Disposed

M/S.Innovasia Media Solutions v. the Tamilnadu Road Development

Madras HC9 Jun 2014WP/13421/2014

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging a rejection of a license renewal request. Specifically, the Court directed that the licensee's preferential right to renew be exercised only if the licensee bids an amount higher than the highest competitive bid received from third-party tenderers, ensuring the public authority maximizes revenue through bidding.

What did the court decide?

The writ petition is disposed of with a direction that the respondents conduct a tender process; renewal can be granted to the petitioner only if their offer exceeds the highest competitive bid.

M/S.Innovasia Media Solutions Vs the Tamilnadu Road… — Service and Employment | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 09-06-2014

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Coram

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THE HONOURABLE MR. JUSTICE B. RAJENDRAN

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M/s. Innovasia Media Solutions Represented by its Authorised Signatory Mr. A. Tamilselvam # 3/5A, 13^th Avenue Harrington Road, Chetpet Chennai – 600 031 .. Petitioner Versus

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The Tamil Nadu Road Development Company Limited (TNRDC) rep. By its Managing Director No.171, II Floor Tamil Nadu Maritime Board Building South Kesavaperumalpuram Pasumpon Muthuramalingam Road (near Greenways Road MRTS Station) Raja Annamalaipuram Chennai – 600 028

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M/s. IT Expressway Limited rep. By its Chief General Manager II Floor, Sindhur Pantheon Plaza No.346, Pantheon Road, Egmore Chennai – 600 008 .. Respondents

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Petition filed under Article 226 of The Constitution of India praying for a Writ of Certiorarified Mandamus calling for the records of the second respondent in its communication dated 05.05.2014 in W.P.S.R. No. 35/TNRDC/ Writs/3035/2014, quash the same and consequently direct the second respondent to renew the licence agreement dated 12.04.2013 entered into between the petitioner and the second respondent for such period and upon payment of such licence fee as may be mutually agreeable between the parties.

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For Petitioner : Mr. R. Muthukumarasamy, Senior Advocate for Mr. A. Jenasenan For Respondents : Mr. P.H. Aravind Pandian Additional Advocate General assisted by Mr. Sivavarthanan

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https://hcservices.ecourts.gov.in/hcservices/

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O R D E R

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The petitioner has come forward with this writ petition challenging the communication dated 05.05.2014 of the second respondent, in and by which, the representation dated 23.04.2014 of the petitioner was rejected.

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The petitioner company had entered into an agreement of licence with the petitioner on 12.04.2013 by which the petitioner was allowed to display its advertisement in the toll plaza developed by the second respondent for a period of one year commencing from 11.05.2013. The licence was due for renewal on 12.05.2014 and thereefore, the petitioner written a letter dated 11.04.2014 to the second respondent for renewal of the licence in their favour. As there was no reply, the petitioner approached this Court by filing WP No. 11650 of 2014 seeking for a Mandamus directing the respondents to consider the representation dated 11.04.2014 and to renew the licence in their favour. By an order dated 23.04.2014, this Court directed the second respondent to dispose of such representation. Pursuant to such direction, the second respondent sent the communication dated 05.05.2014 rejecting the request for renewal of the licence.

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The learned Senior counsel for the petitioner would contend that as per Clause 11.1 of the terms and conditions of the agreement, the petitioner is entitled to have the first right of option to renew the agreement for further period subject to payment of enhanced licence fee that may be decided by the second respondent. However, the second respondent, in the communication dated 05.05.2014 directed the petitioner to offer their competitive price first, which is contrary to the terms and conditions of the agreement. Further, by the very same communication dated 05.05.2014, the second respondent rejected the request for renewal made by the petitioner.

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At the time when the writ petition was taken up for admission, this Court, by an order dated 08.05.2014, granted an order of injunction. For vacating the order dated 08.05.2014, the second respondent has filed M.P. No. 4 of 2014.

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The learned Additional Advocate General appearing for the respondents would contend that on receipt of the representation dated 11.04.2014 of the petitioner, the second respondent sent communication dated 28.04.2014 and 02.05.2014 requesting the petitioner to offer their competitve rate for taking a decision regarding the renewal of the licence. However, the petitioner has not chosen to come forward to offer such a price. It is further stated that from the year 2014, the second respondent has taken a policy decision to appoint a Marketing Consultant for the purpose of managing the advertising space available with the second respondent and for this purpose, the second respondent has also appointed SSI Media India Pvt Ltd.,. It is further stated that the licence issued to the petitioner expired, however, by virtue of the interim order, https://hcservices.ecourts.gov.in/hcservices/ the petitioner is continuing to occupy the advertising space. It is further submitted that when the petitioner did not disclose the competetive price sought for by the second respondent, the highest

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bid that would be received by the Marketing Consultant also cannot be disclosed to any one before consideration of the bids. It is further submitted that the interim order granted by this Court cannot be taken advantage of by the petitioner to continue to display the advertisement space especially when his licence expired on 12.04.2014 itself.

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I heard the learned senior counsel for the petitioner as well as the learned Additional Advocate General appearing for the respondents. In a matter of this nature, it has to be seen as to what would be the best price that could be fetched by the respondents by collecting licence fee. The respondents are public authorities and the licence fee received from the tenderers will be utilised for rendering efficient service to the public at large. This is the settled proposition of law and there cannot be any second thought.

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In this case, even though the petitioner has a preferential right to opt to renew the agreement for further period subject to payment of enhanced licence fee, such right cannot be an absolute right and it is for the respondents to ensure that they receive the best offer from the tenderers. Such right is subject to the minimum bid amount to be quoted by the tenderers.

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Having regard to the aforesaid facts, in order to strike a balance, this Court feels that the respondents can go ahead with the tender and select the highest bidder. The amount that would be quoted by the highest bidder shall be disclosed to the petitioner and thereafter, if the petitioner is willing to offer more than the price offered by such highest bidder, then the competition will only be between the petitioner and the highest bidder to offer their amount. The petitioner and the highest bidder shall quote their respective amount or even express their willingness to offer more amount. Based on such quote by the petitioner and the highest bidder, the respondents shall decide the bid and award the contract. By this process, the petitioners right of first option can be availed and the corporation can also ensure that they receive the maximum bid amount.

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Subject to the aforesaid direction, the writ petition is disposed of. No costs. Consequently, connected miscellaneous petitions are closed. Sd/Assistant Registrar(CS-IV) Dated: 19.06.2014

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//True Copy//

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Sub Assistant Registrar

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https://hcservices.ecourts.gov.in/hcservices/

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The Managing Director The Tamil Nadu Road Development Company Limited (TNRDC) No.171, II Floor Tamil Nadu Maritime Board Building South Kesavaperumalpuram Pasumpon Muthuramalingam Road (near Greenways Road MRTS Station) Raja Annamalaipuram Chennai – 600 028 2. The Chief General Manager M/s. IT Expressway Limited II Floor, Sindhur Pantheon Plaza No.346, Pantheon Road, Egmore Chennai – 600 008 2 CC to Mr. A. Jenasenan, Advocate SR.No.23654 & 23535 1 CC to Mr.D.Srinivasaraghavan, Advocate SR.No.23464 WP No. 13421/2014 RSI(CO) JJM (19.06.2014)

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https://hcservices.ecourts.gov.in/hcservices/

M/S.Innovasia Media Solutions v. the Tamilnadu Road Development

Case brief

What is this about?

What did the court decide?

M/S.Innovasia Media Solutions v. the Tamilnadu Road Development

Case brief

What is this about?

What did the court decide?

What the court decided

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