Vasundhara Enterprises v. Indian Oil Corporation Limited
2007-05-08
NAVANITI PRASAD SINGH
body2007
DigiLaw.ai
Judgment Navaniti Pd.Singh, J. 1. In the present Writ application the petitioner has questioned the legality and propriety of rejection of his bid for appointment of Carrying and Forwarding Agent (hereinafter referred to as CFA) for Lubricants of Indian Oil Corporation, a Government of India undertaking to be situated at Dhanbad and established by the Indian Oil Corporation Limited, Bihar State Office Patna. The said communication is contained in letter dated 8.2.2006 (Annexure 11 to the Writ application). 2. In course of the Writ proceedings counter affidavit was filed by the Indian Oil Corporation and on disclosure that apart from petitioner there was only one other person in the running and consequent to the rejection of the petitioner the other person was to be granted the agency, the other person, namely, Pradeep Kumar Santhalia was added as respondent No. 4 and notices issued to him. He has also appeared and filed a counter affidavit. 3. The petitioner has filed rejoinder and with the consent of all the parties this Writ application was heard and is being disposed of at the stage of admission itself. 4. By the said impugned communication the petitioner has been informed that the land documents submitted by the petitioner does not meet the NIT condition and hence the petitioners tender documents for price bid is not to be considered. It is the legality in the correctness of this communication, that is in challenge. It is common ground that by the said order what is being communicated was that the petitioner having submitted a registered lease deed in his favour for a period of more than six years, as required, this deed was found to be inappropriate and not in accordance with law relating to lease, more specifically not in accordance with Sec.107 of the Transfer of Property Act. 5. The uncontroverted facts, in brief, are that Indian Oil Corporation Limited, a Government of India undertaking through its Marketing Division, Bihar State Office, Patna, issued a notice inviting tender for appointment or Carrying and Forwarding Agent for the State of Jharkhand for lubricants manufactured by Indian Oil Corporation. The location was to be at Dhanbad. The relevant terms and conditions have been annexed as Annexure 1 to the Writ application. The tender had to be filed in two separate sets.
The location was to be at Dhanbad. The relevant terms and conditions have been annexed as Annexure 1 to the Writ application. The tender had to be filed in two separate sets. First, dealing with Techno commercial bid for which the last date for filing was 17.8.2005 at Patna and the Second was the Price bid cover. The two were to be marked A and B respectively and were to be in separate covers. One of the requirements in respect of Techno commercial bid was that the tenderers was to enclose documentary proof of papers of ownership/lease arrangement of land/warehouse and minimum qualifying criteria. 6. The petitioner in order to satisfy the said term of the Techno commercial bid, took on lease adequate land and for the said purpose got a lease deed drawn up and duly registered before the Registrar at Dhanbad on 13.8.2005, a copy whereof is annexed as Annexure 2 to the Writ application. He accordingly along with other documents submitted his tender on 17.8.2005. A perusal of lease deed would show that one Nemlal Mahto was the lessor and the petitioner was the lessee. The lease rent was Rs. 10,000.00 per year and lease period was seven years in relation to land about 3240 sq.m. in the district of Dhanbad . 7. It is not disputed that there were several other tenderers but except for petitioner and respondent No. 4, all other tenders were rejected consequent to opening of the Techno commercial bid. 8. The petitioner has brought on record various communications thereafter to show that his techno commercial bid, which included the said registered lease deed, was not treated to be inappropriate and/or not complying with the provisions of Sec.107 of the T.P. Act as several correspondences were there in relation to different matters but at no point of time any query was raised by Indian Oil Corporation with regard to the said lease. There was communication dated 28.10.2005 (Annexure 3) wherein petitioner was requested to submit balance sheet of its firm duly certified by Chartered Accountant for last three years indicating the turnover, alongwith corresponding income return. The petitioner complied and submitted the said information. Then there were certain queries made by letter dated 15.12.2005 with regard to Accounts by Indian Oil Corporation, which was also replied (Annexure 5).
The petitioner complied and submitted the said information. Then there were certain queries made by letter dated 15.12.2005 with regard to Accounts by Indian Oil Corporation, which was also replied (Annexure 5). Then by letter dated 6.1.2006, there were further queries and the site plan with measurement duly signed by Circle Officer in respect of the land offered was sought for by the Indian Oil Corporation (Annexure 7). This was also furnished. Till this time there was no question raised with regard to the registered lease deed, as submitted by the petitioner. 9. The petitioner has then asserted that he was called for opening the financial /price bid in the month of January and it is submitted that he was confident that he would be selected but then he was questioned about the registered lease deed apparently on the ground that it did not appear to be a genuine document as it did not bear the signature of the lessee i.e. the petitioner himself. This fact is admitted by the respondent-Indian Oil Corporation in their counter affidavit wherein in paras 11 and 12 they have themselves stated that when Indian Oil corporation was on the verge of finalisation of the process of tender, Indian Oil Corporation received a complaint in writing dated 23.1.2006 made by some Ashok Kumar, which, inter alia, points out that the lease deed was not a complete document in accordance with law as it was not signed by the lessee. Only the lessor had signed the said document. 10. It may be mentioned that Ashok Kumar appears to be some advocate and is not concerned with the tender, in question, in any manner. 11. Petitioner states and it is not controverted by Indian Oil Corporation that the petitioner immediately stated to the authorities that the document is a registered and is a genuine document. The authenticity of which is verifiable from the office of the Registrar at Dhanbad. He also stated that after the Techno commercial bid, the officer of Indian Oil Corporation also inspected the site and nothing wrong in the location of land was found. This, inspection reflects to certain doubts, which Indian Oil Corporation appears to have it in mind but is not relevant as those were not the grounds for taking the action, as impugned. 12. Petitioner then consulted lawyers and others in regard to the registered lease deed.
This, inspection reflects to certain doubts, which Indian Oil Corporation appears to have it in mind but is not relevant as those were not the grounds for taking the action, as impugned. 12. Petitioner then consulted lawyers and others in regard to the registered lease deed. He was surprised at the contention of the Indian Oil Corporation that the lease deed was invalid because no such objection was taken by the Registrar at the time of registering the documents, yet, by way of abundant caution the petitioner got a deed of rectification prepared to over come any technical objection duly signed by both lessor and lessee on 1.2.2006 and immediately got it registered on the same day and sent a copy thereof on the same day by FAX to Indian Oil Corporation and submitted to its office on 2.2.2006. These facts are not disputed. 13. However, by the impugned order dated 8.2.2006, as noted above, the petitioners tender was rejected and virtually on the sole ground of invalid lease deed to which the respondent-Indian Oil Corporation apparently became alive only at the stage of finalization of the tender and being prompted by a person, who had no concerned with Indian Oil Corporation or the tender, in question. 14. I have noted these facts only to show that they clearly bring up the fact that Indian Oil Corporation by itself had not considered the registered lease deed to be inappropriate till the very last when for whatsoever reason it may be unconnected person suddenly turned up and was able to persuade Indian Oil Corporation to take this stand to disqualify the petitioner on this ground. 15. Thus, the question is whether such a lease deed duly registered but signed only by the lessor can be said to be valid and whether its invalidation, if any, did not stand cured by the deed of rectification submitted by the petitioner specially when neither the lessor nor the lessee challenged and/or denied the said jural relationship of lessor and lessee in respect of the land, in question, and apparently reaffirmed the said transfer and relationship. 16. Sec.107 of the Transfer of Property Act provides: A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
16. Sec.107 of the Transfer of Property Act provides: A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee; Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that lease of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession. 17. Mr. K.D. Chatterjee and Mr. S.D. Sanjay appearing for Indian Oil Corporation and private-respondent respectively contended that in view of the third paragraph of Sec.107 of the T.P. Act the instrument creating lease of immovable property was required to be executed by both the lessor and the lessee. 18. In the present case, the registered lease deed, as submitted by the petitioner, had named the lessor and the lessee and complied with all other provisions of law but did not have the signature of the lessee i.e. the petitioner and as such it could not be said that such an instrument was executed by both the lessor and the lessee. That being the position, the document, as first submitted did not comply with the legal requirement under Sec.107 of T.P. Act and its subsequent rectification could not validate or avoid such a consequence. 19. On the other hand, Mr. Y.V. Giri, learned senior counsel appearing for the petitioner has submitted that the expression used in Sec.107 is "executed" and not "signed". Singing a document and executing a document in legal parlance are two different things and a lease deed signed only by lessor can still be a valid lease deed and not incontravention of Sec.107 of T.P. Act.
Y.V. Giri, learned senior counsel appearing for the petitioner has submitted that the expression used in Sec.107 is "executed" and not "signed". Singing a document and executing a document in legal parlance are two different things and a lease deed signed only by lessor can still be a valid lease deed and not incontravention of Sec.107 of T.P. Act. Reliance was placed in this regard by the petitioner on the decision of the Hon ble Supreme Court in the case of Rajendra Pratap Singh V/s. Rameshwar Prasad since reported in - , a decision arising out of a case from Patna wherein the learned Apex Court has held that "to execute" does not mean necessarily (sic) sign". 20. In the case, referred to above, the petitioner-tenant, admitted that he had executed a registered deed of Kabuliat in favour of the predecessor-in-title of the landlord agreeing to vacate the premises on expiry of five years. But the contention was that the said instrument was not signed by both the landlord and the tenant and as such the Kabuliat/lease was not a valid lease for a fixed period and as such that could not form the basis that the landlord to seek his eviction on expiry of the lease period. In para 10 of the judgment the Apex Court has clearly held that a close reading of the third paragraph of Section 107 of T.P. Act indicates that there is no stipulation that the instrument must be signed by both parties. The requirement is that when the lease is made by a registered instrument, "such instrument shall be executed by both the lessor and the leasee." What is underlined in it is that the creation of a lease is not a unilateral exercise of one of the parties but a bilateral endeavour of both the lessor and the lessee. Then in para 11 of the said judgment the Apex Court elaborates as to what is the meaning of "execute". The Court then noticed that sometimes one party alone would affix the signature on it and deliver it to the other party. Sometimes both parties would affix their signature on the instrument.
Then in para 11 of the said judgment the Apex Court elaborates as to what is the meaning of "execute". The Court then noticed that sometimes one party alone would affix the signature on it and deliver it to the other party. Sometimes both parties would affix their signature on the instrument. If the document is required by law to be registered, both parties can be involved in the process without perhaps obtaining the signatures of one of them but in all such instances the instrument can be said to have been executed by both parties. It is a question of the fact whether both of them have executed it. Similarly, if an instrument is signed only by one party it does not mean that both parties have not executed deed together. Merely because the document show only the signature of one of the parties it is not enough to conclude that the non-signing party has not joined in the execution of the instrument. 21. In the facts of the present case, apart from the facts that neither the lessor nor the lessee denied the execution of the instrument creating the said jural relationship but proof that it was executed by the joint endeavour of both the parties stand reaffirmed by deed of rectification signed both the parties. 22. In my view, in the aforesaid facts and in view of the said judgment of the Apex Court it cannot be said that the lease deed as registered and submitted to Indian Oil Corporation was invalid in any manner being incontravention to the requirements of third paragraph of Sec.107 of the T.P. Act. It was an instrument creating lease of immovable property duly executed and registered. This being the finding of this Court, there is no escape from the conclusion that the rejection of the petitioners tender is untenable being on nonest ground and thus Indian Oil Corporation has committed actionable wrong in rejecting the tender of the petitioner. I hold accordingly. 23. It appears from the counter affidavit of respondent No. 4 that notwithstanding the interim order of this Court passed earlier restraining the Indian Oil Corporation from issuing letter of intent in respect of the laid tender he has gone ahead and made certain investment on the site in anticipation of the tender being allotted to him.
I hold accordingly. 23. It appears from the counter affidavit of respondent No. 4 that notwithstanding the interim order of this Court passed earlier restraining the Indian Oil Corporation from issuing letter of intent in respect of the laid tender he has gone ahead and made certain investment on the site in anticipation of the tender being allotted to him. This the respondent has done at his own peril as the matter was already subjudice and cannot enure to the benefit of the said respondent in any manner. 24. Let a writ of ceriorari accordingly be issued quashing the impugned communication (Annexure 11) and consequent thereto let a writ of mandamus be issued to Indian Oil Corporation commanding it to consider the price bid of the petitioner along with that of the respondent No. 4 without being prejudiced by the earlier rejection of petitioners Techno commercial bid which has been found to be wrong. 25. Accordingly, this writ application is allowed.