1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1113 OF 2009 M/s. Parsvnath Developers Ltd. and another. ... Petitioners Versus The Municipal Corporation of Greater Mumbai and others. ... Respondents Mr. Umesh Shandilya with Mr. K.R. Chaudhari for the petitioners. Ms. Geeta Jogalekar for the BMC. Mr. Harvinder Toor with Ms. P.V. Thorat i/by M/s. M.V. Kini & Co. for the respondent Nos.3 to 6. CORAM : SWATANTER KUMAR, C.J. & A.M. KHANWILKAR, J. DATED : 11TH AUGUST, 2009 P.C. Rule. Rule made returnable forthwith, by consent. As short question is involved, petition is heard finally at admission stage by consent. 2. On 22nd May, 2007, Brihan Mumbai Electric Supply & Transport Undertaking (hereinafter to be referred to as the `Undertaking') invited tenders for the development of plot admeasuring area of 1,751 sq. mtrs. reserved for commercial purposes on contract basis on the terms and conditions stipulated therein. The petitioners submitted the tenders in 2 response thereto. The tenders were opened and the meetings were held between the petitioners-developer and the Undertaking whereafter the petitioners bid was accepted. Later on, because of certain disputes between the owner of the restaurant situated in the suit plot to which the Undertaking was party, the tender in question could not be taken to its logical end and there was a complete deadlock. The petitioners assert that they were not made aware of the said pending proceedings until it was disclosed to them by the legal officer of the Undertaking for the first time on 21.9.2007. In this petition under Article 226 of the Constitution of India, the petitioners raise the challenge to the proceedings in the matter of Tender No.AGM(C)/1 17/2007 dated 22nd May, 2007 and prays for refund of 7.5 crores, the amount collected from the petitioners on account of the tender notice in question with interest at the rate of 21% p.a. and further for quashing and setting aside the communication dated 19th May, 2009, 30th March, 2009 and 11th June, 2009. It is further prayed that the respondents be restrained from forfeiting the security deposit of Rs.1 crore as per the terms and conditions of the tender. 2. We have heard the learned counsel appearing for the parties. Though no reply has been filed on behalf of the respondents, the officers with record are present in court. The learned counsel appearing for the 3 respondents have stated that they are not disputing some of the documents which have been filed by the petitioners as the petitioners have mainly relied upon the letter dated 30th March, 2009. The letter dated 30th March, 2009 has been written by the Chief Engineer (Civil) in response to the representation of the petitioners in relation to the demand to pay the entire amount towards the non-refundable premium to the Undertaking. It is interesting to note the following contents of the letter which are reproduced at this stage itself: "Your aforesaid proposal for revised payment schedule and waiver of interest was examined and being found principally justifiable, was placed before the BEST Committee on 30.06.2008 seeking its proposal. However, the BEST Committee did not communicate any decision in the matter even after a lapse of 8 months. Subsequently, vide your letter dated 05.02.2009, you desired to seek exit from the contract and requested to seek refund of part payment of non-refundable premium of Rs.6.50 Crores and Security Deposit of Rs.1 Crore paid by you alongwith 21% interest per annum at the earliest. Your said proposal was also examined and recommended for approval of BEST Committee on 27.02.2009. During discussion on the said item, the BEST Administration clarified to the BEST Committee that due to unprecedented Court litigations between New Aram Restaurant & BEST Undertaking, it was not practically feasible to evict i.e. shift to M/s. New Aram Restaurant elsewhere and execute the development at site. However, inspite of this, the Developer had offered to make the payment of premium if interest is waived. However, the Undertaking did not consider their proposal. It was, therefore, finally suggested by the Administration that the Undertaking can discuss the 4 matter with the Developer and obtain his consent whether he will make the payment of premium and execute the work if the Undertaking waived the total interest. However, on 02.03.2009, the BEST Committee disapproved both he proposals submitted by you." 3. The Committee has rejected the request of the petitioners either for refund of the amount and the other claims. In the letter dated 19th May, 2009, the Undertaking noticed that the BEST Committee i.e. Competent Authority has disapproved both the proposals i.e. waiver of interest and also refund of Rs.7.5 crores to the Developer. As such, once a decision is taken by the BEST Committee on a proposal, the same proposal cannot be placed before the Committee again unless there is Court intervention. 4. From the documents placed on record and the pleadings in the writ petition, it is obvious that there was serious divergence of opinion between the General Manager and the Chief Engineer on the one hand and the Committee on the other. It is stated on behalf of the respondents that the Committee is the higher authority. The decision of the Committee as such was not communicated to the petitioners except what was intimated to the petitioners vide the aforestated letter. 5. From the record produced before us, it appears that some office note was put up on 2nd July, 2008 wherein the file is kept for re- 5 scheduling and finally a note was put up on 2nd March, 2009 before the Committee in the shape of probably an agenda or further note. The decision of the Committee appears to have been taken by putting on it a rubber stamp containing the words "not accepted". It is surprising that matter of such importance where revenue of the Corporation of a huge amount was involved, the Committee did not record any reason much less even a sentence was written akin to the reasoning. It is a settled principle of law that reasoning is the soul of decision whether they are administrative or executive particularly when such decisions relate to deciding rights of the parties and are bound to result in civil consequences. Here we have a case where the technical experts of the department as well as the General Manager had recommended the case of the petitioners by detail notes and by providing reasons. If the committee wanted to reject such reasoning, it ought to have and at least was expected to state some reasons as to why the claim of the petitioners was being rejected so as to enable the petitioners to challenge the decision in accordance with law. We have already noticed that the decision of the Committee apparently suffers from the vice of non- application of mind and not providing any reason for coming to such decision which was informed to the petitioner subsequently. 6. It is admitted position before us that the General Manager and the 6 Chief Engineer had expressed one view and the Committee had taken another view and in terms of Section 460-A of the Mumbai Municipal Corporation Act, the General Manger is the authority to manage the affairs of the Corporation and take decision and Committee is a body higher than the General Manager. However, the learned counsel appearing for the petitioner has questioned the very competence and jurisdiction of the Committee to take a decision as according to him, the General Manager exercising the power of the Commissioner has to take all decisions with regard to the management and affairs of the undertaking. We do not consider it necessary to decide this question and leave it open. 7. It is further not in dispute before us and cannot be disputed that under the provisions of the Act, the directions issued by the State Government are binding upon the Corporation and the Corporation is expected to act as per the guidelines which may be issued by the appropriate Government even in relation to discharge of responsibility in terms of Chapter XX of the Act. Therefore, while setting aside the decision of the Committee, we hereby remand the matter to be re- examined by a body which will be able to deal with the matter objectively and would have the approval of the Government in terms of the provisions of the Act. There is no objection before us for the matter 7 being reconsidered by such Committee which shall consist of the General Manager and the Chief Engineer of the Undertaking and which shall be presided over by the Secretary, Urban Development Department. We do further direct that the said Committee shall meet and decide the matter in accordance with law preferably within eight weeks from today. 8. Rule is made absolute in the above terms. No order as to costs. CHIEF JUSTICE A.M. KHANWILKAR, J.