-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1853 OF 2008 1. Alok Parshuram Jalan ) Managing Director of Laqshya Media Private Limited) a Private Limited Company, registered ) under the provisions of the Companies Act, 1956 ) and having its registered office at Unit No. 17, ) Andheri Industrial Estate, Off. Veera Desai Road, ) Andheri (West), Mumbai-400 053 ) 2. Laqshya Media Private Limited, ) a Private Limited Company, registered ) under the provisions of the Companies Act, 1956 ) and having its registered office at Unit No. 17, ) Andheri Industrial Estate, Off. Veera Desai Road, ) Andheri (West), Mumbai-400 053 )...Petitioners versus 1. The Brihanmumbai Electric Supply and ) Transport Undertaking (governed under the ) Municipal Corporation of Greater Mumbai), having ) its address at Electric House, Post Box No. 192, ) Colaba, Mumbai-400 001. ) 2. The Municipal Corporation of Greater Mumbai, ) a body corporate constituted under the provisions ) of the Municipal Corporation of Greater Mumbai ) Act, 1888, and having its head office at ) Mahapalika Marg, Near CST, Mumbai-400 001 ) 3. Pioneer Publicity Corporation Private Limited, ) a Private Limited Company registered under the ) provisions of the Companies Act, 1956 and having ) its registered office at 410-416, Anjani Complex, ) Pereira Hill Road, Opp. Guru Nanak Petrol Pump, ) Off Andheri Kurla Road, Andheri (East), ) Mumbai-400 099 ) 4. State of Maharashtra, ) having their office at High Court annexe Building, ) -2- (PWD) Building, Fort, Mumbai-400 032 )..Respondents Mr. S.C. Naidu, assisted by Mr. M.M. Gujar, Mr. N.P. Dalvi and S.R. Ingule, instructed by Shri Shoaib I. Memon for the petitioners. Mr. S.G. Aney, Senior Advocate, with Mr. H. Toor, Mr. Sunil Chavan and Mr. D.G. Dhanure, instructed by M/s. M.V. Kini & Company, for respondent No.1. Mrs. S.M. Modale for respondent No.2. Mr. Janak Dwarkadas, Senior Advocate, with Mr. M.D. Siodia and Ms. Manmeet Arora, instructed by M/s. Rustamji & Ginwala, for respondent No.3. Mr. A.B. Ketkar, AGP, for respondent No.4. WITH WRIT PETITION NO. 1997 OF 2008 Abha Surender Gulati, of Mumbai, ) Indian Inhabitant, being sole Proprietress of ) M/s. Alakh Advertising & Publicity, having her ) address at 3, Cosmos Commercial Centre, 2nd floor, ) 3rd Road, Khar (West), Mumbai-400 052 )...Petitioner versus 1. The Brihan Mumbai Electric Supply and Transport ) Undertaking (governed under the Municipal ) Corporation of Greater Mumbai) having its address ) at Electric House, Post Box No. 192, Colaba, ) Mumbai-400 001 ) 2. M/s. Pioneer Publicity Corporation, a registered ) partnership firm, carrying on business at 410-416 ) Anjani Complex, Pereira Hill Road, ) Opp. Cine Magic, Andheri-Kurla Road, ) Mumbai-400 099 ) 3. State of Maharashtra, ) having their office at High Court Annexe ) Building (PWD), Fort, Mumbai-400 032. )...Respondents. -3- Mr. Rajiv Narula, instructed by M/s. Jhangiani, Narula & Associates, for the petitioner. Mr. S.G. Aney, Senior Advocate, with Mr. H. Toor, Mr. Sunil Chavan and Mr. D.G. Dhanure, instructed by M/s. M.V. Kini & Company, for respondent No.1. Mr. Janak Dwarkadas, Senior Advocate, with Mr. M.D. Siodia and Ms. Manmeet Arora, instructed by M/s. Rustamji & Ginwala, for respondent No.2. Mr. A.B. Ketkar, AGP, for respondent No.3. WITH WRIT PETITION (LODGING) NO. 2111 OF 2008 M/s. Prithvi Associates, ) a Company incorporated under the provisions ) of the Companies Act, 1956, having its office at ) 18/2, Prabhadevi Industrial Estate, ) Opp. Siddhivinayak temple, Prabhadevi, ) Mumbai-400 025 )..Petitioner versus 1. The Brihan Mumbai Electric Supply and ) Transport Undertaking, a statutory body ) constituted under the provisions of the Bombay ) Municipal Corporation Act, 1888 having its ) office at Brihan Mumbai Electric Supply & ) Transport Undertaking, Electric House, BEST ) Marg, Colaba, Mumbai-400 001. ) 2. Mr. Uttam Khobragade, ) General Manager, B.E.S.T., ) having his office at Brihan Mumbai Electric ) Supply & Transport Undertaking, ) Electric House, BEST Marg, Colaba, ) Mumbai-400 001 ) 3. State of Maharashtra, through the ) Government Pleader, High Court, ) Mumbai. ) 4. M/s. Pioneer Publicity Corporation Pvt. Ltd. ) having its office at 113/114 Anjani Complex, ) -4- Pereira Hill Road, Opp. Gurunanak Petrol Pump ) Off. Andheri-Kurla Road, Andheri (East), ) Mumbai-400 099 )..Respondents Mr. Sudhir Nanavati with Mr. Birendra Saraf, Mr. Subhash Jadhav and Mr. Daljeet Singh Bhatia, instructed by M/s. ALMT Legal for the petitioner. Mr. V.A. Thorat, Senior Advocate, with Mr. H. Toor, Mr. Sunil Chavan and Mr. D.G. Dhanure, instructed by M/s. M.V. Kini & Company, for respondent Nos.1 and 2. Mr. A.B. Ketkar, AGP, for respondent No.3. Mr. S.U. Kamdar, Senior Advocate, with Mr. M.D. Siodia and Ms. Manmeet Arora, instructed by M/s. Rustamji & Ginwala, for respondent No.4. CORAM: P.B. MAJMUDAR & A.A. SAYED, JJ. Judgment reserved on: 16 th September, 2008 Judgment pronounced on: 23 rd September,2008 ORAL JUDGMENT (Per P.B. Majmudar, J.) Rule. Learned counsel appearing for respective respondents waive service of Rule. 2. Since common point is involved in all these petitions, with the consent of the learned counsel, all these petitions were heard together and are disposed of now by this common judgment. For the sake of convenience, the facts are taken from Writ Petition No. 1853 of 2008, as the main dispute is common in all these petitions. 3. The main challenge in these writ petitions is to the award of -5- contract for display of advertisements by affixing kiosks on pole and non illuminated display board on bracket of street lighting pole belonging to the Brihan Mumbai Electric Supply and Transport Undertaking (“BEST”) and Municipal Corporation of Greater Bombay for a period of 36 months, on the ground that at the time of processing various tenders, respondent No.1 has deviated from the conditions incorporated in the tender conditions illegally, arbitrarily and in a surreptitious manner the tender of respondent No.3 has been accepted. So far as the petitioners in Writ Petition No.1997 of 2008 and Writ Petition (Lodging) No. 2111 of 2008 are concerned, they have also taken additional challenge in the petitions in connection with blacklisting the said petitioners by respondent No.1. 4. Respondent Nos. 1 and 2 issued an advertisement on 3rd July, 2008, inviting bids in connection with display of advertisement by affixing kiosks on pole and non illuminated display board on bracket on approximately 32,473 street lighting poles belonging to respondent Nos. 1 and 2 in the old city limits of Mumbai for a period of 36 months. The tender conditions and instructions to tenderers categorically stated that the expected revenue in this contract is minimum Rs. 33 crores and offer below the minimum prescribed will not be accepted. A corrigendum dated 22nd July, 2008, was issued by respondent No.1 stating that respondent No.2 is unlikely to accord sanction in respect of non-illuminated display boards and the bids may be quoted accordingly and that the Undertaking will conduct -6- auction amongst the eligible bidders immediately after opening the tender on 24th July, 2008 at 16.00 Hrs. Pursuant to the above advertisement, as per the averments in Writ Petition (Lodging) No. 2111 of 2008, 15 prospective bidders purchased the tender forms, out of which on the relevant day only four bidders responded with the payment of earnest money deposit. It is the case of the petitioners that on the relevant day i.e. 24th July, 2008, four tenderers were present which includes the present three writ petitioners and Pioneer Publicity Corporation Pvt. Ltd., the successful bidder. On that day none of the petitioners submitted their tender till 15.00 hrs. subsequent to which Mr. A.A. Mule, Chief Engineer (Works) invited discussions with regard to the suggestions made by the tenderers. At that time a grievance was made by all of them about the minimum reserve price prescribed in the tender. According to the petitioners, the said Mr. Mule informed the tenderers present that a fresh advertisement would be issued in this behalf and on such assurance, the petitioners left the place. 5. It is the case of the petitioners that after the petitioners were assured that the fresh tenders will be invited by reducing the minimum reserve price, they left the place and subsequently it was not open for the respondents to accept the tender submitted by respondent No.3 at about 5.00 p.m. on the same day for an amount of Rs. 21 crores for a period of three years. According to the petitioners, respondent Nos. 1 and 2 have acted in an arbitrary manner and have abused the powers vested in them -7- and thus the action of awarding the tender to respondent No.3 is highly arbitrary. The procedure adopted by respondent Nos. 1 and 2 is also arbitrary and contrary to the conditions of tender in awarding the contract to respondent No.3 below the minimum reserve price as provided in the tender conditions for the contract. 6. Mr. Naidu, learned counsel appearing for the petitioners in Writ Petition No. 1853 of 2008, has challenged the said procedure mainly on the ground that it was not open for the first respondent to alter the essential conditions of the tender. It is further submitted by Mr. Naidu that the essential terms of the tender cannot be changed unless fresh advertisement is issued so that the people at large could have taken part. It is further submitted by Mr. Naidu that when the minimum reserve price was fixed at Rs. 33 crores, it was not open for the respondents to reduce the same at the time of submitting the tender by accepting the tender of respondent No.3 for Rs. 21 crores. The tenders were to be opened at 3.00 p.m. on 24th July, 2008. It was not open for the respondents to extend the time as ultimately it was opened at 5.00 p.m. He further submitted that even the minimum reserve price which was fixed at Rs. 33 crores is arbitrary and without any rationale basis and that there as no norms and standard which were taken for fixing such amount. It is submitted by Mr. Naidu that even the internal note states that four bidders were not interested in the tender and that the four bidders were cartelling amongst themselves. Inspite of the above, the -8- action of awarding the tender to respondent No. 3 is highly arbitrary and is violative of Article 14 of the Constitution of India. The first respondent was bound by the conditions prescribed in the tender documents and could not have altered the said condition while awarding the contract. He further submitted that for changing any conditions in the tender, notice of the same was required to be given to all the tenderers who had purchased the tender forms. The petitioners have, therefore, prayed that the tender awarded to respondent No.3 be quashed and respondent No.1 be directed to re-tender the same or in any case by inviting the four tenderers who were present on the relevant date. During the course of hearing it was submitted by Mr. Naidu that subsequently the petitioners also came to know that a decision was also taken blacklisting the petitioners for forming a cartel with other bidders as set out in the note of the BEST Committee. The petitioners in Writ Petition No. 1997 of 2008 and Writ Petition (Lodging) No. 2111 of 2008, have also challenged the decision taken by the respondent Nos. 1 and 2 for blacklisting them. 7. Mr. Naidu has taken us through the various documents forming part of the petition as also cited various judgments to substantiate his argument that it was not open for the first respondent to alter the essential condition of tender at the last minute and that the act of the respondent No.1 in allowing the petitioners to leave the premises with an assurance that fresh tenders would be invited and thereafter accepting the tender of respondent -9- No.3 is illegal. The action of respondent No.1 in awarding the contract to respondent No.3 below the minimum reserve price as provided in the tender conditions is also illegal, arbitrary and contrary to the conditions of tender. The learned counsel appearing for the petitioners in other two writ petitions have adopted the arguments of Mr. Naidu. However, in their respective petitions, additional challenge is also made in connection with the order passed by respondent No.1 in blacklisting them. They submitted that the action of respondent No.1 in blacklisting the petitioners from participating in the tenders floated by respondent No.1 for five years is unreasonable and arbitrary and smacks of bias and discrimination against the petitioners. 8. The petition has been resisted by the learned counsel appearing for the respondents. Mr. Aney, learned counsel appearing for the first respondent took a preliminary objection to the effect that the petitioners neither bid nor participated in the bidding process and thus they have no right to make any grievance. Mr. Aney further submitted that it is not correct to say that the petitioners were not present at the time of opening of the tender. Mr. Aney further submitted that the Chief Engineer (Works) has requested all the eligible bidders and their representatives that the matter will be decided on the same day and that time to drop the bid will be extended with the approval of the General Manager, BEST. The same has been communicated to all the eligible bidders and they were told to give their best offer. Mr. Aney has further submitted that even though the present -10- petitioners were present all throughout, they did not submit their tender forms and only respondent No.3 chose to put in the tender. Thus the bid of respondent No.3 was accepted. It is submitted that the entire process has taken place in the presence of all the petitioners. However, subsequently the petitioners in Writ Petition No. 1853 of 2008 refused to sign and left the venue. He submitted that there were only four tenderers present on the relevant day. The matter was discussed and the petitioners were told to submit their own bid, but inspite of that the petitioners have failed to make any offer either at the time of opening of the tender or any time thereafter. It is submitted by Mr. Aney that the disputed facts cannot be decided in a writ petition. Mr. Aney further submitted that this petition suffers from delay and laches. Mr. Aney further submitted that in the advertisement given in the newspaper, there was no reference to minimum reserve price at all. Even if there is change effected in the minimum reserve price, the same was done in the present of all the tenderers present there. Inspite of the same, the petitioners did not put up their bid. In view of this, no relief is required to be granted. He submitted that there is no arbitrariness on the part of respondent No.1. The action of the first respondent is reasonable as per the test of Wednesbury principles on unreasonableness. Mr. Aney further submitted that in this view of the matter, the ultimate decision cannot be challenged in writ proceedings. It is submitted that the decision making process is not vitiated in any manner. It is submitted that the action of awarding contract to respondent No.3 is just and proper. Mr. Aney submitted -11- that considering the facts and circumstances, this Court may not entertain this petition as the petitioners have not filed the same with a bona fide intention. 9. Mr. Janak Dwarkadas, learned counsel appearing for respondent No.3 has submitted that respondent No.3 has already deposited Rs. Five crore as security deposit as per the tender conditions. Pursuant to the award of tender, the contract has been executed on 6th August, 2008 and respondent No.3 has also entered into contracts with various companies for displaying their advertisements on the said kiosks and substantial costs have been incurred by respondent No.3. This petition is filed only to harass respondent No.3 simply because respondent No.3 has not supported the petitioners at a subsequent stage though initially all of them were of the opinion that the minimum reserve price should be reduced. He has submitted that in view of delay and laches, the petition is required to be dismissed. He submitted that the condition about minimum reserve price of Rs. 33 crores is mentioned only for the first time in the tender form. It is therefore, submitted that the petitioners have no locus to file the present petition in view of the fact that the petitioner have not participated or submitted their tenders. Since respondent No.3 has entered into contract with third parties for displaying their advertisements, the petition be dismissed with costs. Mr. Dwarkadas cited various judgments of the Supreme Court to substantiate his say that the High Court should not -12- interfere in such matters. He has further submitted that even though there is allegation of mala fide against the General manager and other Officers, they have not been joined in the petition and, therefore, the allegation in this behalf cannot be entertained against such officer without joining him as party respondent. 10. We have heard the learned counsel appearing for the parties at length. We have gone through the record and proceedings and also considered the contentions raised by the parties. The principal questions which require consideration is (i) whether it was open for the first respondent to accept the tender of respondent No.3 below the minimum price which was mentioned in the tender form, (ii) whether the petitioners have been able to substantiate their case that after allowing them to leave the hall the tender of respondent No.3 was accepted after extending the time, (iii) whether there is any arbitrariness or illegalities in the decision taking process on the part of respondent No.1; and (iv) whether the petitions suffer from delay and laches. 11. So far as the petitioners in Writ Petition Nos. 1997 of 2008 and Writ Petition (Lodging) No. 2111 of 2008 are concerned, they have raised an additional point about blacklisting the said petitioners on the ground that they have formed a cartel and, therefore, they have been blacklisted. The said decision is challenged by the said petitioners on the ground that no order of -13- blacklisting could have been passed without affording them an opportunity of hearing. The impugned order blacklisting them is unreasonable and arbitrary. 12. So far as the question about prescribing minimum reserve price of Rs. 33 crores is concerned, it is not in dispute that in the advertisement there was no such reference . That condition is finding place in the tender form. As pointed out earlier, the tender forms were purchased by 15 tenderers. However, only four tenderers were responded with the payment of earnest money deposit on the relevant day. In the affidavit in reply filed on behalf of respondent No.1 at page 100, it is averred as under. “(i) The license to affix kiosk on street lighting pole are in existence since from 1.4.1998. The original contract was with M/s. Vantage Advertising for about 1 ½ years. Thereafter, it was with M/s. Mid-Day Publications Ltd. for about 3 years, and thereafter it was with M/s. D.S. Mittal for about 1 year. Thereafter since from 3.3.2004 the said license to affix kiosk on street lighting pole is with M/s. Prithvi Associates. I say that the original period of the said license was only for three years, but however the said license has been now extended for over 1 ½ years and will now expire on 02.09.2008. It may be noted here that even though the reserve price in the earlier contracts, including the contract with M/s. Prithvi Associates, was for Rs. 22 crores, the best offer received by BEST Undertaking was only Rs. 10.59 crores. Thus, the contract for the last 4 ½ years is pegged at the original rate. The extension granted in favour of M/s. Prithvi Associates has been at the behest of the petitioner, as would be clear from the following:- (ii) I say and submit that even in the previous contract which is expiring on 2.9.2008, the reserve price was Rs. 22 crores whereas the BEST undertaking could get the best offer for Rs. 10.59 crores, as such, upon getting approval from the BEST Committee the earlier contract was granted in favour of -14- Prithvi Associates for Rs. 10.59 crores even though reserve price was Rs. 22 crores. I say that the said contract was already extended twice and the said extended period is expiring on 2.9.2008. (iii) Prithvi Associates being the beneficiary of the license at present, and being actively assisted in their stratagem by the Petitioners, are instrumental in creating a cartel in the tendering process initiated on 24.07.2008. The sole attempt and motive of the Petitioners and Prithvi Associates is to frustrate the tender process and consequently, get the existing license extended. I say that the present petition apparently filed at the instance of the said Prithvi Associates and therefore, the Petitioners have no locus standi.” It is also further averred in the affidavit in reply at pages 102 and 103 as under: “ C- Delay and latches: I say that the bidding was closed on 24.07.2008 at 5.05 p.m. I say that the 3rd Respondent's bid was recommended to the BEST Committee on 28.07.2008 by the note to the BEST Committee, Exhibit-D to the petition. Thereafter, the BEST Committee resolved to grant the contract in favour of Respondent No.3 vide its Resolution No. 216 dated 29.7. 2008. The contract document in favour of the 3rd Respondent has been already executed on 6.8.2008. I say that the present petition has been filed on 20.8.2008 and was served upon the BEST, the 1st Respondent on 25.08.2008. I say the Petition is therefore highly belated an stands defeated by delay and latches and on this count alone, the petition shall liable to be dismissed. D- False Statement on oath by the Petitioners: I say that petitioner knowingly made false and incorrect statements as to the events of tendering. An attempt has been made by the Petitioners to put false words to my mouth. I say that I never stated that there will be re-tendering. On the contrary, I have requested all the eligible bidders and their representatives that matter will be decided on the same day and time to drop the bid will be extended with the approval of the General Manager, BEST and upon extension of time, the same has been duly communicated to all the eligible bidders, and they were all told to make their best offer. Only Respondent No.3 -15- chose to put in his best offer. Thereafter the sole tender bid was opened in the presence of representatives of all the four (4) bidders and I announced the respondent No.3's bid. I requested all the representatives of 4 bidders to sign the Tender Opening Report. They were all present at the tender opening hall till 5.05 p.m. Out of the representatives of four eligible bidders, two representatives of eligible bidders counter-signed the Tender Opening Report sheet along with various other officers of the BEST undertaking. The Petitioner and Prithvi Associates refused to sign and left the venue...” 13. It is further averred that the tender was opened in the presence of all the representatives of the four eligible bidders and after opening the tender box, sealed envelope of the bid dropped by respondent No.3 was opened in the presence of all the parties and the highest bid of respondent No.3 was announced in the open hall in the presence of all the representatives of the parties. The presence of the Officers is also mentioned in the reply at page 105. As per the averments at page 106 of reply of respondent No.1, the BEST Committee awarded the contract in favour of respondent No.3 vide letter dated 30th July, 2008, inter alia, granting license to display kiosks on electric poles and non-illuminated display board for the period between 3rd September, 2008 and 2nd September, 2011. Respondent No.3