Jesudasan Ravi .S vs. The Managing Director

Facts

The petitioner, S. Jesudasan Ravi, was the successful bidder for a marriage hall leased by the State Express Transport Corporation (SETC). The monthly lease amount was fixed at Rs. 1,33,200/- including GST. As per the lease agreement dated 29.04.2023, the petitioner was required to deposit a six months' lease amount of Rs. 7,99,200/- and an advance for electricity charges of Rs. 50,000/-, along with a bank guarantee of Rs. 3,00,000/-, within 15 days of the agreement, i.e., by 13.05.2023. The petitioner failed to meet this deadline, making the payment on 22.05.2023 and submitting the bank guarantee on 06.06.2023. Consequently, SETC cancelled the lease agreement via a letter dated 18.05.2023, citing violation of lease conditions. This cancellation order is under challenge in the present writ petition.

Held

The Court allowed the writ petition and set aside the impugned order of cancellation. The Court noted that while the petitioner admittedly delayed in making the payment and submitting the bank guarantee beyond the stipulated 15 days, the cancellation order dated 18.05.2023 was intimated to the petitioner only on 16.06.2023, as evidenced by the cover produced by the petitioner. This significant delay in despatching the order raised a doubt as to whether the order was indeed passed on 18.05.2023 as claimed. Furthermore, the petitioner had remitted the required amount of Rs. 7,99,200/- and produced the bank guarantee before the order of cancellation was despatched. The Court presumed that the amount had been deposited by the petitioner even before the order of cancellation was effectively communicated, especially given the respondents' failure to substantiate the reasons for the delay in despatch. The Court also took into account that pursuant to the interim stay granted, the petitioner had been running the marriage hall and paying monthly dues promptly. Therefore, in view of the delay in despatching the order and the subsequent compliance by the petitioner, the Court found merit in the petitioner's plea and quashed the cancellation order.

Key Issues

1. Whether the cancellation of the lease agreement by the respondents is illegal, without jurisdiction, ultravires, and unconstitutional, considering the petitioner's delayed payment and submission of bank guarantee? 2. Whether the impugned order of cancellation dated 18.05.2023, which was allegedly despatched on 16.06.2023, was passed belatedly as an afterthought at the instance of other bidders? Petitioner's arguments: The petitioner contended that while there was a delay in payment, the amount was remitted on 22.05.2023 and accepted by the respondents. The petitioner argued that the cancellation order dated 18.05.2023 was despatched much later, on 16.06.2023, raising doubts about its timely passing and suggesting it was an afterthought influenced by other bidders who quoted lower amounts (specifically, the 3rd respondent who quoted Rs. 1,15,300/-). The petitioner also pointed out that the demand draft was accepted and the bank guarantee was provided. Respondents' arguments: The respondents argued that the petitioner failed to comply with the lease conditions by not depositing the required amounts and bank guarantee within the stipulated 15 days. They submitted that the subsequent payments did not confer any right upon the petitioner and that the writ petition was not maintainable as the amount had already been forfeited. They disputed the petitioner's claim of payment pending the writ petition, stating that due to the interim order, they could not take a decision on the amounts sent. They also argued that the belated despatch of the cancellation order did not imply it was passed belatedly.