Allowed

Maharashtra State Road Development Corporation Limited,Mumbai. v. Urja Developers and Beautification Pvt. Ltd.,Thane.

Bombay HC31 Jul 2009APP/500/2012

Case brief

AI extract

What is this about?

The High Court set aside an interim order granting a private lessee rights to use existing hoarding sites at Mahim Interchange. The Court held the Lease Agreement did not cover these pre-existing structures, finding no obligation to remove them and allowing the lessee to coexist with them.

What did the court decide?

The impugned order of the Single Judge setting aside is allowed; Notice of Motion No. 2373 of 2007 dismissed. Status quo maintained for 4 weeks.

Maharashtra State Road Development… — Contract and Commercial Disputes | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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CIVIL APPEAL (LODGING) NO. 627 OF 2008

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NOTICE OF MOTION NO. 2373 OF 2007

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SUIT NO. 1770 OF 2007

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Maharashtra State Road Development

Corporation Ltd.

…. Appellant.

Versus

M/s Urja Developers & Beautification

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Pvt Ltd. … Respondent.

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Mr. C.J. Sawant, Sr. Advocate a/w Mr. P.P. Charan i/b Mr. Nitin Dhumal for Appellant.

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Mr. P.K. Dhakephalkar, Sr. Advocate a/w K.S. Dewal for Respondent.

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CORAM: S.B.MHASE &

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A.A.SAYED, JJ.

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DATE: 31st JULY, 2009.

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JUDGMENT (Per: A.A. Sayed, J.)

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1 The above Appeal is filed by the appellant-defendant challenging the order dated 2^nd September, 2008 passed in the

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Notice of Motion taken out by the respondent-plaintiff whereby it was held that the respondent-plaintiff had made out a prima facie case for grant of interim reliefs in terms of prayer clauses (a) to (e) of the Notice of Motion and it was further held that the respondent-plaintiff would be entitled to use three hoarding sites out of six hoarding sites which are available for advertisements or, in the alternative, respondent-plaintiff would be entitled to use 50% of the sites which are available subject to the rules and regulations of the Bombay Municipal Corporation for the use of the said sites. Aggrieved by this interim order the appellant – Maharashtra Road Development Corporation (MSRDC) has filed this appeal.

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2 For the sake of convenience the respondent shall be referred to as “plaintiff” and appellant as “defendant-MSRDC”.

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3 The case of the plaintiff in the suit in a nutshell is as follows:

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i) That, the defendant-MSRDC had invited offer for beautification/landscaping and maintenance with advertisement rights in Segments II, III and IV underneath Mahim Interchange, admeasuring 9800 square meters, (“the suit site”) vide offer document on or about 11^th July, 2005. The relevant portion of the offer document reads as follows:

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“MSRDC is now offering, as separate works/contracts, this space underneath Mahim Interchange in various segments given below and Kalanagar flyover for beautification / landscaping and maintenance thereof with display of advertisements in the corresponding segments on Design, Build, Operate and Transfer (DBOT) basis.”

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ii) That the plaintiff was awarded the contract in respect of the Mahim Interchange and accordingly the plaintiff and defendant-MSRDC entered into an Agreement for Lease on 25^th March, 2006. By the said Lease Agreement exclusive advertisement rights for the project at the suit site was given to the plaintiff and the rent for the entire lease period of eight years was shown as Rs.27,60,000/- i.e. Rs.3,45,000/- p.a. Possession of the sites were to be handed over by defendantMSRDC to the plaintiff upon signing of the Lease Agreement and on payment of security deposit of Rs.5,00,000/- in terms of the said Agreement. The plaintiff was to execute and implement the project in the suit site i.e. Segment Nos. II, III and IV underneath the Mahim Interchange, as per the maps annexed to the Agreement and the rights and benefits of the advertisements solely vested with the plaintiff. In accordance with the said Agreement, the plaintiff was handed over possession of the suit site on 4^th April, 2006. The map

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annexed to the Agreement clearly shows the area offered to the plaintiff was the entire Segment II, III and IV and the defendant-MSRDC has not kept any right in respect of the suit site and possession of any part thereof and the plaintiff was given exclusive rights, possession and benefits of the advertisement rights on the suit site. There were existing hoardings and hoarding structure i.e. unipole displaying advertisements which was leased prior to conceptualization of the beautification of the suit site and the lease in respect of these existing hoardings was getting over in near future. That it was represented by the defendant-MSRDC to them that after the lease period in respect of the existing hoarding i.e. unipole was over, the hoarding would be removed and plaintiff would have exclusive rights of advertisement over the suit site.

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iii) That, under the Lease Agreement, the entire area of 9800 square meters was given to them which included the area of existing hoarding and the plaintiff has invested more than Rs. 90,00,000/- in beautifying the suit site and they paying rent of Rs.27,60,000/- for the contractual period and they would have to spend more than Rs.2,00,000/- p.m. for maintenance, which expenses were likely to increase with time. The plaintiff was also to remove all the encroachments on the site. The plaintiff was aware that the existing hoardings were given prior to the

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Lease Agreement and since the lease period of one of the hoarding (unipole) was getting over, the plaintiff wrote a letter dated 13.09.2006 to the defendant-MSRDC asking them that if they are not removing the existing hoarding which is on the suit site then the said hoarding (i.e. material such as steel, fabrication, etc.) be handed over to the plaintiff and to permit the plaintiff to beautify the same. However, the plaintiff was shocked and surprised to receive the reply dated 21.09.2006, wherein, it was for the first time mentioned by the defendantMSRDC that plaintiff does not have rights for advertisement on the existing hoardings. The plaintiff, accordingly informed the officers of the defendant-MSRDC and clarified that the plaintiff is not interested in existing hoarding i.e. “unipole” and that since the plaintiff had got exclusive rights of the advertisement and possession of the suit site, no new agency should be permitted to advertise on the suit site belonging to the plaintiff, after expiry of the lease period of the advertisement display on the existing hoardings. That if the existing hoardings were allotted to third party, the entire work of beautification will be destroyed during the erection of new hoarding and the plaintiff would not have control over the same. That on perusal of the map annexed to the Lease Agreement it can be clearly seen that the defendant-MSRDC

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had permitted the plaintiff to put up hoarding structure just next to the disputed unipole hoarding and advertisement display thereon which indicates that the existing hoarding was to be removed in near future after the expiry of the lease period and unless the existing hoarding is removed the plaintiff cannot put up the hoarding since it will be blocking each others view.

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iv) That the plaintiff was shocked to see a ‘fresh tender notice’ wherein, in the table under the column “Name of Work” it is stated that Leasing of right to display advertisement on hoardings at the ‘suit site’. By the new tender notice the defendant-MSRDC is to assign the work on Build, Operate and Transfer basis and the scope of work involves designing, which work has already been assigned to the plaintiff. The tender notice, clearly mentions that the person winning the tender will have to construct a new pole which will not effect the beautification, which goes to show that the place in the suit site itself is not fixed for erecting pole.

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v) That the fresh tender notice issued by the defendantMSRDC is breach of the Lease Agreement entered into between the plaintiff and defendant-MSRDC. That the plaintiff has exclusive rights of advertisement and benefits of

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advertisement on the suit site. That once defendant-MSRDC has given rights and benefits of advertisement to the plaintiff, the only option available to the defendant is the removal of existing hoardings in the suit site after the expiry of the lease period.

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4 The Plaintiff has therefore, filed the present suit inter-alia for a declaration that the plaintiff alone has advertisement rights and benefits on the suit site and for injunction restraining the defendant-MSRDC from creating any rights in respect of advertisement in the suit site and to direct the defendant-MSRDC to remove the existing hoardings in the suit site or to permit the plaintiff to remove the same. As stated above, in the suit, Notice of Motion being Notice of Motion No. 2373 of 2007 was taken out inter-alia seeking restraint orders including stay to the allotment of the advertisement rights in respect of the suit site pursuant to fresh tender notice issued by the defendant-MSRDC to third parties and to restrain defendant-MSRDC from displaying or creating any rights in respect of advertisement on the suit site. In the said Notice of Motion the impugned order came to be passed by the learned Single Judge which is challenged in this Appeal.

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5 The defendant-MSRDC resisted the Motion by filing a reply stating that their company is engaged in public utility activities and is established by the State Government. According to the defendant-MSRDC, it has not committed any breach of the Lease Agreement dated 25.03.2006 which was entered into pursuant to the tender floated by them. According to the defendant-MSRDC, the plaintiff was entitled to put up advertisement of specified sizes only at the suit site as mentioned in the offer document.

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6 It is the defendant-MSRDC’s case that prior to the issuance of the said beautification tender there existed in all six hoardings viz. five hoardings in segment III (including one unipole) and one separate unipole in segment IV. Out of these six hoardings, four were of size 40 x 40 ft. (back to back structure) and remaining two of size 60 x 20 ft and 40 x 20 ft. These hoardings were in existence for about five years prior to the issuance of the beautification tender which was awarded to the plaintiff and contracts in respect of these hoardings were already entered into by them with 3^rd parties who are paying requisite charges for the same to them and defendant-MSRDC received about Rs.27,00,000/- per annum from this hoardings (unipole) prior to January 2006 and they were getting about Rs.92.6 lacs per annum from the said six hoardings.

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7 According to the defendant-MSRDC, the plaintiff was no way concerned with the six large sized hoardings which were in existence for about five years prior to the tender and the Lease Agreement dated 25.03.2006 nowhere mentions that the plaintiff shall have advertisement rights in respect of the six existing hoardings or that six existing hoardings will be removed. Infact the tender document itself restricts the size as well as number of hoardings which plaintiff can put up in the said segments. According to the defendant-MSRDC, by issuing a fresh advertisement for inviting bids in respect of one Unipole in segment III, they have not committed any breach of the Lease Agreement dated 25.03.2006. The contract period for one Unipole in the said segment III was to expire on 31.10.2006 and accordingly fresh advertisement in respect thereof was floated in October 2006, about six months after the execution of the present Lease Agreement. The size of hoarding of the said Unipole is 40 x 40 feet which is way beyond what was permitted to the plaintiff under the contract. According to the defendant-MSRDC, the revised offer received by them in respect of the said Unipole for the period of five years is Rs.6.25 crores i.e. Rs.1.25 crores per annum. However, in view of the interim orders passed by this Court, the defendant-MSRDC had not finalized the said tender.

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Moreover, there were contracts of other two hoardings which expired on 31.01.2008 and 29.02.2008 which also could not be opened due to the interim orders. Thus, according to the defendant-MSRDC, the plaintiff is not concerned with the tenders of the Unipole and other existing hoardings.

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8 It is the further case of the defendant-MSRDC that clause 13 of the offer document – Instructions to Bidders – specifically calls upon the proposed bidder to visit the site namely, segment II, III and IV, so that the bidders will be acquainted with the site, therefore, the plaintiff has accepted the fact that six hoardings were existing on the site when the tender was floated and the tender document and Agreement nowhere provided for removal of the existing hoarding when the contract period in respect of the Unipole in segment III was coming to an end and the plaintiff by their letter dated 13.09.2006 had requested defendant-MSRDC to give the said hoarding to the plaintiff. However, the defendant-MSRDC by the reply letter dated 21.09.2006 informed the plaintiff that the existing hoardings were not covered by the Lease Agreement between the plaintiff and defendant-MSRDC. According to the defendant-MSRDC, the plaintiff has also participated in the pre-bid meeting.

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9 According to the defendant-MSRDC, the exclusive right mentioned in the offer document/Lease Agreement indicate that the advertisement rights are given to the plaintiff only and that defendant-MSRDC will not give advertisement rights to the structure hoarding display boards, advertisement panels, kiosks, support structures etc. designed by the plaintiff to any other party; it also implies that the right is given to plaintiff alone in respect thereof and not to anyone else. According to the defendant-MSRDC, the plaintiff was fully aware that it has no right under the contract to claim the site on the unipole and other existing hoardings, and as a result of the interim order which has been passed after various proceedings taken out by the plaintiff, the fresh tender has not been finalized till date with the result that there are losses incurred to defendantMSRDC. According to defendant-MSRDC, there is no case made out by the plaintiff in respect of the existing hoarding (unipole) and other hoardings to grant stay of the fresh tender process in respect of the display of advertisement of the Unipole and existing hoardings.

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10 The Learned Senior Counsel for the appellant, (defendant-MSRDC) had taken us through the offer document, Lease Agreement and the annexures. The Learned Senior Counsel submitted that definition of “site” or “segment” was

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provided for in the offer document – General Condition of Contract – which stated that the site or segment shall mean the specified area below Mahim Interchange meant for beautification, landscaping and leasing of right to display advertisements. The learned Senior Counsel also pointed out that under the offer document/Lease Agreement the plaintiff was to use the said site and the advertisement panels/boards/hoardings thereon only for the purpose of display advertisement of the “specified sizes”. The learned Senior Counsel submitted that it was clearly understood that the existing hoardings were not to be given under the Lease Agreement. He pointed out that clause 13 of the tender document itself provided for site visit by the proposed bidder to get himself acquainted with the site conditions and that in the pre-bid meeting the plaintiff has never raised any issue or asked for any clarification in respect of the right to display advertisement on the existing hoarding. He pointed out conditions 19 and 20 of the Offer Document - Special Conditions of Contract, which read as under:

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“19 The Concessionaire shall not put any neons/hoardings and shall be permitted to display advertisements on illuminated boards/kiosk of maximum size 3’ x 2.5”. The Concessionaire shall be entitled to put hoardings/sponsorship boards i.e. 2 boards of size 6’ x 4’

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and 8 smaller boards of size 2’ x 10’. In respect of 8 smaller boards of size 2’ x 10”, the Concessionaire can display the names of their sponsors. The Concessionaire shall ensure that the bigger boards shall bear the name of MSRDC in lettering of not less than 6.

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20 The Concessionaire shall not put any structure, which is permanent in nature.”

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11 Thus, according to the learned Senior Counsel for the defendant-MSRDC, the plaintiff’s rights to display advertisement had restrictions as to the number and sizes of hoardings/boards. According to the learned Senior Counsel the existing six hoardings in Segment II, III and IV are of the much larger size viz 40’ x 40”, 60’ x 60” and 40’ x 20”, which is way beyond the permissible limits as to the size permitted to the plaintiff under special condition No.19 as afore stated. Therefore, these existing hoardings were not part of the tender and therefore by the impugned order, the learned single Judge has erred in granting 50% of the sites to the plaintiff. He reiterated that the defendant-MSRDC has received the bid in the year 2007 for a sum of Rs. 6.25 crores for a lease period of 5 years i.e. Rs. 1.25 crores per annum, however, under the impugned order, by allotting 50% of the site to the respondent, the learned single Judge has put considerable amount of public revenue in the hands of the plaintiff without any security for

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bringing back the amount if the plaintiff ultimately fail to prove their claim. The learned Senior Counsel submited that lease is only in respect of the display of advertisement and there is no lease of the site which is given for the beautification and therefore, the learned single Judge had erred in granting relief to the plaintiff by holding that the entire area was given on lease to the plaintiff and that these hoardings form the part of the Lease Agreement. The learned Senior Counsel submitted that it was never intended to give these existing hoardings to the plaintiff and the existing hoardings including the unipole were never part of the Lease Agreement under which the plaintiff is paying only Rs.3,45,000/- per annum. The learned Senior Counsel submitted that the defendant-MSRDC is a government company engaged in development of road infrastructure in the State of Maharashtra and therefore, by giving 50% of the hoardings to the plaintiff, grave loss would be caused to the public at large.

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12 The learned Senior Counsel for the defendant-MSRDC also drew our attention to the letter dated 13^th September, 2006 written by the plaintiff to defendant-MSRDC wherein, it was stated that if the defendant-MSRDC was deciding to continue the same hoardings which are located in the site, they should be given to the plaintiff and that the same would

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be erected and modified by them in a beautiful manner to add to the beauty of the area and in reply to the said letter the defendant-MSRDC wrote back to the plaintiff vide their letter dated 21.09.2006 that the existing hoardings were not covered under the Lease Agreement between the defendant-MSRDC and plaintiff. The learned Senior Counsel contended that the impugned order also does not adequately protect the defendant-MSRDC since in the event that the plaintiff is unsuccessful in the suit, it will be impossible for the defendantMSRDC to recover the amount from the plaintiff in respect of the existing hoardings which are given to them under the impugned order and that the impugned order does not provide for adequate security, if the plaintiff’s suit is ultimately dismissed. The learned Senior Counsel therefore, urged that the impugned order is required to be set aside.

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13 The learned Senior Counsel for the plaintiff, on the other hand, has drawn our attention to the clause 1 of the Lease Agreement, which reads as follows:

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“1. Scope of work

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The Concessioner shall be responsible for the beautification/landscaping and maintenance thereof with exclusive advertising rights for the project at the sites more particularly set out in Annexure-1

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hereto, on the payment of the total lease rent of Rs. 27,60,000/- (Rupees Twenty Seven Lacs Sixty Thousand only) (“the said lease rent”) by the Concessionaire to MSRDC.”

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14 The learned Senior Counsel for the plaintiff has also pointed out clause 5.2 of the agreement which reads as follows:

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“5.2 It is expressly agreed, understood and confirmed

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by and between the Parties hereto that the Concessionaire shall execute and implement the work of advertisement and display in Segments II, III and IV underneath Mahim Interchange under the project as per the plans enclosed in Annexure 2 hereto and all the rights and benefits of advertisement rights shall be solely vested with the concessionaire. It is hereby confirmed by the Parties hereto that the Concessionaire shall be entitled to advertising rights with respect to the said project on the said sites in the nature of advertisement media, kiosks, display boards, platforms etc., as sanctioned/permitted by authorities other than MSRDC, and shall be entitled to apply for, obtain the licenses for the same and enter into contracts and receive payments for the same.”

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15 Thus, according to the Learned Senior Counsel for the plaintiff, the words “exclusive advertisement rights” and the words “all the rights and benefits of the advertisement rights shall be solely vested with the Concessionaire” in the above referred clauses clearly demonstrate that the sole and exclusive rights in respect of the advertisements at the suit site i.e. Segment No. II, III and IV lay with the plaintiff alone. The learned Senior Counsel has also pointed out that the definition of “work” in the offer document included leasing of the rights to display advertisement.

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16 The learned Senior Counsel for the plaintiff submitted that defendant-MSRDC is a huge corporation and a government company and it is not possible to believe that if at all the defendant-MSRDC were desirous of retaining the six existing hoardings, the same would not have found a mention in the Lease Agreement. He submitted that in the face of the written contract in the form Lease Agreement it would be hazardous to make guess work of what was agreed to between the parties particularly at this interim stage. The learned Senior Counsel therefore submitted that once the lease period in respect of the hoarding/unipole has expired on 31^st October, 2006, there was no question of inviting further tender in the

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suit site and the learned Single Judge was right in allowing the Notice of Motion of the plaintiff.

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17 The learned Senior Counsel has placed reliance on decision of the Hon’ble Apex Court in the case of State Bank of India and another Vs. Mula Sahakari Sakhar Karkhana Ltd. reported in 2006(6) Mh.L.J. 257 wherein it was held that the document must primarily be construed on the basis of the terms and conditions contained therein and while construing document the Court shall not supply any words which the author of the document did not use.

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18 We heard the learned Senior Counsel for the parties and perused the material on record.

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19 At the outset, it is to be noted that the suit site consists of Segment II, III and IV, underneath the Mahim Interchange. Insofar as the Kalanagar flyover mentioned in the offer document is concerned, the same is not the subject matter of the present suit. The case of the plaintiff in short is that they have exclusive advertisement rights in the suit site underneath the Mahim Interchange. Now, it is common ground that in the suit site there were existing hoardings even prior to the offer document and execution of the Lease Agreement between the parties and the existing hoardings were given on lease earlier

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to third parties. In Segment III there were four existing regular hoardings and one unipole and in Segment IV there is one existing unipole. The question therefore is, insofar as existing hoardings are concerned, what is to happen to these existing hoardings when the existing lease given by the defendantMSRDC to third parties expire – whether the existing hoardings can be given on further lease by defendant-MSRDC to 3^rd parties or whether they are required to be removed by defendant-MSRDC or whether the existing hoardings are required to be given to the plaintiff by defendant-MSRDC.

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20 It must be stated that proceedings were initiated by the plaintiff when the lease period of the unipole in Segment III was due to expire on 31.10.2006 and when the defendantMSRDC had floated tender for leasing the said unipole in Segment III. The plaintiff took exception the tender being floated in respect of the said unipole claiming that since exclusive rights of advertisement display in the suit site i.e. Segment II, III and IV was given to them, the defendant-MSRDC did not have a right to call for tenders for advertisement display on the existing hoardings/unipoles in the suit site. The plaintiff on coming to know of the said tender being floated, had prior to filing of the proceedings addressed a letter dated

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13^th September, 2006 to the defendant-MSRDC, which reads thus:

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“We have been allotted the above mentioned work and exclusive advertisement rights thereon. As per the earlier discussion about the existing hoardings which are already there on the site which are erected in very ugly manner, it was told to us they will be removed.

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In that regard, I would like to state here that if the corporation is deciding to continue the same hoardings which are located in our site, should be given to us. We will erect them again or modify them in beautiful manner which will add to the beauty of this area.

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Please look into the matter and give us an opportunity to beautify this area in maximum possible manner.”

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The said letter was replied by the MSRDC, vide their letter dated 21.09.2006, wherein, it was pointed out by the defendant-MSRDC that the existing hoardings are not covered under the contract between defendant-MSRDC and the plaintiff. It is thereafter, that proceedings came to be initiated by the plaintiff.

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21 The learned single Judge whilst making Notice of Motion absolute, ordered that the plaintiff would be entitled to use three hoarding sites out of six hoarding sites which are

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available for advertisement or in the alternative plaintiff would be entitled to use 50% of the site which are available, subject to rules and regulations of Municipal Corporation for the use of the said site.

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22 Insofar as the directions of the learned single Judge contained in the impugned order, entitling the plaintiff to use three hoardings out of six hoardings or in alternative 50% of the hoardings, would, in our view, be incorrect, inasmuch as it was never the case of the plaintiff in the present suit that they are entitled to any of the existing hoardings to display advertisements. What the plaintiff have infact averred in their pleadings is that on the expiry of the lease of the existing hoardings the said hoardings should be removed by the defendant-MSRDC. The same is also reflected in prayer clause (d) of the plaint which reads thus:

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“d) That this Hon’ble Court may be pleased to order and direct the defendant their servants and agents and the persons working under them or permit the Plaintiff to remove the existing hoardings in the suit premises/site i.e. Segment No.II, III and IV of Mahim interchange on CTS No.A-791/792 ad-measuring about 9800 square meters whose lease period is already over.”

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In the plaint itself, in para 19, it is stated by the plaintiff as under:

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“The plaintiff therefore met the officers of the defendant and clarified that the plaintiff is not interested in the existing hoardings ‘Unipole’ and all that the plaintiff wants to point out that it is the plaintiff who has got the exclusive rights of advertisement and possession of the suit premises/site and therefore no new agency should be permitted to advertise on the suit premises/site belonging to the plaintiff after the expiry of the lease of the existing Advertisement display.”

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In para 27 of the plaint also it is stated thus:

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“The plaintiff states that it is pertinent to note here that once the defendant has given rights and benefits of advertisement to the plaintiff then the only option available to the defendant is to permit removal of existing hoardings in the site which is in possession of the plaintiff after expiry of lease period of said hoardings as all the space on the site is already given to the plaintiff for exploiting advertisement benefits on the suit premises/site. The plaintiff states that instead of doing so the defendant herein has chosen to give rights to some other party by inviting tender which is illegal.”

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Significantly, even in the affidavit in rejoinder in the notice of motion of the plaintiff in para 12, it is averred as follows:

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“ ... I say that I at the cost of repetition say that I am not asking for the hoardings which are there on the suit/property site. I say that I have been granted exclusive rights and benefits of advertisement in respect of suit property/site and none other should be allowed to display advertisement on the suit/property site which is given to me under an agreement....”

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23 Thus, a plain reading of the above averments makes it clear that the plaintiff themselves have not asked for existing hoardings/unipole and have sought removal of the existing hoardings/unipole. In absence of a prayer in the motion or the plaint, to grant or to handover the existing hoardings/unipole in the suit site to them, the directions of the learned single Judge in the impugned order so far as it grants three hoardings out of the six hoardings or 50% of the hoardings to the plaintiff would not be correct, and even outside the scope of the tender offer itself. Infact it would result in enrichment of the plaintiff outside the terms and conditions of the tender offer. In the circumstances, we find that the plaintiff is not entitled to any existing hoardings in the suit site and/or display advertisements on the existing hoardings.

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24 At this juncture, it may be stated that the plaintiff had earlier filed Writ Petition (Lodging) No.2724 of 2006 contending

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therein that the plaintiff is entitled to use existing hoarding and it was agreed and understood by the parties that after the expiry of the contract period of the earlier existing hoardings the same would be handed over to the plaintiff for its use as per the terms and conditions of the Lease Agreement. In the writ petition the plaintiff prayed for withdrawal of the fresh tender notice and further prayed for direction against the defendant-MSRDC to permit the plaintiff to use the existing hoardings as per the permission of the Lease Agreement. Thus, in the writ petition it was the specific case of the plaintiff that it was agreed between the parties that after expiry of their term, the existing hoardings would be handed over to the plaintiff for their use as per Lease Agreement. The said Writ Petition came to be dismissed by this court. The plaintiff carried matter to the Hon’ble Supreme Court, and the Hon’ble Supreme Court vide its order dated 15.01.2007, whilst dismissing the Special Leave Petition, stated in its order that any observations made by the impugned order of the High Court shall not be construed as expression of the opinion on the rights of the parties in any subsequent proceedings which may initiated by the petitioner. Thereafter, the plaintiff filed a suit in the City Civil Court at Bombay and also took out Notice of Motion inter-alia praying for injunction. As no ad-interim

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reliefs were granted, the plaintiff preferred an AO (Appeal against Order) in this Court and this Court directed the City Civil Court to hear the Notice of Motion expeditiously and also ordered that the defendant-MSRDC may process the tender documents but they shall not take any final decision in the matter in respect of the advertisement in relation to the suit site and/or give possession of the hoarding to any third party until final decision in the Notice of Motion. Accordingly, the City Civil Court heard and dismissed the Notice of Motion finally vide its order dated 28.03.2007. The plaintiff being aggrieved by that order filed an AO in this court and in the said AO, the plaintiff withdrew the suit and sought liberty to file a fresh suit and that is how the present suit came to be filed. Thus, the matter as it now stands, is that the advertisements on the unipole and existing hoardings continue to be displayed at site at the old rate under the agreements between defendant-MSRDC and 3^rd parties, which agreements have already expired.

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25 Thus, having concluded that the plaintiff is not entitled to the existing hoardings as discussed hereinabove, the question now to be examined is what is to be done with the existing hoardings when the lease of the said existing hoardings expire i.e. whether the defendant-MSRDC is required to remove the

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said hoardings or whether the defendant-MSRDC is entitled to invite bids for lease of advertisement rights in respect of the existing hoardings.

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26 The plaintiff’s case as stated above, is that, since they have been granted exclusive right for advertising display in the suit site, no outside agency can be permitted to display advertisements in the suit site including the existing boarding after the expiry of the lease period of the existing hoardings. Firstly, it needs to be stated that nowhere in the offer document or Agreement for Lease, there is any mention about the existing hoardings/unipole and therefore, this issue would need to be interpreted and construed from the terms and conditions of offer document and Lease Agreement as a whole, including the surrounding circumstances and conduct of the parties. It would therefore be necessary to examine in detail the terms and conditions in the Agreement for Lease and the offer document.

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27 The Lease Agreement itself states in clause 3 that the offer document would also form part of the contract. The offer document is described as “Offer Document for beautification/landscaping and maintenance thereof with advertising rights underneath Mahim interchange.....”. The

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‘suit site’ is described in the plaint by the plaintiff as Segment II, III and IV.

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The Offer Document – Section-1 - Instructions to Biddersclause (2) reads thus:

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“(2) MSRDC is now offering, as separate works/contracts, the space underneath Mahim Interchange in various segments given below and Kalanagar flyover for beautification/landscaping and maintenance thereof with display of advertisements in the corresponding segments on ‘Design, Build, Operate & Transfer (DBOT)’ basis .....”

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The Offer Document – Section-1 - Instructions to Bidders - clause (9)(f) reads thus:

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(9)(f) “Details of Beautification/Landscaping plan (to be submitted as Annexure-E) including:

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. Proposed Beautification/Landscaping plan in the form of detailed drawings/plans/layouts, photographs, perspectives, 3D-views etc.

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. Types of species of plants, turf & landscape details.

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. Area lighting arrangements & fixtures.

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. Watering arrangements & fixtures.

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. Ralling/Fencing

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. Specifications of all items proposed for beautification/ landscaping.

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. Location, size and specification of proposed advertisement structures and spaces.

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. Other relevant information.”

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The Offer Document - Section- 1 - Instructions to Biddersclause (13) reads as under:

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“(13) SITE VISIT: It will be imperative on each bidder to fully inform himself by visiting and examining the site of all local conditions and factors, which may have any effect on the execution of work covered under this document and specifications. It must be understood and agreed that all the factors have properly been investigated and considered by the bidders while submitting the proposals. No claim for financial adjustment to the contract awarded on these specifications and documents will be entertained by MSRDC. Neither any change in the time schedule of the contract nor any financial adjustment arising therefrom shall be permitted by MSRDC, which are based on lack of such clear information or its effect on the costs of the work to the bidder.”

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The Offer Document – Section-2 - General Conditions of Contract, sets out the definition of “Site” or “Segment” in clause 1.14 which reads as under:

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“1.14 “Site” or “Segment” shall mean the specified area below Mahim Interchange and Kalanagar flyover

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meant for beautification, landscaping and leasing of the right to display advertisements.”

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The Offer Document – Section-2 - General Conditions of Contract, states the definition of “Work” in clause 1.18 which reads as under:

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“1.18. “Work” shall mean the beautification/ landscaping and maintenance thereof and leasing of the right to display advertisements on the said site/s.”

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The Offer Document – Section-2 - General Conditions of Contract - clause (8) reads as under:

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“(8) .... Nothing herein contained shall be construed as conferring upon the Concessionaire the right or interest over the land or the property of MSRDC.”

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The Offer Document – Section-2 - General Conditions of Contract - clauses 10.1, 10.2, and 10.6 read as under:

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“10.1 The Concessionaire shall at his own cost, design, carry out and maintain the beautification/landscaping of the said site/s, erect and fix the permitted advertisement structure/panels/boards, remove and re-fix the advertisements/boards on the site/s as per the technical proposal submitted by the Concessionaire and presentation made by him to the Evaluation Committee based on the special conditions of contract (under Section-3) enclosed with this document....”

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10.2 The Concessionaire shall at his own cost undertake the maintenance and repair works of the beautification/landscaping of the said site and advertisement panels/hoardings/boards permitted and erected on the said site and keep them in safe and secured position. In case, any damage is caused to any part of the beautified area of the advertisements for any reason, the same shall be repaired and if required redone by the Concessionaire at his cost to the satisfaction of the Engineer-in-charge.

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10.6 The Concessionaire shall use the said sites and the advertisement panels/boards/hoardings thereon only for the purpose of displaying the advertisements of the specified size and not for any other purpose and not in any other manner. The Concessionaire shall not alter or change or increase the size of the permitted advertisement panels/boards/hoardings in any way.”

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The Offer Document – Section-2 - General Conditions of Contract - clause (14) reads as under:

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“(14) Inspection of Site: The Concessionaire shall be deemed to have inspected and examined the site, its surroundings, local conditions, factors and information available in connection therewith and to have satisfied himself before submitting his offer as to risks and all other information which may influence his offer”

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The Offer Document – Section-3 - Special Conditions of

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Contract- clause 19 reads thus:

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“19 The Concessionaire shall not put any neons/hoardings and shall be permitted to display advertisements on illuminated boards/kiosk of maximum size 3’x2.5’. The Concessionaire shall be entitled to put hoardings/sponsorship boards i.e. 2 boards of size 6’x4’ and 8 smaller boards of size 2’x10”. In respect to 8 smaller boards having size 2’x10”. The Concessionaire can display the names of their sponsors. The Concessionaire shall ensure that the bigger boards shall bear the name of MSRDC in lettering of not less than 6.”

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The Offer Document – Formats for Technical Proposal – Appendix-2 reads thus:

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“ ....We have studied the site conditions, site constraints and have made our own assessment of potential at the locations specified by you.”

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28 Let us now examine the relevant clauses of the Lease Agreement. It is to be noted that the Lease Agreement is for a period of eight years and the amount of lease is fixed at Rs.27,60,000/- in yearly instalment at the rate of Rs.3,45,000/-. Clause 1 of the Lease Agreement states, the scope of work and reads thus:

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“1 Scope of the work:

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The Concessionaire shall be responsible for the beautification/landscaping and maintenance thereof with exclusive advertising rights for the project at the sites more particularly set out in Annexure 1 hereto, on the payment of the total lease rent of Rs.27,60,000/- (Rupees Twenty Seven Lacs Sixty Thousand only) (“the said lease rent”) by the concessionaire to MSRDC.”

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Clause 5.2 of the Lease Agreement reads as under:

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“5.2 It is expressly agreed, understood and confirmed by and between the Parties hereto that the Concessionaire shall execute and implement the work of advertisement and display in Segments II, III and IV underneath Mahim Interchange under the project as per the plans enclosed in Annexure 2 hereto and all the rights and benefits of the advertisement rights shall be solely vested with the Concessionaire. It is hereby confirmed by the Parties hereto that the Concessionaire shall be entitled to the advertising rights with respect to the said project on the said sites in the nature of advertisement media, kiosks, display boards, platforms etc., as sanctioned/permitted by authorities other than MSRDC, and shall be entitled to apply for, obtain licenses for the same and enter into contracts and receive payments for the same.”

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29 Thus, from the above quoted terms and conditions what emerges is that the plaintiff was entitled to display advertisements by erecting and fixing the permitted advertisement structure/panels/boards only as per the

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specifications given by the defendant-MSRDC in the Offer Document - Special Conditions of Contract. The Special Conditions of Contract stipulates that the plaintiff shall be permitted to display advertisements on illuminated boards/kiosk of maximum size 3’ X 2.5’ and two hoardings/sponsorship boards of size 4’ X 6’ and eight smaller boards having size 2’ X 10”. The rights of the plaintiff therefore in respect of display of advertisements are clearly restricted. When the offer document was published, as also when the Lease Agreement was executed, both the parties were well aware that there were existing hoardings on the suit site which displayed advertisements way beyond what was permissible to the plaintiff. The offer document also sets out that it would be imperative upon the bidder to visit the site and inform himself of all local conditions and factors which have any effect on the execution of work and specifications and consider the same before submitting their proposals. The offer documents clearly speaks about a presentation to be made specifying the details of Beautification/Landscaping plan (to be submitted as Annexure-E) including the location, size and specification of proposed advertisement structures and spaces. The plans annexed to the Agreement also clearly show the existing hoardings. The formats for Technical Proposal – Appendix 2 of

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the Offer Document indicates that the bidders were required to study the site conditions, site constraints and to have made their own assessment of potential at the locations at the suit site specified by the plaintiffs in their plans. There were also pre-bid meeting arranged by the defendant-MSRDC.

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30 In our view, considering all the above aspects, it was clear that the plaintiffs were well aware that the existing hoardings were to remain. Even though the Lease Agreement nowhere reserves the right of the defendant-MSRDC to continue the existing hoardings, at the same time, the Agreement also does not speak about the removal of the hoardings by the defendant-MSRDC. In the pre-bid meeting also the issue about the existing hoardings has not been raised by the plaintiff or their representative and there is nothing on record to indicate that any attempt was made by the plaintiff to find out as to when the lease in respect of the existing hoardings were to expire. Though it is mentioned in the plaint that it was represented to them by the defendant-MSRDC that after the lease of the existing hoardings were to expire the same would be removed, the particulars as to the name of the officer, etc who had given such assurance is not mentioned by the plaintiff. It is to be noted that only specified areas at the suit site are given for beautification and landscaping and so far

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as leasing of the right to display advertisement is concerned, the same is clearly restricted as stated above. Moreover it is specifically mentioned in the Offer Document - General Conditions of the Contract, that the bidders would have no right or interest over the land or the property of MSRDC. In view of the aforesaid discussion, the contention of the defendant-MSRDC is plausible that the words ‘exclusive’ and ‘solely’ were meant to indicate that in respect of those erections, structures, panels and boards, which were built by the plaintiff, the plaintiff alone would have exclusive and sole rights to display the advertisements for the lease period of eight years. We feel that merely by the use of the words ‘exclusive’ and ‘solely’ in the Lease Agreement would not mean that it was agreed by defendant-MSRDC that they would remove the existing hoarding as this fact is nowhere found in the Lease Agreement. Had the plaintiff not understood it that way, they would have surely sought clarification regarding the same in the pre-bid meeting. Moreover, considering the fact that the plaintiff is given the contract for beautification and landscaping and advertisement rights display on an annual lease rent of only Rs. 3,45,000/-, whereas the defendantMSRDC has been offered an annual sum of Rs. 1,25,00,000/- in respect of lease of a single Unipole hoarding, it seems

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inconceivable that defendant-MSRDC might agree to remove the existing hoardings which generate such huge income. We take note of the fact that Mahim Interchange is a prime location in the city of Mumbai for display of advertisements and the roads from this junction also lead to the freeway/highway and Local as well as International Airport. In our opinion, the Lease Agreement is required to be read as a whole and on such reading we do not find that it was agreed by the defendant-MSRDC that the existing hoardings were to be removed. We are unable to accept the case of the plaintiff that insofar as the existing hoardings are concerned, the Lease Agreement should be read to mean that after the expiry of the lease of the existing hoardings with 3^rd parties the defendantMSRDC is required to remove the same, in absence of any such term in the Lease Agreement and merely on the statement of the plaintiff that it was represented by the defendant-MSRDC that the existing hoardings would be removed on the expiry of the lease.

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31 We must however mention that at the first blush the words ‘exclusive’ and ‘solely’ used in the Lease Agreement did impress us, however on examining the offer document and the Lease Agreement more closely, we prima-facie feel that the plaintiff had not made out a case for granting the reliefs as

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prayed in the notice of motion. Pertinently, it is admitted in the plaint that the suit site was visited by the plaintiff and the existing hoardings and advertisement display was noticed by the plaintiff. However, there is no explanation as to why the plaintiff did not seek any clarification in the pre-bid meeting in respect of the existing hoarding and advertisement display. Thus the plaintiff has not been able to demonstrate that the existing hoardings were to be removed under the Lease Agreement. Prima facie, therefore, we find that the existing hoardings are not covered under the Lease Agreement.

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32 Thus there is a clear ambiguity in the Lease Agreement, inasmuch as it is silent insofar as advertisement display on the existing hoardings is concerned. It neither speaks about reservation of any advertisement rights of lease by defendantMSRDC in respect of the existing hoardings, nor does it speak about the removal of the same, either by defendant-MSRDC or the plaintiff, after the lease period of the same expires, though the said existing hoardings were very much in existence at the time of the execution of the Lease Agreement. In such circumstances, the words ‘exclusive’ and ‘solely’ would really speaking loose its significance qua the existing hoardings as the existing hoardings were already leased to 3^rd parties at the relevant time when the Lease Agreement was executed and

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the plaintiff in no circumstances can be said to have sole or exclusive advertisement rights in the suit site-atleast not at the time of the execution of the Lease Agreement and certainly not in respect of the existing hoardings. In view of the ambiguity in the Lease Agreement, the ruling (State Bank of India and another Vs. Mula Sahakari Karkhana Ltd. 2006(6) Mh.L.J. 257) cited by the learned Senior Counsel for the plaintiff would in our opinion have no application to the facts of the present case. Infact in the ruling cited by the learned Senior Counsel for the plaintiff, the Hon’ble Apex Court clearly lays down that when an ambiguity exists in the document, the surrounding circumstances are relevant for construction of a document.

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33 We also prima-facie find that no irreparable loss would be caused to the plaintiff if the existing hoardings are allowed to remain. The plans submitted by the plaintiff clearly showed the existing hoardings of defendant-MSRDC in addition to the proposed display of advertisements by the plaintiff. Thus the plaintiff’s proposed advertisements display are shown after having taken into consideration the placements of the existing hoardings. Therefore it cannot be said that the existing hoardings would cause any obstruction to the advertisement display of the plaintiff. Thus, it is not that because of the

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existing hoardings, the plaintiff is likely to loose any revenue, as the advertisements display which are to be put by them are not affected in any manner. In any event, if at all the existing hoardings cause any obstruction to the advertisement display of the plaintiff approved by the defendant-MSRDC under the Lease Agreement that grievance can be taken care of by observing that it would be open to the defendant-MSRDC to shift the existing hoardings in consultation with the plaintiff in accordance with the extant rules and regulations of the local authority. In our view the advertisement display on existing hoardings of the defendant-MSRDC as well as the display of the advertisements of the plaintiff as erected / built as shown in the plan can very well co-exist. The balance of convenience would also in our opinion tilt in favour of the defendant-MSRDC inasmuch as there would be no revenue loss to the plaintiff whereas the defendant-MSRDC would suffer revenue losses of substantial amounts if the existing hoardings were required to be removed. The fact that the defendant-MSRDC is a public body and therefore interest of public is also involved in the present case cannot be brushed aside or overlooked. Even assuming the plaintiff had a prima facie case, it cannot be said that they would suffer irreparable loss as stated earlier inasmuch as the plaintiff’s as well as defendant-MSRDC’s

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display of advertisements can clearly co-exist without any revenue loss being caused to either of them. Thus, prima facie we find that there is no material injury or prejudice as such that would be caused to the plaintiff if the injunction as sought by them is not granted. Moreover, it also cannot be said that by refusal of injunction, if the plaintiff ultimately succeed in their suit, they cannot be adequately compensated in terms of money.

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34 We have also noted that the plaintiff has made a departure from their earlier case in the Writ Petition which was initially filed by them in this Court where they claimed that the defendant-MSRDC be directed to handover the existing hoardings to them, whereas in the present case, the plaintiff has prayed that the existing hoardings be removed. In our view the case of the plaintiff appears to be an afterthought and we are not ready to accept, at least at this prima facie stage, that the existing hoardings were to be removed as was allegedly represented to them by the officers of defendantMSRDC.

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35 We make it clear that it would also be open to the defendant-MSRDC to remove any existing hoardings if they so desire. The number of existing hoardings and the size of the

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hoardings/advertisement display, however, shall in no case, be increased. We may further clarify that the defendant-MSRDC would be required to abide by the relevant rules and regulations of the local authority in respect of the advertisement structures and display. The defendant-MSRDC shall ensure that the plaintiff’s display of advertisement and the beautification and landscaping done by the plaintiff is not adversely affected, whilst displaying the advertisements on the existing hoarding and/or making any repairs and/or modifications to the existing hoarding structures.

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36 In the circumstances, the Appeal of the defendantMSRDC is allowed. The impugned order of the learned Single Judge is set aside and the Notice of Motion No. 2373 of 2007 shall stand dismissed. No order as to costs.

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37 At this stage, Mr. K.S. Deval, learned counsel for the respondents makes a prayer that the status quo order which was imposed during the pendency of the Appeal be continued for a period of four weeks in order to enable the respondents to avail appropriate remedy against this order. We accordingly direct that status quo be maintained for a period of four weeks from today.

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[A.A. SAYED, J.] [S.B. MHASE, J.]

Maharashtra State Road Development Corporation Limited,Mumbai. v. Urja Developers and Beautification Pvt. Ltd.,Thane.

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Maharashtra State Road Development Corporation Limited,Mumbai. v. Urja Developers and Beautification Pvt. Ltd.,Thane.

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