Case Note & Summary
The present writ petition under Article 226 of the Constitution of India was filed by Olectra Greentec Limited (formerly Goldstone Infratech Limited) challenging the decision of the Brihanmumbai Electric Supply & Transport Undertaking (BEST) to withdraw a contract work order dated 28 February 2018 and to issue a fresh tender notice dated 31 August 2018 for operating 40 electric buses in Mumbai on a Gross Cost Contract model. The dispute arose out of a tender floated by BEST on 10 January 2018 under the FAME India Scheme of the Department of Heavy Industries (DHI), Government of India, which provided subsidy for electric buses. The petitioner emerged as the successful bidder, and by an acceptance letter dated 26 February 2018, the terms of the contract were set out, including delivery of 25% of buses within three months and the remaining 75% within six months. The acceptance letter contained a note that the acceptance was subject to approval of incentive from DHI. The petitioner furnished the required security deposit and commenced manufacturing, having manufactured 24 buses by June 2018. However, BEST, by its communication dated 30 August 2018, withdrew the contract work order with immediate effect, and on the next day issued a fresh tender for the same scope of work. The petitioner argued that the withdrawal was arbitrary and illegal, especially after it had acted upon the contract and incurred substantial expenditure. The High Court, after hearing the parties, reserved judgment on 11 October 2018 and pronounced its decision on 16 October 2018. The operative portion of the judgment and the court's reasoning are not included in the available excerpt, thus the final outcome remains unknown.
Issue of Consideration
WRIT PETITION LODGING NO. 3069 OF 2018
Case Details
2018 LawText (BOM) (10) 135
Writ Petition Lodging No. 3069 of 2018
Naresh H. Patil, Acting CJ, G. S. Kulkarni, J.
Mr.Milind Sathe, Senior Advocate, Mr.P.K.Dhakephalkar, Senior Advocate, Mr.Karan Bhosale, Ms.Neha Bhosale, Ms.Aditi Bhargava i/by NDB Law for the Petitioner; Mr.G.S.Godbole, Mr.Aseem Naphade, Mr.Arsh Misra I/b. M.V.Kini & Co., for Respondent No.1; Ms.Deepali Patankar, AGP for the State; Mr.Rajendra K.Singh, Mr.Atul Singh for Respondent No.4Union of India
1.The Brihanmumbai Electric Supply & Transport Undertaking, 2. Municipal Corporation of Gr.Mumbai, 3. The State of Maharashtra, 4. Department of Heavy Industries
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging withdrawal of contract work order and subsequent fresh tender notice for electric buses.
Remedy Sought
Petitioner sought quashing of termination notice dated 30 August 2018, mandamus to respondent no.1 to act as per acceptance letter dated 26 February 2018, and setting aside fresh tender notice dated 31 August 2018.
Filing Reason
The petitioner was aggrieved by BEST's withdrawal of the contract work order despite the petitioner having manufactured 24 electric buses in compliance with delivery terms, and issuance of a fresh tender notice.
Issues
Whether the termination notice dated 30 August 2018 was legally valid and sustainable
Whether the acceptance letter constituted a binding contract despite the note regarding DHI incentive approval
Whether the fresh tender notice dated 31 August 2018 was arbitrary and in violation of principles of natural justice
Judgment Excerpts
Note : This acceptance letter is subject to approval of incentive from Department of Heavy Industries (DHI).
You have agreed to provide 25% buses within 3 months and balance 75% by 6 th month after requirement is given by the Undertaking after release of Contract Work order.
Procedural History
The petitioner filed writ petition challenging the termination notice dated 30 August 2018 and fresh tender notice dated 31 August 2018. The High Court issued Rule, heard the parties by consent on 11 October 2018, and pronounced judgment on 16 October 2018. The judgment order was corrected as per speaking to minutes on 23 October 2018.
Acts & Sections
- Constitution of India, 1950: Article 226
