ABW INFRASTRUCTURE LTD Vs. RAIL LAND DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) In this intra court appeal, the legal substantiality and vulnerability of the order dated 10.12.2009 passed by the learned Single Judge in W.P.(C) No.13590/2009 is called in question.

(2.) The factual scores as undraped are that the appellants - petitioners (hereinafter referred to as "the appellants"), M/s ABW Infrastructure Ltd., on the basis of the highest tender bid of Rs.1026 crores, was awarded project for development of plot at Sarai Rohilla, Kishanganj, New Delhi as per letter of acceptance dated 19.5.2008 with the stipulation that the said amount was to be paid by the appellants to the respondent, Rail Land Development Authority (for short "the RLDA"), in installments. The first installment was fixed at Rs.513 crores which was to be paid within 30 days from 19.5.2008, i.e., the date of issue of letter of acceptance. The appellants did not pay the first installment. It had only given a performance guarantee of Rs.10 crores and had made other payments amounting to Rs.29 crores to the respondents towards interest and success fee. 2. It is worth noting, at one point of time, the RLDA, the respondent herein, desired to review the project allotted to the appellants and resile from the letter of acceptance which compelled the appellants to file WP(C) No.4320/2008 wherein this Court, on 12.8.2008, directed the respondents to abide by the contract awarded to the appellants vide letter dated 19.5.2008. Be it noted, in the said order, this Court had quashed the communication dated 24.5.2008 by which the respondent had taken a decision to review the order.

(3.) After the said order was passed, the appellants did not pay Rs.513 crores but approached the RLDA for amendment of the tender terms. The said amendment was sought on 24.4.2009 after expiry of 8 months from the date of order passed in WP(C) No.4320/2008, i.e., 12.8.2008. The appellants sought renegotiation of the terms of the tender. Similar request was reiterated by letter dated 16.7.2009. As set forth, the RLDA, by letter dated 20.8.2009, agreed to examine the request of the appellants for modification of the existing agreement to the extent mentioned therein. The learned Single Judge, as is evincible from the order impugned, has referred to the said letter and analysed the same to arrive at the conclusion that the said communication clearly mentions that the modifications suggested and pending consideration would be applicable and valid only if a renewed Joint Bidding Agreement was submitted to the RLDA and the agreement was signed and, hence, till the signing of the agreement, the parties were obligated to be bound by the original obligations. The learned Single Judge further held that on a scrutiny of the said letter, it was clear as crystal that the appellants should communicate their willingness to go ahead with the project within 10 days of issuing the aforesaid letter. In pursuance of the aforesaid letter, the appellants sent a letter dated 29.8.2009 which indicated, according to the learned Single Judge, no unconditional and absolute acceptance. Thereafter, the RLDA, on 18.9.2009, circulated a draft modified development agreement asking the appellants to offer comments on the said document clearly outlining the paragraph / clause which was not in accord with the decision communicated by the RLDA through their letter dated 20.8.2009. It has further clarified that the agreement sent to the appellants for their comments was merely a draft and would be finalized only after approval of the competent authority. As is evincible, the appellants, on 7.10.2009, entered into correspondence with the RLDA raising various objections to several clauses of the draft agreement and suggested amendment. They gave a list of suggestions / amendments for favourable consideration and incorporation in the modified development agreement. The RLDA, by letter dated 9.10.2009, informed the appellants that on consideration of the suggestions for amendment and modification, the same were not acceptable. Thereafter, the appellants sent two letters dated 16.10.2009 and 19.10.2009 which were responded to by the RLDA expressing its inability to accept the same. The RLDA invoked the bank guarantee and the appellants, vide CM No.15228/2009, assailed the action for invoking the bank guarantee and for quashment of the communications dated 1.12.2009 and 2.12.2009.