ALLOTMENT OF LEASE

 

 

 

T HROUGH the judgement of the partly allowed writ petition filed by Vast Media Network Pvt. Ltd.’s Director Abhijit Rane, delivered on June 19, 2025, against the State of Maharashtra & others, Chief Justice Alok Aradhe and Justice Sandeep V Marne, at the Bombay High Court in Mumbai, have set aside the allotment of Lease of Central Store Office in favour of the respondent-4, Nitin Laxmidas Dama and the tender process initiated vide notice of July 24, 2024 is restored qua the Central Store Office. Since the petitioner and respondent-4 have quoted same rate of Rs 75/- per square feet per month, as per the HC’s directions, the respondents – State Dairy Development Department, Chief Executive Officer, Aarey Milk Colony and the Commissioner, Dairy Development, Mumbai, shall allot lease in respect of Central Store Office to the entity offering higher rate. Except the petitioner and the respondent-4, Nitin L Dama, no other bidder shall be entitled to participate in such re-negotiation process.

 

The HC has stated further that till the fresh decision is taken for allotment of lease in respect of Central Store Office, respondent4 Dama shall continue to hold possession thereof. In the event of respondents 1 to 3 taking decision to allot the lease in respect of Central Store Office in favour of the petitioner, the respondent4 shall forthwith vacate the possession of the Central Store Office within two weeks of the decision of the respondents 1 to 3. This petition has been filed to seek cancellation of the tender process in pursuance of tender notice of July, 24, issued by respondents – 1 to 3 for grant of lease of 16 warehouses and Central Store Office for tenure of 30 years. Petitioner is aggrieved by nonallotment of Central Store Office to it even though its financial bid is identical o that of respondent4. It is aggrieved by the action of the tendering authority in applying the preference clause in the tender notice (providing for preference to bidder applying for higher number of warehouses, which, according to the petitioner, applies only in relation to warehouses and not for the Central Store Office. What is also pertinent to note here is that the bidders were granted liberty to submit bids for either one warehouse/some warehouses/all warehouses ‘out of the 16 warehouses’.

 

Thus the right to apply for more than one premises was restricted only in respect of ‘16 warehouses’, thereby drawing a conscious distinction between ‘warehouses’ and ‘Central Store Office’. The list of 17 premises also clearly made a distinction between ‘16 warehouses’ and ‘Central Store Office’, the clause of security deposit only applied to the 16 warehouses and not to Premises no. 17 in the List, namely, ‘Central Store Office’. In the Court’s view, therefore, the petitioner has rightly contended that the preference clause in paragraph 4(IV ) only applied to bidders in respect of the 16 warehouses and the same had absolutely no connection with implementation of tender process regarding Central Store Office in the opening paragraph of the tender document. Therefore, in the Court’s view the action of the tendering authority in giving preference to respondent-4 only on account he submitting bids for eight warehouses plus Central Store Office over the petitioner is clearly arbitrary, irrational and against the tender conditions.

 

While holdingthat the decision of the tendering authority in granting preference to respondent-4 by application of condition No. 4(IV ) to be arbitrary and irrational, the HC is conscious of settled position of law that the interpretation of the tendering authority is final and binding on bidders. However, the present case does not involve two possible interpretation of Clause 4(IV ). Application of preference clause 4(IV ) to bidder applying for allotment of Central Store Office is clearly erroneous. Since the tender conditions are clear and unambiguous, in HC’s view, clause 4(IV ) had no application, while allotting the Central Store Office premises, which is clearly distinct from the 16 warehouses as per the Tender document itself. Since the petitioner and the respondent have quoted same rate- Rs 75/- per sq. feet, the tendering authority could have entered into renegotiations with both the bidders and ought to have allotted Central Store Office only to the bidder offering higher rate. For taking the, the HC has derived support from the Supreme Court decision in the case –Ram and Shyam Co. v. State of Haryana and others- (1985) 3 SCC 267.

 

If petitioner and respondent-4are permitted to renegotiate theirbids, the same would benefitrespondents 1 and 3, who wouldbe in position to secure better ratefor allotment of Central StoreOffice, which, ultimately, is theproperty of the State Governmentand it is in larger public interest,that the said premises fetch higher rent. As the premises will begiven on rent for fairly long tenureof 30 years and this is yet another reason and in public interestthat the premises are allotted atmaximum possible rate of rent. Merely because the lease agreement is executed in favour ofrespondent No 4 and possessionthereof is granted in his favour,the same cannot be a reasonenough for entertaining this petition. The possession has beenhanded over to Respondent-4 during the pendency of this petitionby taking the same away from thepetitioner on January 23, 2025.

 

Considering the position thatthe lease would be in respect oflong period of 30 years, mere possession of the Central Store Officeby respondent no. 4 by about fivemonths would not create anyequities in its favour. Since the petition has remained pending, execution of the Lease Deed as wellas grant of possession of CentralStore Office to the respondent No.4 was obviously subject to the finaloutcome of the petition. Till fresh decision is taken forallotment of lease in respect ofCentral Sore Office, respondent4 shall continue to hold possession thereof. With the directions the BombayHigh Court has partly allowed thepetition and disposed it of.