The High Court disposed of a writ petition challenging the cancellation of a fishing contract and the acceptance of a new lower bid. The Court declined to interfere as the petitioner failed to deposit the secured amount ordered earlier, noting the Authority's intent to invite a fresh tender.
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Court No. - 21
Case :- WRIT - C No. - 28376 of 2022
Petitioner :- Matsya Jivi Sahkari Samiti Limited Ramgarh And Another Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Manish Kumar Nigam,Manoj Kumar Counsel for Respondent :- C.S.C.,Ashok Kumar,K.R. Singh,Mohd. Washi Uddin Faridi
Hon'ble Manoj Kumar Gupta,J. Hon'ble Jayant Banerji,J.
Petitioner no. 1 is a registered society of fishermen. The petitioner society was given fishing rights in respect of a pond (Ramgrahtal) by Gorakhpur Development Authority, Gorakhpur in pursuance of an e-auction. A formal agreement was executed between the parties on 2.6.2020, whereunder the petitioner society was given fishing rights for the period upto 28.6.2024 (as extended subsequently). On 19.8.2021, the contract was cancelled by the Vice Chairman, Gorakhpur Development Authority on account of non deposit of the amount under the contract. As there was an arbitration agreement between the parties for settlement of dispute arising out of contract, therefore, the matter was referred to the Arbitrator Tribunal. An award was passed on 1.7.2022 whereby the order cancelling the contract was set aside. The petitioner was permitted to deposit Rs. 6,06,36,375/- towards arrears of five installments and also furnish security for the remaining amount. The order further directed the Vice Chairman, Gorakhpur Development Authority to constitute a committee under his Chairmanship to redetermine the monthly installments.
The petitioner, being aggrieved by the order to the extent it directed the petitioner to deposit Rs. 6,06,36,375/- within one month, filed Writ-C No. 21674 of 2022 which was disposed of on 23.8.2022 and the following order was passed:
"By means of instant petition, the petitioner has sought to challenge an arbitration award dated 1.7.2022 passed by the respondent No.5 in Arbitration Case No.5 of 2022, to the extent it directs the petitioner to deposit a sum of Rs.6,06,36,375/-, within a period of one month and the direction regarding payment of interest.
Learned counsel for the petitioner admits that the petitioner has remedy to challenge the arbitration award by filing objections under Section 34 of the Arbitration and Conciliation Act, 1996. He submits that in fact the petitioner is not challenging the award on merits but prays for a direction to Gorakhpur Development Authority, Gorakhpur, who has to receive the
amount in question, to accept the same in easy instalments, on account of the fact that fishery activities will remain suspended in the months of July and August. His submission is that unless the petitioner carries on work under the agreement and earns money out of it, it would be difficult for the petitioner to abide by the conditions imposed under the award.
Sri K.R. Singh, learned counsel appearing on behalf of the Gorakhpur Development Authority, Gorakhpur states that in case any application is filed before the Authority, it will be considered having regard to the above facts.
Accordingly, the petition is disposed of with liberty to the petitioner to file application before the Gorakhpur Development Authority, Gorakhpur for accepting money under the impugned order in installments and in which event, the application will be considered by the Authority, as is the stand taken by the counsel before this Court.
It is clarified that we have not expressed any opinion on merits of the case and the decision will be taken by the Authority, without being influenced by any observation made in the instant order."
In pursuance thereof, the Vice Chairman, Gorakhpur Development Authority considered the request of the petitioners for deposit of the above amount in installments and rejected the representation. It seems that in the meantime, the Gorakhpur Development Authority invited fresh tenders for settlement of fishery rights. Respondent no. 5 was the highest bidder for a sum of Rs. 10,91,49,336/- and by order dated 25.8.2022, respondent no. 5 was required to deposit 40% of the said amount. Challenging the above orders, the instant petition has been filed.
The main contention of the learned counsel for the petitioner, on the date the petition was taken up as a fresh case, was that under the contract the petitioner had to pay Rs. 22 crores and odd whereas the same contract is now being settled in favour of respondent no. 5 at a meagre sum of Rs. 10,91,49,336/-. The petitioner also showed willingness to deposit Rs. 5 crores in order to show their bonafidies. Consequently, we passed the following order on 11.10.2022:
"The instant petition has been filed seeking quashing of the orders dated 22.8.2022, 25.8.2022 and 30.8.2022, passed by respondent no.3, thereby the contract of fishery in favour of the petitioner has been cancelled and the contract has been settled in favour of respondent No.5.
The principal contention of the learned counsel for the petitioners was that the petitioners had offered a bid of Rs. 22 crores and odd for the same contract, but it has been arbitrarily cancelled and now the same is sought to be settled in favour of respondent no. 5 at a sum of Rs. 10,91,49,336/-.
Having regard to the aforesaid contention, we permitted Sri K.R. Singh, learned counsel appearing on behalf of respondent nos. 2, 3 and 4 to obtain
instructions in the matter.
On matter being taken up today, learned counsel, Sri K.R. Singh has placed on record the instructions received by him from the said respondents. According to the instructions, the respondents have agreed to permit the petitioner to operate the contract provided it deposits Rs. 5 crores within fifteen days and remaining amount in next fifteen days.
Sri Manish Kumar Nigam, learned counsel for the petitioners states that Rs. 5 crores will be deposited by the petitioner by the end of this month.
Accordingly, we permit the petitioner to deposit Rs. 5 crores by 29.10.2022.
List as fresh on 31.10.2022.
On or before the next date fixed, the petitioner shall file affidavit bringing on record the evidence to show that the amount has been deposited."
We are informed that the petitioner had not deposited any amount so far in pursuance of our order dated 11.10.2022.
Shri K.R. Singh, learned counsel appearing for Gorakhpur Development Authority states that since the highest bid offered by respondent no. 5 does not match the previous bid amount at which contract was settled with the petitioner and therefore, Gorakhpur Development Authority has decided to invite fresh tender.
As the petitioners have failed to deposit the sum in compliance of our order dated 11.10.2022, we are therefore of the opinion that no ground is made out to interfere with the impugned orders. This is particularly so in view of the fact that the Gorakhpur Development Authority has also taken a stand before us that it will not proceed any further with the offer made by respondent no. 5 and would invite fresh tender.
Accordingly, we decline to interfere with the impugned orders. The petition stands disposed of with liberty to Gorakhpur Development Authority to invite fresh tender as is the stand taken by it before this Court.
Order Date :- 31.10.2022 A. V. Singh
(Jayant Banerji, J.) (Manoj Kumar Gupta, J.)
Digitally signed by AJAY VIKRAM SINGH Date: 2022.11.01 17:02:31 IST Reason: Location: High Court of Judicature at Allahabad
2 issues framed by the court
Whether the High Court should interfere with the impugned orders rejecting the petitioner's fresh bid and inviting a new tender despite an agreement not to proceed further with the highest bidder's of
Whether the petitioner's failure to deposit the secured amount within the stipulated time justified disposal without interference.
Matsya Jivi Sahkari Samiti Limited Ramgarh
State Of U.P.
Gorakhpur Development Authority
Respondent No. 5
Manoj Kumar Gupta
Jayant Banerji
As recorded by the court registry
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