Vld Agency And Contractors vs. The State Of Andhra Pradesh

Held

The Court held that the writ petition is maintainable, stating that the alternative remedy of arbitration is a rule of discretion and not compulsion, and writ courts can exercise jurisdiction in appropriate cases with peculiar circumstances, citing the Apex Court's decision in M/s. Tamil Nadu Cements Corporation Limited. Regarding the extension of the lease, the Court noted that the tender conditions clearly stipulated that the temple authorities would not be responsible for losses arising from closure of the ghat road due to unforeseen climatic conditions or festival periods. The Court acknowledged that the petitioner was aware of these conditions and participated in the tender process. However, the Court also observed that if the authorities decide to close one of the designated areas and offer an alternative location that is farther away, this modification should not be disadvantageous to the petitioner. The Court found that the petitioner had participated in the tender process based on the designated areas, and a change in location could impact the potential for toll collection. Therefore, considering Clause 21 of the tender conditions, which allows for a refund of proportionate license fee if the toll gate is closed due to developmental activities, the Court directed the 2nd respondent to re-fix the license fee for the second year, taking into account the circumstances under which the petitioner had to use an alternate parking area. The Court also directed that the petitioner be given an opportunity for a hearing. The Court did not decide on the exact amount of the revised license fee.

Facts

The petitioner, Vld Agency And Contractors, was the successful bidder for managing vehicle parking and collecting toll fees for vehicles reaching Temple Hill for a two-year period from 01-06-2023 to 31-05-2025. The lease was extended for the first year until 30-11-2024. The petitioner sought an extension of the lease from 01-12-2024 to 30-11-2026, citing the closure of the 'ghat road' from July to September 2024 for retention wall fortification and the partial closure of the licensed parking area at 'Kanakadurga Nagar' due to development activities. The 3rd respondent rejected the extension request and directed the petitioner to pay a license fee of Rs.2,06,38,199/- (including GST) by 30-11-2024. The petitioner challenged this order, arguing that the respondents were obligated to extend the lease due to losses incurred from the road and parking closures. The respondents argued that the writ petition was not maintainable due to the availability of an alternative remedy through arbitration and that the petitioner was aware of potential contingencies as per tender conditions. They also stated that an alternate parking site was provided.

Key Issues

1. Whether the Writ Petition is maintainable despite the availability of an alternative remedy of arbitration under Clause 31 of the tender conditions? 2. Whether the petitioner is entitled to an extension of the lease period from 01-12-2024 to 30-11-2026 on account of the closure of the 'ghat road' and partial inoperability of the parking area at 'Kanakadurga Nagar'? Petitioner's arguments: The petitioner contended that the impugned order was passed without obtaining a ground report from the Executive Officer, unlike a previous extension. They argued that the respondents are duty-bound to compensate for losses incurred due to road and parking closures, which were not the petitioner's fault. They also claimed to have remitted a significant portion of the second-year license fee. The petitioner relied on the principle that High Courts can exercise writ jurisdiction even with an alternative remedy in peculiar circumstances, citing M/s. Tamil Nadu Cements Corporation Limited Vs. Micro and Small Enterprises Facilitation Council and Another. Respondent's arguments: The respondents argued that the Writ Petition is not maintainable due to the arbitration clause in the tender conditions. They contended that the vehicular movement on the uphill ghat road was not minimal, and the petitioner was adequately compensated by providing an alternate site. They also argued that the tender conditions clearly stated the temple would not be responsible for losses arising from unforeseen situations like bad weather or festival periods, and the petitioner, as a successful bidder, accepted these conditions.