WP(C) 2253/2010 BEFORE THE HON’BLE MR. JUSTICE B.P. KATAKEY The petitioner, which is an association of the workers of Assam State Tr ansport Corporation (ASTC) and registered under the Trade Union Act, 1926, repre sented by its General Secretary, by the present petitioner has challenged the No tice Inviting Tenders (in short the NIT) dated 22.02.2010 issued by the Chief Ex ecutive Officer, Guwahati Metropolitan Development Authority (in short the GMDA) , inviting bids from the reputed companies/firms in respect of 150 buses, for ci ty bus operations purchased with the additional central assistance provided by t he Govt. of India under the Jawaharlal Nehru National Urban Renewal Mission (in short JnNURM), contending inter alia that pursuant to the announcement of the pa ckage by the Govt. of India on 02.01.2009 for providing assistance as a one time measure under JnNURM for purchase of buses for the Urban Transport System and c onsequent upon approval of the project report by the Govt. of Assam on 18.02.200 9 for availing assistance under the said scheme for purchase of buses for Guwaha ti city, a proposal was submitted by the Govt. of Assam in Transport Department on 23.02.2009 to the Joint Secretary and Mission Director, Ministry of Urban Dev elopment, Govt. of India for procurement of 250 nos. of buses of different categ ories to be placed at the disposal of the ASTC, about which the Chief Minister o f Assam by his D.O. letter dated 02.03.2009 also informed the Minister of Urban Development, Govt. of India requesting him to provide the funds for purchase of said 250 nos. of vehicles to be operated through the ASTC. After approval of the project report by the Govt. of India, as submitted by the Govt. of Assam, the G ovt. of India made available the necessary funds for purchase of 200 nos. of dif ferent types of buses to be introduced as city service within the Guwahati city area under the JnNURM scheme, which was received by the Govt. of Assam in Transp ort Department in the middle part of February, 2010. It has also been contended that though the funds for purchase of the buses have been sanctioned by the Govt . of India and received by the Govt. of Assam as per the scheme and the proposal submitted through the ASTC, the said buses, however, are not being allowed to b e managed by the ASTC and instead allowed the GMDA to issue NIT from the compani es/firms for operating those buses in the city of Guwahati, in each package of r outes and accordingly the NIT dated 22.02.2010 has been published by the Chief E xecutive Officer of the GMDA asking for bids from the companies/firms for operat ion of the said buses. The further contention of the writ petitioner is that the Govt. of India under the JnNURM scheme allotted buses for city transport to oth er States also and wherever an organized body like ASTC is in existence, the sam e has been allowed to be operated by such already existing body or Corporation, but in case of the city of Guwahati, the Govt. of Assam instead of allowing the ASTC to manage and operate the city bus service through the aforesaid buses, fun d for which has been sanctioned by the Govt. of India under JnNURM scheme, has a llowed the GMDA to manage and operate the same through the private companies/fir ms though the GMDA has absolutely no authority to do so under the JnNURM. 2. Though the State of Assam represented by the Chief Secretary and the Pri ncipal Secretary to the Govt. of Assam, Transport Department, are arraigned as r espondent Nos.1 and 2 respectively, an affidavit-in-opposition has been filed by the Deputy Secretary and the Nodal Officer for the Department of Transport, Gov t. of Assam, on behalf of the respondent No.2, contending that the Govt. of Indi a through the Ministry of Urban Development has made available the fund to the G ovt. of Assam in Transport Department for purchase of 200 nos. of different type s of buses to be introduced as the city bus service within the area of city of G uwahati. In the said affidavit the respondent No.2, however, has denied that the Govt. of Assam through the Transport Department has purchase the buses in the m iddle part of February, 2010. The said affidavit apart from saying so, dealing w ith the averments made by the petitioner in paragraph 9 of the writ petition, no thing has been said relating to the averments made in paragraphs 1 to 8 and 10 t o 13 of the writ petition except saying that the respondent No.2 has no comment to make. The authority to issue the NIT by GMDA, which has been challenged by th e writ petitioner in the writ petition, has also not been dealt with by the resp ondent No.2 in his affidavit. The Chief Secretary to the State of Assam though h as been made party respondent No.1 in the writ petition, he has chosen not to fi le any affidavit. 3. The GMDA and its Chief Executive Officer, the respondent Nos.3 and 4, ha ve contested the writ petition by filing the joint affidavit-in-opposition givin g details about the initiation of the proposal by the Govt. of India for introdu ction of the city bus services under JnNURM, the submission of the Detailed Proj ect Report (DPR), requirement of formation of the Special Purpose Vehicle (SPV) structure for management and operation of such city bus service, initial sanctio n of fund for purchase of different types of 50 buses and subsequent sanction of the fund for additional 150 nos. of buses, the decision of the Govt. of Assam t o form a company called Guwahati City Transport Services Limited for instituti onal management of city bus system and planning and functioning for all public t ransport in Guwahati to be jointly owned by the GMDA, Guwahati Municipal Corpora tion (GMC) and ASTC. In the said affidavit, it has been denied that the buses ar e to be placed at the disposal of the ASTC for running and managing the city bus services, as contended by the writ petitioner. The respondent Nos.3 and 4 have also contended that on 18.09.2009 a meeting was held under the Chairmanship of t he Chief Secretary, Govt. of Assam, with the participation of (i) the Principal Secretary, Transport Department, Govt. of Assam; (ii) Secretary, Guwahati Develo pment Department, Govt. of Assam; (iii) Joint Secretary, Guwahati Development De partment, Govt. of Assam; (iv) Deputy Secretary, Guwahati Development Department , Govt. of Assam and (v) Managing Director, ASTC, wherein a decision was taken t o create a coordinating body, namely, SPV for running the 200 buses in the Guwah ati city, which will also have representations from the GMC and ASTC and the Exe cutive Committee of the SPV shall take operational decisions including route, ti mings and mode of operating the buses and authorizing the Guwahati Development D epartment to find out the Revenue Model adopted by other transport corporation o f other States. A further decision, according to the said respondents, was also taken in the said meeting to explore the possibility of providing ASTC with a pe rmanent role in operating the buses as they have the experience and allied infra structure facilities and even explore the possibility of giving the right of fir st refusal to ASTC before offering the buses in the Public Private Partnership ( PPP) mode to private players. Relating to the authority to issue the NIT, it has been stated in the said affidavit that pending formation of the SPV, the Govt. of Assam took a decision to authorize the GMDA to call for the bids for the city bus operations and accordingly the NIT dated 22.02.2010 and the corrigendum the reto were issued by the Chief Executive Officer of the GMDA. 4. The Managing Director of the ASTC in the affidavit-in-opposition filed o n behalf of the respondent Nos.5 and 6 has projected that the project report as prepared by the ASTC by the Govt. of Assam was submitted to the Govt. of India f or sanctioning of the funds under JnNURM for 250 nos. of buses and accordingly t he funds for purchase of 200 nos. of buses of different types were sanctioned by the Govt. of India and released to the Govt. of Assam and it was decided to pla ce those buses at the disposal of the ASTC for city bus operations. 5. The Union of India, represented by the Secretary to the Govt. of India, Ministry of Urban Development, respondent No.7, in the affidavit-in-opposition f iled has contended that the Central Government considered the proposal submitted by the State Government as a single unit and it is not concerned with the Depar tment or Agency of the State Government, which has initially mooted the proposal and the State Government is obliged to comply/fulfill the conditions/commitment imposed by/made before the Central Sanctioning and Monitoring Committee (in sho rt CSMC), which is the competent body to consider the proposal submitted by the State Government, in regard to the sanction of fund for purchase of buses for ci ty service in respect of the cities identified under JnNURM. It has also been co ntended that initially the fund for purchase of 50 buses was sanctioned as per r esolution of the CSMC meeting held on 20.02.2009 and subsequently, in terms of t he proposal submitted by the State of Assam, fund for purchase of 150 additional buses was sanctioned as per decision taken by the CSMC on 24.04.2009, with the condition that the buses would be run through the structure known as SPV, which would comprise of ASTC, GMDA and GMC with the Chief Secretary of the Govt. of As sam as Chairman and Managing Director of ASTC as Managing Director of SPV to sta rt with. It has also been contended in the said affidavit that the approval of t he CSMC is conditional to the commitment of the State Government and the actual owner of the buses would be SPV having the above composition. The respondent No. 7, however, has further contended that it is for the Govt. of Assam to decide th e modalities of operation of 200 buses to be run for the city of Guwahati, fund for which has been sanctioned under the JnNURM, keeping in view the best interes t of the people residing in the city of Guwahati. 6. I have heard Mr. Uzir, learned counsel for the petitioner; Mr. N. Dutta, learned Sr. counsel appearing for the respondent Nos.1 and 2; Mrs. M. Hazarika, learned Sr. counsel appearing for the respondent Nos.3 and 4; Mr. P.C. Deka, le arned Sr. counsel appearing for the respondent Nos.5 and 6 and Mr. R. Sarma, lea rned Asstt. Solicitor General appearing for the respondent No.7. 7. Mr. Uzir, learned counsel for the petitioner referring to the communicat ion dated 12.01.2009 issued by the Joint Secretary and Mission Director, Ministr y of Urban Development, Govt. of India to all the Chief Secretaries of the State s and the Union Territories submits that the central financial assistance in the form of grant to the State Government for procurement of buses for Urban Transp ort under JnNURM and the guideline attached to the said communication does not a ttached a condition that the buses are to be run and managed by SPV structure on ly and it can, wherever there already exist the Transport Corporation can be run and managed by such Transport Corporation without formation of the SPV structur e. It has also been submitted by Mr. Uzir that it is evident that DPR for 250 bu ses were submitted by the Govt. of Assam keeping in mind the ASTC for running an d managing the same and also in compliance of the requirement of availing assist ance under JnNURM. Mr. Uzir in that regard has also referred to the D.O. letter dated 02.03.2009 issued by the Chief Minister of Assam to the Minister of Urban Development, Govt. of India, wherein it has been mentioned that another comprehe nsive proposal along with the DPR for purchase of the additional 250 nos. of bus es through ASTC has been submitted to the Govt. of India and requesting the Mini ster to favourably consider the proposal of the ASTC in order to provide a bette r and efficient transportation system in the Guwahati city. Mr. Uzir further sub mits that the formation of the SPV is not the mandatory condition for releasing the central assistance for purchase of the buses under JnNURM, which is evident from the communication dated 05.05.2010 issued by the Under Secretary to the Gov t. of India, Ministry of Road Transport and Highways to the General Secretary, A ll India Road Transport Worker’s Federation (AIRTWF), of which the writ petition er is a constituent, wherein it has been mentioned that vide D.O. letter dated 0 5.04.2010, the Ministry of Urban Development, Govt. of India has been advised no t to insist upon formation of the SPVs to facilitate the central assistance to t he State under JnNURM for procuring buses for operation in the urban areas and t o make necessary arrangement to facilitate the central assistance to the State R oad Transport undertakings for operating the vehicles in city areas under JnNURM , from where according to Mr. Uzir it appears that wherever the State Road Trans port Corporations or undertakings are in existence, such bus services are to be run and managed by such Corporations/undertakings. Mr. Uzir further submits that the said position has been admitted by the Govt. of India in the Ministry of Ur ban Development, respondent No.7, in its affidavit-in-opposition dated 07.09.201 0, more particularly, in paragraph 6 thereof where it has been stated that it is for the Govt. of Assam to decide the modalities of operation of buses in the be st interest of the people residing in the city of Guwahati. 8. Mr. Uzir to buttress his argument has submitted that even the Principal Secretary to the Govt. of Assam in Transport Department issued a communication d ated 23.02.2009 to the Joint Secretary and Mission Director, Ministry of Urban D evelopment, Govt. of India, informing that a separate DPR for purchasing 250 nos . of different types of buses is being forwarded for consideration of the Minist ry keeping in view the running of the city bus services by the ASTC for more tha n 30 years and having all the infrastructure facilities with further intimation that the ASTC, which has been created under the Road Transport Corporation Act, 1970 and has the legal mandate to run the bus service including the city service , would be able to create a separate business unit (SBU) for city service to com ply with the requirement of availing assistance under JnNURM. 9. Referring to the proceeding of the meeting held on 18.09.2009, which has been annexed as Annexure-VIII to the affidavit-in-opposition filed by the GMDA (respondent Nos.3 and 4), it has also been submitted by the learned counsel for the petitioner that a decision was taken in the said meeting held under the chai rmanship of Chief Secretary to the Govt. of Assam, with the participation of the Principal Secretary, Transport Department; Secretary, Guwahati Development Depa rtment; Joint Secretary, Guwahati Development Department; Deputy Secretary, Guwa hat Development Department and the Managing Director, ASTC, to explore the possi bility of providing ASTC with a permanent role in operating the buses as it has experience and allied infrastructure facilities and also to explore the possibil ity of giving the right of first refusal to ASTC before offering the buses in PP P mode to private players. 10. Relating to the NIT dated 22.02.2010 issued by the Chief Executive Offic er, GMDA, which is under challenge in the writ petition, it has been submitted b y Mr. Uzir that in any case the GMDA has no authority to run and manage the bus services in the city through the buses purchased under such central assistance a nd as such any arrangement made by the State Government asking the GMDA to issue the NIT is contrary to the scheme under which such central assistance has been granted by the Govt. of India to the Govt. of Assam, as is apparent from the aff idavit filed by the Govt. of India, the respondent No.7. Mr. Uzir, therefore, su bmits that while setting aside the tender process initiated by the Chief Executi ve Officer, GMDA by issuing the NIT dated 22.02.2010, the Government of Assam ma y be directed to allow the ASTC to run and manage the city bus services by means of the buses purchased under central assistance under the financial assistance of the Govt. of India under JnNURM. 11. Mr. Dutta, learned Sr. counsel appearing for the respondent Nos.1 and 2, submits that the financial assistance given by the Govt. of India under JnNURM for purchasing the buses for city bus services attach conditions to it, namely, the formation of the city specific SPV, constitution of which has also been fixe d i.e. the ASTC, GMDA, GMC as well as its elected members, who has been given th e responsibility of running and managing the city bus services through such buse s and operation of such bus service through PPP mode with one private operator r unning cluster of minimum of 25 buses. As such the Govt. of Assam cannot allow t he ASTC to manage and run such bus services through such buses, as in that case it would be violative of the conditions imposed for granting of such central ass istance, which in turn may entail cancellation of such grant by the Govt. of Ind ia. Placing reliance on the proceeding of 69th CSMC meeting held on 20.02.2009 a nd 21.02.2009, it has been submitted that the Govt. of India has insisted format ion of the city specific SPV with the involvement of the ASTC, as at present the bus service is run by the ASTC, though the SPV was initially formed by the Govt . of Assam with the GMDA and GMC only. According to Mr. Dutta, in respect of all the States where such central assistance was granted, the Govt. of India insist ed formation of the city specific SPV. Referring to the minutes of the 70th CSMC meeting held on 26.02.2009, it has been submitted by Mr. Dutta that though the State of Uttarakhand instead of formation of city specific SPV proposed to have a State level SPV, for the cities namely, Dehradun, Haridwar, Nainital, the same was rejected by the CSMC and directed formation of the city specific SPVs. Mr. Dutta, drawing attention of the Court to the minutes of the 72nd meeting of CSMC submits that financial assistance for procuring 150 nos. of additional buses wa s sanctioned with the condition that those have to be operated through PPP mode only and hence the ASTC cannot be allowed to manage and operate those buses. 12. Referring to the scheme of JnNURM and the guidelines issued for the purp ose of extending additional central assistance for purchasing the buses for city bus services under the said scheme, it has further been submitted that the Stat e Government or the State Level Nodal Agency is required to submit the DPR and t here is no scope for preparation of the DPR by the ASTC and submission of the sa me to the Govt. of India for its own. Any proposal from the different organizati on is required to be considered by the State Government or the State Level Nodal Agency and thereafter the DPR is formulated and submitted to the Govt. of India . Hence, according to Mr. Dutta, the contention of the petitioner that a specifi c DPR for sanction of the funds for purchase of 250 nos. of buses to be managed by the ASTC only was submitted, cannot be accepted. Placing reliance on the comm unication dated 06.03.2009, copy of which has been produced before the Court, is sued by the Secretary to the Govt. of India in Ministry of Urban Development to the Chief Secretary to the Govt. of Assam, it has been submitted by Mr. Dutta th at in fact the proposal of the ASTC for releasing the central assistance for pur chase of 250 nos. of buses through the ASTC has not been considered by the Govt. of India and the Govt. of Assam was asked to review the proposal, further infor ming that the demand for additional buses for Guwahati would be considered only after receiving clarity from the State Government through State Level Steering C ommittee (SLSC) regarding implementation of the city bus services in Guwahati. 13. Mr. Dutta, however, has submitted that as the formation of the SPV is a condition attached to the grant of financial assistance by the Government of Ind ia to the Govt. of Assam and such bus services are required to be run and manage d by such SPV, the issuance of the NIT by the GMDA authority is contrary to such condition. Mr. Dutta further submits that the city bus services with those buse s procured with the central assistance would now be run and managed by the SPV a fter its formation, with the constitution as accepted by the Govt. of Assam as w ell as by the Govt. of India. 14. Mrs. Hazarika, learned Sr. counsel appearing for the respondent Nos.3 an d 4 while adopting the argument advanced by Mr. Dutta, learned Sr. counsel appea ring for the respondent Nos.1 and 2, relating to the condition of formation of t he SPV and running and managing the bus services by such SPV through PPP mode, h owever, has submitted that pursuant to the Government of Assam’s decision to all ow the GMDA to float the tender, pending formation of the SPV, the NIT was issue d by the Chief Executive Officer, GMDA on 22.02.2010, for allotment of buses to various companies/ firms in terms of the guidelines issued by the Govt. of India for that purpose and as soon as the SPV is formed, it would take over the manag ement and running of such bus services. Mrs. Hazarika further submits that since the process initiated vide NIT dated 22.02.2010 has been stayed by this Court, in any case, a fresh process has to be initiated for allotment of the said buses in terms of the guidelines issued by the Govt. of India and that would naturall y be done by the SPV. 15. Mr. Deka, learned Sr. counsel appearing for the respondent Nos.5 and 6, supporting the arguments advanced by Mr. Uzir, learned counsel for the petitione r, submits that it is evident from various communications, as referred to by the learned counsel for the petitioner, that the DPR was submitted by the Govt. of Assam seeking central assistance for procuring the buses with a view to allow th e ASTC to run and manage the same, which has the experience as well as the infra structure for that purpose. According to the learned Sr. counsel, the formation of the SPV, where the State Transport Corporation or undertaking is in existence , is not the condition precedent for the central assistance for purchase of the buses and the ASTC being a creature of a statute and managing the bus services t hroughout the State of Assam including the city bus services in Guwahati, is to be entrusted with the responsibility of running and managing the city bus servic es through the buses purchased with the central assistance. 16. The learned Asstt. Solicitor General appearing for the respondent No.7 r eferring to the averments made in the affidavit-in-opposition filed has submitte d that the central assistance for purchase of the buses