JUDGMENT : Akil Abdul Hamid Kureshi, J. 1. The petitioner has prayed for a direction to the respondents to release an amount of security deposit of Rs. 39.85 lacs (round about) with interest. The litigation has checkered history. 2. Briefly stated facts are as under:- Petitioner is a proprietorship concern and is engaged in the business of exhibiting advertisements on bill-boards and kiosk at various places in the State of Gujarat. Vadodara Municipal Corporation had awarded a contract to the petitioner for exhibiting such advertisements on the electric poles within the Corporation limit of the city of Baroda. For awarding the contract at different rates the city was divided into four zones. For Zone No. 1 the contract period was three years commencing from 27.10.2009. For Zone No. 2 the contract period was three years commencing from 18.3.2010. For Zone No. 3 the contract period was three years commencing from 17.10.2011 and for Zone No. 4 the contract period was three years commencing from 20.09.2011. 3. During the course of such period serious disputes arose between the petitioner and the Corporation. The Corporation therefore passed an order dated 17.8.2012 and terminated the petitioner's contract for all four zones. On 13.9.2012, the Corporation passed further order debarring the petitioner from doing any business with the Corporation for a period of three years. 4. The petitioner filed Special Civil Application No. 14541 of 2012 challenging such orders. The High Court set aside the order of blacklisting on the ground that the same was passed without hearing. Insofar as order of termination of contract is concerned, the court allowed the petitioner to make a representation. The petition was disposed of on 9.11.2012 accordingly. 5. The petitioner filed writ petitions being Special Civil Application Nos. 16743 and 16744 of 2012 and again questioned the legality of the order of the Corporation of premature termination of the contract with respect to zones No. 3 and 4, since by then the period of contract for zones No. 1 and 2 had already come to an end. In such petitions the High Court on 20.12.2012 while issuing rule making it returnable on 28.1.2013 gave following directions:- "The respondents are restrained from inviting fresh tenders till the returnable date and if any fresh tenders have been invited, no further action be taken on such tenders. D.S. Permitted." 6. In such petitions the High Court on 20.12.2012 while issuing rule making it returnable on 28.1.2013 gave following directions:- "The respondents are restrained from inviting fresh tenders till the returnable date and if any fresh tenders have been invited, no further action be taken on such tenders. D.S. Permitted." 6. This order was clarified by an order dated 7.1.2013 passed below note for speaking to minutes, in which the Court granted interim relief in terms of para 8(C) of the petition. In such paragraph the petitioner had prayed for an injunction against the implementation, execution and operation of the order passed by the Corporation terminating the contracts and with the further direction not to obstruct the petitioner from placing advertisements on the electric poles on all four zones. 7. The petitioner filed yet another petition being Special Civil Application No. 3737 of 2013 questioning the action of the Corporation to invite fresh tenders for the same purpose. The interim relief earlier granted by the High Court continued from time to time till in a common order dated 9.4.2013 came to be passed in earlier petition as well as in fresh Special Civil Application No. 3737 of 2013, whereby the Court provided as under:- "After hearing learned counsel for the parties, we are satisfied that in all these writ petitions, interim relief is required to be granted. Therefore, we are passing fresh orders of stay. The respondents are restrained from inviting fresh tenders till the next date of hearing and if any fresh tenders have been invited, no further action be taken on such tenders." 8. This order was clarified by the High Court by a further order dated 13.8.2013 that the stay against tenders for advertisements for zones No. 1 and 2 does not survive. However, regarding fresh tenders for zones No. 3 and 4 the Court deferred its decision for a later date. At that stage, it was conveyed by the counsel for the Corporation that the Corporation may consider withdrawing the order of termination so that contractor be continued enabling the Corporation to earn revenue. 9. When such legal battle was going on, it appears from the record that the parties tried to resolve the dispute more amicably. In April, 2013 the Municipal Commissioner, Vadodara, conveyed to the Standing Committee that multiple disputes concerning the contracts in question are pending before various courts. 9. When such legal battle was going on, it appears from the record that the parties tried to resolve the dispute more amicably. In April, 2013 the Municipal Commissioner, Vadodara, conveyed to the Standing Committee that multiple disputes concerning the contracts in question are pending before various courts. It was pointed out that the petitioner had filed Special Civil Application No. 3737 of 2013 seeking releasing of the security deposit of Rs. 53.48 lacs (round about) after adjusting pending license fee of Rs. 14.06 lacs (round about). He had shown willingness to withdraw all proceedings. It was pointed out that tenders were invited for other zones for which highest offer of Rs. 16.51 lacs was received. He therefore suggested that if this dispute can be resolved, the Corporation can start earning monthly income of Rs. 16.51 lacs. He, therefore, recommended that all proceedings be resolved. The petitioner may withdraw the petitions and pending suits. The Corporation may drop the blacklisting and return the security deposit to the petitioner so that fresh contract can be awarded. 10. This proposal was considered by the Standing Committee during its meeting dated 27.6.2013 and approved the same. Whatever be the reason, this specific proposal was not acted upon. Further negotiations seem to have taken place between the petitioner and the Corporation. The petitioner thereupon placed its proposal in writing under communication dated 21.8.2013 which reads as read:- "To, Shri Manish Bhardwajji, Municipal Commissioner, Vadodara Municipal Corporation Settlement proposal in SCA Nos. 16742-44/12 and 3737/13 Respected Sir, In connection with SCA Nos. 16742-16744/2012 and SCA No. 3737/13, we submit the following proposal for your consideration: (i) For Zone 3, we shall pay rent of Rs. 375/- per month per pole for a total of 1036 poles for the period 17.10.11 to 17.8.12 and again for the period 22.1.13 to 9.4.13. (ii) For Zone 4, we shall pay rent of Rs. 375/- per month per pole for a total of 872 poles for the period 20.9.11 to 17.8.12 and again for the period 22.1.13 to 9.4.13. (iii) For Zone 1, we shall rent at the rate of Rs. 500/- per pole per month for a total of 782 poles for the period 27.10.09 to 17.8.12. (iv) For Zone 2, we shall pay rent at the rate of Rs. 375/- per pole per month for a total of 614 poles for the period 18.3.10 to 17.8.12. (iii) For Zone 1, we shall rent at the rate of Rs. 500/- per pole per month for a total of 782 poles for the period 27.10.09 to 17.8.12. (iv) For Zone 2, we shall pay rent at the rate of Rs. 375/- per pole per month for a total of 614 poles for the period 18.3.10 to 17.8.12. Our security deposit for all these four contracts is lying with the Corporation. We would request you to adjust the amount payable by us against the same and intimate us if there is any difference amount to be paid by us. If the amount of security deposit is in excess of what has to be paid by us, we trust that you would refund the same to us. Our contracts for Zone 3 and Zone 4 have been terminated by the Corporation. Presently there is no stay of the court on the said termination orders. We would request you to kindly cancel the contract by mutual consent. We shall withdraw our petitions from the High Court challenging the termination orders. We also undertake to withdraw the petition challenging the new tender notice of 14.9.12 and get the stay order on award of contract to new party withdrawn from the Court. In return, we would request you to kindly drop the proceedings initiated by you for blacklisting us and oblige. Kindly convey your acceptance of our proposal." 11. This proposal was accepted by the Corporation and was so conveyed to the Court when the said petitions were taken up for further hearing on 23.8.2013. The Court therefore disposed of all the petitions in the following terms:- "Special Civil Application No. 3737 of 2013 is pertaining to issuance of fresh tender notice. Special Civil Applications No. 16742 of 2012, 16743 of 2012, and 16744 of 2012 pertain to termination of contract. Learned advocate Mr. Maulik G. Nanavati places a photocopy of communication dated 21.08.2013 received from Sun Communications, Vadodara. The same is taken on record. The learned advocate further states that proposal made by the said communication is acceptable to the respondent-Municipal Corporation provided the petitioner in all these petitions complies with the said proposal. 2. Proprietor of Sun Communications, Mr. Learned advocate Mr. Maulik G. Nanavati places a photocopy of communication dated 21.08.2013 received from Sun Communications, Vadodara. The same is taken on record. The learned advocate further states that proposal made by the said communication is acceptable to the respondent-Municipal Corporation provided the petitioner in all these petitions complies with the said proposal. 2. Proprietor of Sun Communications, Mr. Kiranbhai Vasantrav Kadam is personally present before the Court and who assures the Court that Sun Communications will abide by all the provisions of the aforesaid communication dated 21.08.2013, which is under his signature. 3. In view of the fact that the proposal made by the petitioner is accepted by the respondent-Corporation, the petitioner does not have any surviving grievance at this stage. In view of that the Special Civil Applications are not pressed. The same are disposed of accordingly. Rule is discharged. Interim relief is vacated. No order as to cost. 4. Consequently, Civil Applications No. 1947 of 2013 in Special Civil Application No. 16743 of 2012 and Civil Application No. 1945 of 2013 in Special Civil Application No. 16744 of 2012, preferred by the Municipal Corporation for vacating interim relief granted on 20.12.2012 in Special Civil Applications No. 16743 of 2012 and 16744 of 2012, do not survive. The said Civil Applications stand disposed of accordingly." 12. Despite such agreement between the parties disputes refused to die down. The Corporation did not release the security deposit after adjustment and the petitioner thereupon had to file the present petition. The central controversy that arises in this fresh round of litigation is with respect to the precise terms of the agreement between the petitioner and the Corporation. According to the Corporation, the previous sum of Rs. 14.06 lacs of unpaid license fees did not take into consideration the period upto 9.4.2013 till which the petitioner enjoyed interim relief from the High Court against the Corporation disturbing the petitioner's exhibition of advertisements at least in zones No. 3 and 4. This however is not directly relevant for our purpose, since this formula was never acted upon. What is of essence is that according to the Corporation, in the offer letter dated 21.8.2013 made by the petitioner which was accepted by the Corporation two elements of charges are not accounted for. First is the escalation clause contained in the contract and second is with respect to service tax. What is of essence is that according to the Corporation, in the offer letter dated 21.8.2013 made by the petitioner which was accepted by the Corporation two elements of charges are not accounted for. First is the escalation clause contained in the contract and second is with respect to service tax. The Corporation therefore contends before us that in addition to the charges that the petitioner agreed to pay to the Corporation for compromise, the petitioner must pay further rental charges on the basis of price escalation and service tax. According to the petitioner, the sum payable under the said offer letter dated 21.8.2013 which was accepted by the Corporation comes to Rs. 13,62,770/-. According to the petitioner, therefore the Corporation should after adjusting such sum from the security deposit of Rs. 53,49,298/- should refund the rest i.e. Rs. 39,85,528. When the Corporation refused to do so, this petition had to be filed. On the other hand, the Corporation computes the recoverable sum as per this formula added by the escalation and service tax charges which according to the Corporation comes to Rs. 38,18,827/-. During the pendency of this petition the difference admitted by the Corporation of Rs. 14,67,471/- was paid over to the petitioner and towards disputed amount the Corporation has been ordered to be deposited before the registry of this Court a sum of Rs. 25 lacs. 13. Learned counsel Mr. Dipen Desai for the petitioner submitted that the petitioner had given offer in writing upon which the petitioner would compromise all the disputes and withdraw all the proceedings initiated by the petitioner against the Corporation. The Corporation had accepted such compromise formula. It now cannot recover any additional charges, either in the guise of service tax or escalation clause. On the other hand, Mr. Maulik Nanavati for the Corporation opposed the petition contending that by accepting the offer the Corporation did not mean to waive the legally recoverable charges. In any case the period of contract for zones No. 1 and 2 was over. The petitioner's liability to pay according to such contract has been crystallized. The petitioner has also paid such charges with escalation and service tax. Regarding zones No. 3 and 4 also the contract clearly envisages price escalation every year. The petitioner cannot pay the rental charges at the base rate. 14. We must split the consideration of the rival contentions in two parts. The petitioner has also paid such charges with escalation and service tax. Regarding zones No. 3 and 4 also the contract clearly envisages price escalation every year. The petitioner cannot pay the rental charges at the base rate. 14. We must split the consideration of the rival contentions in two parts. First one would be with respect to recovery of revised charges as per escalation clause. It is undisputed that the contract contained provision for revising the rental charges every year for the total period of three years of contract. Nevertheless, it is not unknown to law that the parties can come to terms independent of what may have been initially agreed. If out of free will and with conscious decision two sides present the compromise formula which is also accepted by the Court, the question of why it was entered into becomes secondary. 15. In the present case, we may recall that the petitioner had launched various legal proceedings against the Corporation. Besides filing civil suits the petitioner had filed four petitions before the High Court questioning the action of the Corporation of terminating the contract of the petitioner, blacklisting the petitioner agency and thereafter inviting fresh tenders for advertisement. The petitioner had also obtained injunction against termination of contract and against the Corporation inviting fresh tenders. It was for this reasons that, as noted above, the Commissioner put a detailed note before the Standing Committee suggesting that the Corporation is losing revenue of Rs. 16.51 lacs every month. If the petitioner therefore withdraws all proceedings, the Corporation may consider dropping the blacklisting and releasing the security deposit after adjusting Rs. 14.06 lacs of unpaid rental dues. 16. The petitioner made a firm offer in writing on 21.8.2013 in which it was conveyed to the Corporation that he would pay at specified rates for specified zones for the number of electric poles for which the petitioner was allowed to exhibit the advertisements. It was this offer which the Corporation accepted. If the Corporation had any intention of applying escalation as per the original contract, the Corporation either had to reject the offer or make a counter offer which the petitioner would or would not have accepted. However, the Corporation having accepted the written offer of compromise made by the petitioner, now cannot read an escalation clause out side of such compromise formula. However, the Corporation having accepted the written offer of compromise made by the petitioner, now cannot read an escalation clause out side of such compromise formula. This is so because the petitioner had conveyed in black and white the rate at which the rental charges would be recoverable by the Corporation during the period specified in such offer letter. The offer of the petitioner was unambiguous. 17. Why did the Corporation agree to such term is not necessary for us to go into. The Corporation itself had considered multiple reasons, such as loss of revenue of Rs. 16.51 lacs every month and multiple pending legal disputes. Quite apart from the Corporation suffering such loss, the petitioner's claim of illegal termination of contract was also pending before the Court. What would have been outcome of such challenge is not possible nor necessary for us to predict. 18. If due to such reasons the Corporation in its conscious decision accepted the petitioner's offer of payment of rent at specified rate in view of which the petitioner would withdraw all the proceedings against the Corporation, the Corporation now cannot apply another formula for computing the unpaid rental charges. 19. This discussion would cover rentals for zones No. 3 and 4 only where during the currency of the contract period High Court had granted interim protection and rental charges have remained unpaid. Regarding zones No. 1 and 2 we are informed by the counsel for the Corporation that the petitioner had already made payments on rental charges with escalation and service tax till 17.8.2012, the date on which the contract termination order was passed. There is no intention in the offer letter of the petitioner that such amounts would be refunded by reopening entered transactions. 20. We may now address the question of service tax. The offer letter dated 21.8.2013 does not make any mention of service tax and must therefore be seen out side of such an offer. What we have concluded above refers to the rental charges and not the service tax. The offer letter is silent and refers to rental payable by the petitioner to the Corporation. If other than the rental charges, there is any other tax liability upon the petitioner, he must separately pay the same. What we have concluded above refers to the rental charges and not the service tax. The offer letter is silent and refers to rental payable by the petitioner to the Corporation. If other than the rental charges, there is any other tax liability upon the petitioner, he must separately pay the same. Under the circumstances, the Corporation must be allowed to recover such charges on the computation of unpaid rentals to be paid by the petitioner to the Corporation as per offer letter dated 21.8.2013. 21. Under the circumstances, the petition is allowed in part. The Corporation shall recalculate the petitioner's liability to pay rental for zones Nos. 3 and 4 as per the following formula. "(i) For Zone 3, we shall pay rent of Rs. 375/- per month per pole for a total of 1036 poles for the period 17.10.11 to 17.8.12 and again for the period 22.1.13 to 9.4.13. (ii) For Zone 4, we shall pay rent of Rs. 375/- per month per pole for a total of 872 poles for the period 20.9.11 to 17.8.12 and again for the period 22.1.13 to 9.4.13." On such charges the Corporation shall be entitled to recovery service tax also with respect of zones No. 1 and 2 there shall be no fresh computation of liability. However, if any amount has not been actually paid on account of dishonor of cheque or some similar reason, the same shall be added to the total payable by the petitioner to the Corporation. The resultant figure would be what the Corporation would be entitled to retain out of the original total security deposit of the petitioner of Rs. 53,48,298 and release the rest after adjusting Rs. 14,67,471/- already paid by the Corporation to the petitioner. The Corporation shall carry out such computation and place it before the registry latest by 7.4.2016 in accordance with which the registry shall release such amount as is found payable to the petitioner and refund the rest to the Corporation out of Rs. 25 lacs deposited by the Corporation before the registry.