Judgment :- Invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, the petitioners, namely M/s. Nagarjuna Construction Company Limited and M/s. NCC Infra Holdings Limited, which have formed into a consortium, have filed this writ petition praying to grant the following relief: The Hon’ble Court may be pleased to issue a writ, direction or order especially in the nature of writ of mandamus declaring that the 1st and 2nd respondents have failed to comply with the conditions precedent contained in paragraph 3.5 of the Request for Proposal and, consequently, declare that the petitioners are not in default of the terms and conditions contained in the Request for Proposal and Letter of Award dated 06.10.2008 for the Development of AP Bhavan in New Delhi and, consequently, set aside G.O. Ms. No. 8, Infrastructure and Investments (IID-2) Department, dated 20.02.2009 cancelling the Letter of Award and pass such other order (s) as the Hon’ble Court deem fit and proper in the circumstances of the case. Respondent No.2, namely, the Government of Andhra Pradesh, have in their possession an extent of Acs. 22.222 cents of land in and around A.P. Bhavan, New Delhi. Out of the said extent, they have earmarked an extent of Acs. 12.568 cents (comprising A.P. Bhavan and Old Nursing College Hostel) for “institutional use”, and the balance extent of land i.e. Acs. 7.564 cents (Pataudi House) for “residential use”. The petitioners have to execute the project by development of lands belonging to the Government of Andhra Pradesh situated in and around Andhra Pradesh Bhavan, on Build, Operate and Transfer (BOT) basis. For developing those lands, respondent No.2, vide G.O. Ms. No. 423, dated 14.09.2005, nominated respondent No.1, namely M/s. Infrastructure Corporation of Andhra Pradesh Limited (INCAP) as their “Executing Agency” for development of the project called “Development of Andhra Pradesh Centre at New Delhi” under Public-Private Partnership mode. Respondent No.2 further decided to constitute a “Special Empowered Committee” consisting of experts and high-ranking officials, to guide and monitor the progress of the project. Thereafter, vide G.O. Ms. No. 436, dated 23.09.2005, respondent No.2, constituted the “Special Empowered Committee”. On 20.06.2006, respondent No.1 addressed a letter to respondent No.2 to constitute a “Technical Advisory Committee”. Acting on the said letter, respondent No.2, issued orders in G.O. Ms. Thereafter, vide G.O. Ms. No. 436, dated 23.09.2005, respondent No.2, constituted the “Special Empowered Committee”. On 20.06.2006, respondent No.1 addressed a letter to respondent No.2 to constitute a “Technical Advisory Committee”. Acting on the said letter, respondent No.2, issued orders in G.O. Ms. No. 6, dated 12.07.2006, constituting Technical Advisory Committee, for advising on matters encompassing all activities, such as, pre-design, legal, construction management, evaluation of conceptual models, architectural designs and evaluation of construction drawing with respect of amenities like Water supply, Sanitary, Electricity, Fire Fighting, Lighting, etc. and recommend appropriate guiding principles at all steps of the project. While so, on 07.11.2007, respondent No.1 notified “Expression of Interest-cum-Request for Qualification” fixing the last date for submission of tenders as 30.11.2007. Responding to the same, 14 developers, including the petitioners submitted their tenders. The Technical Advisory Committee, having considered the qualifications, on 06.02.2008, qualified the names of ten developers, for the purpose of issuance of Request for Proposal - Technical Document. Thereafter, respondent No.1, vide letter dated 23.04.2008, informed those ten developers, including the petitioners that they are selected for issuance of Request for Proposals, and accordingly they were given the Request for Proposals. On 14.05.2008, respondent No.1 conducted the pre-bid meeting, and claims to have cleared the doubts raised by six developers, including the petitioners. The petitioners’ technical bid qualified when it was opened on the last date of submission of Request for Proposal on 31.05.2008. The Technical Advisory Committee, after considering the Request for Proposal of the petitioners, who agreed to accept and abide by the terms and conditions and also gave bank guarantee for Rs. 5.00 crores on 24.06.2008, recommended for issuance of Request for Proposal – Financial Document. Thereafter, based on the recommendations made by the Special Empowered Committee, for issuance of Letter of Award in favour of the petitioners, respondent No.2, issued G.O. Ms. No. 38, dated 20.09.2009, approving the petitioners’ bid and directing respondent No.1 to take further action. 5.00 crores on 24.06.2008, recommended for issuance of Request for Proposal – Financial Document. Thereafter, based on the recommendations made by the Special Empowered Committee, for issuance of Letter of Award in favour of the petitioners, respondent No.2, issued G.O. Ms. No. 38, dated 20.09.2009, approving the petitioners’ bid and directing respondent No.1 to take further action. The said G.O. reads as follows: The Vice Chairman & Managing Director, INCAP has therefore requested the Government (1) to approve the concept of construction of (a) A.P. International Centre with main Convention Hall, Guest rooms, Art Gallery with Food courts, Club house (b) an Office Complex, an Auditorium Complex, Conference Halls, Function/Banquet Hall, Staff quarters for exclusive use of the Resident Commissioner and staff (c) Cottages for His Excellency Governor and Hon’ble Chief Minister as against the earlier proposal of development of Five Star hotel at Pataudi House site approved vide G.O.Ms.No.4, dated 4.4.2007 (2) to ratify the action taken by INCAP for the development of the Project as per the revised model, in anticipation of Government orders (3) to approve the highest bid of Consortium of M/s. Nagarjuna Construction Limited and NCC Infra Holdings Ltd. After careful consideration and based on the recommendations of the Special Empowered Committee, Government hereby accord approval to the Revised concept of the A.P. Bhavan Project, New Delhi, as indicated in para-5 above under BOT basis through PPP mode and also approve the highest bid of M/s. Nagarjuna Construction Company Limited – NCC Infra Holdings Ltd. Consortium with agreed payment of annual minimum guaranteed amount and revenue share to the State Government as mentioned in para-5 above. The licence period of the project is for 30 years from Commercial Operation Date. The Concessionaire shall construct and complete the project within 30 months from the date of signing Development Agreement, which includes six months period for getting project clearances. Government hereby also ratify the action of the Vice Chairman & Managing Director, INCAP in implementing the Revised Concept Plan as per the recommendations of the Special Empowered Committee, in anticipation of the Government orders. In pursuance of the above G.O., respondent No.1, on 06.10.2008, issued Letter of Award in favour of the petitioners. The petitioners, vide letter dated 21.10.2008, communicated their unconditional acceptance of the award duly consenting to all the terms and conditions specified therein. In pursuance of the above G.O., respondent No.1, on 06.10.2008, issued Letter of Award in favour of the petitioners. The petitioners, vide letter dated 21.10.2008, communicated their unconditional acceptance of the award duly consenting to all the terms and conditions specified therein. In pursuance of the Letter of Award, the petitioners state that they approached respondent No.3, namely Syndicate Bank, their bankers, informing them about the need to fund for the project development and performance security. Responding to the same, respondent No.3 called upon the petitioners to furnish title documents with respect to A.P. Bhavan along with title verification report to process their request. Thereafter, the petitioners on 21.10.2008, submitted their acceptance of the Letter of Award, unconditionally agreeing to pay Rs. 30.00 crores being the project development fee, and enclosed cheque for Rs.5.00 crores and promised to pay the balance amount of Rs.25.00 crores at the time of executing the Development Agreement. On 04.11.2008, the petitioners are said to have addressed letter to respondent No.1 to consider accepting the project development fee within 30 days from the date of execution of the Development Agreement or within 30 days from 30.10.2008, which ever is later. On 18.11.2008, respondent No.1, addressed letter calling upon the petitioners to attend meeting on 25.11.2008 to discuss the provisions of the Development Agreement and the operational guidelines in consultation with Project Consultants. Having received the same, the petitioners state that on 21.11.2008, they raised several issues with respect to the project, including the issue of documents pertaining to the land, to facilitate verification by an Advocate and emphasizing that without the said documents, it would be difficult for them to achieve the financial closure from their bankers. On 29.11.2008, respondent No.1 claims to have addressed letter to the Government of India, enclosing all the documents with a request to issue NOC. The petitioners state that on 05.12.2008, they have incorporated a Special Purpose Vehicle by name M/s. NCC International Convention Centre Limited as part of their consortium. After that, on 18.12.2008, the petitioners requested respondent No.1 to grant time beyond 60 days for execution of the Development Agreement and Licence Agreement i.e. beyond 20.12.2008. Having considered the request of the petitioners, respondent No.1 vide letter dated 20.12.2008, extended time by 15 days. However, on 02.01.2009, the petitioners again requested for extension of time by 15 days, which request, respondent No.1 by letter dated 03.01.2009, rejected. Having considered the request of the petitioners, respondent No.1 vide letter dated 20.12.2008, extended time by 15 days. However, on 02.01.2009, the petitioners again requested for extension of time by 15 days, which request, respondent No.1 by letter dated 03.01.2009, rejected. After expiry of the extended period, respondent No.1 states that by operation of Clause 15 of the Letter of Award, the Letter of Award stands cancelled, which the petitioners denied. Vide letter dated 05.01.2009, the petitioners while requesting extension of time, are said to have requested respondent No.1 to issue title deeds and bankable documents to facilitate financial closure of the project. On 06.01.2009, respondent No.1 addressed letter to respondent No.2, narrating the developments. On 09.01.2009, the petitioners addressed letter requesting respondent No.1 to furnish the land documents and title deeds. Thereafter, on 11.02.2009, the petitioners informed respondent No.1 that they are keen to execute the Development and Licence Agreement, and sent draft Development Agreement and Licence Agreement duly incorporating the proposed changes and incorporated various details with respect to the project, project company etc. While the matters stood thus, respondent No.2 issued G.O. Ms. No. 8, dated 20.02.2009, cancelling the Letter of Award dated 06.10.2008, which by letter dated 20.02.2009 of respondent No.1, was communicated to the petitioners. Questioning the said G.O., the petitioners filed this writ petition to declare the same as being illegal and arbitrary. The learned counsel for the petitioners submitted that the petitioners have not committed any default of the terms and conditions of the Letter of Award dated 06.10.2008, much less the events of default pointed out by respondent No.2, and as such, the action of respondent No.2, in issuing the impugned G.O., cancelling the Letter of Award, on the ground that the petitioners have committed six events of default as detailed therein, is illegal and arbitrary. He submitted that before entering into Development Agreement, conditions precedent as contained in Clauses 3.4 and 3.5 of the Request for Proposal, are required to be fulfilled both by the petitioners as well as respondent Nos.1 and 2 respectively, and unless the conditions precedent are fulfilled, the Development Agreement cannot be entered into or executed. He submitted that it is not the petitioners, but respondent Nos.1 and 2, who have committed default of the conditions precedent contained in Clause 3.5 of the Request for Proposal. He submitted that it is not the petitioners, but respondent Nos.1 and 2, who have committed default of the conditions precedent contained in Clause 3.5 of the Request for Proposal. He submitted that the conditions precedent date and the zero date are entirely different, and have no connection to each other. The conditions precedent fulfillment date, referred to in Clause 3.5(b) of the Request for Proposal, is with reference to the conditions precedent contained in Clauses 3.4 and 3.5 of the Request for Proposal, while the zero date as defined in Request for Proposal, is with reference to Clauses 2.6.2.8, 2.6.2.10, 3.1.7, 3.1.11(b), 3.8.6, 3.9.1.6 and 4.3 of the Request for Proposal. He submitted that the zero date, referred to in the said Clauses, which is linked to the period of time mentioned therein, is in relation to performance related issues, and the said date has nothing to do with the execution of the Development Agreement. He submitted that as per Clause 3.5 of the Request for Proposal, respondent Nos.1 and 2 are required to complete the documentation with respect to title related matters of the project sites before Development Agreement is entered into, and non-completion of the same, amounts to default by respondent Nos.1 and 2 as per Clause 4.4 of the Request for Proposal. However, respondent Nos.1 and 2, without settling the title related issues with the Government of India and without furnishing the title related documents to the petitioners, as required by Clause 3.5 of the Request for Proposal, have cancelled the Letter of Award by issuing the impugned G.O. alleging certain defaults of the terms and conditions of the Request for Proposal, which is illegal and arbitrary. He submitted that as per Clause 3.5 of the Request for Proposal, respondent Nos. 1 and 2 are required to settle and furnish the title related documents before entering into Development Agreement, and now they cannot contend that they are entitled to furnish the title deeds by the start of the zero date. He further submitted that the project is to be executed on Build, Operate and Transfer basis and as lot of money is required for executing the same, the petitioners have to bank on financial institutions for financial assistance, and unless title related issues are settled, the financial institutions would not come forward to advance loans and thereby disable the petitioners from obtaining financial closure. He further submitted that the bankers of the petitioners are insisting upon production of title deeds relating to the project site for providing financial closure and more so, when Clauses 3.13.2 and 3.13.3. of the Request for Proposal provide that the finances raised by the petitioners are subject to the right of respondent Nos.1 and 2 to take reposition of the land, thereby relegating the right of the bankers to a subordinate position. He contended that the issue of title deeds and furnishing thereof raised by the petitioners is not an after-thought, and submitted that the petitioners are very much conscious of the need on the part of respondent Nos.1 and 2 to provide the title deeds of the land and to substantiate their contention that after receiving Letter of Award they had requested respondent Nos.1 and 2 to provide the title related documents, relied on the minutes of the meeting of the pre-bid conference held on 16.05.2008 and the letters, dated 21.11.2008, 05.01.2009 and 09.01.2009. He further submitted that in the Letter of Acceptance dated 21.10.2008 it is clearly stated that they would pay the balance amount of Rs.25.00 crores at the time of execution of Development Agreement and that performance security will be paid upon achieving the financial closure. He further submitted that even though the Request for Proposal and the Letter of Award do not speak about non-refundable of Rs.5.00 crores paid towards Project Development Fees, respondent Nos.1 and 2, contrary thereto have for the first time in the counter have taken a stand that the Project Development Fee paid by them is non-refundable. He further submitted that even though the Request for Proposal and the Letter of Award do not speak about non-refundable of Rs.5.00 crores paid towards Project Development Fees, respondent Nos.1 and 2, contrary thereto have for the first time in the counter have taken a stand that the Project Development Fee paid by them is non-refundable. He submitted that this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, can entertain writ petitions arising out of contractual matters particularly when there are no disputed questions of fact involved, and since no disputed questions of fact are involved, the petitioners are entitled to maintain this writ petition arising out of a contract and in support of this argument, he relied on the judgments of the apex Court in Kumari Shrilekha Vidyarthi vs. State of U.P. AIR 1991 SC 537 , Tata Cellular vs. Union of India AIR 1996 SC 11 , ABL International Ltd. vs. Export Credit Guarantee Corporation of India Limited (2004) 3 SCC 553 and Food Corporation of India v. SEIL Ltd. AIR 2008 SC 1101 , of the Bombay High Court in Kirloskar Pneumatic Co. Ltd. vs. National Thermal Power Corporation Ltd. AIR 1987 Bom 308 , of the Delhi High Court in Basic Tele Services Ltd. vs. Union of India AIR 2000 Del. 1 , Central Bank of India vs. Gour Nitya Industries Ltd. AIR 2008 Cal 207 and of the Calcutta High Court in Satav Infrastructure Pvt. Ltd. vs. Union of India AIR 2008 Pat 179 . The learned counsel for the petitioners while trying to explain the terms and conditions of the Request for Proposal contended that it is not the petitioners but respondent Nos.1 and 2 who have committed default of the conditions precedent and submitted that since the petitioners have not committed any default of the conditions, they are entitled to plead and ask the relief of their willingness to execute the project. The learned Advocate General appearing on behalf of respondent Nos.1 and 2 submitted that as per the Letter of Award, the petitioners have to execute the Development Agreement within a period of 60 days. However, on the request made by the petitioners, time was extended by 15 days. The petitioners instead of executing the Development Agreement before the expiry of the said date, again make a request for extension of time which was refused. However, on the request made by the petitioners, time was extended by 15 days. The petitioners instead of executing the Development Agreement before the expiry of the said date, again make a request for extension of time which was refused. As the petitioners despite extending the time, did not execute the Development Agreement and again sought time, respondent No.1, by operation of Clause 15 of the Letter of Award, cancelled the Letter of Award and no fault can be found with the impugned G.O. issued by respondent No.2, which merely reiterated the events of default committed by the petitioners, as highlighted by respondent No.1. He submitted that respondent Nos.1 and 2, as per Clause 3.5 of the Request for Proposal, are under an obligation to comply with the conditions precedent as on the conditions precedent fulfillment date, which date he contends has to be understood in the light of the definition of zero date. He submitted that the petitioners were required to execute the Development Agreement within 60 days from the date of Acceptance of Letter of Award, which was extended by 15 days and from that date zero date can fall within nine months but not later than nine months. He submitted that the difference between zero date and conditions precedent fulfillment date is only fifteen days, and by such calculation, respondent Nos.1 and 2 will have time up to 18.09.2009 to perform their obligation as per Clause 3.5 of Request for Proposal. He further submitted that the question of fulfillment of obligation on the part of respondent Nos.1 and 2 as per Clause 3.5(b) of Request for Proposal would arise only upon receipt of response from the Government of India with regard to payment of fee, and which fact was already brought to the notice of the petitioners vide Letter dated 29.11.2008 wherein they have expressed their readiness and willingness to pay the fee upon receipt of notice from the Government. Hence, he submitted that the petitioners cannot interlink the conditions precedent to be complied by them with that of the conditions precedent to be complied with by the respondents. He submitted that the petitioners have raised the dispute with respect to title deeds only on 05.01.2009 i.e. a day after the Letter of Award stood cancelled, and therefore, the said letter has no validity. He submitted that the petitioners have raised the dispute with respect to title deeds only on 05.01.2009 i.e. a day after the Letter of Award stood cancelled, and therefore, the said letter has no validity. He submitted that the person who accepted the Letter of Award namely K.J.B.B. Subrahmanyam is not an authorized signatory. He submitted that only two letters dated 20.11.2008 and 21.11.2008 which are not signed by the authorized signatory have raised title related issued. At any rate, he submitted that once the petitioners have accepted the Letter of Award unconditionally, they are not entitled to raise unnecessary and untenable issues, which are beyond the scope of Letter of Award and Request for Proposal, and have nothing to do with the performance of obligations by the petitioners as per the Letter of Award. He submitted that since the Letter of Award stood cancelled, the question of the petitioners expressing their readiness and willingness to go ahead with the project either on the same terms and conditions or as per the altered conditions. He further submitted that as per Clause 3.17.2, respondent No.1 is entitled to invoke the bid security. He submitted that as per Clause 3 of the Letter of Award, the petitioners are required to deposit Rs.30.00 crores as project development fee, while they have paid only Rs.5.00 crores, which is a significant event of default. He further submitted that the petitioners have not submitted the Memorandum and Articles of Association of the Special Purpose Vehicle for approval of respondent No.1 and they submitted the said documents for the first time only in the Court. He submitted that though this Court can examine non-statutory contractual matters, but having regard to the law laid down by the apex Court in ABL International Ltd. v. Export Credit Guarantee Corporation of India Limited and Food Corporation of India v. SEIL Ltd., this Court is not entitled to entertain the present writ petition, which involves examination of disputed questions of fact. In the absence of fraud and equity pleaded by the petitioners, they are not entitled to question the invocation of bank guarantee, and in support of this argument, he relied on judgment in Vinitec Electronics (P) Ltd. Vs. HCL Info Systems Ltd. ( 2008(1) SCC 544 ). Heard the learned counsel for the petitioners and the learned Advocate General for the respondents. HCL Info Systems Ltd. ( 2008(1) SCC 544 ). Heard the learned counsel for the petitioners and the learned Advocate General for the respondents. The principal question that arises for consideration in this writ petition is whether there is any arbitrariness or favouritism or mala fides in the action of respondent Nos. 1 and 2 in cancelling the Letter of Award issued to the petitioners? To consider this question, some of the facts, which are not in dispute, may be noted, and they run thus: Respondent No.2 owns land in an extent of Acs. 19.84 cents in and around A.P. Bhavan in New Delhi comprised in three sites – A.P. Bhavan site Acs. 8.42 cents; Old Nursing Hostel site Acs. 3.78 cents and Pataudi House site Acs.7.64 cents. They have decided to develop the same into Andhra Pradesh International Centre on Build, Operate and Transfer basis through Public Private Partnership Mode. For the purpose of developing those lands, respondent No.2 vide G.O. Ms. No. 423, dated 14.09.2005, nominated respondent No.1, namely M/s. Infrastructure Corporation of Andhra Pradesh Limited (INCAP) as their executing agency. Thereafter, respondent No.2, vide G.O. Ms. No. 436, dated 23.09.2005 constituted “Special Empowered Committee”. Thereafter, on the request made by respondent No.1, respondent No.2, issued G.O. Ms. No. 6, dated 12.07.2006 constituting a Technical Advisory Committee, for advising on matters of developing the project. On 07.11.2007, respondent No.1 notified “Expression of Interest-cum-Request for Qualification”. In response thereto, 14 developers, including the petitioners submitted their tenders. The Technical Advisory Committee, which considered the tenders, qualified the names of ten developers, including the petitioners for the purpose of issuance of Request for Proposal – Technical Document. Subsequently, the Technical Advisory Committee also selected them for issuance of Request for Proposal. Accordingly, the petitioners and others were issued Request for Proposal. After issuing the Request for Proposal, respondent No.1 conducted pre-bid meeting and claims to have cleared the doubts raised by the participants. The technical bids were opened on 31.05.2008, and the petitioners bid having been qualified, were recommended by the Technical Advisory Committee for issuance of Request for Proposal – Financial Document. Thereafter, based on the recommendations made by the Special Empowered Committee, respondent No.2 issued G.O. Ms. No. 38, dated 20.09.2009, approving issuance of Letter of Award in favour of the petitioners. In pursuance thereof, respondent No.1 issued Letter of Award dated 06.10.2008 in favour of the petitioners. Thereafter, based on the recommendations made by the Special Empowered Committee, respondent No.2 issued G.O. Ms. No. 38, dated 20.09.2009, approving issuance of Letter of Award in favour of the petitioners. In pursuance thereof, respondent No.1 issued Letter of Award dated 06.10.2008 in favour of the petitioners. The petitioners having received the Letter of Award, communicated their acceptance of the same vide their letter dated 21.10.2008. As per the terms and conditions of the Letter of Award, the petitioners were required to pay Rs.30.00 crores towards Development Fee upon acceptance of the Letter of Award and enter into Development Agreement and Licence Agreement within a period of 60 days from the date of acceptance of the Letter of Award. As the petitioners, among others, are said to have not paid the entire Development Fee and failed to execute the Development Agreement and Licence Agreement, despite extending time for execution by 15 days, respondent No.1 invoked Clause 15 of the terms and conditions of the Letter of Award and cancelled the same, and respondent No.2, reiterated the cancellation of the Letter of Award vide G.O. Ms. No. 8, dated 20.02.2009, impugned in the writ petition. From the admitted facts, as noted above, it is clear that the petitioners were only granted Letter of Award, and they did not enter into Development Agreement and Licence Agreement with respondent No.1. The contract in question imposes obligations on both the petitioners and respondent Nos. 1 and 2, which they are required to perform as per the terms and conditions thereof, and enumerates the consequences that follow in the event of their non-compliance by any of the parties. As one of the parties to the contract, namely the petitioners are said to have failed in complying with the conditions of the contract, the respondents have cancelled the contract. Thus, the contract in question is a pre-concluded contract. The law is well settled that matters relating to pre-concluded contract have to be examined only on the touchstone of arbitrariness. In this context, a reference be made to the judgment of the apex Court in Tata Cellular v. Union of India (1994) 6 SCC 651 , wherein it was held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. In this context, a reference be made to the judgment of the apex Court in Tata Cellular v. Union of India (1994) 6 SCC 651 , wherein it was held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. The apex Court further held that the duty of the Court in contractual matters is to confine itself to the question of legality. Its concern should be (1) whether a decision-making authority exceeded its powers? (2) committed an error of law, (3) committed a breach of the rules of natural justice, (3) reached a decision which no tribunal would have reached or (5) abused its powers. In the instance case, the petitioners except alleging arbitrariness in the action of respondent Nos. 1 and 2 in canceling the Letter of Award, have not attributed any favouritism or mala fides against respondent Nos. 1 and 2. Therefore, in the light of the settled legal principles, as noted above, it may be examined as to whether there was any arbitrariness in the action of respondent No.2, in issuing the impugned G.O., cancelling the Letter of Award. For appreciating this question, it would be appropriate to refer to some of the important Clauses in the Request for Proposal and Letter of Award. Respondent No.1 having accepted the bid of the petitioners, issued Letter of Award dated 06.10.2008 to the petitioners. As per Clause 14 thereof, the petitioners are required to communicate their acceptance of the Letter of Award. The petitioners having accepted the Letter of Award, vide their letter dated 20.10.2008, have communicated their unconditional acceptance of the Letter of Award to respondent No.1. The petitioners, as per the Letter of Award, are required to strictly adhere to the terms and conditions mentioned therein, and inter alia, the following conditions: 3. You shall have to pay the Project Development Expenses @ 3% of Project Cost as per the approved DPR or Rs. 30 crores whichever is higher through a Demand Drat drawn on any Scheduled Commercial Bank in favour of “The Vice Chairman and Managing Director, Infrastructure Corporation of Andhra Pradesh” payable at Hyderabad in the following manner: (a) Rs. 30 crores on acceptance of the Letter of Award. 30 crores whichever is higher through a Demand Drat drawn on any Scheduled Commercial Bank in favour of “The Vice Chairman and Managing Director, Infrastructure Corporation of Andhra Pradesh” payable at Hyderabad in the following manner: (a) Rs. 30 crores on acceptance of the Letter of Award. (b) The balance amount if any, so arrived based on the Project Cost as per the approved DPR shall be paid within 15 days from date of approval of DPR by INCAP 4. You shall have to incorporate a Special Purpose Vehicle (SPV) under the Companies Act, 1956, well before the execution of the Development Agreement and Licence Agreement for O & M. 5. You shall have to submit to INCAP the Memorandum and Articles of Associations of the registered SPV along with Certificate Incorporation and Certificate of Commencement of Business well before the execution of the Development Agreement. You shall also have to obtain prior approval of INCAP of the Memorandum and Articles of Associations of the SPV well before its incorporation. 8. You shall have to execute the Development Agreement and the Licence Agreement for O & M within 60 days from the date of submission of acceptance of Letter of Award by you. 10. You shall comply with all the Conditions Precedent as mentioned in the RFP document prior to the handing over all or any of the Project Site(s) to you. Similarly Government of Andhra Pradesh shall comply with the Conditions Precedent as mentioned in the RFP Document prior to the handing over all or any of the Project Site (s) to you. 15. In case of your failure to comply with any of the above terms and conditions within the stipulated time, unless extended, this Letter of Award shall stand withdrawn/cancelled without any notice of whatever nature and besides invoking the Bid Security as per the terms and conditions mentioned in the RFP Document. The Request for Proposal enumerates the events of default, which entail cancellation of the contract at any stage – before entering into Development Agreement, after entering into Development Agreement or during the course of execution of the Project. Some of the events of default are rectifiable while some are not rectifiable. In the case of events of default that are rectifiable, the petitioners can expect a notice from respondent Nos. Some of the events of default are rectifiable while some are not rectifiable. In the case of events of default that are rectifiable, the petitioners can expect a notice from respondent Nos. 1 and 2 before any action for cancellation of the contract is taken, inasmuch as they can be rectified and cured by payment of penalties/damages, but in the case of non-rectifiable events of default, which are termed as significant events of default, the petitioners cannot expect any notice from respondent Nos. 1 and 2, for they are entitled to cancel the contract, for any one or more or all of the significant events of default committed by the petitioners. Clause 4.1 deals with the events of default by the SPV/Developer after issue of Letter of Award and before execution of the Development Agreement, Clause 4.2.1 deals with the significant events of default during the Project Implementation Period, while Clause 4.2.2 deals with significant events of default during the Operations Period. Default by the Developer/SPV of any of the events enumerated in Clauses 4.1, 4.2.1 and 4.2.2, directly enable respondent Nos. 1 and 2 to cancel the contract without any notice at any point of time after issue of Letter of Award and before execution of the Development Agreement, during the Project Implementation Period or During the Operations Period. While Clause 4.3 deals with other obligations of SPV/Developer failure of which amounts to defaults and are subject to rectification and payment of penalties/damages. The events of default enumerated in Clause 4.3 can be rectified on payment of penalties/damages. In the case of events of default enumerated in Clause 4.3, the defaults can be rectified by the parties by exchange of notices/replies and upon payment of penalties/damages. Respondent No.2, issued the impugned G.O., cancelling the Letter of Award dated 06.10.2009, issued in favour of the petitioners, on the ground that they committed the following events of default: i) Failure of NCC Consortium to comply with the terms and conditions as mentioned in the Letter of Award dated 06.10.2008 issued to NCC Consortium. ii) Default to execute the Development Agreement and Licence Agreement with INCAP within the specified time of 75 days (including extended period of 15 days) from the date of acceptance of LoA. iii) Default to submit performance security (Rs.100.00 crores) before the execution of the DA and LA for the project. ii) Default to execute the Development Agreement and Licence Agreement with INCAP within the specified time of 75 days (including extended period of 15 days) from the date of acceptance of LoA. iii) Default to submit performance security (Rs.100.00 crores) before the execution of the DA and LA for the project. iv) Default of payment of Rs.25.00 crores of the Project Development Expenses to INCAP as specified in RFP document within the time as specified in the LoA. So far only Rs.5.00 crores is paid. v) Default to incorporate and obtain certificates of commencement of business for the Special Purpose Vehicle (SPV) well before the execution of the DA and LA and obtain approval of INCAP on the Memorandum of Articles of Association of the SPV. vi) Default of submission of the required legal documentation in favour of the authorized persons to negotiate and execute the DA and LA. Since respondent Nos. 1 and 2 have cancelled the Letter of Award on the ground that they have committed significant events of default, which entail cancellation of the Letter of Award, a reference be made to Clause 4.1 of the Request for Proposal, which details the significant events of default, and they read thus: Clause 4.1 Default by the SPV/Developer After issue of Letter of award and before execution of the Development Agreement: Each of the following will be considered as significant event of default by SPV and/or Developer leading to cancellation of LOA and has consequences of forfeiture of Bid Security and/or Performance Security as the case may be. i. Failure of the Developer to submit unconditional acceptance of the terms and conditions specified in Letter of Award within the time specified. ii. Failure to pay the Project Development Expenses and other Payments to INCAP as specified in this RFP Document within the time as specified in the LOA on acceptance of LOA and before the execution of the Development Agreement. iii. Failure to incorporate and obtain certificate of commencement of business for the Project Company (SPV) well before the execution of the Development Agreement and obtain approval from INCAP of the Memorandum and Articles of Association of the SPV. iv. Failure to incorporate and establish as per the relevant rules and regulations an International Standard Socio-Cultural Club. iii. Failure to incorporate and obtain certificate of commencement of business for the Project Company (SPV) well before the execution of the Development Agreement and obtain approval from INCAP of the Memorandum and Articles of Association of the SPV. iv. Failure to incorporate and establish as per the relevant rules and regulations an International Standard Socio-Cultural Club. v. Failure to submit the required legal documentation to the satisfaction of INCAP in favour of the authorized persons to negotiate and execute the Development Agreement. vi. Failure to submit Detailed Project Report to the satisfaction of INCAP within 45 days from the date of issue of LOA. vii. Failure to submit Performance Security before the execution of the Development Agreement for the Project. viii. Failure to execute the Development Agreement with INCAP within the specified time. Whether there is any arbitrariness or favouritism in the action of respondent Nos. 1 and 2 in cancelling the Letter of Award by reason of the impugned G.O., particularly on the events of default as mentioned therein, may be examined and considered in the light of the relevant Clauses in the Request for Proposal and terms and conditions of the Letter of Award, and the actions taken by the respective parties in complying with their part of their obligations. (1) Failure of NCC Consortium to comply with the terms and conditions as mentioned in the Letter of Award dated 06.10.2008 issued to NCC Consortium. This event of default pointed out in the impugned G.O. is general in nature, and the answer to the same, would be found while examining and considering the other alleged events of default, pointed out in the impugned G.O. (2) Default to execute the Development Agreement and Licence Agreement with INCAP within the specified time of 75 days (including extended period of 15 days) from the date of acceptance of LoA. As per Clause 3.2.16(iv) of the Request for Proposal and Clause 8 of the Letter of Award, the petitioners are required to execute the Development Agreement and the Licence Agreement to Operate and Maintain within 60 days from the date of submission of acceptance of Letter of Award. The petitioners, admittedly, conveyed their acceptance of the Letter of Award vide their letter dated 21.10.2008. As per the above-mentioned clauses, the petitioners are required to execute the Development Agreement and Licence Agreement within 60 days from the said date. The petitioners, admittedly, conveyed their acceptance of the Letter of Award vide their letter dated 21.10.2008. As per the above-mentioned clauses, the petitioners are required to execute the Development Agreement and Licence Agreement within 60 days from the said date. If 60 days from the said date is to be counted, the 60 days period would expire on 19.12.2008. However, the petitioners did not execute the Development Agreement and Licence Agreement either within the said date or on that date, and instead they addressed letter dated 19.12.2008, requesting respondent No.1 to grant another 60 days time for entering into draft Development Agreement and Licence Agreement. Respondent No.1 having considered the said request of the petitioners, vide their letter dated 20.12.2008, granted only 15 days time for executing the Development Agreement and Licence Agreement, and the said extended period of 15 days expired on 03.01.2009. The petitioners, in spite of extending the time, have not execute the Development Agreement and Licence Agreement, and in stead again vide their letter dated 02.01.2009, requested respondent No.1 to grant another 60 days time to execute the Development Agreement and Licence Agreement, but the said request of the petitioners, vide their letter dated 03.01.2009, was rejected by respondent No.1. Be that as it may, it is the contention of the petitioners that fulfilment of conditions is a sine qua non for execution of Development Agreement and Licence Agreement by the petitioners, and it is their case that respondent Nos. 1 and 2 have not fulfilled their part of the conditions precedent i.e. the condition in Clause 3.5(a) which prescribes respondent Nos. 1 and 2 to complete the documentation with the Government of India with respect to title related matters of the Project Sites, and (b) make payment of statutory dues to the respective local authorities and also lease rental amounts due to Government of India w.r.t. Project Site as on the date of Conditions Precedent Fulfillment Date, and therefore, they have not executed the Development Agreement and Licence Agreement. Clause 3.4. prescribes conditions precedent for the Developer, while Clause 3.5 prescribes conditions precedent for GOAP/INCAP. Since it is the contention of the petitioners that respondent Nos. Clause 3.4. prescribes conditions precedent for the Developer, while Clause 3.5 prescribes conditions precedent for GOAP/INCAP. Since it is the contention of the petitioners that respondent Nos. 1 and 2, have not fulfilled their part of the conditions precedent, a reference to Clause 3.5, which deals with conditions precedent for GOAP/INCAP, may be noticed, which reads thus: 3.5 Conditions Precedent for GoAP/INCAP The GoAP/INCAP shall a) Complete Documentation with Government of India w.r.t. Title related matters of the Project Site. b) Make payment of Statutory Dues to the respective Local Authorities and also Lease Rental amounts due to Government of India w.r.t. Project Site as on the date of Conditions Precedent Fulfilment Date. From a reading of the above clause, it becomes clear that GOAP/INCAP are required to fulfil their part of the conditions precedent as on the date of conditions precedent fulfilment date. There is nothing to show that before execution of the Development Agreement and Licence Agreement, both the petitioners and respondent Nos. 1 and 2 have to comply with the conditions precedent, prescribed for them in Clause 3.4 and 3.5 respectively. Clause 3.5 of the Request for Proposal does not prescribe any outer time limit and it is an open-ended clause. There is nothing in Clause 3.5 of the Request for Proposal that would show that only after compliance of the conditions mentioned therein, the stage of Clause 3.6, which provides certain events to be complied with by the petitioners, would be reached. Hence, it is manifest that Clauses 3.4, 3.5 and 3.6 of the Request for Proposal, operate independently. Be that as it may, the Request for Proposal does not define “the conditions precedent fulfilment date”. However, the meaning thereof, can be found from the definition of “Zero Date”, which is defined in the Request for Proposal as follows: Zero Date means a date within a period of 15 days from the date on which the conditions precedent are satisfied that is not later than nine months from the date of execution of the Development Agreement. A close reading of the definition of “Zero Date”, would make it clear that “zero date” would fall within a period of 15 days from the date the conditions precedent are satisfied which is not later than nine months from the date of execution of the Development Agreement. A close reading of the definition of “Zero Date”, would make it clear that “zero date” would fall within a period of 15 days from the date the conditions precedent are satisfied which is not later than nine months from the date of execution of the Development Agreement. That means, the conditions precedent are to be satisfied within a period of and not later than nine months from the date of execution of the Development Agreement, while the zero date would fall within a period of 15 days from the date on which the conditions precedent are satisfied. Thus, it is clear that respondent Nos. 1 and 2 are required to satisfy the conditions precedent within a period of nine months and not later than the said nine months from the date of execution of the Development Agreement, while the zero date for executing the project, would fall within a period of fifteen days from the date the conditions precedent are satisfied. The question of respondent Nos. 1 and 2 satisfying their conditions precedent would arise only after the petitioners execute the Development Agreement, and in fact, respondent Nos. 1 and 2 would have nine months time from the date of execution of the Development Agreement to satisfy the conditions precedent. Therefore, the petitioners cannot be allowed to contend that because respondent Nos. 1 and 2 have not fulfilled their conditions precedent as prescribed in Clause 3.5, they have not executed the Development Agreement and Licence Agreement. It is the contention of the petitioners that even though they raised title related issues on several occasions, respondent No.1 has not responded to the same. This contention of the petitioners cannot be accepted. The petitioners communicated their unconditional acceptance of the Letter of Award dated 06.10.2008 vide their letter dated 20.10.2008. Neither in the letter of acceptance of the Letter of Award dated 20.10.2008 nor in their letter dated 21.10.2008 (whereunder they paid Rs.5.00 crores towards Development Fee), not in their letters dated 04.11.2008, 18.12.2008 and 02.01.209, wherunder they have requested for extension of time, the petitioners have raised any title related disputes in relation to the project sites. The petitioners, for the first time in their letter dated 05.01.2009, and that too after expiry of the time provided i.e. 60 days and the extended period of 15 days, which expired on 03.01.2009, has raised title related disputes. The petitioners, for the first time in their letter dated 05.01.2009, and that too after expiry of the time provided i.e. 60 days and the extended period of 15 days, which expired on 03.01.2009, has raised title related disputes. Since the petitioners failed to execute the Development Agreement and Licence Agreement, even within or before the extended period of 15 days, and the said event being a significant default as provided in Clause 4.1(viii) of the Request for Proposal and Clause 8 of the Letter of Award, respondent No. 1 invoked Clause 15 of the Letter of Award, which provides for automatic withdrawal/cancellation of the Letter of Award for non-compliance of any of the terms and conditions of the Letter of Award, has withdrawn the Letter of Award dated 06.10.2008 granted to the petitioners. Having cancelled the Letter of Award, requested respondent No.2 to issue necessary orders, and accordingly, acting on such request of respondent No.1, respondent No.2 issued the impugned G.O. cancelling the Letter of Agreement, and no arbitrariness can be alleged against such action of respondent Nos. 1 and 2. Since the Letter of Award dated 06.10.2008 granted to the petitioners was cancelled after expiry of the extended period for executing the Development Agreement, any amount of correspondence/letters addressed by the petitioners to respondent No.1 would be of no consequence. (3) Default to submit performance security (Rs.100.00 crores) before the execution of the DA and LA for the project. Submission of Performance Security is an event, which would follow the Development Agreement and Licence Agreement. The submission of Performance Security, is a condition subsequent to Development Agreement, and is required to be complied with by the Developer in terms of Clause 3.6(i) of the Request for Proposal. Admittedly, the petitioners have not executed the Development Agreement and Licence Agreement, and since the petitioners have not executed the Development Agreement and Licence Agreement, the stage of the petitioners submitting the Performance Security, has not arisen. Therefore, alleging this event, as an event of default by respondent No.2 in the impugned G.O., which event was required to be complied by the petitioners after executing the Development Agreement and Licence Agreement, is redundant, inasmuch the petitioners have not complied with the fundamental event i.e. they have not executed the Development Agreement and Licence Agreement, within the specified and extended time. (4) Default of payment of Rs. (4) Default of payment of Rs. 25.00 crores of the Project Development Expenses to INCAP as specified in RFP document within the time as specified in the LoA. So far only Rs. 5.00 crores is paid. As per Clause 3.14 of the Request for Proposal and Clause 3 of the Letter of Award dated 06.10.2008, the petitioners upon acceptance of the Letter of Award, are required to pay Development Expenses @ 3% of the Project Cost as per the approved DPR or Rs.30.00 crores, which ever is higher. However, the petitioners upon accepting the Letter of Award, the acceptance of which was communicated to respondent No.1 vide letter dated 20.10.2008, have not paid the entire amount of Rs. 30.00 crores towards Development Fee, and instead requested respondent No.1 to consider payment by the petitioners of the said amount, as per the schedule mentioned therein i.e. (Rs. 5.00 crores upon handing over all documents establishing title over A.P. Bhavan; Rs.5.00 crores upon finalization of Development Agreement; Rs.5.00 crores upon finalization of the DPR; and Rs.15.00 crores upon financial closing). Though the petitioners have communicated such schedule of payment, they however, on the next day i.e. 21.10.2008, have paid an amount of Rs. 5.00 crores to respondent No.1 by way of cheque, though it was required to be paid by demand draft, and informed respondent No.1 that they would pay the balance amount of Rs. 25.00 crores at the time of executing Development Agreement. This is evident from their letter dated 21.10.2008 addressed to respondent No.1, which reads as follows: As per the terms of Clause 3 of the aforesaid Letter of Award, we are enclosing herewith a cheque bearing No. 039348, dated 21.10.2008 for Rs.5,00,00,000/- (Rupees five crores only) drawn on State Bank of India, Banjara Hills Branch, in favour of the Vice Chairman and Managing Director, Infrastructure Corporation of Andhra Pradesh, payable at Hyderabad. We would request you to kindly note that the balance amount of Rs.25,00,00,000/- (Rupees twenty five crores only) will be remitted at the time of execution of Development Agreement and the Performance Security shall be submitted at the time of achieving financial closure. We would request you to kindly accept the same. We would request you to kindly note that the balance amount of Rs.25,00,00,000/- (Rupees twenty five crores only) will be remitted at the time of execution of Development Agreement and the Performance Security shall be submitted at the time of achieving financial closure. We would request you to kindly accept the same. Respondent No.1, having received the above said letter, vide their letter dated 30.10.2008, informed the petitioners that their request for payment of Project Development Fee and submission of Performance Security at a later stage are not agreeable, and further communicated the acceptable terms of payment for compliance i.e. (a) Project Development expenses to be paid in the form of Demand Draft within 30 days from the receipt of the letter and (b) Performance Security in the form of Bank Guarantee to be submitted on or before the date of execution of the Development Agreement. The petitioners having received the said letter, vide their letter dated 04.11.2008, informed respondent No.1 that they will submit performance security in the form of Bank Guarantee on the date of execution of the Development Agreement. However, in spite of extending the time, the petitioners have neither entered into the Development Agreement and Licence Agreement, nor paid the balance amount of Rs.25.00 crores towards Development Fee. Since the petitioners have not paid the total Development Fee, as required by Clause 3.14 of the Request for Proposal and Clause 3 of the Letter of Award, having regard to Clause 4.1(ii) of the Request for Proposal, the petitioners can without any doubt be said to have committed significant event of default, entitling the petitioners to invoke Clause 15 of the Letter of Award to cancel the same. Therefore, no arbitrariness can be found in the action of respondent Nos. 1 and 2 in cancelling the Letter of Award by mentioning this event as one of the significant events of default committed by the petitioners. (5) Default to incorporate and obtain certificates of commencement of business for the Special Purpose Vehicle (SPV) well before the execution of the DA and LA and obtain approval of INCAP on the Memorandum of Articles of Association of the SPV. (5) Default to incorporate and obtain certificates of commencement of business for the Special Purpose Vehicle (SPV) well before the execution of the DA and LA and obtain approval of INCAP on the Memorandum of Articles of Association of the SPV. Though the petitioners are said to have not obtained certificates of incorporation and commencement of business for the Special Purpose Vehicle before execution of the Development Agreement and Licence Agreement and also failed to approval of respondent No.1 on the Memorandum of Articles of Association of the SPV, the fact remains, at the time of hearing of the writ petition, the counsel for the petitioners submitted that Special Purpose Vehicle by name NCC International Convention Centre Limited, has been incorporated, and to evidence that he filed xerox copies of the Certificate of Incorporation dated 05.12.2008 and Certificate for Commencement of Business dated 23.03.2009 and the Memorandum of Association of the Special Purpose Vehicle dated 02.12.2008. Except the Certificate of Incorporation dated 05.12.2008 and the Memorandum of Association of the Special Purpose Vehicle dated 02.12.2008, the petitioners could not have produced the Certificate of Commencement of Business in time, even if they were to execute the Development Agreement and Licence Agreement, in as much as the Certificate of Commencement of Business is dated 23.03.2009. Since the petitioners have not executed the Development Agreement and Licence Agreement itself, the production of copies of these documents by the petitioners before this Court, which were required to be placed before respondent No.1 before execution of the Development Agreement and Licence Agreement, are of no avail. (6) Default of submission of the required legal documentation in favour of the authorized persons to negotiate and execute the DA and LA. During the course of hearing, the counsel for the petitioner filed xerox copy of the Power of Attorney for signing of Bid dated 30.07.2008, whereunder Mr. K.J.B.V. Subrahmanyam, was constituted, nominated, appointed and authorized to act in connection with or incidental to the bid. In view of this, it cannot be said that the petitioners failed to submit the required legal documentation authorizing one of their representatives to negotiate and execute the Development Agreement and Licence Agreement. The events of default, committed by the petitioners, as discussed above, being significant events of default as enumerated in Clause 4.1 of the Request for Proposal, the default of which enables respondent Nos. The events of default, committed by the petitioners, as discussed above, being significant events of default as enumerated in Clause 4.1 of the Request for Proposal, the default of which enables respondent Nos. 1 and 2 to cancel the Letter of Award, and the petitioners having not alleged any mala fides or favouritism against respondent Nos. 1 and 2 in cancelling the Letter of Award, having regard to the law laid down by the apex Court in its various judgments, no fault can be found with the action of respondent Nos. 1 and 2 in cancelling the Letter of Award without issuing any notice to the petitioners. Even though the petitioners expressed their difficulty in arranging the money due to economic slow down and recession in the market, the fact remains, the market conditions which prevailed then are prevailing even now and the Banks have also not changed their policy of lending. At any rate, this reason cannot be taken as a ground to enable the petitioners to make less payment or delayed payment contrary to the terms and conditions of the contract/Request for Proposal/Letter of Award. Therefore, this contention of the petitioner does not merit any consideration and is rejected. The learned counsel for the petitioners even though contended that respondent No.1 is not entitled to encash the bank guarantee, but in view of the fact that this Court has upheld the action of respondent Nos. 1 and 2 in cancelling the Letter of Award, this issue raised by the petitioners need not be considered. For the foregoing reasons, this Court finds no merit in the writ petition, and the same is accordingly dismissed. No costs.