Patna High Court - Orders
M/S Bla Infrastructure Pvt. Ltd. vs The Bihar State Industrial Development ... on 10 April, 2023
Author: Ashutosh Kumar
Bench: Ashutosh Kumar, Harish Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.1542 of 2019
In
Civil Writ Jurisdiction Case No.18491 of 2010
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M/s BLA Infrastructure Pvt. Ltd.
... ... Appellant/s
Versus
The Bihar State Industrial Development Corporation Ltd. & Ors.
... ... Respondent/s
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Appearance :
For the Appellant/s : Mr. S.D. Sanjay, Sr. Adv.
Ms. Priya Gupta, Adv.
For the BSIDC : Dr. Anand Kumar, Adv.
For the State : Ms. Nutan Sahay, Adv.
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CORAM: HONOURABLE MR. JUSTICE ASHUTOSH KUMAR
and
HONOURABLE MR. JUSTICE HARISH KUMAR
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE ASHUTOSH KUMAR)
3 10-04-2023Heard Mr. S.D Sanjay for the appellant/Ms BLA Infrastructure Private Ltd., a company incorporated under the Companies Act, having its registered Office at Kolkata and Dr. Anand Kumar for the respondents/Bihar Industrial Development Corporation Ltd., a Government company having its registered Office at Patna.
A Company by the name of Bihar Spun Silk Mills, incorporated under Companies Act, was almost at Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 2/12 the point of closure, necessitating a policy decision by the Board of Directors to lease out 11.41 acres of land in the factory premises to entrepreneurs who would set- up viable industrial enterprise/industrial park with support infrastructure and multiplexes. It was also contemplated to put the land on lease for 90 years.
With this decision of the Board of Directors, a tender was floated on 13.05.2010, attracting seven investors including the appellant.
It is the case of the appellant that the Board of Directors were about to approve the tender of the appellant and proceed ahead, when one of the offerers/tenders, namely, M/s Samwad Media Private Ltd. came up with an offer of 17.01 crores.
Despite this offer, the Board of Directors approved the offer of the appellant but with a caveat that he should match the offer of M/s Samwad Media Private Ltd. Later, before the contract could be concluded on the revised offer of the appellant, as the Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 3/12 appellant was never communicated the decision of the Board of Directors, one M/s Rajbir Construction Private Ltd., Bhagalpur came up with an offer of 18.01 crores.
With this offer, the respondents/the Bihar State Industrial Development Corporation (hereinafter referred to as the BSIDC) cancelled the previous tender and issued a fresh tender fixing 18.01 crores as minimum reserve price for 90 years' lease and sought a fresh bid from all the eight tenderers as the biding by them was within a narrow range.
This decision of the respondents/BSIDC was communicated to all the eight tenderers.
The afore-noted decision of the respondents/BSIDC dated 26.10.2010 (Annexure 4 of the writ petition) was challenged by the appellant vide C.W.J.C No 18491 of 2010. However, pursuant to the afore-noted re-tender only for the original eight tenderers, M/s Samwad Media Private Ltd. and M/s Marfin Projects Ltd. offered their price under sealed- Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 4/12 cover.
It was argued on behalf of the respondents/BSIDC that because of the restraint order passed by the writ-Court on 10.11.2010, which order was modified on 16.11.2010, with a direction to the respondents/BSIDC to open the financial bids in presence of all the parties including the appellant, but such opening of the tender papers shall not affect the right of the appellant nor confer any right upon the tenderers, the bids were opened.
Though Mr. Sanjay, prosecuting this appeal, submits that such a proposal by the respondents/BSIDC was contested by the appellant, but the tenor of the order dated 16.11.2010, referred to above, suggests that the Court, varying the earlier stay order, was not even aware that the appellant had not participated in a tender which was meant only for eight of the initial tenderers including the appellant.
Coming back to the narrative, the matter Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 5/12 remained pending.
Armed with the afore-noted order of 16.11.2010, all the initial tenderers were issued notice dated 29.07.2010, fixing 15.12.2010 as the date for opening of the bids, on which date, bid was opened and M/s Samwad Media Private Ltd. was found to have offered an amount of Rs. 19.06 crores, whereas Ms Marfin Projects Ltd. offered 21.61 crores.
It further appears that but for the afore- noted two tenderes, no offer was made by any one of the initial tenderers including the appellant.
However, since the matter had remained pending, while canvassing the writ petition against the decision to fix the reserve-price as 18.01 crores, the appellant, even though had not participated in the re- tender for the eight original tenderers, came up before the Court with an offer of 21.51 crores.
Because of all these developments, a decision was taken by Board of Directors finally vide Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 6/12 Resolution No. 324/4934 on 18.07.2013 to reopen the project and revive the entire process. Even the offer of the appellant of 21.61 crores before the writ-Court, which was communicated to the Board of Directors, was rejected and the entire tender process was rescinded.
The Board of Directors, on 08.01.2019, took a policy decision to develop the land which was proposed to be leased-out earlier as Silk-city in the District of Bhagalpur under Public Private Partnership (PPP).
This decision of the Board of Directors has not been challenged presumably on the plea that the writ petition was not concluded by that time and the initial restraint order and in the order varying the afore-noted stay order, there was a caveat that it would not create any right in favour of any one of the tenderers/offerers to the prejudice of the appellant.
Pursuant to the decision dated 08.01.2019, a fresh tender was issued in a completely new format under the Public Private Partnership initiative for reviving Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 7/12 the Bihar Spun Silk Mills, Bhagalpur.
The writ-Court, after having noted the developments, rejected the argument of the appellant that a right had accrued to him by affirmation of his offer by the Board of Directors, even though it was not communicated to him, and a concluded contract therefore, could not have been rescinded or varied or a fresh tender with different requirements and specifications could have been floated, more so when the writ petition was not concluded and the modified order of stay prevented any adverse rights being created in favour of any one of the offerers.
It has been submitted on behalf of the appellants that the decisions of the Supreme Court in State of A.P. & Ors. Vs. Guntakal Toddy Tappers Co- operative Society and Anr.: AIR 1985 SC 1676; Vedica Procon Private Ltd. Vs. Balleshwar Greens Private Ltd.
& Ors.: AIR 2015 SC 3103 and Punjab Communications Ltd. Vs. Union of India & Ors.:
Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 8/12 (1994) 4 SCC 727 were held to be not applicable only on the ground that in the afore-noted concluded contracts the follow-up action of transferring the land for the purposes and letter of intent having been issued, the stage at which interference was made by the respective Departments/Companies was different from that which was faced by the appellant. The learned counsel for the appellant, therefore, contends that on such a slender ground, the claim of the appellant could not have been diluted in any manner, whatsoever, more so when the interim order protected his rights in the interregnum.
The further argument of Mr. Sanjay is that a novel procedure was adopted by the respondents/BSIDC in taking into account successive offers orally even when the tender papers had been opened and the prices offered by the initial tenderers were made public. He submits that this process would only result in such successive higher offers pouring in and there would never come a point when any contract could be Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 9/12 concluded against the selected tenderer. Such is not the method applied in issuance of tenders and concluding of contract with the best concessionaires.
If further appears to us from the intervening development that now despite all this and the writ petition remaining pending, the respondents/BSIDC continued with its action of selecting tenderers for the purposes of setting-up Silk-city at Bhagalpur and a fresh tender in that regard was issued on 12.12.2019 with a proposal to attract investors for utilizing the land in question for its development as Silk-city and setting-up of integrated textile parks with focus on Silk, Khadi, Muslin and Hand-loom Industry for the avowed purposes of the advancement of socio-economic development in the District of Bhagalpur.
The appellant never participated in the afore- noted tender, even though at earlier stages, he was ready to hike his offer, which he had by offering 21.01 crores.
Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 10/12 In the afore-noted process against the NIT floated on 12.12.2019, referred to above, one Ms OIX Govtech Private Ltd. responded and was selected with the task of development of Silk-city. An agreement also was entered into with the Company on 29.05.2020 and the land in question was transferred to it for the purposes of the development.
Aforesaid Ms OIX Govtech Private Ltd. failed to implement the project within the time-line provided in the tender papers and, ultimately, the lease with it was cancelled.
A request case, vide Request Case No. 55 of 2021 was pressed, which was allowed and on 27.10.2021, an Arbitrator also has been appointed, which proceeding continues before the Arbitrator.
Mr. S.D. Sanjay submits that true it is that a fresh tender in the year 2019 was issued in which he never participated as he stuck to his claim for which the writ petition was filed, which had remained pending for Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 11/12 all this while, but even the initial selection of Ms OIX Govtech Private Ltd. was bad as it was the only/sole tenderer. Precisely for this reason, the selection was not good and the land remained unutilized and the project frustrated for all this while.
In the afore-noted context, it has been urged on behalf of the appellant that notwithstanding such developments with the creation of third party rights, this Court ought to intervene and find out ways, if not for benefiting the appellant, for the socio-economic development of Bhagalpur in setting-up and living up to the vision of creating textile parks for silk and other threads.
Dr. Anand Kumar for the respondents/BSIDC submits that before the arbitration is concluded or Ms OIX Govtech Private Ltd. is impleaded and noticed, this appeal cannot be disposed off for the reason that a clear third party right has accrued in favour of aforesaid Ms OIX Govtech Private Ltd., especially when all the later Patna High Court L.P.A No.1542 of 2019(3) dt.10-04-2023 12/12 decisions of the Board of Directors of the respondents/BSIDC was never challenged by the appellant and even in the last of the tenders, the appellant had chosen not to participate though the tender was open to all.
Mr. S.D. Sanjay, the learned Senior Advocate for the appellant submits that status report filed by the respondents/BSIDC was never served upon him.
Let Dr. Kumar hand-over a copy of such status report to Mr. Sanjay during the course of the day for further arguments.
Re-notify this appeal on 19th of April, 2023 for further arguments.
(Ashutosh Kumar, J) (Harish Kumar, J) Praveen-II/Mayank U