Permission granted by the Apex Court to withdraw writ petition; Senior lawyer writes to CJI in protest.

Permission granted by the Apex Court to withdraw writ petition; Senior lawyer writes to CJI in protest.

An important issue of judicial propriety and legality has arisen in the light of permission granted by the Supreme Court to withdraw a Writ Petition from the Mumbai High Court. While permitting the withdrawal, the Court has rendered the High Court judgement non est and  set it aside. As a result, the damaging observations of the High Court, where it found on merits  that  the public property is given to a private party at grossly undervalued price has been completely erased.

The Senior Lawyers of the Supreme Court are of the opinion that permission granted to withdraw, given the nature of the writ issued by the High Court, is not justifiable in law. 'Live Law' has confirmed reports that, in unprecedented manner, a respected Senior Lawyer has written to the Chief Justice of India, in protest.

The issue arises out of allotment of 33.55 Hectares of prime Mumbai land, running into hundreds of crores for the development of 18 holes International Standard Golf Course and Country Club. The Bombay High Court, in a detailed judgment dated 19.12.2009, found that the decision to award contract was not bonafide and not in public interest. It also found that there was gross undervaluation of public property while fixing the reserved price. The High Court observed that there was lack of bonafide on the part of CIDCO, a public authority and somewhere in the management of CIDCO had made efforts to favor Mistry Construction Co.  Pvt. Ltd,  the winner of the contract .  The High Court Disposed off the writ petition with the following scathing observations;

“27……. Admittedly, the development work of the Golf Course has not yet been commenced and the investments allegedly made by the respondent no.4 beyond the lease amount are by way of engaging agencies and other expenditures. The impugned letter of allotment as well as the subsequent lease deed in favour of respondent no.4 is on the basis of the tender received in November, 2002 and the minimum reserved bid fixed at Rs. 33,00,33,000/- in the consent order dated 18/8/2004 was based on the bid made by the said respondent. It was not based on any contemporaneous record of valuation of the land admeasuring 35.55 H. It cannot be accepted that despite the lapse of six years the reserved bid of Rs. 33,00,33,000/- would be a justifiable lease amount for a public property and, in fact, it was a grossly undervalued reserved bid. Over a period of six years the land costs in and around Mubai have multiplied. Despite this reality, CIDCO proceeded to award the tender to respondent no.4 for a lease amount of Rs.33,00,33,000/-. We have noted with serious concern the actions of CIDCO either in allowing the respondent no.4 to file additional documents after the tenders are opened on 3/12/2002, inviting the order of consent dated 18/8/2004 from this court and allowing Writ Petition No. 908 to be withdrawn without notice to the other side and without disclosing to this court that the said petition was clubbed and was directed to be heard with this petition. Lack of bona fides on the part of CIDCO are, thus, writ large and there is some room to believe that somewhere in the management of CIDCO efforts were made to favour respondent no.4. We have no doubt that CIDCO failed to come to the expectations as a public body to maintain transparency and to follow the tender terms in the process of granting the letter of allotment, at all stages, to respondent no.4. For all these reasons the decision taken by CIDCO to award the bid to respondent no.4 is unsustainable and the letter of allotment dated 12/3/2009 is required to be quashed and set aside. While this petition was pending, CIDCO, as a public body, ought to have refrained from signing the lease deed on 22/8/2009 or at least ought to hae approached with a Civil Application in this petition seeking leave to sign the lease deed when it was fully aware that  way back on 7/7/2005 this court had, while extending the time to implement the order dated 18/8/2004 by a period of four weeks, clarified that it was without prejudice to the rights of the petitioner in the instant petition.

28. Once we have reached to the findings that even the fresh decision taken by CIDCO to award the tender to respondent no.4 is unsustainable, the obvious result, in the normal course, would be to direct CIDCO to consider all the three bids afresh. However, we are not inclined to follow this course in the peculiar facts and circumstances we have elaborately set out hereinabove. In addition to the appreciation of land in multiples, it is required to be noted that the land in pockets C to E is available for real estate development with a permissible FSI about three times and there is a further provision for enhancement of the same on payment of additional consideration that would be fixed by CIDCO. When a public property or the property of a public undertaking is being transferred/alienated, it must receive the best market price/lease amount. It is possible that the reserved bid, as of now, may not work out to even less than Rs.100 crores for the suit land, however, it is for CIDCO management to estimate the same on the basis of the present market value i.e. in the first quarter of the year 2010. It would be necessary for CIDCO to fix reserved bid afresh while inviting fresh tenders and in case fresh tenders are invited, the parties before us i.e. the petitioner and respondent nos. 3 and 4 cannot be prevented from participating in the same. Undoubtedly, such fresh bids are required to be circulated at the national level so that there is a scope for much wider response and CIDCO gets a competitive lease amount while maintaining the development of the golf course strictly as per the experts' guide-lines. It would also be necessary for CIDCO to constitute an Evaluation Committee which would consist of experts in the field i.e. golf players and golf course developers.

29. In the premises, we all this petition and hold that the entire tender process is vitiated and the letter of allotment dated 12/3/2009 issued by CIDCO in favour of respondent no.4 is illegal and void ab initio. The said letter of allotment dated 12/3/2009 stands quashed and set aside and consequently the lease deed signed on 22/8/2009 and registered on 24/8/2009 cannot be acted upon. We direct CIDCO to invite fresh bids for the development of 18 Holes International Standard Golf Course and Country Club over the suit land admeasuring 35.55 H. after fixing the reserved bid amount. The reserved bid amount shall be fixed by CIDCO within a period of four weeks from today and thereafter fresh tenders shall be invited by publishing the proclamation in leading national newspapers. The petitioner as well as respondent nos.3 and 4 are at liberty to respond to the proposed bids and in case the respondent no.4 succeeds in the fresh bids, the amount deposited with CIDCO till now i.e. Rs.33,00,33,000/- by the said respondent shall be adjusted. However, if the respondent no.4 does not succeed in the fresh bids, the said amount shall be refunded to respondent no.4 with simple interest at the rate of 8% per annum. The fresh process of tendering and awarding the tender shall be completed as expeditiously as possible and preferably by 30th June, 2010.

30. Rule is made absolute in the above terms with no order as to costs. ”

Mistry Construction Co. Pvt. Ltd  challenged  the order in the Supreme Court (Civil Appeal No. 9454-9455/2010-Mistry Consurtcion Co. Pvt. Ltd. Vs. Makhija Developers P Ltd. & Ors ) While the Civil Appeals were pending, the contesting parties entered  into a settlement and moved an application for disposal of Civil Appeal,  but the Court then  took cognizance of the findings of the High Court and  did not permit a settlement.  The compromise Application was dismissed on 02.05.213 by a three judge bench consisting of Chief Justice, Justice Vikramjeet Sen and Justice S. A. Bobde with following observations

“Having regard to the fact that the present Appeals are pending against certain findings of the High Court, we are not inclined to accept the settlement or the compromise arrived at between the appellants and the respondent no.1 and the Applications are, therefore, dismissed.

Let the appeals themselves be listed for hearing ……”

The Civil Appeals were  pending for hearing before  the three judge Bench consisting of Justice B. S. Chauhan, Justice J. Chelameshwar and Justice M. Y. Eqbal in the month of February, 2014. While so, the Civil Appeals were tagged along with another unconnected SLP (Crl) No. 7232/2013, pending before two Judge Bench presided by Justice Chandramauli Prasad, by order dated 20.1.2014 by order of latter bench. Later two judge bench found that the Criminal Appeal and Civil Appeals have no relationship and the Civil Appeals were de-tagged. Here comes the procedural course which has become an academic debate now. Having found that the matters are unconnected and de-tagged, whether  the  two judge Bench presided by Justice Chandramauli Prasad  ought to have sent back the Civil Appeals to the Bench where it was originally listed for hearing or not ?. However, the Court the disposed of the Civil Appeals and passed the following order;

“IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 9454-9455 OF 2010

 MISTRY CONSTRUCTION CO. P.LTD.                                                           -APPELLANT

 VERSUS

 MAKHIJA DEVELOPERS P.LTD. & ORS. -                                         RESPONDENTS

O R D E R

M/s Makhija Developers Pvt. Ltd.-respondent No. 1 herein filed a writ petition before the High Court inter alia impugning the decision of City and Industrial Development Corporation (“CIDCO” for short) allotting land to the appellant-Mistry Construction Co. Pvt. Ltd. For development of 18 Holes International Standard Golf Course and Country Club and to invite fresh bids with liberty to the writ petitioner to participate in that. The High Court by the impugned Order quashed the allotment made in favour of M/s Mistry Construction Co. Pvt.Ltd.-respondent No. 4 in the said writ petition and directed the CIDCO to invite fresh bids with liberty to the writ petitioner and other respondents to participate in the same.

M/s Mistry Constructions Co. Pvt. Ltd. Assails this order in the present appeals with the leave of the Court.

When the matter is taken up, Mr. Senthil Jagadeesan, learned counsel appearing on behalf of the writ petitioner prays for withdrawal of the writ petition unconditionally. It is not opposed either by the appellant herein or the other respondents.

We permit the writ petitioner to withdraw the writ petition. In view of the aforesaid, the impugned order passed by the High Court is rendered non est and, therefore, set aside on that ground alone. As the Project is old and the appellant has spent huge amount, we direct the CIDCO to provide necessary assistance to the appellant to complete the Project without unnecessary delay. In the light of the above, these civil appeals are allowed, the impugned order is set aside with the observation aforesaid but without any order as to costs.

 

 (CHANDRAMAULI KR. PRASAD)

 (PINAKI CHANDRA GHOSE)

February 25, 2014”

The above sequence of events have generated interesting issues of legality and judicial propriety before students of law who are following the practice and procedure of Supreme Court. Following interesting questions arise in the present case :

1)     When a  bench having found that a Civil Appeal and Criminal Appeal have no connection to each other and thereby de-tagged, whether the bench which ordered for tagging ought not have sent back the Civil Appeal to the original Bench where it was listed?.

2)     Whether a two Judge Bench can permit the Writ Petitioner to withdraw the Writ Petition when a three Judge bench had earlier rejected the settlement or compromise arrived at between the contesting parties?.

3)     Whether the Court can permit the Writ Petitioner before the High Court, who is a Respondent before the Supreme Court, to withdraw the Writ Petition? If so, whether the court can pass further orders to declare the Judgement passed therein non est and set aside it without adjudication ? .

4)     Whether the Supreme Court can permit withdrawal of Writ Petition filed  in the High Court and declare the High Court Judgments as non est and set aside it , wherein  the High Court have  found that the entire tendering process was against the public interest and there  was connivance and  gross undervaluation  of public property.

A serious debate is going on in the Supreme Court on these interesting legal questions thrown open by the order of the Court. The party who got the contract is now in a position to construct the Golf Course in view of the direction of the Supreme Court to CIDCO to provide necessary assistance to the appellant to complete the project without unnecessary delay.

Since the law is an organic subject, even if matter is finally disposed off, the  questions arising out the above order would strengthen the debate on legal, procedural and constitutional issues .