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TMI Blog2009 (5) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... to the people is possible through joint venture of public and private bodies in which reasonable built area be available by private developer free of cost to MHADA. The above claim and concept cannot be ignored lightly. We conclude that the impugned pilot project or initiation taken by the Government of Maharashtra along with MHADA to encourage public-private participation is in accordance with the need of the time as well as a laudable effort. But to make it an effective approach Swiss Challenge Method or any other encouraging concept should be duly publicized first. The effort of public-private participation can only be possible when private entities are aware of such scheme. Also in the scheme of availing a new system thorough rules and regulations are needed to be followed otherwise unfairness, arbitrariness or ambiguity may creep in. In order to avoid such ill-effects the State Government is suggested to consider the following aspects: 1. The State/Authority shall publish in advance the nature of Swiss Challenge Method and particulars; 2. Publish the nature of projects that can come under such method; 3. Mention/notify the authorities to be approached with respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Developers to whom land at Kavesar, Thane was allotted and Gurukrupa Developers, to whom land at Chhitalsar Manpada at Thane was allotted, both the said developers filed S.L.P.(c) Nos. 21754-21755 21756-21757 of 2008 respectively challenging the very same common order after getting permission from this Court. 2. Leave granted. 3. The common issue involved in all these appeals centres around the validity of the Swiss Challenge Method adopted by the MHADA on a pilot basis with respect to a proposal received from a private entrepreneur i.e. Ravi Development for development of undeveloped land owned by MHADA. 4. Brief facts in a nutshell are as under: Ravi Development submitted a proposal dated 25.08.2006 to the Chief Executive Officer, MHADA for development of undeveloped land in Survey No. 126 to 130, 150 (pt.), 151 (pt.) at Mira Road, District Thane which was received by MHADA on 31.08.2006. On 11.10.2006, similar proposal was also submitted by Ravi Development to the Chief Minister of Government of Maharashtra who was also holding the portfolio of Housing. The Desk Officer, Housing Department, Government of Maharashtra forwarded the aforesaid proposal received by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. 7. On 22.11.2007, MHADA passed Resolution No. 6284 of 2007 accepting the bid of Ravi Development and awarded contract to them for getting construction of 30,000 Sq. Mtr. + 18,841 sq. mtr. (in lieu of receivable amount) = 48,841 sq. mtr. After giving undertaking accepting the Swiss Challenge Method and after participation and having failed in tendering process, M/s Ostwal Builders Ltd. filed W.P. (L) No. 2714 of 2007 challenging the public notice dated 20.05.2007 as well as MHADA's resolution dated 22.11.2007. The High Court of Bombay, by the impugned common order dated 27.03.2008, allowed the writ petition holding that Swiss Challenge Method itself is arbitrary and unreasonable consequently, struck down the action taken thereto. Aggrieved by the said order, MHADA, Ravi Development, Shree Developers and Gurukrupa Developers filed the above appeals by way of special leave petitions. 8. Heard Mr. G.E. Vahanwati, learned Solicitor General of India for State of Maharashtra and MHADA, Mr. P.P. Rao, learned senior counsel for Ravi Development, Mr. Mukul Rohtagi, learned senior counsel for Shree Developers, Mr. P.H. Parekh, learned senior counsel for Gurukrupa Developers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted out that the repeated observations of the High Court to that effect are unsustainable. 11. It is useful to refer the Project details about the contract allotted to Ravi Development: Project Details 1.1 Maharashtra Housing and Area Development Authority (MHADA) established under MHADA Act, 1976 is engaged in the activity of housing development, Konkan Housing and Area Development Board is a regional unit of MHADA. An opportunity to private develop land at Mira Road, District Thane, owned by MHADA, is made available. 1.2 Scheme of the Project: 1. The work of Planning, scheme, actual construction and for that purpose obtaining necessary sanctions from various authorities concerned shall be done by the developer. 2. The area of the said project is approximately 3.55 hectares, bearing survey Nos. 226 to 230, 150 (part) and 151 (part). 3. The successful developer has to prepare plans/designs in consultation with MHADA. 4. In this project approximately 60% of the flats should be for Lower Income Group, is possible. 5. Plans shall have got to be sanctioned by the Mira-Bhayander Municipal Corporation. Save and except the minimum area required to be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the originator of the proposal has also been discussed accordingly. Though the name of the originator of the proposal may not have been mentioned but it was contended in the said public notice that MHADA has received a suo motu proposal from a developer for development of this land pointing out the land marked in the said public notice for due development. So it can be concluded that the existence of the originator of the proposal was very much in knowledge of the other builders at the time of applying for the said bidding. The relevant portion of the Judgment of this Court in Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation and Ors. AIR2000SC2272 , which has been relied upon by the High Court in the impugned judgment reads as under: 10. There have been several decisions rendered by this Court on the question of tender process, the award of contract and have evolved several principles in regard to the same. Ultimately what prevails with the courts in these matters is that while public interest is paramount there should be no arbitrariness in the matter of award of contract and all participants in the tender process should be treated ali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt under D. P. Road, Nalla, amenities, open spaces etc.), near about 46400 sq.mtr. have been utilized and on the same, construction of merely 17840.23 sq.mtr. is actually carried. Thus, it is a fact that with the available subsidy to keep prices of LIG, EWS MIG affordable MHADA has to construct low rise structures with poor specifications and MHADA was not able to utilize the potential of the land which is the case in most of the MHADA layouts. Further from the year 2001 to 2005 MHADA was not able to sale these constructed houses even at reduced prices MHADA had same experience in case of another property at Ambernath, Thane. As against this, in the present proposal submitted by M/s Ravi Development on the available balance land of 35500 sq. mtr., construction of 70000 sq.mtr. was proposed with richer specifications. Furthermore, for allowing 0.8 TDR, additional construction 65052.80 sq.mtr. (with the total share of MHADA to 48841.02 sq.mtr.) will be there on the said land of 35500 sq.mtr. from that point of view, proposal of Ravi Developments can be called as innovative proposal. Further, though as stated herein above, Swiss Challenge Method is adopted in various countries out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.10.2006. As rightly pointed out by Mr. P.P. Rao, learned senior counsel, if there was no decision by MHADA in respect of their proposal dated 25.08.2006, naturally the party concerned viz., Ravi Development in the normal circumstances could approach to the higher authorities, in the case on hand, Cabinet Minister of Housing Department (i.e. Chief Minister of Maharashtra), hence rightly approached the Chief Minister by submitting the same proposal on 11.10.2006 which cannot be motivated or deemed as contrary to any of the Government orders. It was pointed out that the Chief Minister or Government has not at all favoured Ravi Development and no order or endorsement to that effect was either made or reflected anywhere in the record. On the other hand, the Desk Officer of Housing Department of Government of Maharashtra, by letter dated 20.10.2006, simply forwarded the proposal submitted by Ravi Development to MHADA thereby calling upon a detailed report. Pursuant to the said communication, CEO, MHADA recommended the proposal of Ravi Development on 04.12.2006 and also submitted a detailed study report on 24.04.2007 to Principal Secretary, Housing Department, Government of Maharashtra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Ltd. has participated in the tender process and also gave an undertaking on 11.06.2007 while submitting their bid document. The following undertaking submitted by them which is not in dispute is as follows: We are well aware of Swiss Challenge method and that the original proposer of the suo motu proposal shall be given opportunity to take up the project on the highest eligible bid offer. In case the original proposer agrees to match his bid to the highest offer then the project shall be awarded in his favour. In view of clear undertaking, as rightly pointed out by the State, after participation in tender process and failing in the same when the contract was awarded to Ravi Development by MHADA's decision dated 22.11.2007 only at that point of time i.e. on 11.12.2007 Shree Ostwal Builders filed a writ petition in the High Court. 21. It is relevant to mention that the legality of Swiss Challenge Method in its entirety is not challenged. Except the land at Mira Road, in respect of other two remaining properties, no challenge was ever raised till date by any party. Only after issuance of public notice in the newspaper to follow Swiss Challenge Method, Krishna Pratisth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l even these houses at concessional rates. Therefore, MHADA conducted a detailed survey of Public Private Participation (PPP) options available for carrying out land developments for construction of better EWS, LIG and MIG houses at affordable price. In the report dated 24.04.2007, written to the Government, pros and cons of Joint Venture Method and Swiss Challenge Method are clearly reflected and Swiss Challenge Method is recommended with due application of mind. Therefore, on that count also, application of Swiss Challenge Method into present allotment of Mira Road land at Thane is justified and not violative of Article 14 of the Constitution. 24. As pointed out earlier, in the Swiss Challenge Method, there is no provision for allowing other tenderers to raise the bid further, when initiator of proposal accepts to raise up to the highest bid. It was brought to our notice that even there was no such request by Shree Ostwal Builders Ltd. after Ravi Development accepting to match highest bid by their letter dated 14.06.2007. 25. It is well settled principle that in the matters of Government contract, the scope for judicial review is very limited and that the Court cannot sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss nor unreasonableness in the adoption of the said policy. 27. Recently, there has been shift towards encouraging private participation in the government works and promoting of public-private partnership. The Ministry of Housing and Urban Poverty Alleviation in its National Urban Housing Habitat Policy, 2007 specifically mentions participation of private sector as one of its aims. It envisages that the State Government and the Central Government shall act as facilitators and enablers. The Maharashtra State Housing Policy dated 23.07.2007 provides for private participation. Pursuant to the declared policy by the Central and State Governments, the Maharashtra State Housing Board and MHADA are well within their rights to apply the Swiss Challenge Method with respect to the MHADA lands that were lying undeveloped since the same was being applied only on trial basis as a method of encouraging private participation. Though an argument was built up by the contesting respondents based on Ramanna Dayaram Shetty v. International Airport Authority of India and Ors. (1979) 2 SCC 489, E.P. Royappa v. State of Tamil Nadu (1974)ILLJ172SC , Maneka Gandhi v. Union of India [1978]2SCR621 , and E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent scenario one of the way outs is joint venture development by public and private bodies. 29. Due to shortage of land, ever increasing cost, and maximum utilization of permissible FSI, by adopting public-private joint ventures, it would be possible to minimize the cost of LIG, EWS and MIG categories. In the present project, land is partially developed by MHADA with ground floor structures and low rise buildings with lower specifications so as to make housing affordable for EWS, LIG and MIG with the subsidies granted by the Government. The balance FSI cannot be utilized without high rise buildings which involves higher cost and expenses. Ravi Development has proposed multi-storied building to consume balance FSI with 60% number of tenements under LIG and EWS category as per DCR 33(5) of Mira Bhainder Municipal Corporation, which if constructed by MHADA will require higher cost of construction and subsidies required to make MIG, LIG houses will be quite high. In the present project, constructed built up area with richer specifications is to be handed over by Ravi Development to MHADA free of costs in turn MHADA will be at liberty to price these tenements in accordance with pol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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