1 wp-6827-11.sxw mmj IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6827 of 2011 Satyendra Vasant Kadam & Ors. .. Petitioners Versus The Joint General Manager, Khadki Ammunition Factory.. Respondents Mr. M. S. Karnik with Mr. Sanskar Marathe for the Petitioner Mrs Deepa Chavan i/b Ms Geeta Mulekar for Respondent Nos.1 & 2 CORAM : R.M.SAVANT, J. DATE : 18th NOVEMBER, 2011 P.C. : 1 The Writ Jurisdiction of this Court under Article 227 of the Constitution of India is invoked against the Order dated 16-8-2011 passed by the Learned District Judge-13 Pune, by which Order the Misc Civil Appeal No.244 of 2011 filed by the Petitioners came to be rejected and resultantly the Order dated 1-8-2011 passed by the Learned 4th Joint Civil Judge, S.D.Pune on Exhibit 5 in Regular Civil Suit No.933 of 2011, came to be confirmed. 2 There is, therefore, a concurrent finding recorded by both the Courts below as regards the dis-entitlement of the Petitioners to the grant of the discretionary relief by way of interim injunction. 3 The Petitioners are the licensees of the Respondents in respect of the plinth area which can be described as shops. Licence deeds have been 2 wp-6827-11.sxw executed in favour of the Petitioners by the Respondents and the plinth area covered by the said licences are A-2, A-3, A-4, B-3, B-4, B-5, B-6 covering a total area of 1200 sq.ft. The said licences of the Petitioners were come to an end on 2-8-2011 or in the vicinity of the said date. It would be apposite to advert to the terms and conditions of the said licences by clause (2) the licensee has agreed to pay fees of Rs.24,500/- in respect of the concerned block, by clause 3(c) the said payment is to be made in advance by 25th of every month for the preceding month. By clause 3(f) the licensees were not to carry out any addition and alterations to the shop or erect any new structure in or upon any part of premises. The said clauses are relevant in the context of the reliefs sought by the Petitioners in the suit. 4 The Respondents herein who are the licensors invited tenders for the said shops on licence basis some time on 6-7-2011. The said tenders, as can be seen, were invited well in advance of the licences of the Petitioners coming to an end. This resulted in the Petitioners filing the said Regular Civil Suit No.933 of 2011 for restraining the Respondents from acting upon the said tender notice. The case of the petitioners in the said suit was that in terms of the policy guide lines of 1990, they were entitled to further renewal of the licence on enhancement of the licence fees by 25%. In the said suit an application for temporary injunction came to be filed by the Petitioners in respect of the said tender notice dated 3 wp-6827-11.sxw 6-7-2011. The said application for interim injunction filed by the Petitioners came to be rejected by the Trial Court by order dated 1-8-2011. 5 The gist of the reasoning of the Trial Court that the Plaintiffs were not entitled to the reliefs on the ground that they had breached the licence conditions and have also suppressed material facts from the Court. The Trial Court was of the view that if such relief is granted, the right of the Respondents who have invited tenders so as to enable the public at large to participate in the tender process would be jeopardised and would result in a right in perpetuity being created in favour of the Plaintiffs. After so recording of finding, the Trial Court was of the view that the Plaintiffs have not made out a prima facie case. 6 In so far as, the balance of convenience was concerned, in support of which, the Plaintiffs relied upon the amount expended by them in respect of their respective plinths, the Trial Court was of the view that the Plaintiffs being aware that the licence was for a period of 5 years and that the renewal was at the option of the Defendants. If they have carried out any additions or alterations or improvement, they have done so at their own risk and the Defendants cannot be blamed for the same. In so far as, the reliance placed by the Plaintiffs on the Judgment of a Learned Single Judge of High Court of Madhya Pradesh in Writ Petition No.28475 of 2003. It is observed in the said Order that the facts before the Madhya Pradesh High Court were distinguishable from the facts in the instant suit 4 wp-6827-11.sxw in as much as before the Madhya Pradesh High court, the Applications for renewal were rejected where as in the instant case there was no such rejection and the Defendants had though it fit to invite tenders. 7 The Trial Court, therefore, on both the counts i.e. on the ground of prima facie case as well as balance of convenience held that the Plaintiffs were not entitled to the grant of temporary injunction. 8 Aggrieved by the said order dated 1-8-2011 passed by the Learned 4th Joint Civil Judge, S.D.Pune, the Plaintiffs filed an Appeal being Misc Civil Appeal No.244 of 2011. The said Appeal as indicated above has been rejected by the impugned order dated 16-8-2011. The First Appellate Court has confirmed the findings recorded by the Trial Court. The First Appellate Court by adverting to the policy guide lines applicable in respect of the lands / buildings of the Ordinance Factory observed that it is not mandatory for the licensors / Respondents to grant fresh licence by extending the period. The First Appellate Court further observed that the guide lines clearly speak of handing over of the site on the expiry of the license and on reading of the said license conditions concluded that the Plaintiffs have no right to get the fresh licence or get the licence renewed in their favour for a period of 5 years. The First Appellate Court by adverting to the guide lines observed that the mode of giving the shops on licence basis is by auction and, therefore, the action of the Respondents in calling tenders to allot the shops was not illegal. The First Appellate Court 5 wp-6827-11.sxw also took into consideration the fact that the Petitioners had participated in the tender process initiated by the Defendants. In so far as the improvement etc, carried out by the Plaintiffs is concerned, the First Appellate Court confirmed the findings of the Trial Court as also in respect of the balance of convenience. 9 Heard the Learned Counsel for the parties. 10 The learned Counsel for the Petitioners Mr. Karnik relying upon the same Judgment the Learned Single Judge, of the M.P., High Court, Would contend that though fresh guide lines have been issued in respect of the allotment of building / land of the Ordinance Factory the right of the licensee to get renewal of lease on the payment of enhanced licence fee to the extent of 25% is not taken away. The Learned Counsel would rely upon the observations made by the Learned Single Judge of the M.P. High Court which are to the effect that since the policy dated 10-8-1990 is not suspended and since it contains a renewal clause, the Respondents are not justified in not considering the claim of the Petitioners for renewal of licence accorded to them in accordance with the policy in vogue. Per contra, it is submitted by the Learned Counsel appearing for the Respondents Mrs. Chavan that the fresh guide lines in terms provide that the mode of allotting the plinth area in question on licence basis is by auction and in any event since the tenders have been invited, the Plaintiffs cannot take any exception to the same. 6 wp-6827-11.sxw 11 The grant of the premises in question on licence basis would be the distribution of state largesee on the terms and conditions stipulated. Though there is a renewal clause in the licence, the said clause cannot be said to be mandatory so as to create a right in the licensee, that the Defendants are obligated to consider their application for renewal. As rightly observed by both the Courts below in terms of the licence, the Plaintiffs do not have any right for getting the renewal of the licence on fresh terms. Accepting the said contention would be like creating a right in perpetuity in favour of the Petitioners. In my view, accepting the said contention, would also be against the well settled principle applicable to the distribution of the state largesee. As times out of number it has been stated that, to have transparency and to get the best market price, it is advisable to invite tenders. A useful reference could be made to the Judgment of the Apex Court reported in AIR 1988 SC page 157 in the matter of Haji T.M. Hasan Rawther Vs. Kerala Financial Corporation. Paragraph 14 of the said report is material and is reproduced hereunder: “14. The public property owned by the State or by any instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate. Their dealings should be above board. Their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be 7 wp-6827-11.sxw done by them which gives an impression of bias, favouritism or nepotism. Ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders. That is why the Court repeatedly stated and reiterated that the State owned properties are required to be disposed of publicly. But that is not the only rule. As O. Chinnappa Reddy J. observed “that though that is the ordinary rule, it is not an invariable rule”. There may be situations necessitating departure from the rule, but then such instances must be justified by compulsions and not by compromise. It must be justified by compelling reasons and not by just convenience.” 12 In the instant case, as can be seen, the Defendants have invited tenders on 6-7-2011 and the offers received by them pursuant to the said tenders have been compiled in the statement annexed to the affidavit of one Mr. N.P.Naik, IOFS, Joint General Manager, Ammuniton Factory, Khadki, Pune. A perusal of the said offers indicated that in respect of one of the blocks, the offer received is 8.99 times higher than the existing rate and the lowest offer received is at 1.93 times the existing rate. The offers of the highest bidders have also been accepted but in view of the interim order operating in this Petition, the acceptance has not been acted upon by the Respondents. Therefore, the offers received pursuant to the tender are far higher than the existing rates. Considering the said aspect as also considering the reasons mentioned by both the Courts below for rejecting, the grant of temporary injunction in my view no fault can be found with the orders passed by the Courts below. There is no failure to exercise 8 wp-6827-11.sxw jurisdiction or any illegality or infirmity for this Court to interfere in its jurisdiction under Article 227 of the Constitution of India. The Writ Petition is accordingly dismissed. 13 At this stage, Mr. Karnik appearing for the Petitioners submits that suitable time may be granted to the Petitioners to vacate the premises in occupation of each of the Petitioners. On the usual undertaking being filed by the Petitioners within two weeks from date. The time to vacate the premises in question is granted up to 31-1-2012. In the event, the undertaking is not filed, the Respondents would be free to proceed in accordance with law against the Petitioners for getting them evicted from the premises in question. (R.M.SAVANT, J.)