- (1.) The present writ petition has been filed for quashing the letter as contained in Ref. No. TA/REV/RB/2017/2019-338 dated 16.08.2019 (Annexure-14 to the writ petition) issued under the signature of the respondent no. 3-the Deputy General Manager, T.A. Division, Heavy Engineering Corporation Ltd. (HEC) whereby the Letter of Intent No. HQ/BDC & Disp/NRB-NIT/2016-187 dated 31.10.2016 issued in favour of the petitioner, has been terminated with immediate effect and it has also been directed to vacate the premises and to clear the pending dues as well as to complete the formalities relating to handing over the premises to the respondent-HEC on or before 14.09.2019. Further prayer has been made for issuance of direction upon the respondents to execute a formal agreement/contract of lease for a period of ten years commencing from 31.10.2016 with respect to Rajendra Bhawan, Sector-II, HEC.
(2.) The factual background of the case as stated in the writ petition is that a Notice Inviting Tender (NIT) was floated by the respondent- HEC on 18.04.2016 inviting applications from intended bidders for leasing out nine buildings of diverse nature with associated land in HEC Township. The petitioner participated in the said tender and furnished the bid for three non-residential buildings and it was declared technically qualified. However, after opening the price bids, the petitioner was not allotted any non-residential building on the ground that the price quoted by it did not match the reserve price set by the respondents. Thereafter, the respondents floated another tender for leasing out six non-residential buildings with associated land in the HEC Township vide Tender No. HQ/BDC & Disp./NRB-NIT/2016/06 dated 05.09.2016. The petitioner again participated in the second tender process and quoted the bid only for one non-residential building i.e. Rajendra Bhawan, Sector-II, HEC with its associated land. The technical bid of the petitioner was found responsive and thereafter when the financial bid was open, the petitioner was declared successful with respect to its bid for Rajendra Bhawan, Sector-II, HEC along with its associated land. The Senior D.G.M.(BCD & Disposal) issued Letter of Intent (LoI) in favour of the petitioner vide letter as contained in Reference No. HQ/BDC & Disp/NRB-NIT/2016-187 dated 31.10.2016 for a period of 10 years which was renewable for another 10 years on the decisions and terms and conditions of the management of the respondents-HEC. The respondents also handed over the possession of the said building in favour of the petitioner vide letter dated 20.03.2017. Pursuant to the tender notice and its terms and conditions, the petitioner deposited a total amount of Rs. 2,21,21,000/- and service tax of Rs.33,18,150/- on 30.11.2016. It also paid a sum of Rs.3,48,405/- on 30.03.2017 towards annual rent which was accepted by the respondents without any objection. The petitioner further paid the required rent for the financial year 2018-19 and 2019-2020 to the respondents and the same was also accepted without any demur. The petitioner invested Rs.4.7 crores during the period between 29.11.2016 to 20.08.2019. The respondent no. 2 issued a notice vide letter dated 20.10.2017 indicating inter alia that some irregularities might have been done towards the allotment of the said building i.e. Rajendra Bhawan, Sector-II, HEC, in favour of the petitioner and the petitioner was advised not to continue with any construction/activity in the said building/complex as the investigation of matter was going on at appropriate level. The petitioner approached the then C.M.D. of H.E.C. who conveyed the petitioner that it may resume the renovation/construction work after one week. The respondent no. 2 however issued a notice vide letter dated 08.11.2017 mentioning inter alia that the construction/renovation work of the said building/complex was still going in spite of the direction to discontinue any construction/renovation activities and thus the petitioner was again asked to comply the directions as issued earlier. The petitioner submitted its reply to both the earlier notices on 11.11.2017 stating that it had already deposited the required amount as mentioned in the tender document and thereafter invested huge amount of money in order to fulfil the terms and conditions as mentioned in the tender notice. The petitioner made requests to the respondents to allow it to continue the construction/renovation work and thereafter to execute the agreement with it as huge recurring loss was being suffered every day. The respondent no. 2 vide letter dated 29.09.2018 again issued a notice directing the petitioner to submit all the relevant documents on the basis of which three affidavits were given in favour of the petitioner. The petitioner submitted its reply on 09.10.2018, however the respondent no. 3 again issued a show cause notice to it on 22.10.2018 and directed it to submit its reply on or before 22.11.2018 bringing on record all the required documents failing which suitable action as per the terms and conditions of the tender/LoI and existing laws/rules, would be initiated including cancellation of LoI/allotment. The petitioner submitted the reply to the said show cause notice on 21.11.2018 stating inter alia that it never breached any terms and conditions as put forth by the respondents. It was also stated that the petitioner had already submitted all the documents as per the requirement of NIT. However, after nine months of submitting the reply, the respondent no. 3 issued letter as contained in Ref. No. TA/REV/RB/2017/2019-338 dated 16.08.2019 whereby the Letter of Intent dated 31.10.2016 issued in favour of the petitioner was terminated with immediate effect and it was directed to vacate the premises, clear the dues and complete the formalities relating to handing over the said premises to the respondents on or before 14.09.2019. Hence the present writ petition.
(3.) Learned counsel for the petitioner submits that the purpose of leasing out the non-residential building with associated land by issuance of tender was limited. The sole object of the tender was to release the non-residential building with associated land and the scope of enquiry was only to see the purpose for which the said premises was being used by the tenderer and to examine whether the proposed activity could be permitted to be carried out by it. The petitioner's bid was found to be technically qualified twice and therefore to ask it to furnish the documents at such a belated stage, which were not required at the time of submission of bid, appears to be nothing but a malicious and unwarranted initiation of proceeding. It is a settled law that sole proprietorship firm has no separate legal existence from its proprietor. The owner and the business is the same thing in the eye of law and public obligations of business must be considered as the obligations of the sole owner. The petitioner had completed the renovation work prior to issuance of the show cause notice. The petitioner never breached any terms and conditions put forth by the respondents and had submitted all the required documents in terms with the NIT. The petitioner was declared technically qualified twice by the respondents only after being fully satisfied with the documents submitted by the petitioner and thereafter Letter of Intent was issued to it. It is further submitted that after taking possession of the said building, the petitioner invested more than Rs.4.7 crores and as such the respondent, after about a year, cannot be allowed to turn around and declare the petitioner as ineligible as per the terms and conditions of the tender notice. The petitioner is using the said premises for the same purpose which was mentioned by it in its vision and mission document as submitted along with the tender. The Technical Evaluation Committee accepted the documents as submitted by the petitioner and after issuance of the LoI, the same cannot be terminated by the said Technical Evaluation Committee which is wholly unjust and illegal. Even assuming that the petitioner had not submitted any document as required in the tender notice, the respondents during evaluation of the documents should have issued show cause notice and asked the petitioner for submission of the required documents. The LoI issued to the petitioner is a concluded contract between it and the respondents and the respondents cannot be permitted to terminate the LoI, unless there is a violation of the terms of the said LoI. The respondents had issued the LoI in favour of the petitioner with an intention to enter into a contract which was to take place after all other formalities were completed by it. The respondents have evaluated all the documents submitted by the petitioner and thereafter by way of concluded contract, issued LoI for a period of 10 years and renewable for 10 years thereafter. The petitioner has paid the rent up to the year 2020 and the respondents have also accepted the same without any demur. One of the grounds of termination of LoI is alleged violation of the purported instruction to stay the construction/renovation work of the building, however the same cannot be a ground for recalling the contract/LoI as it does not fit into any of the grounds of cancellation of contract, as mentioned in Clause 6(f) of the LoI. Moreover, the respondents in terms with the LoI, specially Clause 6(d), has no authority to issue any order asking the petitioner to stay the renovation work. Further, the petitioner had complied the instructions of the respondents and had stopped the renovation work, however he resumed the same only when the C.M.D. of H.E.C. permitted it to do so. Though the said instruction was oral, yet after resuming the renovation work, the respondents never objected to the same. It is also submitted that neither at the time of issuing show cause notice nor in the said termination letter, the respondents have mentioned any of the six situations whereby the respondents had reserved their right for cancellation of the contract. It would be evident from perusal of the show cause notice/the impugned letter that the petitioner has not violated any terms and conditions of the NIT as the LoI was issued to the petitioner only after the Technical Evaluation Committee was fully satisfied with the documents submitted by the petitioner. The alleged breach will not affect any public interest or cause loss to the public exchequer or lead to public mischief. As per the show cause notice dated 22.10.2018, the petitioner had again furnished the required documents but without considering the same and without assigning any specific reason or accepting the said explanation, the respondents have issued the impugned letter dated 16.08.2019 for cancellation of LoI with immediate effect.;