State actions in contractual relationships must adhere to principles of fairness and non-arbitrariness as mandated by Article 14 of the Constitution of India.

JUDGMENT :

R.K. PATTANAIK, J.

1. Instant writ petition is filed by the petitioner seeking a declaration that the actions of the opposite party (in short, ‘the BMC’) in not abiding by the terms of the Concession Agreement (CA) dated 6^th November, 2013 at Annexure-1 is arbitrary, illegal and violative of Article 14 of the Constitution of India followed by a direction to the BMC to pay damages in the nature of compensation towards the injury caused to it due to such arbitrariness and illegality and realization of Rs.73,25,10,241/- (rupees seventy-three crores twenty-five lacs ten thousand two hundred forty-one) payable as on 30^th November, 2023 along with interest, costs and expenses, pendent lite and future interest @ 9% per annum till such realization under the contract with such other reliefs granted on the grounds inter alia that such a direction with appropriate writs/orders to the BMC is necessary in the interest of justice.

2. In fact, the petitioner is aggrieved by the improper conduct and dealings of the BMC for denying it the legitimate contractual claims under the CA and to the contrary having imposed penalties in an arbitrary and unjustified manner and in complete ignorance of the statutory responsibilities assigned under the Odisha Municipal Corporation Act, 2003 (in short, ‘the Act’), Municipal Solid Wastes (Management and Handling) Rules, 2000 (shortly as ‘the MSW Rules’) and Solid Waste Management Rules, 2016 (hence called as ‘the SWM Rules’) qua handling of waste management, more particularly, when it has fulfilled the obligations for the period more than the prescribed time line under Annexure-1. The actions of the BMC, which are alleged to be illegal, are for (i) non-payment of tipping fees with escalated rates;(ii) wrongful deductions of 4% from each monthly bill; (iii) levy of arbitrary penalties contrary to terms of the CA; (iv) unilaterally withholding 20% amount from June 2019 bill for the additional services rendered during the ‘Fani’ cyclone period; (v) arbitrary withholding of consideration qua services rendered during the Covid-19 (2020/21);(vi) denying payment relating to services rendered in relation to MCC works and Kalinga Stadium;(vii) further withholding payment towards tonnage loss incurred upon deployment of NGO vehicles for door-to-door collection; and finally(viii) non-payment of interest claims on delayed receipts.

3. According to the petitioner, it is a Company registered under the Companies Act, 1956 involved in the business of waste management (Municipal), hazardous and biomedical, and other environment solutions having operational experience of more than 25 years and considered to be a pioneer in the above specialized field and earlier known as Ramky Enviro Engineers Ltd. changed to the present with effect from 10^th February, 2022 and has been issued a Certificate of Incorporation as per Annexure-4.

3.1. The Government of India through Ministry of Environment and Forest notified the MSW Rules in exercise of power conferred under Section 3 of the Environment Protection Act, 1986, by virtue of which it was made mandatory for every Municipal Authority to implement a scientific solid waste management system wherein solid wastes are duly collected, transporte