High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 22-11-2007CORAMTHE HONOURABLE MR.JUSTICE M.CHOCKALINGAMW.P.Nos.18813 and 19521 of 2007andMP No.2/2007 in WP 18813/2007andMP Nos.1 and 2/2007 in WP 19521/2007P.K.Shefi.. Petitioner in both petitions vs1.The Indian Railway Catering andTourism Corporation Limited (A Government of India Enterprise) rep. By Executive Director (CS) 9th Floor, Bank of Baroda Building No.16, Parliament Street New Delhi 110 001.2.The Regional Director Indian Railway Catering and Tourism Corporation Ltd., Zonal Office 6-A, The Rain Tree Place No.9, Mc Nichols Road Chennai 600 031... Respondents in both petitionsWP No.18813/2007 filed under Article 226 of the Constitution ofIndia praying for a writ of certiorarified mandamus calling for therecords of the first respondent herein relating to the TenderNotification published in the New Indian Express dated 21.5.2007 inrespect of the license for setting up, operation and maintenance ofCell Kitchens (Base Kitchens) with eating facilities in respect ofMadurai and Jolrpettai Railway Stations and quash the same in so faras it relates to Madurai and Jolarpettai Railway Stations and directthe respondents herein to forthwith grant final approval for thedrawings submitted by the petitioner, so as to enable the petitionerto commence the construction and commissioning of the Cell Kitchensin Madurai and Jolarpettai Railway Stations.WP No.19521/2007 filed under Article 226 of the Constitution ofIndia praying for a writ of certiorari to call for the records ofthe first respondent herein relating to LetterNo.2006/IRCTC/CATG./CK/South Zone dated 1.6.2007 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner: Mr.AR.L.Sundaresan Senior Counsel for M/s.AL.GanthimathiFor Respondents: Mr.A.Thiagarajan Senior Counsel for Mr.V.G.SureshkumarCOMMON ORDERWhen the matter is taken is up for enquiry, the learned Counselfor the petitioner has made an endorsement that the writ petition inWP No.18313/2007 may be dismissed as infructuous. The same isrecorded.2.Challenging the cancellation of a tender made by the firstrespondent by its letter dated 1.6.2007, the petitioner tenderer hasbrought forth WP No.19521/2007 for a writ of certiorari.3.The affidavit in support of the petition and the counteraffidavits are perused. The Court heard the learned Senior Counselon either side.4.The first respondent Railway Company made publicationscalling for Two Packet Tenders for various locations under Phases I,II and III on 22.11.2006, in the newspapers which included MaduraiJunction as one of the locations in Phase II under Scale-B, and thetender documents were made available for sale between 23.11.2006 and6.12.2006. The last date of submission of the tender was 7.12.2006.As far as the second location namely Jolarpettai, was concerned, itwas included in the said notification under Scale-C, Phase III. Thetender documents were made available for sale, and the last date forsubmission of the tender was 8.12.2006. The cost of the tenderdocuments was paid by the petitioner. By a letter dated 28.12.2006,the first respondent issued the tender documents to the petitionerfor the said two locations. The petitioner submitted those tenderdocuments containing technical bid and also the financial bid.After opening both, they are found to be satisfactory and were alsoaccepted by the first respondent, pursuant to which the firstrespondent intimated to the petitioner by letters dated 3.1.2007 and24.1.2007 respectively, about its acceptance and called upon him topay the security deposit of Rs.43,000/- in respect of the CellKitchen at Madurai, and Rs.44,000/- in respect of the Cell Kitchenat Jolarpettai. The same was also complied with by the petitionerby accepting the terms and conditions of the license stipulated inthe said letters, and the security deposits as demanded, were alsopaid on 4.1.2007 in respect of Madurai, and on 29.1.2007 in respectof Jolarpettai. Then, the petitioner was called upon to submit thepreliminary plans, specifications and tentative schedule forcommissioning of the Cell Kitchens for approval by the IndianRailway Catering and Tourism Corporation Limited (IRCTC). Hesubmitted the same to the respondents on 20.1.2007 and 13.2.2007 forMadurai and Jolarpettai respectively. https://hcservices.ecourts.gov.in/hcservices/

5.The case of the petitioner is that in the plans submitted byhim, the areas are shown as 3220 sq. ft. and 3037 sq. ft.respectively, for those two locations; that while the matter stoodthus, there was no exception made by the Railway Company to the sameas if there was any mistake to the extent of the area which wasnotified in the tender documents and which was actually the subjectmatter of the tender; that on the other hand, discussions were made,and they suggested certain modifications to the preliminary plans;that by letter dated 9.5.2007, the petitioner was called upon tosubmit modified drawings; that the modifications suggested by thefirst respondent, were only technical and in respect of all the CellKitchens; that there was absolutely no doubt in the mind of therespondents as to the area over which the Cell Kitchens were to belocated; that the petitioner was fully aware of the same; thataccordingly, the petitioner modified the structural drawings on19.5.2007; and that the matter was pending in the hands of therespondents for approval. 6.It is the further case of the petitioner that at thatjuncture, a publication was made by the first respondent in thenewspapers on 21.5.2007, inviting tenders for the Cell Kitchens forthose two locations namely Madurai and Jolarpettai; that thepetitioner filed WP 18313/2007 along with stay petition before thisCourt; that while that writ petition was pending before this Court,the first respondent by the impugned letterNo.2006/IRCTC/CATG./CK/South Zone dated 1.6.2007, stating that therewas a discrepancy in the extent notified in the bid document and thearea actually available on ground as per the petitioner's plans, andfurther averred that it was a mistake in the bid document which wasfound out later and the minimum license fee was fixed for the areatendered as 573 Sq. Ft. and 1232 Sq. Ft. for Madurai and JolarpettaiCell Kitchens respectively, and under the circumstances, the earliertender was cancelled, and he has to get back the security depositoriginally given by him, and hence, the instant writ petition in WPNo.19521/2007 came to be filed before this Court. 7.Advancing the arguments on behalf of the petitioner, thelearned Senior Counsel would submit that it is true that there was atender, and documents were received by him; that actually thesecurity deposits were also made; that following the same, two planswere actually prepared and placed before them, by which he hasclearly indicated that the area that was actually understood betweenthe parties at the time of entering into the agreement, was 3220 sq.ft. and 3037 sq. ft. for those two locations namely Madurai andJolarpettai respectively; that once it was understood between theparties and also that was the consensus between them, there is noquestion of cancellation of the same that would arise; that even theimpugned letter would read that there was a mutual mistakecommitted; but, there was no mutual mistake at all; that even if thearea tendered by the petitioner, is to be taken as 573 and 1232 sq.ft., as per the drawings, the Cell Kitchens could not be located,and it is impossibility of performance; that what was understoodbetween them, was actually 3220 sq. ft. and 3037 sq. ft. https://hcservices.ecourts.gov.in/hcservices/ respectively; that when the plans were actually placed, they weredrawn as per the understanding between the parties; that in theinstant case, the petitioner has actually accepted the originalcontract and it has also been acted upon; that it is also givenimplementation; that in this case, there is no question ofcancellation of the agreement that would arise since the right hasalready accrued and it is also in favour of the petitioner; thatfurther the document would go to show an area of 573 sq. ft. and1232 sq. ft. for Madurai and Jolarpettai respectively; that theactual area on ground was known to both the parties as the areamarked and identified; that a reading of the letter would clearlyreveal that there was a mutual mistake; but, that is not so; thatwhat was understood was 3220 sq. ft. and 3037 sq. ft.; and that now,calling it as mutual mistake is only an after thought in order tocancel the same. 8.The learned Senior Counsel took the Court to the plans thatwere placed, and all the communications addressed, which wouldclearly indicate that the original understanding between the partieswas actually in respect of 3220 sq. ft. and 3037 sq. ft. He wouldsubmit that under the circumstances, there is no question ofcancellation, and hence, the cancellation letter has got to bequashed by issuing a writ.9.Contrary to the above contentions, the learned Senior Counselappearing for the respondents Railway Company would submit that inthe instant case, there was a tender; that the tender documents werepurchased by the petitioner; that the terms and conditionsstipulated therein, would be binding on both the parties wherein thearea has been clearly shown as 573 sq. ft. and 1232 sq. ft.respectively, for which he has also made the security deposits; thatthose conditions would be binding on him; that at the time when thepreliminary plans were filed, the area was shown in excess as 3220sq. ft. and 3037 sq. ft. for the two locations; that those plansremained not approved; that the first respondent Railway Companyalso found out the mistake; that the said mistake has crept in atthe time of calling of tender; that it emanated from both sides;that once there was a mutual mistake noticed, the tender cannot beacted upon and it has to be necessarily cancelled; and thataccordingly, it was cancelled. 10.Added further the learned Senior Counsel that in the instantcase, the State is the guardian to protect its property; that evenin a case where it would fetch more amount, the tender could becancelled; that once there was a mutual mistake found, it has beenrightly cancelled; and that under the circumstances, thecancellation has got to be affirmed, and the writ petition bedismissed. 11.The Court paid its anxious consideration on the submissionsmade. https://hcservices.ecourts.gov.in/hcservices/

12.Concededly, the petitioner pursuant to the publication madeby the first respondent Railway Company in respect of the CellKitchens in two locations namely Madurai and Jolarpettai,participated in the tender. It is also not in controversy that itwas he who purchased the tender documents from the first respondent,and he also submitted his applications accordingly. The tenderdocuments following the publications made by the first respondent,would clearly reveal that the area covered, is 573 sq. ft. and 1232sq. ft. only. This was actually the area for which the tender wasmade, and the petitioner has also participated. Accordingly, he wasfound to be the successful bidder and was also declared so.Needless to say in a case of tender, when a party has participatedin the tender, the terms and conditions found in the tender, wouldbe binding on both the parties. Having applied for and participatedin the tender, where the area is shown as 573 sq. ft. and 1232 sq.ft. for those two locations, now the petitioner cannot be permittedto say that though it is found so in those documents, it wasactually a different area from the one understood between theparties. Now, at this juncture, it is pertinent to point out thatno material is available to show that the area that was understoodbetween the parties for those Cell Kitchens at Madurai andJolarpettai, were 3220 sq. ft. and 3037 sq. ft. respectively. But,on the contrary, the tender documents, the averments made by thepetitioner, the security deposits paid and the concluded tender allwould go to show that it was only for 573 sq. ft. and 1232 sq. ft.for Madurai and Jolarpettai respectively. Under the circumstances,the contention put forth by the learned Senior Counsel for thepetitioner that there was a consensus ad idem between the partiesfor the area namely 3220 sq. ft. for Madurai and 3037 sq. ft. forJolarpettai approximately, cannot be countenanced. If to beaccepted, it would be against the agreement between the parties asevident from the materials available.13.The second circumstance which stands against the petitioneris that after the payment of the tender amounts, etc., thepetitioner placed before the authorities the preliminary plans forapproval. Those plans when placed before the Railway Company, theywere not approved; but, they were returned for certain modificationsto be made, along with suggestions. The contention put forth by thelearned Senior Counsel for the petitioner is that those plans werereturned only for the purpose of certain modifications which werequite technical in character; but, they never spoke about any areain question cannot be accepted. Now, the question would be whetherthe said plans which were placed, were either accepted or approvedby the Railway Company. It is seen that the plans remained notapproved. Thus, it would be quite clear that having participated inthe tender in respect of the area namely 573 sq. ft. and 1232 sq.ft. for the locations at Madurai and Jolarpettai respectively, thepetitioner after the concluded contract placed two plans forapproval for excess area of 3220 sq. ft. for Madurai and 3037 sq.ft. for Jolarpettai. Under the circumstances, the plans which wereplaced by the petitioner, were not only for the excess area but alsocontrary to the agreement entered into between the parties. https://hcservices.ecourts.gov.in/hcservices/

14.As regards the contention put forth by the learned Counselfor the petitioner that these areas of 573 sq. ft. and 1232 sq. ft.would not be sufficient to locate the Cell Kitchens, this Court isof the view that the same cannot be a reason to accept the case ofthe petitioner. Once the tender documents were applied for andunder the concluded contract, security deposit has also been paid,and what is borne by the document is only 573 sq. ft. and 1232 sq.ft. for the two locations and not otherwise, it would be bindingupon the parties. Merely because the area that is found in thetender document namely 573 sq. ft. and 1232 sq. ft. for those twolocations, would be insufficient to locate the Cell Kitchens, thecase of the petitioner cannot be accepted since the same would goagainst the document itself. Under the circumstances, thatcontention has got to be rejected.15.Needless to say that a contract becomes void if the partieshave entered into the contract on the mutual mistake of fact. Inthe case on hand, a reading of the letter of cancellation by theRailway Company would clearly reveal that at the time when thetender was called for, the areas were 573 sq. ft. and 1232 sq. ft.for the two locations, and the amounts were also fixed for thoseareas only. It is also true that these areas, in the opinion of theRailway Company, would not be sufficient to locate the Cell Kitchensand thus, a mistake has already crept in at the time when thetenders were called for and notification was made. On the basis ofsuch tender, applications were also made by the tenderer namely thepetitioner herein, and the Railway Company has also accepted thesame. Thus, it is a mutual mistake that has crept in at the initialstage itself. Under the circumstances, the mutual mistake as putforth by the learned Senior Counsel for the respondents, is alsofound correct. Therefore, the case of the petitioner seeking for awrit cannot be accepted both factually and legally for the reasonthat he cannot carry a case on merits on the ground that what wasactually understood between them was 3220 sq. ft. and 3037 sq. ft.for the two locations when the documents entered into between theparties, would be only for 573 sq. ft. and 1232 sq. ft. Thus, itwould be quite clear that the cancellation was made on the strengthof the mutual mistake, and also it was a fit case where cancellationhad to be done. Hence, the act done by the first respondent RailwayCompany, was not only reasonable but also justified. Under thecircumstances, no interference is called for, and WP No.19521/2007requires an order of dismissal. 16.In the result, WP No.19521/2007 is dismissed. WP No.18813of 2007 is dismissed as infructuous. No costs. Consequently,connected MPs are also dismissed.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To:1.The Indian Railway Catering andTourism Corporation Limited (A Government of India Enterprise) rep. By Executive Director (CS) 9th Floor, Bank of Baroda Building No.16, Parliament Street New Delhi 110 001.2.The Regional Director Indian Railway Catering and Tourism Corporation Ltd., Zonal Office 6-A, The Rain Tree Place No.9, Mc Nichols Road Chennai 600 031.nsv/+ 2 cc to the M/s. A. L. Gandthimathi, Advocate SR No. 69538, 69539+ 1 cc to the Mr. V. G. Suresh Kumar, Advocate SR No. 69584WP Nos.18813 and19521 of 2007MS(CO)SR/6.12.2007