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Judgment
This petition under Article 226 of the Constitution of India has been filed by the petitioner, a partnership firm seeking following reliefs :
“(i) To issue an appropriate writ thereby directing the respondent to make the payment of deduction made under the AUB.
(ii) To issue an appropriate writ thereby declaring that the deduction under the head of AUB is contrary to the terms of the contract and the NIT.
(iii) To direct the respondent to make regular payment of lease rent as per the guaranteed sum as per the agreement.
(iv) To grant any other relief as this court deems fit and proper in the interest of justice.â€
AUB stands for “Actual Utilization Basisâ€. In brief the facts of the case are that the petitioner is a partnership firm and is engaged in the
business of logistics and storage. On 17.10.2012 a notice inviting tender (NIT) was floated by the respondent â€" M.P. Warehousing and Logistic
Corporation for construction of godowns for storage requirement of DCPÂ stocks of the State to be managed through the private entrepreneur and
supervised by the M.P. Warehousing and Logistic Corporation for a guaranteed lease of 10 years on Build, Own and Operate basis. The said scheme
is known as the PEG Scheme 2009 i.e.
“Private Entrepreneur Guarantee Schemeâ€. In the aforesaid NIT, the petitioner was declared successful in respect of Niwadi region district
Tikamgarh. The capacity of the godown was prescribed to be 14,000 metric ton. Subsequently on 1.4.2013 an agreement was also entered into
between the petitioner and the respondents. For the aforesaid business venture, the petitioner also applied for the loan from the State Bank of India,
Niwadi Branch and after inspection of the site, the Bank sought clarifications from the respondents about the payment of lease rent to the petitioner.
The aforesaid query was replied to the Bank vide letter dated 21.11.2013 and 6.12.2013 issued by the respondents that since the petitioner has been
declared as successful bidder under the guarantee scheme, after construction of the godown the petitioner shall receive a lease rent of Rs.6,42,600/-
per month irrespective of the fact that the godown is being utilized to its maximum capacity or not.
The petitioner’s contention is that on such representation and assurance made by the respondents to the Bank, a loan of Rs.2.70 crores was
sanctioned in favour of the petitioner and the construction also begun as per the specification provided in the NIT. The petitioner’s further case is
that according to clause 52 and 53 of the NIT which contain description of the inspection which shall be carried out by the respondent-Corporation at
the various stages of the construction of the godown and it also provides that any defect in the construction specification of the godown shall be
pointed out to the petitioner and it shall be obligatory on his part to rectify the defects. It was also provided that if the specifications are not met by
the bidder then the godown shall not be taken over by the nodal agency. Similarly clause 53Â provides that on completion of the construction, after
being fully satisfied, the Corporation shall take over the possession of the godown from the bidder. The petitioner’s case is that the construction
was carried out as per the specification and a completion certificate was also issued to the petitioner by the Engineer Consultant on 16.2.2015.
Subsequently, a joint committee of Engineers nominated by the FCI Â also inspected the godown. The said Committee also approved the construction
and as no defect was found in the said construction, the possession of the godown was also taken over by the respondents on 23.6.2015. At the
time of taking over the possession an agreement Annexure P/8 was also entered into between the petitioner and the respondents on 22.4.2015 for
lease and services of the godown for a period of 9 years.
The petitioner’s contention is that clause 7 of the agreement clearly stipulates that the respondents shall pay to the petitioner the agreed lease
rent of Rs.6,42,600/- p.m. and there shall be an annual increase in the rent @ 33% and clause 7 mandates the respondent to pay the lease rent to
the petitioner irrespective of its use and this clause also provides that the respondents cannot deduct any rent which is payable to the petitioner.
The petitioner’s further case is that on 10.3.2016 a letter Annexure P/9 was issued by the respondent-Corporation to the petitioner asking them
to do a black topping on the road. Another letter was also issued on 11.11.2016 wherein the petitioner and the other similarly situated go-down owners
were directed to complete the black topping on the road within a period of one year from the date of execution of the agreement. The petitioner
complied with the aforesaid direction on 20.4.2016 and furnished the said information vide letter dated 21.4.2016 and an inspection was also carried
out which stipulates that the black topping on the road has been done by the petitioner on 20.4.2016. These letter are filed with the petition as
Annexure P/10 & P/11 respectively.
It is further contended by the petitioner that despite complying with all the requirements of the respondents, the respondents stopped the payment of
lease rent from October 2016 onwards, however in the month of March, 2017 the balance payment from October 2016 to February 2017 was made
by the respondents but the same was made after deducting a major part of the lease rent under the heading of AUB which stands for “Actual
Utilization Basisâ€. According to the petitioner, they were entitled to a sum of Rs.32,13,000/- but a deduction of Rs.18,04,822/- was made from the
aforesaid amount of the petitioner. The petitioner’s contention is that AUB i.e. ‘actual utilization basis’ has not been defined in the
agreement and also does not find place in the NIT and in the circumstances the deduction was illegal. The petitioner made oral request to not
to deduct the amount and also sought the information as to how this AUB is calculated and the parameters governing AUB but no answer was
given by the respondents. The petitioner’s grievance is that the respondents have made the entire payment of the lease rent for the month of
March, 2017 but after the payment from March, 2017 the petitioner has not been paid any amount by the respondents till date. A representation
was also made by the petitioner in this behalf but the same was not answered by them. The petitioner’s contention is that on account of
stoppage of  the payment of the lease rent is causing great hardship and prejudice to the petitioner as the petitioner is also unable to pay the
installments of the Bank towards the loan obtained after a positive assertion was made by the respondents regarding the payment of lease rent. The
petitioner has also been threatened by the Bank that if the nonpayment continues then they would seize the godown and thus the petitioner shall suffer
irreparable loss once the coercive actions are taken by the Bank. The petitioner’s contention is that the respondent is a statutory Corporation and
cannot be allowed to unilaterally change the conditions of the NIT and the agreement executed between the parties without there being any condition
to make such a change. The petitioner’s contention is that they have invested a huge amount in the aforesaid project for construction of godown
only on the positive assertion made by the respondents in this behalf to the Bank and now the respondents cannot be allowed to turn their back from
the petitioner as the same falls within the mischief of promissory estoppel.
Counsel for the petitioner has vehemently argued that the respondents have not denied in their return that there is no reference of AUBÂ either in
the agreement of lease or in the NIT and hence it should be presumed to be admitted and in the absence of any clause regarding AUB in the
agreement or in that NIT the same cannot be applied in the petitioner’s case to deduct the rent. Counsel for the petitioner has also relied upon the
decision of this Court in the case of Shafiq Khan vs Madhya Pradesh Housing Board & Infrastructure Development Board & others in W.P.
No.2802/2017 decided on 28.8.2017.
On the other hand, in reply to the aforesaid petition, a preliminary objection has been raised by the Corporation that the petition is not maintainable
as the matter relates to enforcement of contractual rights between the parties and disputed questions of facts are involved, the same can only be
adjudicated upon by a Court of competent jurisdiction after leading the evidence. Reference is also made to clause 21, 27 and 42 of the lease
agreement between the parties to submit that the writ petition is not maintainable on the ground of availability of efficacious alternative remedy.
In the NIT also in condition No.61 it is provided that the Contract shall be governed by the laws in India and all disputes arising out the above
tender will be dealt with in the court of law of competent jurisdiction. The condition No.51(2) of the NITÂ also provides that mere submission, receipt
and acceptance of any progress report regarding contract and constructions of godown shall not prejudice the rights of the M.P. Warehousing and
Logistic Corporation under the contract, nor shall operate as an estoppel against the M.P. Warehousing and Logistic Corporation merely by reason of
the fact that the Corporation has not taken notice of or objected to any information contained in such report. Thus it is submitted that these
conditions being mandatory and obligatory cannot be ignored and the petitioner must file a civil suit only for the adjudication of the same.
The respondents’ further contention is that the parties are also governed by Private Entrepreneur Scheme 2009 known as ‘PEG
scheme’ framed in consultation, collaboration and supervision of the Central Warehousing Corporation of India, Food Corporation of India and the
Madhya Pradesh Warehousing and Logistic Corporation to meet out the problem of shortage of wheat and rice procured by the Food Corporation of
India and DCP State agencies in the past years. It is further submitted that since the petitioner has failed to perform its contractual obligation for black
topping of WBM roads within the prescribed one year time limit from the affidavit dated 25.3.2015 by the partner of the firm and even afterÂ
relaxation of one year granted, the same was not complied with. As per the resolution dated 28.3.2017 passed by the High Level Committee at
New Delhi it was resolved to adopt ‘AUB’ principle i.e. ‘Actual Utilization Basis’ for dealing with the situation and hence the
petitioner is being paid the rent for the actual stocks stored in the godown. A letter to this effect was also sent to the petitioner vide Annexure R/1.
The respondents have also placed on record the letter dated 13.4.2017 sent by the FCI containing extract copy of the resolution dated 28.3.2017
passed by the High Level Committee in its 49th meeting. The counsel for the respondents has strongly placed reliance on the guidelines as per the
PEG scheme, beside entering into Contract agreement with the private entrepreneur, another agreement is also executed between the Food
Corporation of India and the M.P. Ware Housing & Logistic Corporation in which the guarantee for fixed rent and other related issues was also
provided by the FCI but on account of the lapse on the part of the petitioner and other persons whereby they failed to complete the black
topping/bituminisation in the godown within the stipulated extended time of one year, as per the decision of the High Level Committee on
28.3.2017 the said agreement has been cancelled by the FCI withdrawing the guarantee also and even the prescribed fixed rent has been
stopped and deducting the above amount on AUB basis.
It is further submitted by the counsel for the respondent that the M.P. Warehousing & Logistic Corporation is also bound to comply with the
directions issued by the Food Corporation of India. It is further submitted that the petitioner has not challenged the decision taken by the High Level
Committee nor the High Level Committee has been impleaded as a party in this petition as also the agreement with the FCI granting guarantee for
the petitioner and payment of lease rent. It is further submitted that as per clause 7 of the Agreement (Annexure P/8) it is clearly mentioned that
the M.P. State Warehousing Corporation shall pay the rent to the petitioner within a period of 30 days after receiving it from the FCI or
Government of India. Thus once it is provided that the rent shall be paid after receiving the same from the FCI or Government of India then the
petitioner cannot compel the respondents to pay the amount over and above what is stipulated by the FCI or the Government of India and since the
FCI itself is making the payment on AUB pattern by deducting the amount and also after considering the quantum of stored commodities, the
petitioner cannot claim any right unless proper directions against the FCI are sought. So far as the contention raised by the petitioner regarding the
investment made by the petitioner and the bank loan is concerned, counsel for the respondent submits that it is not a case where the petitioner is
not being paid anything for the use of the godown, in fact, the proportionate amount under the AUB has already been paid to the petitioner which is
sufficient to bear the expenses, hence on this ground also no case for interference is made out.
Heard learned counsel for the parties and perused the record.
Before appreciating the rival contentions of the parties, it would be apt to refer to certain clauses of the Agreement, para
21, 27 and 42 are relevant in this regard, same read as under :
“21. The terms of this lease deed shall be governed , construed, interpreted and enforced in accordance with the Laws of India in force.
The terms of this lease deed shall be governed, construed, interpreted and enforced in accordance with the Laws of India in force. In case of any
doubt in interpretation of the terms of this lease deed, the decision of Lessee shall be final and binding on the parties.
The contract will be governed by the laws in India for the time being in force. All disputes arising to this tender, will be dealt with in the Court of
Law of Competent
Jurisdiction.â€
The condition No.51(2) of the NIT is also relevant, the same reads as under :
 “51 PROGRESS REPORT
(1) XXXÂ Â XXXÂ Â XXX
(2) The submission, receipt and acceptance of such reports shall not prejudice the rights of the M.P. WAREHOUSING & LOGISTICS
CORPORATIONÂ under the contract, nor shall operate as an estoppel against the M.P. WAREHOUSINGÂ &Â LOGISTICS CORPORATION
merely by reason of the fact that he has not taken notice of or objected to any information contained in such report.â€
After going through the aforesaid condition as also the documents filed by the parties, this Court is of the considered opinion that this being purely
a contractual matter, no interference is called for as the same can very well be contested by the parties in a court of competent jurisdiction where
they will have the right and opportunity to lead evidence in support of their contentions.
Whether the direction as issued by the Food Corporation of India are binding on the respondents and which agreement, the one executedÂ
between the petitioner and the respondent- Corporation or the one between the M.P. State Warehousing & Logistic Corporation and FCI is
binding on the parties can only be decided after the proper evidence is led by the parties in this behalf.
In the considered opinion of this Court, the proper remedy for the petitioner in such facts and circumstances of the case was to file a civil suit only
for the ventilation of his grievance and to seek damages or specific performance of contract, if any, and which relief, as already opined by this Court
cannot be granted to the petitioner in the writ jurisdiction under Article 226 of the Constitution of India. Merely because an assurance was made by
the respondents and on the basis of which certain further action has been taken by the petitioner would not ipso fact lead to invocation of the doctrine
of promissory estoppel because if an action has been taken by the State in public interest and such policy decisions cannot be interfered under the garb
of promissory estoppel. The principles in this regard have been laid by the Apex Court in the case of Transmission Corporation of Andhra Pradesh
Limited and another v. Sai Renewable Power Private Limited and others, (2011) 11 SCC 34, the relevant para of the same read as under:-
   “87. Lastly, we may refer to a more recent judgment of this Court. In Kusumam Hotels (P) Ltd. v. Kerala SEB where the
Court discussed in some elaboration the different judgments of this Court on the subject and then declined to enforce the principle of promissory
estoppel as there was no foundational facts and also indicated that the Government can alter, amend or rescind its policy decision in public interest, the
Court held as under:
(SCC pp. 223 & 227, paras 27 & 36)
“27. Yet again in U.P. Power Corpn. Ltd. v. Sant Steels & Alloys (P) Ltd., it was held: (SCC p. 800, para 27)
‘27. In this background, in view of various decisions noticed above, it will appear that the court’s approach in the matter of invoking the principle
of promissory estoppel depends on the facts of each case. But the general principle that emerges is that once a representation has been made by one
party and the other party acts on that representation and makes investment and thereafter the other party resiles, such act cannot be stated to be fair
and reasonable. When the State Government makes a representation and invites the entrepreneurs by showing various benefits for encouraging to
make investment by way of industrial development of the backward areas or the hill areas, and thereafter the entrepreneurs on the representations so
made bona fide make investment and thereafter if the State Government resiles from such benefits, then it certainly is an act of unfairness and
arbitrariness.
Consideration of public interest and the fact that there cannot be any estoppel against a statute are exceptions.’
The law which emerges from the above discussion is that the doctrine of promissory estoppel would not be applicable as no foundational fact
therefor has been laid down in a case of this nature. The State, however, would be entitled to alter, amend or rescind its policy decision. Such a policy
decision, if taken in public interest, should be given effect to. In certain situations, it may have an impact from a retrospective effect but the same by
itself would not be sufficient to be struck down on the ground of unreasonableness if the source of power is referable to a statute or statutory
provisions. In our constitutional scheme, however, the statute and/or any direction issued thereunder must be presumed to be prospective unless the
retrospectivity is indicated either expressly or by necessary implication. It is a principle of the rule of law. A presumption can be raised that a statute
or statutory rule has prospective operation only.’
In our country, the law of promissory estoppel has attained certainty. It is only an unambiguous and definite promise, which is otherwise
enforceable in law upon which, the parties have acted, comes within the ambit and scope of enforcement of this principle and binding on the parties
for their promise and representation. It will be difficult for the Court to hold that the guidelines can take the colour of a definite promise which in the
letters of the Central Government itself were proposals to the State Government. Besides that, if for the sake of argument, we treat the State
letters/circulars as promise or representations to the private parties like the respondents, even then, they led to the execution of a definite contract
between the parties which will purely fall in the domain of contractual law. ………..â€
(emphasis supplied)
So far as the judgment of this Court in the case of Shafiq Khan (supra) relied upon by the counsel for the petitioner is concerned, the same is
distinguishable on the ground that in the aforesaid petition the only ground was that if a specific plea has not been denied by the respondent whether
the same would amount to be admitted or not and this Court rightly relying upon judgment rendered by the Apex Court in the case of Naseem Bano vs
State of U.P. reported in 1993(4) SCC 46 has held that the averment made in the petition if not controvered by the respondent with the pleading
shall be presumed to be admitted. As already discussed above, there are other disputed questions also which are also to be answered one way or the
other, hence no help can be had by the petitioner by the aforesaid judgment.
In the circumstances, the petition stands dismissed. However, the petitioner is at liberty to take recourse of such efficacious alternative remedy as
may be available to him under the law.