Delhi High Court
Green Delhi Bqs Ltd. vs Delhi Transport Corporation And Ors. on 5 April, 2010
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
DATE OF RESERVE: 09.03.2010
PRONOUNCED ON: 05.04.2010
+ IA Nos.5773/2009, 5985/2009 & 7333/2009 in CS(OS) 790/2009
GREEN DELHI BQS LTD. ..... Plaintiff
Through: Mr. S. Ganesh, Sr. Advocate with Ms. Shally
Maheshwari and Ms. Megha Mukerjee, Advocates.
versus
DELHI TRANSPORT CORPORATION AND ORS. ..... Defendant
Through: Mr. Parag P. Tripathi, Mr. Anuj Bhandari and
Mrs. Avanish Ahlawat, Advocates.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers YES
may be allowed to see the judgment?
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
MR. JUSTICE S.RAVINDRA BHAT
*
1. The plaintiff (hereafter called "Green Delhi") sues the defendant for declaration that the
Defendant's (hereafter "DTC") refusal to hand over 17 BQS sites (near the airport) to it (the
plaintiff) is illegal, and a declaration that refusal of the Defendant Nos.1 and 3 to shift the 18
BQS to more convenient locations is fraudulent and illegal. The suit seeks a declaration that
Green Delhi is liable to pay only Rs. 32,880/- per BQS per month, instead of the contracted Rs.
93,800/- per month. Consequential decrees for mandatory injunctions, are sought. Green Delhi
seeks a decree for permanent injunction restraining DTC from taking coercive measures against
it in terms of a letter dated 31.03.2009; likewise a permanent injunction to restrain the defendants
from invoking and en-cashing some bank guarantees.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 1
2. Briefly, the facts are that DTC issued a global tender, on 08.01.2007, for construction of
225 Bus Queue Shelters (BQS) on Build, Operate and Transfer basis for a period of 10 years.
Green Delhi bid for the project, and tendered for the venture. DTC, after evaluating the tender,
issued an offer letter, on 28th May, 2007. The parties executed a Concession Agreement on
26.07.2007, which contained the terms of contract. The implementation period of the contract
was 26 weeks, together with an additional period of one month. In terms of the Agreement, 225
sites were earmarked for the project, and listed in Schedule A (to the agreement). DTC could,
under Article 13.1 (of the agreement) increase the number of BQS by 10% without change in the
other terms. Likewise, Article 14 enabled DTC to, within one year of achieving the COD, decide
to augment the project capacity upto 25% of the 225 BQS. The material terms of the Agreement,
including the definition clause, are extracted below:
"ARTICLE-1
DEFI NITIONS & INTERPRETATION
1. Definitions:- In this Agreement, the following words and expressions shall,
unless repugnant to the context or meaning thereof, have the meanings
hereinafter respectively assigned to them:
"Accounting Year" means the financial year (Financial year for the purpose of
turnover and net worth is acceptable as per the bidder‟s financial year. But the
financial year for other purposes including execution/implementation/operation
and maintenance of the work pertaining to this tender will be as per the DTC‟s
financial year i.e. form 1st April to 31st March).
"Agreement" means this Agreement including Schedules „A‟ through „L‟ hereto,
and any amendments thereto made in accordance with the provisions of this
Agreement.
"Applicable Laws" means all laws, promulgated or brought into force and
effect and all Rules and Regulations made and all Notifications and Guidelines
issued there under by government of India, Government of Nation al Capital
Territory of Delhi, MCD, DTC, Statutory Authorities and other local bodies
including all judgments, decrees, injunction, writs and orders of any court of
record, as may be in force and effect during the subsistence of this Agreement.
"Applicable Permits" means all clearances, permits, authorizations,
consents and approvals under or pursuant to Applicable Laws, required to be
obtained and maintained by the Concessionaire, in order to implement the Project
and to provide the Project Facility in accordance with this Agreement.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 2
"Arbitration Act" means the Arbitration and Conciliation Act, 1996 and shall
include any modifications to or any re-enactment thereof as in force from time to
time.
"Change in Law" means the occurrence of any of the following after the date of
this Agreement.
a. The enactment of any new Indian law;
b. The repeal, modification or re-enactment of any existing Indian law;
c. The commencement of any Indian law which has not entered in to effect until
the date of this Agreement;
d. A change in the interpretation or application of any Indian law by a court of
record as compared to such interpretation or application by a court of record
prior to the date of this Agreement; or
e. Any change in the rates of any of the taxes.
"COD" means the Commercial Operations Data of the Project which shall
be the date on which the Independent Engineer has issued the Completion
Certificate or the Provisional Certificate upon completion of construction of the
Project and which shall, subject to the provisions of this Agreement, be not later
than 4 weeks plus 44 weeks from the date of signing of this Agreement.
"Commencement Date" means the date on which the physical possession of
first lot of 25 BQS such that BQS in each lot are at contiguous locations and
location of the stretch of each lot is decided by DTC is handed over by DTC to the
Concessionaire which shall not be later than 4 weeks from the date of this
Agreement.
"Termination" means termination of this Agreement and the Concession
hereunder pursuant to a Termination Notice or otherwise in accordance with the
provisions of this Agreement but shall not, unless the context otherwise requires,
include the expiry of this Agreement / Concession due to expiry by efflux of time
to the Con cession Period in the normal course
"Termination Date" means the date of which the Termination Notice (as per
article 16.2) has been delivered or deemed to have been delivered by a Party
issuing the same to the other Party in accordance with the provisions of this
Agreement.
2.1 Grant of Concession
a) Subject to and in accordance with the terms and conditions set forth in
this Agreement, DTC hereby grants and authorises the concessionaire to
investigate, study, design, construct, operate and maintain the Project
Facility and to exercise and /or enjoy the rights to collect revenue from
displaying advertisements at earmarked locations on Bus Q Shelters as set
forth in this Agreement (collectively "the Concession"). The
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 3
Concessionaire shall pay prescribed Concession Fee to DTC for grant of
above Concession.
Stand Fee: Any Stand fee paid by Bus operator(s) to DTC will not be
part of concessionaire‟s revenue and concessionaire has no right/claim
over this.
(b) The title, interest, ownership and rights with regard to Bus-Q-
Shelters constructed by the Concessionaire for DTC along with
fixtures/fittings provide therein shall vest with the DTC except that these
will be operated and maintained by the Concessionaire during the
concession period as agreed in this Agreement. Title, interest in and
ownership of land remains with the land owning agency.
2.4 PROJECT SITE
DTC hereby undertakes to handover to the Concessionaire physical possession of
the Project Site (Bus-Q-shelters) free from encumbrance together with the
necessary rights of way/way leaves for the purpose of implementing the Project in
accordance with this Agreement but subject to the rights of DTC and the land
owning agency. The handing over of the sites in lots of 25 BQS at a time such
that BQS in each lot are at contiguous locations and location of the stretch of
each lot is decided by DTC shall commerce within 30 days from the date of this
Agreement. The handing over of sites shall be linked to agreed construction
schedule.
Handing over/ taking over physical possession of the site (s) shall comprise the
following stages:
a) Batch-wise offer of sites to the Concessionaire by DTD
b) Joint Survey by DTC and Concessionaire of each site of the batch and,
c) Preparation of site plan of each site by the Concessionaire based upon joint
survey and its approval by DTC
DTC confirms that upon the Project Site being handed over pursuant to the
preceding para, the Concessionaire shall have the right to enter upon, occupy and
use the Project Site and to make at Concessionaire‟s costs, charges and expenses
such development and improvements in the Project Site as may be necessary or
appropriate to implement the Project and to provide the Project Facility subject
to and in accordance with the provisions of this Agreement.
2.6 INFORMATION ABOUT THE PROJECT SITE
The information about the Project Site set out in Schedule „A‟ is provided by DTC
in good faith and with due regard to the matters for which such information is
required by the Concessionaire. DTC agrees to provide to the Concessionaire,
upon a reasonable request, any further information relating to the Project Site,
which DTC may now possess or may hereafter come to possess. DTC, however,
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 4
makes no representation and gives no warranty to the Concessionaire in respect
of the condition of the Project Site.
2.7 PEACEFUL POSSESSION
DTC warrants that:
a) The Concessionaire shall have no obligation/liability as to payment of any
compensation whatsoever to whosoever for the use of Project Site or any part
thereof for the project during the concession period except the payment of
Concession Fee.
b) The Concessionaire shall, subject to complying with the terms and conditions
of this Agreement, remain in peaceful possession and enjoyment of the Project
Site during the Concession Period. In the event the Concessionaire is
obstructed by any Person/ Company claiming any right, title or interest in or
over the Project Site or any part thereof DTC shall, if called upon by the
concessionaire, defend the Concessionaire against such claims and
proceedings and also keep the Concessionaire indemnified against any direct
loss or damages which the Concessionaire may suffer, on account of any such
right, title, interest or charge which shall be limited to depreciated cost of the
BQS.
ARTICLE 3 Performance Security
3.1 PERFORMANCE SECURITY
The concessionaire shall, as the Performance Security for due and
punctual performance of its obligations during Construction and Operation,
deliver to DTC, beofr eor at the time of the execution of this Agreement a Demand
Draft for Rs.20 (twenty) million in favour of CMD, DTC. In case bidder who
submitted bids for both packages is evaluated to be highest financial bidder in the
both packages, then two separate demand drafts for Rs. Twenty million each as
above shall be submitted in favour of CMC/DTC.
This amount shall be returned without interest to the Concessionaire 90 days
after handing over of the BQS to DTC on expiry of Concession period. The
performance Security shall be returned after deducting the claims if any.
ARTICLE 16 EVENT OF DEFAULT
16.1 Event Of Default
Notwithstanding anything herein contained, breach by Concessionaire of the
terms and conditions of the Agreement, and specifically any of the following
events of default means the concessionaire event of Default.
CONCESSIONAIRE EVENT OF DEFAULT
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 5
Any of the following events shall constitute an event of default by the
Concessionaire (Concessionaire Events of Default") unless such event has
occurred as a result of a DTC event of Default or a Force Majeure Event.
(1) The Concessionaire falls to commence the construction works within 30
days from the Commencement date.
(2) The Concessionaire falls to open and establish an Escrow Account within
six months from signing of Concession
(3) The Concessionaire falls to achieve COD within 44+4 weeks from the
Commencement Date.
(4) Any representation made or warranty given by the concessionaire under this
agreement is found to be false or misleading.
(5) The Concessionaire creates any Encumbrance on the Project Site/Project
Facility in favour of any person.
(6) The aggregate shareholding of the members of the members of the
Consortium/Sponsors falls below the minimum prescribed under Article
20.1 (x9) of the Strategic partner reduces his shareholding or withdraws
before the lock in period of 5 years.
(7) The transfer, pursuant to law of either (a) the rights and/or obligations of
the Concessionaire under this Agreement, or (b) all or part control of the
Concessionaire except where such transfer in the reasonable opinion of
DTC does not affect the ability of the Concessionaire to perform, and the
Concessionaire has the financial and technical capability to perform its
material obligations under the Agreement;
(8) A resolution is passed by the shareholders of the Concessionaire for the
voluntary winding up of the Concessionaire;
(9) Any petition for winding up of the Concessionaire is admitted by a court of
competent jurisdiction or the concession are is ordered to be would up by
Court except for the purpose of amalgamation or reconstruction, provided
that, as part of such amalgamation or reconstruction, the property, assets
and undertaking of the concessionaire are transferred to the amalgamated
or reconstructed entity and that the amalgamated or constructed entity has
unconditionally assumed the obligations of the Concessionaire under this
agreement and the project agreements, and provided that:
(i) the amalgamated or reconstructed entity has the technical
capability and operating experience necessary for4 the performance of its
obligations under this agreement and the project agreements;
(ii) the amalgamated or reconstructed entity has the financial standing
to perform its obligations under this Agreement and the project agreements
and has a creditworthiness at least as good as that of the Concessionaire as
at the Commencement Date; and
(iii) this Agreement remains in full force and effect.
(10) the Concessionaire suspends or abandons the operations of the project
without the prior consent of DTC, provided that the Concessionaire shall be
deemed not to have suspended abandoned operation if such suspension/
abandonment was (j) as a result of Force Majeure Event and is only for the
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 6
period such Force Majeure is continuing, or (ii) on account of a breach by
DTC of its obligations under this Agreement;
(11) the Concessionaire repudiates this Agreement or otherwise evidences an
intention not to be bound by this agreement;
(12) the concessionaire repudiates this Agreement of otherwise evidences an
intention not to be bound by this Agreement;
(13) The Concessionaire has neglected or failed to regularity and properly
maintain the Bus-Q- Shelters in clean and hygienic conditions and to keep
the Bus-Q-Shelters in a state of good repair at its own cost;
(14) The Concessionaire is otherwise in material Breach of this agreement and
wishes to surrender. The surrender may be accepted only for complete
package of the Bus-Q-Shelters. The declaration of DTC regarding accepting
the surrender shall be final and binding.
(15) Repeated non payment of salaries, wages and other dues of its employee
(including employees of the contractors) including depositing PF and ESI
premiums in time;
(16) The concessionaire falls to pay the concession, fee in time:
(17) Non settlement of 3rd party claims on DTC as a consequence from the fault
of the Concessionaire.
16.2 TERMINATION DUE TO EVENT OF DEFAULT
TERMINATION FOR CONCESSIONAIRE EVENT OF DEFAULT
(1) Without prejudice to any other right or remedy which DTC may have in
respect thereof under this agreement, upon the occurrence of a
Concessionaire Event of Default, DTC shall be entitled to terminate this
Agreement by issuing a Termination Notice to the Concessionaire,
provided that before issuing the Termination Notice, DTC shall be a
notice in writing inform the Concessionaire of its intention to issue the
Termination Notice (the "Preliminary Notice"). In case the underlying
breach/default is not cured within a period of 60 (sixty) days from the date
of the Preliminary Notice (Cure Period) DTC shall be entitled to
terminate this agreement by issuing the termination notice. Provided
further, that
(a) If the default is not cured within 30 (thirty) days of the Preliminary
Notice, DTC shall be entitled to appropriate the performance security
followed by issue of intimation of appropriation to concessionaire.
(b) If the default is not cured within 30 (thirty) days of issue of intimation of
appropriation and a fresh performance security is not furnished within the
same period in accordance with Article 3.2, DTC is entitled to issue the
termination notice.
(2) The following shall apply in respect of cure of any of the defaults and/or
breaches of this agreement.
(i) The Cure period provided in this Agreement shall not relieve the
concessionaire from liability for damages caused by its breach or default;
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 7
(ii) The Cure period shall not in any way be extended by any period of
suspension under this agreement;
(iii)If the cure of any breach by the Concessionaire requires any reasonable
action by the Concessionaire that must be approved by DTC or any
Government Agency hereunder the applicable cure period shall be
extended by the period taken by DTC or the Government Agency to accord
the required approval.
16.3. RIGHTS OF DTC ON TERMINATION
Upon Termination of this Agreement for any reason whatsoever, DTC shall have
the power and authority to;
(i) Take possession and control of project assets forthwith;
(ii) Prohibit the Concessionaire from entering upon the Project Assets/
dealing with the project or any part thereof;
(iii) DTC shall not be responsible for any payment due by the Concessionaire
to his sub contracts/ lenders or any other agencies. All such matters have
to be settled by the Concessionaire."
3. Green Delhi had caused bank guarantees, in terms of the agreement, to be issued in
favour of DTC, on 22nd May, 2008 and later on 25th September, 2008. The suit contends that
Green Delhi had been handed over 200 sites by DTC, for development, in early March 2008; a
letter dated 24.03.2008 is relied on for this purpose. The plaintiff also alludes to a letter to DTC
dated 04.03.2008, mentioning that it was agreeable to accept certain alternative sites, and listing
out 80 such sites. Green Delhi contends that the DTC issued a letter on 22.05.2008 mentioning
that the size of the project had been determined as 248 BQS, by invoking Article 13. DTC also
stated that 195 sites were available with Green Delhi, and offered 53 to it. The list of such
additional sites was attached to the letter, which requested Green Delhi to complete construction
of 248 BQS by 10.07.2008. Green Delhi also mentions about a letter of 26.11.2007, issued by
DTC, that the project size had been increased to 310 sites, and that 85 sites would be handed
over. It is submitted that Green Delhi, in fact, took possession of 248 sites, pursuant to this
representation. It is stated that project sites were to be handed over in lots of 25 each; yet, DTC
failed to hand over a large number of such sites, for various sundry reasons. Green Delhi
specifically underlines the alleged default of DTC in handing over 17 out of 24 sites, near the
Airport, which are the most commercially viable.
4. Green Delhi narrates that on 07.05.2008, it asked DTC to hand over possession of the
said 85 sites. At that stage, on 22nd May, 2008, DTC reduced the project size to 248 sites. Green
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 8
Delhi however, insisted that the original 310 sites should be handed over, to which DTC agreed.
The suit mentions that again, on 27th May, 2008, DTC was reminded to hand over 85 sites.
According to Green Delhi, 248 sites were constructed, out of which 200 were handed over to
DTC, in good faith. Next, it is mentioned that DTC agreed to shift some sites from under
flyovers, at the request of Green Delhi, which it did not do, in respect of 18 locales; mention is
made of a letter dated 27th November, 2008. In this background, says Green Delhi, a meeting
was held in the office of the Chief Secretary, NCT of Delhi, where it was disclosed by DTC for
the first time that 17 sites were in the possession of Delhi International Airport Ltd (DIAL),
which had refused to hand over them; Green Delhi mentioned in the meeting that this aspect had
been suppressed from it, by DTC, at the stage of inviting bids. Green Delhi states, in the suit, that
in this meeting, it was agreed as follows:
5. The plaintiff, Green Delhi, next submits that instead of complying with the terms of the
understanding, DTC started demanding the outstanding concession fee of Rs. 5,03,09,713/-
through its letter dated 20th January, 2009. A reference is made to several letters written to DTC
reminding it about the commitment to hand over 17 sites. The plaintiff then submits about
another meeting dated 03.03.2009, the minutes of which were circulated in the letter of
09.03.2009. The relevant extract of the said minutes are as follows:
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 9
The letter also stated that:
Green Delhi states that there were lacunae in the minutes, and that it offered alternative
proposals, to resolve the issue. It also asked for a meeting to discuss the issue, on 24th April,
2009, which the DTC refused. In this background, the DTC issued a preliminary notice on
31.03.2009 threatening to terminate the Concession Agreement and take coercive action. Green
Delhi responded, denying the allegations, by its letter, dated 24.04.2009. In this background of
circumstances, the present suit was filed. Green Delhi states that it was induced, by the DTC's
representations, to invest over Rs. 75 crores, under the belief and understanding that the
promised sites, 17 airport sites would be handed over. The said sites had, according to its pre-bid
estimates, revenue yielding capacity to constitute 60% of its earnings through the entire contract.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 10
The default and neglect by DTC in handing over possession of those plots fundamentally altered
the basis of the contract. Green Delhi relies on a project and feasibility report submitted to Yes
Bank, which reveals that possession of those 17 sites was of the essence and an integral part of
the contract.
6. This Court had, by its order directed that Green Delhi could pay Rs. 66,76,045/- per
month towards the concession fee, instead of the full amount. On that day, i.e .01.05.2009, DTC
invoked the bank guarantee. By a further interim order, dated 5th May, 2009, DTC was restrained
from en-cashing the bank guarantee subject to Green Delhi paying the amount directed,
according to the previous order.
7. Green Delhi argues that handing over of the 17 sites was vital for it, and an essential basis
for its accepting the offer. It relies on the project report furnished to its banker, indicating that the
bulk of advertising revenue was to be generated from the BQS near the Airport, as the situational
advantage it offered outdid the other locations. It is argued that when Green Delhi entered into
the contract, there was an understanding that the sites, including the 17 sites, would be handed
over to it. DTC increased the project size to 310 sites, promising to hand over 85 sites, but did
not do so, and later did not adhere to the promise to hand over these 17 vital sites. It is submitted
that DTC's position, in the Court, that Green Delhi had accepted alternative sites in lieu of the 17
airport sites, is incorrect, and contrary to the record. It is also argued that in response to a query
under the Right to Information Act, (RTI), that DTC had responded on 04.09.2009, conceding
that its Board of Directors had increased the project size to 310 and approved the development of
additional 85 sites.
8. Learned senior counsel on behalf of Green Delhi contended that the refusal or inability of
DTC to hand over the most economically viable sites, which effectuates the contract, has altered
the situation so drastically, that the Court should confirm the equitable order made on the first
date of hearing relieving it (Green Delhi) from the obligation to pay Rs. 93,800/- per month for
each BQS as concession fee, and allow it to pay a lesser amount. It is submitted that the
documents and materials placed on record clarify that a diligence survey had been undertaken in
respect of each of the 225 sites originally offered, which were classified (by Green Delhi) into
five categories, i.e. A++; A+; A, B and C according to their estimated revenue commercial
viability. Sites in A++ category were expected to fetch over Rs. 5,50,000/- per month, whereas
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 11
those in the least commercially viable category, i.e. C were expected to fetch Rs. 35,000/- per
month. Invoking the doctrine Rebus sic standibus, or discharge of contractual obligations due to
supervening events and circumstances, it is submitted that the failure to hand over the most
commercially viable sites, undermined the very purpose of Green Delhi's offer, and the basis of
the contract, which entitles the Court to make an equitable interim order, protecting its interests.
Counsel submitted that Green Delhi has already invested in excess of Rs. 89 crores, and
permitting the DTC to take coercive action and invoke the bank guarantee would mean that the
Bus Queue Shelters would be dismantled, thus destroying the larger public purpose. Reliance
was placed on the judgment reported as Old World Hospitality Ltd .v. IHC 73 (1997) DLT 374
and Pioneer Publicity Corporation -vs- Delhi Transport Corporation 103 (2003) DLT 442 for
the submission that the Court can appropriately injunct the party in default, in a contract, from
taking precipitate action, in its terms.
9. Green Delhi argues that the express terms of the contract, more particularly clause 16
spells out a negative covenant, which binds the DTC and prevents it from terminating the
arrangement, as is sought to be done. It is argued that as events of default have been defined
exhaustively, in clause 16, therefore, un-enumerated conditions cannot be the basis for
determining the contract. The plaintiff consequently argues that the exceptions spelt out in
Section 42 of the Specific Relief Act apply to entitle it to the injunctions sought for. Reliance
here is placed upon the judgment of the Supreme Court reported as Gujarat Bottling Co. Ltd v.
Coca Cola Co., 1995 (5) SCC 545.
10. It is submitted that in any event the invocation, in the present case was not in terms of the
bank guarantee. As a consequence the plaintiff Green Delhi is entitled to injunction restraining
its encashment. The relevant portions of the bank guarantee invocation letter, dated 01.05.2009,
issued by the DTC are as follows :
"Dear Sir,
A. By the letter of award No.Sr.Mgr (Civil)/07/65 dated 28.05.2007 issued by DTC
to lead partner, M/S Jindal Stainless Ltd. (a company incorporated under the company
act, 1956) having its registere office at O.P. Jindal Marg, Hissar, Haryana and Head
Office at 12-Bhikaji Cama Place, New Delhi-110066, the consortium was granted the
construction of 225 nos. bus queue shelters (enhanced to 248 nos. bus queue shelters on
build, Operate and Transfer Basis).
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 12
B. The concession agreement was signed between Delhi Transport Corporation and
the concessionaire M/S Green Delhi BQS Pvt. Ltd. on 27.06.07 according to which
performance guarantee equal to three times of license fee of 200 nos. bus queue shelters
has been submitted by the concessionaire through above cited bank guarantees as per
article 3 of the agreement.
C. That the concessionaire is not making the payment of concession fee in respect of
200 nos. bus queue shelters for which provisional COD has been granted and the
concessionaire is also not offering 48 nos. bus queue shelters for COD and as such an
amount of approximately Rs. 11.50 cores has become outstanding. The above acts on the
part of concessionaire amounts to default as per the terms of the agreement. Preliminary
notice to this effect has been issued by DTC to the concessionaire under Clause
No.16.2(i) of the concession agreement. The concessionaire was requested to cure the
default within 30 days of preliminary notice issued by DTC and received by the
concessionaire on 31.03.09.
D. Since the period of 30 days within which the concessionaire was required to cure
the default has already expired and the concessionaire has not taken any steps to cure the
default, the notice for encashment of Bank Guarantee has been issued to concessionaire
under Article 16.2(1)a of the concession agreement.
In view of the above, you are requested to pay the sum of Rs.6,22,15,000/-
through demand draft in favour of CMD, Delhi Transport Corporation immediately, as
per the concessionaire has failed to discharge his obligation under the concession
agreement."
11. In this connection, learned counsel for the Green Delhi relies upon the judgment reported
as Hindustan Steel Works Construction Limited v. Tarapur & Co., AIR 1996 SC 2268. It is
argued here that the competent authority empowered to invoke the guarantee has not done so and
besides letter, dated 01.05.2009 nowhere states that the plaintiff had failed to meet its
performance/ obligation in terms of the concessional agreement during the implementation
period. Green Delhi submits that since the fulcrum of the contract was based on the number of
sites, particularly those with revenue generating capacity being handed over by DTC, an
eventuality, which did not occur, irretrievable injustice would ensue and visit the plaintiff if the
DTC were allowed to en-cash the bank guarantees.
12. DTC, in its written statement, as well as in the reply to the temporary injunction
application (I.A. No. 5773/2009, 5999/2009) as well as in the application for vacation of the
interim order (IA 7333/2009) submits that since Green Delhi was the highest bidder for the
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contract and its terms was acceptable the concession agreement was entered into; for a tenure of
10 years. Schedule K of the agreement prescribes the concession fee payable by the plaintiff (the
concessionaire) during the tenure. DTC submits that although the agreement was for 225 BQS
yet under Article 13 the number could be increased or decreased by 10% without change in other
conditions. It is submitted that as per the agreement, sites for 225 BQS were given to Green
Delhi; during the implementation period. However, 53 sites could not be made available because
of the development work in the area. DTC submits that it exercised the option and increased the
number of BQS to 248 and there was specified list of 80 sites, out of which 52 were handed over
to Green Delhi. DTC concedes that 200 sites had been made operational and were being used,
for which a concession fee of Rs.93800/- per BQS per month was being paid.
13. It is submitted that 48 BQS were also ready in January 2009 but were not operationalised
deliberately, which resulted in loss of revenue to it (the DTC). The DTC submits that Green
Delhi for the first time raised a dispute with respect to 17 sites that were to be initially in the
airport area. Such sites were not made available by the land owning agency, i.e. DIAL.
Consequently Green Delhi was given alternative sites, which has resulted in the increased
number of BQS at 248 as against the 225. DTC admits to a meeting in the office of the Chief
Secretary, NCT of Delhi on 8.01.2009 when it was pointed out that Green Delhi was not
operating 48 BQS and also not paying license fee on one pretext or the other. It also mentions
about the letter dated 20.01.2009 stating that the sum of Rs.5,03,09,713/- was outstanding
towards concession fee and interest in respect of 200 BQS, for which commencement of date had
been granted. DTC submits that initially 172 BQS were handed over from amongst the original
list of 225. An alternative list of sites were given to the plaintiff, which by letter dated
04.03.2008 showing a list of 80 BQS including the list of alternative sites against unfeasible
BQS. The balance 53 sites were allotted on 22.5.2008. It is submitted that despite this being a
position Green Delhi did not hand over the 48 sites in spite of their having been constructed.
DTC relies upon the letter dated 27.11.2008 stating that it admitted that it contains an admission
that Green Delhi had 248 BQS ready but could not proceed further due to a major credit crunch.
14. It is submitted that Green Delhi, after December 2008, for the first time started harping
on non-availability of 17 sites near the airport area and how it was important for it to generate
revenue. Its counter offers and proposals were not acceptable to the DTC, a position which was
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 14
expressly and clearly made known to Green Delhi. Another meeting was held and eventually,
DTC issued a notice on 30.3.2009 intimating the acts of default and requiring Green Delhi to
rectify them. Since the Green Delhi's reply, dated 24.4.2009 neither addressed the real issue nor
assured of any remedial action, the DTC invoked the bank guarantees on 01.05.2009. It is
further stated that the allegation that bank guarantees were not invoked in accordance with the
terms, is denied.
15. It is argued that essentially what Green Delhi is seeking from the Court is a re-definition
of the terms of the contract. In other words, the Court is asked to re-write the contract, an
unworkable proposition. The learned Additional Solicitor General, appearing for DTC submits
that the Green Delhi is clearly in default and has not performed what it was expected to under the
contract. In the circumstances, it is not entitled to any equitable relief. Counsel relies upon the
letters, dated 04.03.2008 and 22.05.2008, which clarified the understanding of both parties that
the total number of sites made available were 248. That the plaintiff was satisfied with this all
along is clear from the letter of Green Delhi, dated 27.11.2008, which talked about difficulties
other than the handing over of the 17 airport sites. Reliance is also placed upon the letter of the
Consultant RITES, dated 30.12.2008 written to DTC submitting that the 48 BQS had in fact been
made ready. It was under these circumstances that the first letter, dated 20.01.2009 requesting
Green Delhi to clear the outstanding amounts, was issued. A reminder was issued on
03.02.2009, to which Green Delhi in its reply, for the first time mentioned about the 17 shelters
(which were also recorded in the minutes of meeting, dated 08.01.2009). The request, for
altering the terms of the contract, was rejected on 09.03.2009 by the DTC. It is thus argued that,
as neither the contemporaneous correspondence, nor indeed the contract mentioned the alleged
essentiality of the 17 airport sites, Green Delhi cannot argue that their non-availability strikes at
the root of the contract and makes them commercially unfeasible.
16. It is also submitted that the request for change was articulated for the first time, by Green
Delhi, in December, 2008, when the obligation to postpone or re-schedule the monthly payments
was requested, not on the ground of unavailability of the 17 airport sites, but the economic
downturn. Thus, submits DTC, Green Delhi is citing a reason that had never been voiced at the
contract formation stage, nor when its terms were substantially worked out, and both the parties
had committed themselves to it. In these circumstances, the Court would be assuming that
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 15
handing over of such sites was an essential condition for DTC's performance of the contract,
which is not so in reality, as such conclusion is unsupported by any material on the record.
17. DTC submits that Green Delhi accepted the conditions in the contract, and constructed
248 BQS, which stands established from the record. The feasibility or otherwise of the 17 airport
sites, was considered before the acceptance of the alternative sites. Therefore, its argument that
handing over of such sites were essential to the performance of the contract, cannot be accepted
by the Court, much less in furtherance of a claim for temporary injunction restraining the
encashment of an unconditional guarantee.
18. In support of the submission that the Court cannot re-write a commercial agreement
entered into between the parties, DTC relies on the judgments reported as Citbank v. Standard
Chartered Bank, 2004 (1) SCC 12; Polymat India v. National Insurance Co. Ltd., 2005 (9) SCC
174 and Central Bank of India v. The Hatford Fire Insurance Co. Ltd., AIR 1965 SC 1288. It is
submitted that the decisions in State of Haryana v. Jage Ram 1980 (3) SCC 599 and New Bihar
Biri Leaves Co v. State of Bihar, AIR 1981 SC 679 have ruled that a contracting party is not
absolved of its obligations under the bargain, due to commercial difficulty or inconvenience. It is
also submitted that the Concession Agreement being a commercial contract, can always be
terminated, even in the absence of a specific clause or condition, authorizing one party to do so;
reliance is placed on the decisions reported as Indian Oil Corporation v. Amritsar Gas Service &
Ors., 1991 (1) SCC 533.
19. The following undisputed facts may be noticed, from the above discussion:
(1) Green Delhi and DTC entered into a contract on 26.07.2007. In terms of the agreement,
Green Delhi contracted to build and operate 225 BQS. The agreement spelt out, exhaustively, the
rights and obligations of the parties, and also contemplated various contingencies, including the
situations when DTC could terminate the contract, or direct Green Delhi to take remedial action.
(2) Green Delhi had to pay Rs. 93,800/- per month as concession fee, in respect of each BQS.
(3) In terms of the Agreement, DTC had the option of increasing the project size. It is not
disputed that this option was exercised.
(4) The total number of BQS sites handed over to Green Delhi was 248.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 16
(5) Green Delhi built and handed over 200 BQS;
(6) Green Delhi argues that further operation of BQS, after development of the balance 48
sites, is premised on the DTC handing (to it) 17 airport sites, which are vital to the commercial
viability of the entire project;
(7) DTC, on the other hand, contends that having accepted the 248 sites, Green Delhi cannot
insist that such 17 sites should be handed over to it, and that it (Green Delhi) is bound by the
terms of the contract to pay the agreed concession fee in respect of each BQS.
20. The controversy as to whether the handing over the seventeen airport sites, is vital and an
essential condition of the contract, has to be viewed from the overall perspective. The definition
clause in the contract mentions about the project site; they are listed in Schedule A. The various
stipulations clarify that Green Delhi is only given the right to use and share the revenue from the
BQS (with the DTC) for 10 years; under no circumstance did the parties agree that the
concessionaire was to have any interest in the property. Interestingly, clause 2.6 explicitly
mentioned that DTC gave "information about the Project Site set out in Schedule „A‟"...in good
faith and with due regard to the matters for which such information is required by the
Concessionaire." No warranty of any kind was assured. Likewise, Green Delhi has not pointed
out any stipulation in the agreement, which adverts to the project report and other materials
relied on by it (and submitted by it to its banker). Clause 1.3 lists out the contract, as including
the Notice Inviting Tender; Request for Proposal; Bid submitted by the tenderer; Notice of
award; letter of acceptance and concession agreement. It does not include any other term, or
contents of any other document, which is not the subject of inter se exchange between the
contracting parties. Nor does the Green Delhi establish, prima facie that at the contract formation
stage, or when the Concession Agreement was signed, the parties had any understanding that
some of the sites were important, and had to be delivered, to it, under any circumstance, or that
their handing over was of the essence, or an essential part, of the contract. The other aspect,
which the Court cannot ignore, is that the contract contains a fairly exhaustive force majure
stipulation in Clause 15, which lists out various different contingencies, the happening of which
would relieve parties of their obligations; it also put in a place a mechanism in this regard. In the
circumstances, where the rights and obligations of the parties were clarified exhaustively by
them, and they had envisioned every contingency, an argument that the fulfillment of some
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 17
conditions - to wit, the handing over of some specific sites being an essential part, or integral to
the contract, is unfeasible. The Court is un-persuaded by the submission of Green Delhi that
advertisement revenue from the 17 airport sites, or any others had been estimated to be so high
(by it) that not handing over of such sites constituted a fundamental breach, relieving it of the
rest of the obligations under the contract, with DTC. If such were the position, it could have been
clearly provisioned in the contract; also, the document or report or some part of it, disclosing the
estimated earnings from the BQS, site wise, could have been classified and made part of the
contract, (by including it under Clause 1.3 or through some other device). In fact, none of the
contemporaneous correspondence for the period November 2008 to March 2009 disclose that
such document was adverted to.
21. It would be relevant here to recollect some of the salient facts pertaining to Green Delhi's
contention. As noticed earlier, none of the contract terms mentions about the essentiality of the
17 airport sites, or other sites. It is common ground that the contract project size was increased;
though the Green Delhi says that it was increased by DTC availing itself of powers under
Clauses 13 and 14, to swell the BQS numbers to 310, all correspondence (save the November
2007 letter) indicate that the project size was increased to 248 sites (or 10% over 225 sites),
clearly pointing to recourse to Clause 13. Green Delhi's position in its correspondence till
November 2008 was that 200 sites had been developed and operated; it had also concurred for
the shifting of some sites to alternative locales. All this while, there was no mention about the
omission to hand over 17 sites. Indeed, the two letters of Green Delhi (in November and
December, 2008) mention about other reasons, but significantly do not advert to the DTC's
default or omission to hand over the said 17 airport sites. In these circumstances, a meeting (on
09.03.2009) was held, the minutes of which were drawn - a copy of which is placed on the
record. Here, Green Delhi asserted that without the DTC handing over the said 17 sites, it was
not prepared to pay the outstanding liability towards the concession fees. DTC's position was
that there was no question of Green Delhi defaulting in such payment, or stating that such sites
were to be handed over as a precondition for payment of the concession fee liabilities. Further
inter se correspondence appear to emphasize these positions.
22. An important principle of interpretation of documents is that if parties enter into written
agreements, that contain express stipulations, the Court would ordinarily desist from extending
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 18
them (such conditions) through implication. The general presumption in such cases is that
having expressed some terms explicitly, the parties have expressed all conditions by, which they
intend to be bound under the instrument. (Aspdin v. Austin) 1944(5) QB 671. It was held in
Luxor(Eastbourne) Ltd. v. Cooper, 1941 AC 108 that there is a presumption against adding to
terms in a contract or other documents drawn up containing several subject matters. It was held:
"the general presumption is that the parties have expressed every material
term which they intended should govern the agreement, whether oral or in
writing."
23. Another rule applied by English Courts while interpreting documents is that a term
should not be implied if it is inconsistent with express terms of the instruments or its general
tenor. This rule is because the implication of a term rests upon the presumed intention of the
parties and that it is unlikely that they would have intended to incorporate, by implication a term
which was inconsistent with one they have incorporated expressly. It was held in Lynch v.
Thorne, 1956(1) WLR that:-
"...a term prima facie to be implied must, according to well-settled principles,
always yield to the express letter of the bargain."
In India, in relation to functioning of companies, it was held (Ref. A. Lakshmanaswami Mudaliar
v. LIC of India, AIR 1963 SC 1185) that where a particular activity has not been provided for in
the Memorandum of Association, the directors cannot seek recourse to the Articles of
Association to imply that such business falls within its objects.
24. In the opinion of this Court, the absence of any internal indication in the contract that
some sites were to be treated as more important than others, on account of their revenue
generating potential, estimated by Green Delhi, such a conclusion cannot be arrived at its mere
asking. This conclusion is fortified by the circumstance that the record discloses that such a
position was articulated apparently for the first time, in January, 2009; indeed when Green Delhi
sought accommodation from DTC in regard to discharge of its liability towards payment of its
concession fee dues, it cited the prevalent economic slowdown as the reason for such treatment,
not because some sites at particular locales had not been handed over to it by DTC. The question
about the said sites being essential was articulated in a letter, for the first time, on 06.02.2009.
Relevant extracts of the said letter are as follows:
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 19
25. The Court is of the opinion that acceptance of such a submission, when all indications
from the record are that 248 sites had been handed over to it, and 200 had been developed, would
virtually result in re-writing the terms of the contract. This is the more so, since Green Delhi's
argument is that since such argument would result in scaling down its liability, proportionately,
having regard to the notional opportunity loss in revenue collection, entailed by the denial to
hand over such 17 sites, to about Rs. 33,000/- per month, per BQS. The court does not discern
any power to warrant such a direction.
26. The other argument of Green Delhi is that it had expended considerable amounts (above
Rs. 80 crores) for setting up the BQS, and denial of a temporary injunction would result in
irretrievable hardship not only to itself, but to third parties, particularly the travelling public.
Here, the Court is mindful that Green Delhi had expressly agreed by Clause 11.2 to pay the
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 20
concession fee, in a timely manner, regardless of any dispute that may subsist or arise with the
DTC. The documents on record indicate that its request to DTC to scale down, or reduce the
amount of monthly concession fee, was rejected more than once. In the circumstances, prima
facie, the DTC is within its rights to treat Green Delhi as in breach of the agreement (Ref Clause
16.1 (16) of the Concession Agreement), which says that non-payment of concession fee, in a
timely manner, amounts to an event of default. Green Delhi does not attack this clause, or any
other term in the contract. For this reason too, the Court is of the opinion that the decisions relied
upon by Green Delhi, for its contention that there is a negative covenant restricting DTC from
terminating the contract, for reasons other than clause 16, has no substance. There is an express
condition, which authorizes the DTC to treat Green Delhi in breach if the latter delays or does
not pay concession fee- a contingency which is not disputed, by it (Green Delhi) in this case.
Further, the holding, in Amritsar Gas (by the Supreme Court), in the opinion of the court prima
facie clarifies that such contracts are determinable, in which case, the relief of injunction would
be untenable, and inappropriate. The reliance placed on Old World Hospitality and, Pioneer
Publicity, in this Court's view, is inapt. In the former, the Court undoubtedly made certain
general observations that the remedy of injunction is available to enjoin a party in breach from
taking precipitate action in termination of the contract. In the latter decision, the Court went by
the understanding that one of the contracting parties was a state agency, and therefore bound by
higher standards, not to terminate a contract. These decisions have to be read in the context of
the peculiar facts, and treated as informative rather than persuasive. It has been held by the
Supreme Court, in Life Insurance Corporation v. Escorts Ltd., 1986 (1) SCC 264 that if the
state or its agencies don the mantle of a trader, they have all the options available to those
performing similar activities, in making commercial choices. Such choices would include
deciding whether a contractor was in breach of his or its terms, and deserved to be treated so.
Imposing additional conditions of fairness standards, available in public law, at the stage of
contract performance, more so in the case of contracts of service would be subjecting the state
agency to an unwarranted disability, akin to asking it to trade, with its hands tied by additional
conditions - something unacceptable, as the Court would then be importing public law standards,
into what are concededly private law relationships.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 21
27. The law relating to bank guarantees is well settled. In U.P. State Sugar Corporation v.
Sumac International Ltd., AIR 1997 SC 1644, the Supreme Court, after reviewing the previous
judgments, and the settled position in law for about two decades, reiterated that injunction can be
granted only in rare and exceptional circumstances, in the following terms:
"The courts have carved out only two exceptions. A fraud in connection with such a bank
guarantee would vitiate the very foundation of such a bank guarantee. Hence if there is
such a fraud of which the beneficiary seeks to take advantage, he can be restrained from
doing so. The second exception relates to cases where allowing the encashment of an
unconditional bank guarantee would result in irretrievable harm or injustice to one of the
parties concerned.
xxxxxxxx xxxx xxxx
On the question of irretrievable injury which is the second exception to the rule against
granting of injunctions when unconditional bank guarantees are sought to be realised the
court said in the above case that the irretrievable injury must be of the kind which was
the subject matter of the decision in the Itek Corpn. Case.
xxxxxxxx xxxx xxxx
Before us, however, in the course of argument, the learned advocate for the respondent
urged for the first time in this case there would be irretrievable injustice to the respondent if the bank guarantees are allowed to be realised because the appellant is a sick industrial company in respect of which a reference is pending before the board for industrial and financial reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985. The respondent contends that even if it succeeds before the arbitrator it will not be able to realise his claim from the appellant. The mere fact that a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 is pending before the Board, is, in our view, not sufficient to bring the case in the ambit of the "irretrievable injustice" exception.... There can, therefore, be no presumption that the company will, in no circumstance, be able to discharge its obligations..."
28. In a previous judgment, reported as General Electric Technical Services Company Inc. v. Punj sons (P) Ltd. and Anr., [1991] 4 SCC 230, it was held that:
"20. In our considered opinion if the bank guarantee furnished is an unconditional and irrevocable one, it is not open to the bank to raise any objection whatsoever to pay the amounts under the guarantee. The person in whose favour the guarantee is furnished by the bank cannot be prevented by way of an injunction in enforcing the guarantee on the pretext that the condition for enforcing the bank guarantee in terms of the agreement entered between the parties has not been fulfilled. Such a course is impermissible. The seller cannot raise the dispute of whatsoever nature and prevent the purchaser from IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 22 enforcing the bank guarantee by way of injunction except on the ground of fraud and irretrievable injury.."
29. In U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd., [1988]1SCR1124, the Supreme Court had emphasized that apart from fraud, if there was to be irretrievable injustice, injunction could be granted:
"...commitments of banks must be honoured free from interference by the courts. Otherwise, trust in commerce internal and international would be irreparably damaged. It is only in exception case that is to say in case of fraud or in case or irretrievable injustice be done, the could should interfere.."
In State of Maharashtra v. National Construction Co., [1996] 1 SCR 293, the Supreme Court clarified the position on this aspect in the following words:
"The rule is well settled that a bank issuing a guarantee is not concerned with the underlying contract between the parties to the contract. The duty of the bank under a performance guarantee is created by the document itself. Once the documents are in order the bank giving the guarantee must honour the same and make payment ordinarily unless there is an allegation of fraud or the like. The courts will not interfere directly or indirectly to withhold payment, otherwise trust in commerce internal and international would be irreparably damaged. But that does not mean that the parties to the underlying contract cannot settle the disputes with respect to allegations of breach by resorting to litigation or arbitration as stipulated in the contract. The remedy arising ex contractu is not barred and the cause of action for the same is independent of enforcement of the guarantee.."
30. Recently, Himadri Chemicals Ltd. v Coal Tar Refining Co., 2007 (8) SCC 110, re-stated the law as follows:
"...we find that the following principles should be noted in the matter of injunction to restrain the encashment of a Bank Guarantee or a Letter of Credit:
(i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional Bank Guarantee or Letter of Credit is given or accepted, the Beneficiary is entitled to realize such a Bank Guarantee or a Letter of Credit in terms thereof irrespective of any pending disputes relating to the terms of the contract.
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 23
(ii) The Bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer.
(iii) The Courts should be slow in granting an order of injunction to restrain the realization of a Bank Guarantee or a Letter of Credit.
(iv) Since a Bank Guarantee or a Letter of Credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of Bank Guarantees or Letters of Credit.
(v) Fraud of an egregious nature which would vitiate the very foundation of such a Bank Guarantee or Letter of Credit and the beneficiary seeks to take advantage of the situation.
(vi) Allowing encashment of an unconditional Bank Guarantee or a Letter of Credit would result in irretrievable harm or injustice to one of the parties concerned...."
31. In this case, the bank guarantee is an unconditional one. The plaintiff's contention is that the invocation was not in accordance with the terms of the guarantee. The relevant part of the invocation is as follows:
"C. That the concessionaire is not making the payment of concession fee in respect of 200 nos. bus queue shelters for which provisional COD has been granted and the concessionaire is also not offering 48 nos. bus queue shelters for COD and as such an amount of approximately Rs. 11.50 cores has become outstanding. The above acts on the part of concessionaire amounts to default as per the terms of the agreement. Preliminary notice to this effect has been issued by DTC to the concessionaire under Clause No.16.2(i) of the concession agreement. The concessionaire was requested to cure the default within 30 days of preliminary notice issued by DTC and received by the concessionaire on 31.03.09.
D. Since the period of 30 days within which the concessionaire was required to cure the default has already expired and the concessionaire has not taken any steps to cure the default, the notice for encashment of Bank Guarantee has been issued to concessionaire under Article 16.2(1)a of the concession agreement.
In view of the above, you are requested to pay the sum of Rs.6,22,15,000/- through demand draft in favour of CMD, Delhi Transport Corporation immediately, as per the concessionaire has failed to discharge his obligation under the concession agreement."
The relevant condition about invocation in the guarantee, reads as follows:
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 24 "...The guarantor shall, pay without demur pay to DTC....within five (5) days of receipt of a written demand thereof from DTC, stating that the Company has failed to meet its performance obligations under the Concession Agreement during the operation period. The Guarantor shall not go into the veracity so made by the DTC and shall pay the amount specified in the demand notwithstanding any direction to the contrary given or any dispute whatsoever raised by the concessionaire/ company or any other person."
As noticed earlier, clause 11.2 of the contract states that the concessionaire has to pay the concession fee agreed, without reference to any dispute: clause 16 specifically mentions that the non-payment of concession fee is an event of default. Having regard to these, the Court is of opinion that the invocation in this case, cannot be said to be contrary to terms of the guarantee. As regards the question of who has invoked the guarantee is concerned, that can, prima facie, be hardly a ground for granting temporary injunction. The DTC has in fact supported the invocation during the proceedings.
32. "Irretrievable injustice" contextually would mean a ground comparable with fraud - of the kind which would vitiate the underlying contract. It cannot mean the mere possibility of pecuniary loss, to the plaintiff, in a given case. The parties here envisioned a lot of contingencies, which were factored into the Concession Agreement. One such was that the withholding of agreed amounts of concession fee by the concessionaire (i.e. Green Delhi), was an event of default on its part. In this case, Green Delhi has been unable to establish that handing over of the airport sites was an essential condition of the contract. It argues, again unsuccessfully, that the Court should scale down the concession agreed to be paid under the contract. The terms of contract have not been shown to be oppressive, nor prima facie, the result of mistake or misrepresentation. Therefore, that payment of such concession fee amounts to a serious business inconvenience or economic hardship would not transform the situation into one of irretrievable hardship, for the plaintiff Green Delhi.
33. In view of the above conclusions - of necessity, the prima facie kind, since parties are yet to adduce evidence, the Court is of opinion that the temporary injunction sought by Green Delhi cannot be granted. The interim order subsisting till date is hereby vacated; Green Delhi shall ensure that the balance amount constituting the difference between the amounts paid in terms of the interim orders of this Court, and what is payable to DTC, under the contract, are paid to the latter, as a measure of restitution, within eight weeks from today. The applications, I.A. No. IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 25 5773/2009, 5999/2009 are dismissed, but subject to compliance by Green Delhi, of the above terms. IA. 7333/2009, is, for the same reasons, allowed.
A copy of this judgment be given Dasti.
CS (OS) No.790/2009List the suit for further proceedings on 14th July, 2010.
5th April, 2010 (S.RAVINDRA BHAT)
JUDGE
IA Nos. 5773, 5895 & 7333/2009 in CS(OS) 790/2009 Page 26