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2000 DIGILAW 416 (DEL)

POLO AMUSEMENT PARK v. INDIA TRADE PROMOTION ORGANISATION

2000-05-15

MANMOHAN SARIN

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Manmohan Sarin, J. ( 1 ) THE petitioner company, which runs an amusement park by the name and caption of Fun n Food Village, Kapeshera, has filed this writ petition, aggrieved by thelender conditions framed by respondents 1 and 2 in respect of development and setting up of the amusement park at the Pragati Maidan, New Delhi. At present, anamusement park by the name of "appu Ghar" is being run at Pragati Maidan. ( 2 ) PETITIONER s case in brief is that it is a company, which has been successfullyrunning the amusement park under the name of "fun n Food" at village Kapeshera. It has the expertise and the resources for successfully, setting up and running theproposed amusement park at Pragati Maidan. However, the respondents have devisedand designed the terms and conditions of the tender, so as to exclude fair competition. The terms and conditions. of the tender enquiry are such so as to render ineligible acompany like the petitioner, who are otherwise fully capable of developing and running the amusement park of high standards. ( 3 ) LEARNED counsel for the petitioner submits that in fact the terms and conditions especially, the eligibility criteria given at Clause 2. 51, appearing at page 145 ofthe paper book is so designed, so as to exclude and scuttle competition. In fact thepetitioner goes to the extent of urging that this has been made to accommodate apromoter of amusement park by the name of "black Thunder", who alone wouldremain eligible for the present tender. It is alleged that the terms are tailor made forthe said party. This, it is claimed, has been done malafide, with a view to favour thepromoters of Black Thunder. ( 4 ) THE second limb of the petitioner s submission is that the eligibility criteria asset out, which for the sake of convenience is reproduced below, has no direct nexuswith the object sought to be achieved:clause 2. 51 The applicant must fulfil all the following eligibility criteria lorshortlisting: Constitution of the project executing vehicle : The project executing vehicleshould be incorporated as a company under the Indian Companies Act,1956. . Relevant experience of managing and operating amusement park/themeparks/water parks/multiplexes/leisure complexes and other related facilitiesthe promoter (s) must have managed and operated one or more than onesimilar facility in the last 3 years. . Relevant experience of managing and operating amusement park/themeparks/water parks/multiplexes/leisure complexes and other related facilitiesthe promoter (s) must have managed and operated one or more than onesimilar facility in the last 3 years. Relevant experience of developing and implementing amusementpark/theme parks/water parks/multiplexes/leisure complexes and other related facilities : The promoter (s) must have, developed and implementedone or more than one similar project in the last 10 years. Investments made in similar projects, in the past : The promoter (s) musthave made minimum capital investments in one or more similar project ofrs. 100 million in the past 10 years.-Networth of the promoter company :the promoter (s) must have a minimum consolidated net worth of Rs. 100. 00 million in the last financial year. Net cash accruals of the promoter (s) : The promoter (s) must have averagenet cash accruals of Rs. 150. 00 million in the last three years:liquid assets, as defined as cash and other investments readily convertibleinto cash in a period of 6 months, of the promoter (s) should be at least Rs. 125 million or the promoter (s) should be able to display documented abilityto mobilize Rs. 125. 00 million in. a period of ^months. The promoter (s) should have filed Income Tax and Wealth Tax returns in thelast assessment year. The submission is that the experience requirement was of a promoterhaving developed and set up one similar project in the last 10 years. Yet thefinancial limits prescribed are made stringent so as to exclude other experienced and qualified persons, who have been running amusement parks. The stringent financial conditions are unnecessary and not required for setting up and operating amusement parks. Learned counsel submits that eventhe promoter of Appu Ghar would not be eligible by the said criteria. Learned counsel criticised the requirement of Rs. 10. 00 crores of capital investment on similar project in the last 10 years. The requirement of having minimum consolidated networth of Rs. 10 crores, as also cash accruals of Rs. l5crores in the last 3 years are not necessary for the purposes of successfullydeveloping and operating the amusement park. Learned counsel criticised the requirement of Rs. 10. 00 crores of capital investment on similar project in the last 10 years. The requirement of having minimum consolidated networth of Rs. 10 crores, as also cash accruals of Rs. l5crores in the last 3 years are not necessary for the purposes of successfullydeveloping and operating the amusement park. Learned counsel alsoplaced reliance on Dhar Cement Ltd. and Others v. Slate of Madhya Pradeshthrough Secrtilaty, Ministry of lrrigation Government, Madhya Pradesh,bhopal and Others AIR JW3 Madhya Pradesh 25l, wherein the Court hadstruck down a lender condition prescribing an exceedingly high production -capacity of cement plant, which was not required lor the meagre quantitiesto be supplied as per tender. This authority shall be adverted to later. 5. Show cause notice was issued and a short counter affidavit has also been filedon behalf ofrespondent No. 1. I have heard the learned Additional Solicitor Generalmr. Mukul Rohtagi and Mr. Ravinder Sethi, senior advocate, on behalf of respondents. The respondents have in the counter affidavit averred that keeping in mind thepast experience of the amusement park being run by the name of Appu Ghar, therespondents were desirous of setting up an amusement park, which would meet International standards. Towards this end, a Committee has been constituted under thechairmanship of Additional Secretary and other senior officers, financial advisors. The Committee the deliberations, decided that terms and conditions for the globaltender be devised by professional consultants. M/s. FCI Financial services were appointed the consultants for the project, who have after deliberations devised detailedterms and conditions. ( 6 ) THE question to be considered is whether the terms and conditions of a tenderenquiry devised by expert consultants and approved Committee of senior officers andexperts should be subjected to judicial scrutiny. The answer to this is not far to seek. The Supreme Court in the case of TATA Cellular v. Union of India AIR 1996 S. C. 32observed:"the terms of the invitation to tender cannot be opened to judicial scrutinybecause the invitation to tender is in the realm of contract. Normally speaking the decision to accept the tender or award the contract is reached byprocess of negotiations through several tiers. More often then not such adecisions are made qualitatively by experts. Normally speaking the decision to accept the tender or award the contract is reached byprocess of negotiations through several tiers. More often then not such adecisions are made qualitatively by experts. " ( 7 ) THE Court is neither aware of nor it needs to delve into what the projected investment, gross returns, revenue and expenditure for the proposed amusement parkshould be. It is not for this Court to assess whether the sum of Rs. 10 crores projectedas investment is sufficient or whether the prescribed cash accruals would benecessary. There are matters strictly for the experts and within the administrative domain, in anycase it is not open for the Court to substitute its own opinion even if it is different withregard to sufficiency or adequacy of the specified eligibility terms. Learned counsel atthis stage submitted that the terms are irrational and arbitrary so, therefore, deserve tobe struck down. In these facts, it cannot be said that the prescribed eligibility criteria isso arbitrary or irrational that no reasonable person could have taken such a decision. ( 8 ) THE petitioner has also not been able to make acase of malafides. There isnothing on record to support the petitioners plea that the eligibility criteria wasprescribed so as to excluse all others except the promoters of the park "black Thunder," Respondents in the affidavit have stated that ten parties have submilted theirbids. ( 9 ) THE reliance by the petitioner on Dhar Cement Ltd. and Ors. v. State of M. P. (Supra) would also not advance its case. The cited case was one where the petitionertherein had manufacturing capacity of I lac tonnes but was excluded by the tenderterm for supplying even a meagre quantity of 4000 tonnes byprescribing a capacity of40 lac tonnes. The Court came to the conclusion thal a term requiring the tenderer tohave the capacity of 40 lacs of tonnes to supply only meagre quantity of 4000 tonneswas arbitrary and irrational.-There is no such material on record to hold that thepresent case is vitiated by any such arbitrariness or irrationality. In view of the foregoing discussion, the petitioner has failed to make out a casefor interference in exercise of jurisdiction under Article 226 of the Constitution ofindia. The writ petition has no merit and is dismissed.