not been done, the order impugned in the writ petition was vitiated in law. 12. Mr. Harish N. Salve, learned Senior Counsel appearing on behalf of the Reliance Industries Ltd., on the other hand, would submit that - i) the Executive Committee could not have taken a decision in regard to the change of policy; ii) when the second tender was floated, Appellant did not take part therein; iii) procedu....
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.... condition that the offer shall remain open and valid for acceptance for a period of 30 days and shall lapse if it remains unaccepted by the expiry of this period; provided that it shall be lawful for the Metropolitan Commissioner to renew any lapsed offer on an additional condition that the Government, Local Authority or Public Sector Undertaking, as the case may be, shall pay interest at the rate of 18% per annum over the premium specified in the lapsed offer with effect from the date on which the lapsed offer was made; provided further that nothing contained herein shall authorize the Metropolitan Commissioner to renew any lapsed offer after three months of its lapse. Regulation 9 provides for the mode and manner of payment of premium. Sub-regulation (ii) of Regulation 9 reads as under: 9(ii) Notwithstanding anything contained in the foregoing Clause to contrary, if there shall a scheme formulated and sanctioned by the Authority to erect or to finance erection of a building or buildings on land agreed to be leased to the Government, a Local Authority or a Public Sector Undertaking to subserve the development of the Metropolitan Region or any part thereof and to grant in leas....
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....ss than Rs. 750 Million as per the latest audited financial statement. * Annual turnover not less than Rs. 500 Million as per the latest audited financial statement. * Net Profit not less than Rs. 50 Million as per the latest audited financial statement or Average annual net profit of the last three financial years not less than Rs. 50 Million. Category "I", related to field of activity defined as Convention & Exhibition centers, Hotels, Restaurants and Banquet Halls. 17. Clause 7.22 provides for Category "II" to include an indirectly related field of activity defined as shopping centers, commercial complexes, housing or office complexes, retail stores, entertainment centers and amusement parks. Clause 7.23 provides for the eligibility criteria to show that the bidding company must have developed during last five years at least one Project having Capital Cost not less than Rs. 1,000 Million. Clauses 7.24 and 7.25 thereof read as under: 7.24 The turnover of the Bidding Company or the combined turnover of the Financially Significant Members of the Bidding Consortium from the directly related field of activities shall not be less man Rs. 500 million. 7.25 Format for Cover I ....
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....er the Authority had any jurisdiction to cancel the bid. 18. The Executive Committee is a statutory functionary. The powers and functions of the authority and the respective committees concededly are governed by the provisions of the statute, but, then the jurisdiction of the Executive Committee is limited. It was confined to rejection or acceptance of the tender. The Authority exercises a larger power. For the said purpose we would assume that the Authority had no incidental or ancillary power, but there cannot be any doubt or dispute that the Executive Committee could not cancel the entire tender. It could not have caused any change in the entire scheme or policy. It could not make alterations in the methodology of tender. It could not have gone into the working of the project. It also could not have gone into the question as to whether the project would be financially viable if the method of calculation is changed. 19. Strong reliance has been placed by Mr. Nariman on Marathwada University v. Seshrao Balwant Rao Chavan (1989)IILLJ161SC to contend that as therein the power of the Vice Chancellor and the Executive Council was different, the former's power could not have been....
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....use in this sentence, but not in subsequent ones, of inverted commas). The agent, in fact, has no authority to do what he does at the time he does it. Subsequently, however, the principal, on whose behalf, though without whose authority, the agent has acted, accepts the agent's act, and adopts it, just as if there had been a prior authorisation by the principal to do exactly what the agent has done. 21. As noticed hereinbefore, we have proceeded on the basis that the powers of the Executive Committee and the Authority are separate and distinct and we have pointed out that the powers vested in the Executive Committee being limited, the decision taken by the Authority cannot be said to be illegal. It was furthermore contended that the Executive Committee had a special power which would prevail over general power vested in the Authority. In J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. The State of Uttar Pradesh and Ors. 1961)ILLJ540SC , this Court applied the rule of construction that general provisions yield to special provisions, but, the said rule has no application in the facts and circumstances of the present case. Executive Committee does not exercise any special power.....
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....e of Rs. 20,000 per sq.m. of built up area for total built-up area 65,000 sq.m. for Convention & Exhibition center. The amount will be Rs. 130 crores. The bidder will also have to quote a rate of premium higher than Rs. 70,000 per sq.m. of built-up area for 50,000 sq.m. of total built-up area for Commercial Complex. The premium amount will be higher than Rs. 350 crores. The total minimum amount of lease premium to be quoted by the bidder will be higher than Rs. 480 crores of the total amount of lease premium that will be payable to MMRDA 50% will have to be paid within one month and the balance will have to be paid within two months i.e. within three months from the time the bid is accepted. The lease period is of 80 years as is indicated in the MMRDA (Disposal of land) Regulation 1977. Real Estate component. The built-up area (considered for FSI computation) of C&EC shall be considered as 60,500 sq.m. (Phase I and II) irrespective of the reduction that may be possible on finalization of detailed architectural designs. Similarly the floor space considered in FSI computation for the Real Estate component shall be 15,000 sq.m. The bidder has the option of bidding only for the C&EC w....
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.... light of the decision of this Court in ABL International Ltd. (supra), each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise power of judicial review. In a case where a public law element is involved, judicial review may be permissible. Noticing some of the areas where judicial review would be permissible, this Court opined that ordinarily, this Court would not enforce specific performance of contract where damages would be adequate remedy. It was also held that conduct of the parties would also play an important role. The expansive role of Courts in exercising its power of judicial review is not in dispute. But as indicated hereinbefore, each case must be decided on its own facts. 26. Dr. Singhvi placed reliance upon Star Enterprises and Ors. v. City and Industrial Development Corporation of Maharashtra and Ors. [1990]2SCR826 , wherein Ranganath Misra, J., as His Lordship then was, opined: In recent times, judicial review of administrative action has become expansive and is becoming wider day by day. The traditional limitations have been vanishing and the sphere of judicial scrutiny is being expan....
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....f a public project, the Authority was not truly concerned with the enforcement of its master plan. No such argument was advanced before the High Court. Such an argument has been advanced for the first time before us. We would consider the efficacy of said contention a little later. 29. The next question which arises for consideration is as to whether any reason was required to be assigned. A power to deal with a contractual matter and a power of a statutory authority to exercise its statutory power in determining the rights and liabilities of the parties are distinct and different. Whereas reasons are required to be assigned in a case where civil or evil consequences may ensue, the same may not be necessary where it is contractual in nature, save and except in some cases, e.g., Star Enterprises (supra). Whether assignment of reasons forms third pillar of principle of natural justice, is not free from doubt. There is a diversity of opinion as has been noticed by this Court in Rajesh Kumar and Ors. v. D.C.I.T. and Ors. [2006]287ITR91(SC) . 30. Reliance has also been placed by Mr. Nariman on Commissioner of Police, Bombay v. Gordhardas Bhanji 1952 (1) SCR 1351 and Union of India and....
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....tition was dismissed in limine only on the premise that the question involved therein related to contractual obligations and the policy decision could not be termed as unfair or arbitrary. It was opined that therein no question of policy decision arose and as such contract was to be given to the lowest bidder in terms of the tender notice and the contract should have been awarded to the appellant therein, especially when he had been doing the job for many years. As to how the said decision is applicable to the facts of the present case, we fail to understand. For the self-same reasons we are unable to appreciate the contention that only because a change has been effected in computation of total price under the new tender, the same was invalid in law. 34. In New Horizons Ltd. and Anr. v. Union of India and Ors. (1995)1SCC478 , this Court opined that in the matter of grant of tender the State cannot act as a private person having regard to Article 14 of the Constitution of India. It was categorically opined that departing from the narrow legalistic view the Courts have taken note of the realities of the situation which, by no stretch of imagination, would mean that the Court would s....