RUTU ENTERPRISES Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The submissions were heard yesterday. However, order was not passed to enable the learned AGP appearing in W.P. (L) No. 969/2013 to take instructions. These petitions can be disposed of by a common judgment as issues involved are more or less identical. The Maharashtra State Road Development Corporation (hereinafter referred to as "the MSRDC") which is a Government of Maharashtra Undertaking and which is registered under the Companies Act, 1956 executed contracts with various contractors in relation to space under 21 flyovers in the cities of Mumbai, Thane and Navi Mumbai. The contracts were for beautification/landscaping and maintenance thereof with utilization, of the space under the flyovers for display of advertisement/showrooms and pay and parking activities. The challenge in these petitions under Article 226 of the Constitution of India is to the notices issued in March, 2013 by which foreclosure of the contracts in respect of five flyovers was made by the Maharashtra State Road Development Corporation (for short MSRDC). The petitioners-contractors were called upon to hand over the vacant and peaceful possession of the space under the flyovers put in their possession.

(2.) Submissions have been canvassed by the learned senior counsel Shri A.Y. Sakhare, learned counsel Shri M.P. Shetye, learned counsel Shri Mehta, learned counsel Shri Savagave in support of their different petitions.

(3.) The first submission canvassed by the learned counsel for the petitioners is that the impugned notices have been issued to each of the petitioners in violation of principles of natural justice as no opportunity of being heard was granted to the petitioners. The learned counsel for the petitioners have invited our attention to the grounds set out in the impugned notices. It is pointed out that the notices are based only on the resolution passed by the Board of Directors of MSRDC on 22nd December, 2012 by which it was decided to foreclose the on going contracts of the similar nature for security reasons. Our attention was also invited to the affidavit in reply filed on behalf of the MSRDC by Shri Sanjiv Dattatray Madake, Executive Engineer of the MSRDC. It is pointed out that reliance was sought to be placed on the directions allegedly issued in the meeting dated 27th June, 2008 by the Hon'ble Chief Minister. From the affidavit, it appears that admittedly, the minutes of the meeting were served on the MSRDC in or about July, 2009. It is pointed out that in the minutes of the meeting it is recorded that it was resolved that for security reasons, parking under the flyovers should be forthwith discontinued as there is every possibility of destruction of flyovers. The said minutes record that space under the flyovers should be given to the entrepreneurs for the purpose of beautification/landscaping and maintenance thereof. The submission of the learned counsel for the petitioners is that notwithstanding the said decision, the contracts with the petitioners were subsequently executed. The submission is that after having executed the contracts with full knowledge of what transpired in the said meeting, the MSRDC is estopped from raising a contention that for security reasons or due to threat perception, the space under the flyovers cannot be allowed to be used for parking of vehicles. Our attention was also invited to the order dated 24th August, 2012 passed in PIL No. 130/2011. It is contended that there is no direction issued by this Court in the PIL to the MSRDC to terminate the subsisting contracts. It is submitted that the MSRDC cannot rely upon the voluntary statement made by its counsel in the PIL. Our attention was also invited to minutes of the meeting of the Board of Directors and in particular the resolution passed therein in relation to the contracts in question. It is pointed out that it is merely stated that the decision was taken to foreclose the contracts in view of the security reasons. It was contended by the learned counsel for the petitioners that the nature of threat perception or security reasons have not been incorporated in the resolution. It is submitted that contract was sought to be foreclosed on the non existing grounds and for non existing reasons. The learned counsel for the petitioners invited our attention to the substantial investment made by the petitioners. The contention is that the petitioners have acted upon the contract and have invested huge funds in the projects. It is contended that the MSRDC is the State within the meaning of Article 12 which is expected to act fairly and reasonably and, therefore, the action for foreclosure of the contracts is completely arbitrary and is in violation of Article 14 of the Constitution of India. It is further submitted that instead of drastic action of termination of contracts, the MSRDC could have always called upon the petitioners to make arrangements for screening of the vehicles for ensuring security. It is submitted that security of the flyovers could have been guaranteed by enforcing necessary security measures and that the arbitrary and irrational action of foreclosure of the contracts could not have been taken by the MSRDC.