M/S Nova Ads vs Metropolitan Tansp.Corp.& Ors

2. The present batch of appeals characterizes series of collusive concessions, maladroit misrepresentations, designed negotiations and infusion of fraud on financial morality; and further epitomises how statutory Corporations can cultivate the proclivity to give indecent burial to their interests, which is fundamentally collective interest that the Corporations are duty bound to protect, preserve and assert for. That apart, this bunch also exposes, as we have painfully penned, how the State, the protector of the interest of the citizens, has constantly maintained sphinx-like silence and also for some unfathomable reason, dexterously ignored the financial misdeeds as a colossal mute spectator. It seems all have either eloquently or silently competed with each other to write the epitaph of law. But, a pregnant one, there is a watch-dog, the petitioner in Writ Petition(C) No. 223/2009, despite being wedded to individual interest, thought it apposite to uncurtain the machinations adopted by the respondent nos. 3 to 8 and the Metropolitan Transport Corporation (Chennai) Ltd. (MTCL) which had filed SLP(C) No. 16908/2006 against K.S. Kumar Raja & Another and later on chose not to press the same. The painfully unusual thing, has been allowed to happen.

3. The litigation has a history. The MTCL issued advertisements for erection and maintenance of certain bus shelters, both lit and non-lit and in response to the said advertisement, M/s. Aim Associates approached the 1st respondent for taking of the work of erection and maintenance of bus shelters on "build, operate and transfer" on sponsorship basis. It was based on the principle of first come, first serve. Specific areas had been allotted in favour of the respondents to the writ petition who have also preferred appeals by way of special leave. The agreement entered into by the MTCL with the sponsors was to remain valid for one year with the stipulation that the same shall be renewed every year for next nine years subject to the performance of the sponsors and compliance of all the terms and conditions of the agreement to the best satisfaction of the MTCL. Similar sponsorship agreements had been entered into with the other sponsors for construction and maintenance of bus shelters in the city of Chennai. In 2003, as various disputes arose pertaining to the sponsorship agreement, respondent nos. 3 to 8 to the writ petition, invoked the jurisdiction of the High Court under Article 226 of the Constitution. While the said writ petitions were pending, K.S. Kumar Raja, the 9th respondent to the writ petition, also preferred a writ petition before the High Court challenging the authority of the MTCL in allotting contract for erection and maintenance of bus shelters.

4. Dealing with all the writ petitions, the High Court passed a common order on 5.9.2006. Be it stated, along with the writ petition, certain writ appeals were disposed of by the High Court. The High Court adverted to the facts in W.P.(C) No. 318/2004 which was filed by K.S. Kumar Raja, the sole proprietor, City Advertising Systems, Chennai who had questioned the tender notification dated 31.3.2003 published in Dina Bhoomi, a daily newspaper. By the said tender notification, MTCL had called for tenders from intending buyers for erection of bus shelters on the road margins within the city of Chennai. The said K.S. Kumar Raja had also preferred W.P. No. 34872/2003 calling in question the legal acceptability of the order dated 7.11.2003 of the Commissioner, Municipal Corporation of Chennai (for short, 'the Corporation') informing him that the erection and maintenance of bus shelters in Chennai city was being dealt with by the MTCL and, therefore, he should approach the said authority. It was contended before the High Court that it was obligation of the Corporation to provide bus shelters for the convenience of commuters. It was averred that initially various bus stops were identified and allotted on first come, first serve basis and consequently for the successful tenderer, permission was also granted to erect shelters under the royalty scheme. The writ petitioner had submitted an application to the respondent Corporation for allotment of specified location for establishment of shelters but the same did not evoke any response. The reminders also fell on deaf ears. Being aggrieved by the said non-response, he had approached the High Court in W.P. No. 26890/2003 seeking a direction to the Corporation to consider his representation and the High Court had directed the Corporation to pass appropriate orders on the representation within a specific period. Pursuant to the order passed by the High Court, the Corporation on 7.11.2003 him that the construction and maintenance of a shelter in Chennai city was being dealt by the MTCL. At that juncture, MTCL invited tenders which constrained him to file the writ petition assailing the said order.

6. Challenging the said order, the aggrieved parties filed various special leave petitions and as has been stated earlier MTCL had also filed special leave petition. This Court had initially issued notice, and passed an interim order but thereafter during the pendency of special leave petitions the MTCL and the aggrieved contracting parties entered into a settlement. The settlement that was entered between the parties is necessitous to be reproduced:

7. On the basis of the said settlement a prayer was made for listing the matter and accordingly an order came to be passed on 30.06.2008, which is as follows:

9. At this juncture, it is condign to mention that during the pendency of the Special Leave Petitions, an agreement was entered into between the appellants and MTCL and as has been stated earlier, the Court has disposed of the matter on the basis of the settlement on 30.6.2008. At this stage, we think it apt to refer to the agreement that has been entered into between MTCL and M/s. Metro Multimedia, a firm controlled by M/s. Aim Associates, M/s. Front Line Media, M/s. Graphite Publicities, M/s. S.S. International, M/s. Vaishnavi Images and M/s. White Horse Communications Network dated 24.09.2008. The reference to the said agreements is extremely significant, for it throws immense light on the conduct of the parties. The relevant clauses from the said agreements are as follows:

10. As the factual matrix undrape, M/s. Nova Ads, filed the Writ Petition(Civil) No. 223/2009 for recall of the order passed by this Court on many a ground. On 11.01.2011, the following order came to be passed:

40. In view of our foregoing analysis, the opinion expressed by the High Court that the Corporation has the power or authority to deal with the streets, subject to restrictions under the Act and the MTCL has no power or authority to deal with the same on the basis of the government order, which has been referred to hereinabove, is absolutely justified in law.

49. In the instant case, the appellants entered into a compromise/settlement with the MTCL. They were fully aware of the fact that as per the High Court judgment, MTCL did not have the authority. On the basis of the judgment of the High Court, such a settlement could not have been entered into. Despite the same, a settlement was entered and the cases were disposed of.

55. In view of the aforesaid analysis, the contracts entered into by the appellants with the MTCL cannot be sustained and they are accordingly annulled. It is directed that the Corporation shall take over the management of the bus shelters forthwith and shall proceed to deal with them for all purposes by taking recourse to procedure of tender or auction which should be fair and transparent. This direction of ours shall prevail all other directions issued by the High Court.

56. At this juncture, we may note that a submission was canvassed by the appellants that they have spent huge amount of money in putting the structures and making certain arrangements. As we have annulled the contract and their conduct is decryable, the said facet of spending, whatever may be the extent, is absolutely irrelevant and we so hold.

57. Consequently, the civil appeals arising out of SLP(C) Nos. 276 of 2007 and 852 of 2007 are dismissed and the appellants, namely, M/s. White Horse Communication, M/s. Aim Associates Ltd., M/s. S.S. International, M/s. Front Line Media, M/s. Graphite Publicities and M/s. Vaishnavi Images shall pay a cost of Rs.5 lakhs each to the Corporation within a period of eight weeks from today. The writ petition and appeal preferred by Mr. A.T. Mani are disposed of in terms of our order and the order of the High Court is affirmed to the extent it holds that the Corporation has the authority. As far as other directions are concerned, they are given for a specified period and hence, have lost their force and utility. As far as the order directing calling for tender, we have modified the same direction as per our direction and the Corporation shall follow the directions which are stated hereinabove. We expect the Corporation to act in quite promptitude and become more vigilant, for it protects the collective interest.

Hon'ble Mr. Justice Dipak Misra pronounced the reportable judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice Uday Umesh Lalit.

Leave granted in all the special leave petitions.

The civil appeals arising out of SLP(C) Nos. 276 of 2007 and 852 of 2007 are dismissed. The writ petition and appeal preferred by Mr. A.T. Mani are disposed of in terms of the signed reportable judgment.

(Signed reportable judgment is placed on the file)