Case Law Details
Laxmi Vs Indore Smart City Development Ltd. And Others (Madhya Pradesh High Court)
Madhya Pradesh High Court dismissed multiple writ petitions challenging the cancellation of a shop allotment tender under the Indore Smart City Development project. The case arose when the petitioner, who won the bid for Shop No. 5 at Gopal Mandir Amphitheater Complex, failed to deposit the required 25% premium amount along with 18% GST within the stipulated 21-day period. The petitioner objected to the GST charge, arguing it should only apply to rent after the shop’s construction and possession. Despite multiple notices from the respondents, including a final deadline, the petitioner did not make the necessary payment. Consequently, the authorities issued a fresh tender and formally canceled the allotment, prompting the petitioner to file the writ petition, claiming the cancellation was premature and that proper opportunity for compliance was not granted.
The court, after reviewing the terms and conditions of the tender, found that the petitioner was aware of the GST requirement at the time of bidding and had failed to comply despite multiple extensions. The court noted that while other bidders for different shops had paid partial amounts and were granted additional time, the petitioner had not deposited any amount, rendering their claim for parity invalid. The court concluded that the petitioner’s objections were an attempt to delay payment, causing financial loss to the respondents. Consequently, the High Court upheld the cancellation of the allotment and dismissed all related petitions, allowing the respondents to claim damages from the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
This order shall govern disposal of aforesaid Writ Petition Nos. 30072/2024, 30068/2024, 30077/2024 and 30081/2024. Regard being had to the similitude of the controversy involved in the aforesaid petitions, hence heard analogously and disposed of by this common order. For the sake of convenience, facts of W.P. No. 30072/2024 are taken.
2. The petitioner has filed this present petition under Article 226 of the Constitution of India challenging the cancellation of tender No. 08/ISCDL/23- 24/Shop No. 5, whereby the allotment of shop has been cancelled by Chief Executive Officer, Indore Smart City Development Limited, Indore.
FACTS OF THE CASE ARE AS UNDER:-
3. The respondent 1 floated a tender for allotment of 11 shops situated at Gopal Mandir Amphitheater Complex, Indore by way of long term lease under the provisions of M.P. Municipal (Achal Sampatti Antaran) Rules, 2016 (hereinafter referred to as “The Rules of 2016”). The petitioner participated in the said tender for allotment of shop No.5 situated at Ground Floor Gopal Mandir Amphitheater Complex, Indore. The petitioner’s bid was found highest and the respondent No.1 issued an allotment letter dated 18.07.203 calling upon the petitioner to deposit 25% of the amount i.e. Rs. 13,75,197/- + 18% GST within 21 days in the Bank account of respondents failing which, the allotment shall be cancelled with the forfeiture of security amount.
4. The petitioner submitted an objection by stating that 18% of GST amount was not liable to be deposited on the premium amount, and the GST is liable to be paid only on rent payable that too after completion of construction and handing over the possession of the shop. The respondents again sent a notice dated 22.02.2024 calling upon the petitioner to deposit the entire amount of Rs. 64,90,927/- within 14 days. Again, the petitioner raised a similar objection vide letter dated 13.03.2024. The Superintending Engineer of Respondent No. 1 sent a final notice along with an opinion from C.A. about charging and depositing GST on an upfront, one-time premium amount. Despite the aforesaid letter, the petitioner did not deposit 25% of the amount, therefore, the Superintending engineer issued a final notice dated 28.06.2024 calling upon the petitioner to deposit the amount within 7 days. Again, the petitioner raised an objection that demand for a deposit of 25% along with GST cannot be be issued
5. The respondent issued a fresh NIT dated 04.09.2024 for allotment of Shops No. 3, 4, 5 and 6 and the information was sent to the petitioner about the cancellation of earlier tender. Hence the petitioner has filed this present petition inter alia on the ground that fresh NIT has been issued prior to the cancellation of the allotment in his favor.
6. Shri Chetan Jain, learned counsel appearing on behalf of the petitioner submits that the petitioner never refused to deposit the 25% amount of the premium amount but the demand of 18% GST is According to the petitioner, before cancellation of the tender, no proper opportunity of hearing was granted to the petitioner. Since the shops were under construction, therefore, the bank was not extending the loan to the petitioner thus, the amount could not be deposited. Now, one of the petitioners is ready to deposit the entire amount of premium .
7. Shri Rishi Tiwari, learned counsel appearing for the respondents, contends that as per the terms and conditions of the GST, it was made clear that 25% of the bill amount alongwith the GST has to be deposited within 21 days from the date of acceptance of the bid by the highest bidder, therefore, the objection taken by the petitioner after allotment is not tenable. The petitioner was given sufficient time again and again to deposit the amount, and the petitioner did not deposit the same, therefore, the respondents had no option but to cancel the allotment, as the respondents have been suffering the financial loss because of the non-allotment of the vacant shops. Shri Tiwari submits that the remaining successful bidders have deposited the amount and are running their shops. In pursuant to fresh NIT, bids have been received, but due to the stay granted by this court, the same have not been opened. Hence, the writ petition be dismissed.
8. Thereafter, the petitioner filed a rejoinder, alleging that in the case of the allottee of shops Nos. 2, 8, & 9, the respondents have not cancelled the allotment as the successful bidder did not deposit 25% of the amount. The respondent filed an additional reply by submitting that the bidders of shop 2, 8, & 9 have deposited the partial amount of Rs. 13,33,760/-, 9,15,950/-, and 9,20,815/-, respectively; therefore, they have been given some time to deposit the balance amount, but in the present case, the petitioner has not deposited any amount after the allotment of the shops; thus, they cannot claim parity with other bidders.
Heard
9. The NIT was issued by the respondents on 06.06.2023 for allotment of 11 shops, the terms and conditions of the NIT and allotment have been filed by the respondent along with the return. Clause 20.02 specifically mandates that the highest bidder shall deposit 25% of the amount within 21 days from the declaration of the successful bidder, and he is also liable to pay 18% GST on the sanctioned premium amount; therefore, the GST payable on the premium amount was known to the petitioner at the time of submission of the bid; thus, the petitioner has wrongly raised an objection in order to avoid the deposit of 25% of the amount. The petitioner was unnecessarily gaining time to raise this frivolous objection. If the petitioner had an objection about charging 18%, he should not have submitted the bid for the shop; after the allotment, he has unnecessarily caused the financial loss to the respondent by not depositing the entire premium amount and monthly rent.
10. So far as the opportunity is concerned, as stated above, three times the respondents granted the additional time to the petitioner to deposit 25% of the amount, which was to be deposited within 21 days from the date of issuance of the allotment’s letter, but the petitioner did not deposit any amount and showed his adamant attitude; therefore, after the issuance of the final notice/opportunity, the respondents had no option but to cancel the allotment and go for a fresh tender. We do not find any scope of interference in the action of the respondents. The petitioner has failed to comply with the terms and conditions of the tender and allotment without any valid reasons; hence, he has rightly requested cancellation of the allotment.
11. In view of the above, this Writ Petition stands dismissed. The respondents shall be at liberty to claim the damages from the petitioner.
12. As a result, all the aforesaid writ petitions also stand dismissed to the extent indicated above.
13. Let a photocopy of this order be kept in the record of connected writ petitions.
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