India, High Court of Madras, 17 May 2022, W.P. Nos. 881, 888, 891 of 2022, W.M.P. Nos. 968, 975 and 97
Case overview
Country
Case ID
Decision date
Deciding body (English)
Type of body
Type of Court (material scope)
Type of jurisdiction
Type of Court (territorial scope)
Instance
Area
Further areas addressed
Outcome of the decision
General Summary
Due to the pandemic, the operation of buses were affected and the petitioner could not enjoy the fruits of the license granted to them by the government fully. Yet, they were called upon to pay the monthly license fee. Hence, the petitioner filed a case seeking the full waiver of the license fee from the government and Payment of the license fee only for buses utilized during the partial lockdown periods. Such relief was entertained during the lockdown period in India. The Petitioner sought that the measures continue further and did not want the government to issue a fresh notice of tender calling for new bus operators. The Court held that not providing an extension violated Article 14 of the Constitution of India, as the petitioners were not given a fair hearing before the government in the first place, as was recommended in an earlier decision of 2021. Hence new licenses were to be issued to the petitioner.
Facts of the case
The writ petitioner was engaged in the business of the promotion of advertisements as a MSME firm. The respondent Corporation invited tenders for the award of licenses to display advertisements on buses run by them. The number of buses amounted to 1530. They were split into three (500+630+400) groups. Three tender agreements were entered into with the writ petitioner. The license period was to be valid for 11 months starting from February 26, 2021 to January 25, 2022. This was described in the tender agreement itself as the first duration period . The contract between the parties contemplated renewal for two subsequent durations of 11 months each subject to the satisfactory performance by the licensee during the previous license period and prompt payment of license fee and other charges. The petitioner requested the full waiver of license fees during the lockdown period and, during the partial lockdown period, for the fee payment solely for the buses utilized.
Type of measure challenged
Measures, actions, remedies claimed
- Quash all adverse communications and notifications
- Direct the respondent to issue a license for the second period
- Issue a full waiver of license fees during the lockdown period and payment of license fees only for the utilized buses during the partial lockdown periods
- Grant a 30-day grace period
Individual / collective enforcement
Nature of the parties
Claimant(s)
Private individualDefendant(s)
Public
Type of procedure
Reasoning of the deciding body
In this case, the writ petitioner was obliged to pay a certain amount in licensing fees for being permitted to display advertisement boards on the buses run by the respondent Corporation. This obligation could only be enforced in toto if the petitioner had been able to display the advertisement boards on all the 1530 buses and the buses were also fully operational. However, this was admittedly not the case. The Corporation could not run all the buses mentioned in the three agreements as per usual and therefore could not be expected to pay the license fee in full. The fact remained that the entire Nation, including the State of Tamil Nadu, was under lockdown and severe restrictions on movement and transportation were in place. Even according to respondents there was a total lockdown for 42 days, though the period of total lockdown was actually much longer. That aside, there was also a partial lockdown. Sundays also witnessed a total lockdown. The movement of buses was also severely restricted. Therefore, the respondent was obliged to re-visit the amount of licensing fees payable by the petitioner. When the petitioner sought a waiver for the total lockdown period, the respondent’s response was negative.
Only following intervention of the Court, was there a waiver for the period of 42 days. In fact, as the Court already pointed out, the case was not only for considering a waiver for the total lockdown period but also for a reduction of license fees for the partial lockdown period.
Conclusions of the deciding body
The claim of the petitioner was upheld and thus the impugned communications were quashed. The Writ Petitions were allowed. The respondent was directed to issue licenses to the petitioner for the second duration period as per the terms under the agreements dated February 26, 2021. With regard to the liability of the petitioner to make payments for the first duration, the issue was to be revisited. The petitioner was to be afforded the opportunity of a personal hearing before final orders were given. A fresh order was then to be passed on the merits and in accordance with the law within a period of four weeks from the date of receipt of a copy of the order. The adjustment of the security deposit, EMD, etc., remitted by the petitioner towards his dues would also be subject to and abide by the said order to be passed by the respondent at no cost. Consequently, connected miscellaneous petitions were closed.
Fundamental Right(s) involved
Fundamental Right(s) instruments (constitutional provisions, international conventions and treaties)
Rights and freedoms specifically identified as (possibly) conflicting with the right to health
- Health v. economic freedoms
- Health v. freedom to conduct a business
General principle applied
- Non-discrimination
- Reasonableness
Balancing techniques and principles (proportionality, reasonableness, others)
The Court held that not giving an extension was in violation of Article 14 of the Constitution of India as the petitioners were not given a fair hearing before the government in the first place, as was recommended in an earlier decision of 2021. The court applied the principles of fairness and reasonableness in the field of contracts. Also, it took judicial notice of the fact that the pandemic situation could be viewed as a "force majeure" event.
