The Supreme Court cautioned that if any public authority would arbitrarily hesitate to enter into authorities contracts or make investments on guarantees made by the federal government to undo the agreements of its predecessor, citing solely public curiosity or injury to the exchequer with out proving it with proof.
A bench of Chief Justice of India NV Ramana and Justices Vineet Saran and Surya Kant mentioned on Monday, “…On the ground of mere public interest or damage to the exchequer, the successor public authority cannot undo the work done by the previous authority. Such claim must be substantiated by using material facts, evidence and figures. If it were not so, there would be no sanctity in the words and promises of the Government. Would hesitate.”
“Such a practice is prejudicial to the economy and the business environment in general,” the CJI wrote for the bench.
The court docket additionally dismissed the attraction of the City and Industrial Development Corporation of Maharashtra (Cidco), difficult the Bombay High Court’s choice of December 2013, granting M/s Metropolis Hotels the land for the development of a five-star resort. The order of the Corporation canceling the allotment was quashed. Proposed airport website in Navi Mumbai.
SC termed CIDCO’s motion as “abuse of bureaucratic power” and “disproportionate”.
The court docket, which went into the details of the case, mentioned, “From a consideration of the facts and circumstances, it is evident that there is an element of abuse of bureaucratic power behind the subsequent change in tender allotment. To conduct a tender process and receive funds.” Following this, the federal government backtracked, resulting in a long-running trial. The impugned order of CIDCO, inter alia, canceling the allotment on ultra-technical grounds, was not sustained because it was opposite to the precept of equity. The causes acknowledged within the aforesaid order are distorted and based mostly on extraneous views.”
The bench noticed that it “has not been able to identify any material breach of law or the tender conditions, ordering quashing of the allotment and the subsequent arrangement, thereby rendering the conduct of the appellant authority inconsistent”. “
CIDCO had invited bids on June 11, 2008 for leasing land for infrastructure improvement round Navi Mumbai airport. M / s. Metropolis Hotel emerged as the best bidder and was accepted after due scrutiny.
Although the preliminary allotment was for the development of a five-star resort, CIDCO on an utility made by Metropolis later allowed the usage of a portion of the land to be transformed right into a commercial-cum-residential use.
The Corporation permitted a subdivision of plots for a five-star resort and commercial-cum-residential undertaking and the task of metropolitan rights in respect of the commercial-cum-residential plot to M/s Shishir Realty Pvt Ltd. CIDCO, Shishir additionally mortgaged the plot assigned to him to get mortgage for the undertaking.
Thereafter, on the directions of the State Government, the Principal Secretary, Urban Development Department performed a preliminary inquiry into the complaints of irregularities in allotment of land, person change and deviation from the phrases and circumstances of the tender.
Based on the inquiry, the newly appointed Vice Chairman issued notices to Metropolis and Shishir asking them to indicate trigger as to why the lease shouldn’t be canceled if Metropolis violated the phrases of the tender. By an order dated 16 March 2001, the Vice President pursuant to the inquiry canceled the lease deed.
Upholding the High Court’s choice that reversed the Cidco motion, the highest court docket mentioned, “The fairness and goodwill standards enshrined in contracts entered into by public authorities allow such public authorities to conduct themselves in a non-arbitrary manner in the course of their performance.” obliges to. contractual obligation.”
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With inputs from TheIndianEXPRESS
