AJN 00-OS-WP(L)719.11 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (LODGING) NO.719 OF 2011 Mr. Finlay P. Braganza, Proprietor of M/s. Finlays Gateway Auto (In & Out Convenience Stores), Behind Regal Cinema, Chatrapati Shivaji Marg, Colaba, Mumbai – 400 039 and residing at Rosary House, 4th Floor, Flat 14A, Gun Powder Road, Mazgaon, Mumbai – 400 10. ) ) ) ) ) ) ) ) ) ... Petitioners Versus 1. The Territory Manager, Retail (Mumbai), Bharat Petroleum Corporation Limited, having its Head Office at 12/E&F, Maker Towers, Cuff Parade, P.B. No.19949, Mumbai – 400 005. ) ) ) ) ) ) ) 2. The Manager, Bharat Petroleum Corporation Limited, having its Head Office at 12/E&F, Maker Towers, Cuff Parade, P.B. No. 19949, Mumbai – 400 005. ) ) ) ) ) ) AJN 00-OS-WP(L)719.11 2 3. Bharat Petroleum Corporation Limited, a Government Enterprise, having its Head Office at 12/E&F, Maker Towers, Cuff Parade, P.B.No.19949, Mumbai – 400 009. ) ) ) ) ) ) ) ... Respondents Mr. Rafiq Shaikh with Mr. L.S. Shetty and Mr. A.M. Sethna for the petitioners. Mr. Minoo Siodia with Mr. Agrawal Nikhil and Kaushik N. Singh i/b Rustomji & Ginwala for respondent 3. CORAM: MRS. RANJANA DESAI & R.G. KETKAR, JJ. DATE ON WHICH THE ORDER IS RESERVED : 19TH APRIL, 2011. DATE ON WHICH THE ORDER IS PRONOUNCED: 28TH APRIL, 2011. P.C.:- 1. The petitioner carries on business as sole proprietor under the firm name and style of M/s. Finlays, Gateway Auto (In & Out Convenience Stores), situate behind Regal Cinema, Chatrapati Shivaji Marg, Colaba, Mumbai – 400 039. Respondent 3 is the Bharat Petroleum Corporation Limited. Respondent 1 is the Territory Manager – Retail, AJN 00-OS-WP(L)719.11 3 Mumbai and respondent 2 is the Manager of respondent 3. 2. The case of the petitioner is that respondent 3 had issued to him a Letter of Intent (for short, “the LoI”) dated 31/1/2007 in respect of a business known as “Gateway Auto In and Out Convenience Stores” at the premises mentioned hereinabove. The LoI was renewable for a period of one year thereafter on mutually agreed terms. The said letter stipulated execution of a Franchise Agreement. According to the petitioner, the respondents have arbitrarily and unilaterally terminated the said arrangement without any justification, contrary to the settled principles of natural justice. A copy of the Franchise Agreement was not even supplied to him. The petitioner vide his letter dated 23/11/2010 addressed to respondent 1 requested for renewal of the Agreement/LoI dated 31/1/2007. However, the respondents did not respond to the said letter. The petitioner addressed another letter dated 10/1/2011. The respondents did not respond to that letter also. The petitioner made further AJN 00-OS-WP(L)719.11 4 correspondence but to no avail. The petitioner received the impugned order dated 31/1/2011 conveying to him that renewal of the Agreement dated 3/2/2008 was not possible as was orally conveyed to him. The petitioner was informed that his operator-ship agreement had expired on 2/2/2011 and he was advised to remove all his goods before 1/2/2011. 3. The petitioner filed Writ Petition No.409 of 2011 inter alia, seeking cancellation of the impugned letter dated 31/1/2011. The said writ petition was disposed of by a Division Bench of this court (Dr. D.Y. Chandrachud and Anoop V. Mohta, JJ.) on 8/2/2011. The Division Bench in its order observed that the terms of the agreement that was entered into by the petitioner with the respondents on 3/2/2008 had ended on 2/2/2011. A statement made by counsel for the respondents that respondent 3 had negotiated an agreement with a third party, but in the event, the petitioner is ready and willing to match or offer better terms, respondent 3 is willing to consider the offer AJN 00-OS-WP(L)719.11 5 that may be made by the petitioner, was recorded by the court. Counsel for the petitioner made a statement that the petitioner will negotiate with the competent authority of respondent 3 in order to explore whether it would be possible for the petitioner to offer acceptable terms. This statement was also recorded. The Division Bench observed that in view of the statements made in the aforestated terms, counsel appearing for the petitioner does not seek any further relief. The petition was accordingly disposed of. The Division Bench observed that in view of the order which it had passed, the question of maintainability of the petition on the ground that there is an arbitration agreement contained in the contract between the parties was not considered by it. All the rights and contentions of the parties were kept open to be urged in the appropriate proceedings. 4. According to the petitioner, thereafter, the petitioner gave matching and better offer to the respondents. Correspondence was exchanged between the two sides. AJN 00-OS-WP(L)719.11 6 However, the petitioner received order dated 5/4/2011 from respondent 1 informing him, inter alia, that his offer dated 16/3/2011 cannot be considered favourably and the same stands rejected on the grounds recommended by the Negotiation Committee. The petitioner was directed to handover possession on 6/4/2011 at 10.00 hours. It is stated in the petition that the petitioner has no alternate accommodation to shift his stock-in-trade and he is constrained to continue in possession of the said premises. It is stated that the petitioner is ready and willing to pay monthly matching compensation as offered by M/s. Subway. The petitioner has in the circumstances, inter alia, prayed that the impugned letters dated 31/1/2011 and 5/4/2011 directing the petitioner to vacate the said premises on or before 6/4/2011 be quashed and set aside. Though the petitioner has not referred to the agreement which the respondents had entered into with the petitioner and has contended that the Franchise Agreement was not sent to him, the impugned letters dated 31/1/2011 and 5/4/2011 indicate that the petitioner AJN 00-OS-WP(L)719.11 7 was appointed as Operator at the said “In & Out Convenience Store” vide agreement dated 3/2/2008 and the said agreement had expired on 2/2/2011. 5. We have heard Mr. Shaikh, learned counsel for the petitioner, at some length. He submitted that the respondents' action is malafide, highhanded and arbitrary. They have exhibited a callous and malicious approach. He submitted that the Division Bench vide its order dated 8/2/2011 directed the respondents to consider the petitioner's offer and, in the event, the petitioner is ready and willing to match or offer better terms than the party with which the respondents have negotiated the agreement, the petitioner's case was directed to be considered. Counsel submitted that though the petitioner matched the offer of M/s. Subway with whom the respondents propose to enter into an agreement, the respondents in defiance to the order of this court dated 8/2/2011 went ahead and awarded operator-ship to M/s. Subway. Counsel submitted that the petitioner is in AJN 00-OS-WP(L)719.11 8 possession of the said premises and has been conducting “In & Out Convenience Stores” efficiently for a considerable period. However, the respondents have arbitrarily preferred M/s. Subway over the petitioner. Counsel submitted that M/s. Subway is a foreign company. The respondents should have preferred an Indian company over a foreign company. Counsel submitted that the reasons given by the Negotiation Committee are far from satisfactory. Counsel submitted that no opportunity of hearing was given to the petitioner before cancelling the arrangement. In the circumstances, the impugned letters be set aside. 6. We have also heard Mr. Siodia, learned counsel appearing for the respondents, who has raised a preliminary objection that the petition is not maintainable in view of the arbitration clause contained in the agreement dated 3/2/2008 executed by the parties. Counsel for the petitioner submitted that since according to the respondents, the agreement has expired the AJN 00-OS-WP(L)719.11 9 arbitration clause does not survive. In view of the clear unsustainability of the points raised by the petitioner, in our opinion, the petition will have to be dismissed in limine. We are, therefore, not inclined to go into the debatable question of maintainability. The case of the petitioner that the respondents did not abide by this court's order dated 8/2/2011 is not true. It must be borne in mind that this court did not give any directions but merely recorded the statements of the counsel. In any event, letter dated 5/4/2011, which is impugned in this petition records that after this court's order dated 8/2/2011, several opportunities were sought by the petitioner and ultimately on 16/3/2011 the petitioner gave his offer. It was contended by counsel for the petitioner that the petitioner did match the offer of M/s. Subway. M/s. Subway agreed to pay Rs.70,000/- per month. The petitioner also gave the same offer and, therefore, the respondents ought to have considered the petitioner's offer favourably particularly when the petitioner was already conducting the business. It is not possible to AJN 00-OS-WP(L)719.11 10 accept this submission. After the petitioner submitted his offer, the Negotiation Committee of the respondents considered the petitioner's offer. Letter dated 5/4/2011 records the observations of the Negotiation Committee. The Negotiation Committee has observed that the petitioner had requested that the amenities, format of business, etc. should be provided by the respondents. For this, the respondents would be required to make substantial investment. However, M/s. Subway vide their letter dated 25/11/2010 has offered that they will undertake the interior work and the respondents need not invest money for this. The Negotiation Committee has observed that this is a major difference between the offer made by the petitioner and the offer made by M/s. Subway. We can hardly fault the respondents or the Negotiation Committee for this view. Assuming the petitioner has offered Rs.70,000/- per month and matched the offer of M/s. Subway, the offer made by M/s. Subway provides that M/s. Subway would incur all the expenditure in respect of the interior work and other facilities as AJN 00-OS-WP(L)719.11 11 opposed to the petitioner's request that the said expenditure be borne by the respondents. Willingness to bear expenditure of interior work and other facilities would make M/s. Subway's offer a far better offer. Letter dated 5/4/2011 further states that the Negotiation Committee has observed that M/s. Subway was having an international well reputed brand image, carrying immense business spin offs in the concerned area and, therefore, retailing efforts at the retail outlet will be immensely benefited. The Negotiation Committee has further observed that the respondents are having a national tie up with M/s. Subway having association with two corporates. However, the petitioner is a small firm. The petitioner lacks the brand value, expertise in hospitality and has no proven professional track record for customer service which is essential for the subject business. The Negotiation Committee has considered M/s. Subway's brand value, professional approach, expertise in the customer service sector, which according to it, will improve the respondents' business turnover in manifold. AJN 00-OS-WP(L)719.11 12 According to the Negotiation Committee, it would not be prudent to compare a similar business run by the petitioner with that of M/s. Subway. These observations of the Negotiation Committee indicate that the Negotiation Committee has considered both the proposals in their proper perspective. The background of M/s. Subway and of the petitioner has rightly been taken into consideration. The Negotiation Committee has taken a decision which in its opinion would serve the best business interest of the respondents. Apart from the fact that the offer made by the petitioner cannot be called a better or more lucrative offer, from the point of view the business interest of the respondents, the decision taken by the Negotiation Committee will have to be upheld. The courts should not interfere with such decisions which are taken by people who have the necessary expertise. In any case, we do not find that the offer of M/s. Subway is accepted for any extraneous reasons. After a scrutiny of the proposal submitted by M/s. Subway and the proposal submitted by the petitioner, we are unable to draw such a conclusion. AJN 00-OS-WP(L)719.11 13 The decision taken by the respondents does not suffer from the vice of arbitrariness. We are of the opinion that the allegations made by the petitioner are baseless. The petition is, therefore, dismissed. [MRS. RANJANA DESAI, J.] [R.G. KETKAR, J.]