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Connoisseur Catering Services Private Limited v/s Sports Authority of India

    Interim Application No. 3227 of 1999, 3640 of 1999, Suit Appeal No.642 of 1999

    Decided On, 11 August 2000

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE K.S. GUPTA

    For the Appearing Parties: A.S. Chandhiok, Rajiv Nair, Ravi Gupta, Rohit Madan, S. Mukherjee, Advocates.



Judgment Text

K.S. GUPTA, J.


(1) THIS order will govern the disposal of. IAs. No. 3226-27/99. filed under Older XXXIX Rules 1 and 2 read with Section 151 Civil Procedure Code by the plaintiff and IA No. 3640/99 under Order XXXIX Rule 4 read with Section 151 Civil Procedure Code filed by the defendant for vacation of the ex parte ad interim injunction order dated 23th March, 1999.


(2) SUIT was filed by the plaintiff, inter-alia, alleging that it is a company incorporated under the Companies Act. Defendant is a society registered under the Societies Registration Act-In the month of June-July 1996, the defendant came out with a Notice Inviting Tenders for running a cafeteria in the covered space with kitchen and storage facility and having open space of 13 x 15 mis. In Jawahar Lal Nehru Stadium, Lodi Road, New Delhi initially for the period ending on 31st March, 1999. It was widely represented and also assured that though in the notice inviting tenders the period mentioned was upto 31st March, 1999 but the plaintiff would be entitled to ex- tendon for another period of two years at a time subject to 20% increase as per the policy of defendant. It is stated that in pursuance of the said Notice Inviting Tenders, the plaintiff-company submitted its tender and by the letter dated 25th September, 1996 the, defendant conveyed the acceptance of bid of plaintiff-company on a license fee of Rs. 62,500. 00 per month. The plaintiff was required to deposit the security amount of Rs. l,00,000. 00which was deposited by it within time. In terms of the letter dated 22nd October, 1996, the defendant asked the plaintiff to take possession of the site which it did. It is further alleged that the site was lying uninhabited since long and in order to make it usable the plaintiff, spent huge amount of Rs. 18. 00 to 20. 00 lacs in Levelling the ground, clearing the bushes, making pucca pathways and developing the surrounding area etc. Electricity supply was made available at the site by the defendant only in the month of December 1997. It is stated that vide letter dated 31sl July, 1997, the defendant forwarded license deed draft for finalisation by the plaintiff. The plaintiff after getting the license deed typed on requisite stamp papers, sent along with reply dated -24th October, 1997 to the defendant. This license deed provides for renewal of contract under clause 43.


(3) IT is pleaded that the plaintiff sent a letter dated 30th September, 1998 to the defendant bringing to its notice the difficulties faced by it in running business at the site and seeking co-operation of the defendant. In terms of this letter, defendant was required to renew the license for a further period of 5 years w. e. f. 1st April, 1999. Thereafter, deliberations and negotiations started between the parties. Meetings were held on 2nd and 3rd February, 1999, These meetings were attended by Lt. Col. B. S. Ahluwalia, Executive Director, K. N. Sharma, Administrator, V. V. S. N. Rao. Deputy Director, Ramesh Kumar, D. D. O. and Rajeev Sareen, Assistant Director on behalf of the defendant-authority and Harish Kumar and Manish Banga for the plaintiff-company. Substance of the issues resolved in the said meetings has been set out in para No. 16 of the plaint. It is alleged that the plaintiff vide its letter dated 8th February, 1999 confirmed the terms as agreed to between the parties in the said meetings. The plaintiff had agreed to pay extra amount for the open additional area on the backside of cafeteria. It is stated that the defendant has now issued letter dated 8th March, 1999 requiring the-plaintiff to vacate the site and hand over its possession on or before 31st March, 1999. The defendant has further published notice inviting tenders in the 'indian Express' issue dated 15th March, 1999 in regard to the site in question. It is claimed that the plaintiff is entitled to retain possession of the site for a period of three years w. e. f. 1st April, 1999 on license fee of Rs. 1,53,6007. 00-per month as agreed to in the said meetings. The plaintiff has always been willing and ready to perform its part of the obligation under the Contract. It was prayed that a decree of specific performance of the agreement dated 3rd February, 1999 may be passed against the defendant directing it to renew the license for a period of three years from 1st April, 1999 to 30th March, 2002 and execute a license deed in regard to the site in question. Decree of permanent injunction is further sought to be passed against the defendant, its officers, agents and employees etc. restraining them from awarding the contract to a third party.


(4) IN aforesaid IAs. No. 3226/27/99 while issuing notice to the defendant for 10th September, 1999, by the order dated 23rd March, 1999 following ad-interim injunction order was made in favour of the plaintiff-company: -


"meanwhile, the defendant, their servants and agents are hereby restrained from interfering in the running of the restaurant being run by the plaintiff under the name and style of "pavilion" situated opposite Gate No. 30-31, Jawahar Lal Nehru Stadium, New Delhi and from forcibly dispossessing the plaintiff and taking any demolition proceedings in regard to the same. They are further restrained from disconnecting electricity and water connections of the plaintiff. The defendant are also re; trained from acting upon the tender notice dated 15th March, 1999. "


(5) DEFENDANT has contested the suit and also the said IAs. by filing written statement and replies in addition to filing aforementioned IA. No. 3640/99 under Order XXXIX Rule 4 read with Section 151 Civil Procedure Code. In the written statement it is not disputed that the answering defendant came out with a Notice Inviting Tenders for running a cafeteria in the covered space with Kitchen and storage facility and open space of 13x15 mts. for the period ending 31st March, 1999 and the plaintiff being highest bidder, was awarded the license on fee of Rs. 62,500. 00 per month, as alleged. However, it is denied that there was any discussion what to talk of any representation or assurance by the answering defendant on the subject that there would be extention for three years period or that the same would be subject to 20% increase, as alleged. It is alleged that the plaintiff had fully familiarised itself with the site and all other aspects during number of visits by its officials arid it was clearly conveyed that the plaintiff would have to apply and arrange for all the amenities including electricity and water at its end. It is denied that huge amount of Rs. 18. 00 to 20. 00 lacs or any other amount had been spent by the plaintiff-company. The plaintiff wanted to make huge profits and as such had to incur appropriate expenditure for the same. The generator facility was provided there. It is not denied that draft license deed was sent to the plaintiff for signature but it is stated that the same was not signed on behalf of the defendant. Receipt of the plaintiffs letter dated 30th September, 1998 is admitted but is alleged that it was received much later. It is alleged that a committee was constituted to make recommendations for consideration and decision of the competent authority and whatever was discussed and minuted is a matter of record. It is claimed that the recommendations of committee are not binding upon the competent authority whom the committee submitted the recommendations. It is alleged that the plaintiff had occupied excess area and throughout remained in occupation thereof. The plaintiff has failed to pay the arrears of license fee in regard to excess area which amount runs into lacs of rupees. Receipt of the plaintiffs letter dated 8th February, 1999 is not denied. It is denied that the committee had requisite administrative approval for taking any decision itself. It is stated that the authorisation of committee was only to process the case for 'making recommendation (s)to the competent authority who was to finally take the decision in the matter. It is specifically denied that the defendant agreed to renew the license for a further period of three years either on payment of Rs. 1, 53 600. 00 or any other amount, as alleged. It is claimed that the period of license has come to an end by efflux. of time on 31st March, 1999 and the plaintiff is now not legally entitled to retain possession of the site in question.


(6) IN the replies to both the aforesaid IAs. as also in IA No. 3640/99, the defendant has sought the vacation of ex party ad-interim injunction on the 'grounds identical to those taken in the written statement.


(7) I have heard Sh. A. S. Chandhiok, Sr. Advocate for plaintiff and Sh. Rajiv Nayar, Sr. Advocate for defendant and have also been taken through the record.


(8) COPY of the minutes of meeting dated 3rd February, 1999 held in continuation of meeting dated 2nd February, 1999, is placed on the file. It is the recommendation part of these minutes which bu issuance of letter dated 8th February, 1999 is alleged to have ripen into a contract, the specific performance whereof has been sought by instituting the present suit. Said part of the minutes is reproduced below: -


"in view of the above, it would be in the overall interest of organization to resolve the issue mutually instead of going into litigation. Based on above the following is recommended for consideration:- (a) We may charge the areas @ Rs. l,28,000. 00from the month of March 97. (b) To renew the contract for a period of further 3 years w. e. f. 1. 4. 97 without a renewal clause. (c) To sigh the agreement in this regard. (d) Provided M/s. Pavilion agrees to the following: - (i) To pay the arrear Rs. l,28,000. 00from the month of March 97. (ii) That hereafter they will have no claim or dispute surviving pertaining to any matter, including compensation for non-availability of electricity and water for 14 months initially. (iii) That w. e. f. 1. 4. 99 M/s/ Pavilion will pay 20% increase in the rent what they paying at present, i. e. Rs. 1,28,000. 00 p. m. plus 20% w. e. f. 1. 4. 99. (iv) That a fresh lease agreement will be signed on normal terms and conditions applicable to other client. "


(9) AS is manifest from the introductory part of these minutes, said meeting was attended by Lt. Col. B. S. Ahluwalia alongwith four other officers on behalf of defendant while by Harish and Manish for plaintiff. Copies of the letters dated 30th September, 1998, 8th February, 1999 and 8th March, 1999 as also Tender Notice presumably published in 'indian Express' newspaper dated 15th March, 1999 placed on record, also need to be taken note of. By the plaintiffs said letter dated 30th September, 1998 the defendant, in the light of the facts disclosed therein, was requested to renew the license of the site in question for a further period of 5 years w. e. f. 1st April, 1999 at the rate of license fee prevalent on that date. In terms of the letter dated 8th February, 1999 the plaintiff besides confirming the contents of minutes of the said meeting had again requested the defendant to further renew the license for a minimum period of three years w. e. f. 1st April, 1999 with 20% increase in fee and additional entrance to the back area. Aforesaid letter dated 8th March, 1999 was sent By Lt. Col. B. S. Ahluwalia, Executive Director (SA) to the plaintiff-company informing that the arrangement regarding running of open-air cafeteria was coming to end on 31st March, 1999 and the defendant did not wish to continue with that arrangement any longer; that the plaintiff should hand over possession of the site to defendant on or before the midnight of 31st March, 1999 after dismantling the temporary structure raised thereon. Tender Notice published in the said newspaper shows that the defendant had re-invited tenders for giving on license the site in question. It may be noticed that the defendant has been sued through Secretary of the Authority. Clause 4 of the Notice Inviting Tenders published in June-July 1996 (copy at page No. 30 of part -I file) notices that Secretary of the defendant could reject any or all the tenders without assigning any reason. Said clause coupled with the fact that defendant has been sued through Secretary, unmistakably go to show that it is the Secretary of the defendant- authority who was to take decision 'on the recommendations made by five member committee. During the course of arguments, it was pointed out on behalf of defendant that the said recommendations made by five member committee were rejected by the competent authority on 25th February, 1999. Submission advanced on behalf of plaintiff was that the competent authority has not informed the plaintiff about the alleged rejection on 25th February, 1999 and with the issuance of said letter dated 8th February, 1999, a concluded contract had come into existence between the parties for giving on license the site for a further period of three years beyond 31st March, 1999. Submission is, however, without merit. In my view, issuance of the aforesaid letter dated 8th March, 1999 and insertion of advertisement for re-inviting tenders in the issue of 15th March, 1999 of the said newspaper by the defendant, are sufficient indications that the competent authority was not agreeable to renewal of license of the site in question for another period of three years in favour of plaintiff-company. Furthermore, plaintiffs above said letter dated 8th February, 1999 was at the most in the nature of an offer which was to be accepted by the competent authority which it did not accept. Therefore, no concluded contract can be said to have come into existence between the parties.


(10) YET another submission made on behalf of plaintiff that aforesaid letter dated 8th March, 1999 was waived by the defendant by acceptance of license fee beyond 31st March, 1999 is repelled being without merit as the continuance of plaintiff-company over the site and payment of license fee beyond the said date, is pursuant to the ad-interim injunction order dated 23rd March, 1999 and not with the consent of defendant authority.


(11) IT was further contended on behalf of the plaintiff that although in Tender Notice the period of license was mentioned as ending on 31st March, 1999 but it was widely represented and also assured to the plaintiff that it would be entitled to further renewals subject to increases in license fee and acting on said representation/assurance, it spent huge amount of Rs. 18. 00 to 20. 00 lacs in making the site usable. Now, the defendant-authority cannot legally deny further extension to the plaintiff-company. In support of submission, my attention was drawn to the 'doctrine of Legitimate Expectation' in addition to the decision in Punjab Communications Ltd. v. Union of India and Ors. , 1999 IV AD (SC) 491. It may be noticed that plaintiff is a company incorporated under the Companie

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s Act while defendant is stated to be registered under the Societies Registration Act. Both of them being bodies can act only through their officials. In the plaint, the names of officials of defendant-authority who allegedly made representations or given assurances or that of officials of plaintiff-company whom representations were made or assurances given to the said effect, have not been disclosed. Averments on that count being vague and duration of license granted to plaintiff-company having expired on 31st March, 1999 by efflux of time, reliance on said Doctrine of Legitimate Expectation is totally misplaced. Punjab Communications Ltd. 's case (supra) has no applicability to the facts of present case. Thus, the plaintiff must be held to have not made out prima facie case for grant of the ad-interim injunction prayed for on any of the said grounds. (12) IT will not be out of place to state that during the course of arguments it was pointed out on behalf of defendant-authority that the plaintiff has not paid arrears of license fee for the additional area in its occupation from March 1997 to 30th June, 1998 amounting to Rs. 10,49,600. 00. Needless to say that injunction is a discretionary relief and it cannot be extended in favour of a person who is in arrears of such a huge amount of license fee. (13) FOR the foregoing discussion, IAs. No. 3226 and 3227/99 are dismissed while IA No. 3640/99 is allowed. Order dated 23rd March, 1999 is hereby vacated. Plaintiff- company is, however, allowed 15 days time to hand over possession of the site after de moistening the structures raised thereon, to the defendant-authority.
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