M/S. A.S. Motors Pvt. Ltd vs U.O.I. & Ors

3. National Highway Authority of India Ltd. (NHAI for short) invited tenders for award of a contract for collection of fee for the use of National Highways from Km. 61.00 to Km.103 on Morena-Gwalior Section of National Highway No.3. Appellant too among others made an offer which was accepted by the NHAI in terms of its letter dated 14th March, 2006 asking the appellant to submit a demand draft for a sum of Rs.2,20,00,125/- towards performance security and a bank guarantee for a similar amount to be valid for a period of 15 months for the due observance of the terms and conditions contained in the contract. Both these requirements were satisfied by the appellant with the result that a contract for collection of user fee commencing from 1st April, 2006 to 31st March, 2007 was finally allotted in its favour. It is not in dispute that pursuant to the said allotment the appellant started collecting the prescribed fee as per the terms and conditions of the agreement and also started depositing monthly instalments stipulated under the same.

5. Aggrieved by the fresh termination of the contract as also the forfeiture ordered by the competent authority, the appellant filed Writ Petition No.720 of 2007 before the High Court of Madhya Pradesh. By his order dated 18th June, 2007, a Single Judge of the High Court allowed the said petition in part and while upholding imposition of penalty and forfeiture of performance guarantee, quashed the revocation of the bank guarantee by the respondent, as unfair and unreasonable having regard to the fact that the respondent had already received Rs.7,33,33,750/- towards collection charges, Rs.2,20,00,125/- towards forfeiture of the performance security and a penalty amount of Rs.2,41,097/- making a total of Rs.9,55,74,970/- which was more than Rs.8,80,00,500/- the amount contracted to be paid to the respondent. The High Court held that the termination of the contract and the forfeiture of the performance security for the breaches committed by the appellant were perfectly justified in the light of the report submitted by the agency deployed by the respondent to collect material regarding overcharging of fee and other violations committed by the appellant.

6. Feeling aggrieved by the order passed by the Single Judge of the High Court the appellant preferred Writ Appeal No.491 of 2007 which was heard and dismissed by a Division Bench of the High Court by its order dated 8th August, 2007. The present appeal assails the correctness of the said order.

26. In the result this appeal fails and is dismissed but in the facts and circumstances, without any order as to costs.

Petition(s) for Special Leave to Appeal (Civil) No(s).2490/2008 (From the judgement and order dated 08/08/2007 in WA No.491/2007 of The HIGH COURT OF M.P AT JABALPUR) M/S. A.S. MOTORS PVT. LTD. Petitioner(s) VERSUS U.O.I. & ORS. Respondent(s) Date: 21/02/2013 This Petition was called on for JUDGMENT today.

Hon'ble Mr. Justice T.S. Thakur pronounced Judgment of the Bench comprising His Lordship and Hon'ble Mrs. Justice Gyan Sudha Misra.

Leave granted.

The appeal is dismissed in terms of the signed judgment.

(Signed “Reportable” Judgment is placed on the file)