2014 Supreme(SC) 887

SUPREME COURT OF INDIA
DIPAK MISRA, UDAY UMESH LALIT, JJ.

M/s. Nova Ads – Petitioner
Versus
Metropolitan Transport Corporation And Ors. – Respondents
WRIT PETITION (C) NO. 223 OF 2009 WITH C.A. NO. ______ OF 2014 (@ SLP(C) NO. 276/2007) C.A. NO. ______ OF 2014 (@ SLP(C) NO. 852/2007) C.A. NO. ______ OF 2014 (@ SLP(C) NO. 11880/2009)
Decided On : 12-12-2014

IMPORTANT POINTS
Chennai City Municipal Corporation Act, 1919 only the Corporation has the authority to construct and maintain cart stand including motor vehicles and bus shelters, not the MTCL.
Words should be understood in their grammatical meaning and common parlance meaning.
Purpose of interpretation is to understand and gather the intention of the legislature.
‘Stand’ cannot include bus shelters.
Corporation has the authority to deal with the ‘stands’. It is also obliged to control and manage bus shelters for public convenience.
Under the Chennai City Municipal Corporation Act, 1919, State Government could have notified certain places as stands for motor vehicles of the Transport Department including MTCL, but it could not allow State transport undertakings to provide shelters for passengers.
If subordinate legislation conflicts with statute, statute shall prevail.
A rule making authority cannot make a rule inconsistent with or repugnant to the enabling Act.
When a party not competent to enters into the contract keeping the party competent out of picture, principle of equity cannot be invoked.
Parties shamelessly indulging in falsehood cannot invoke equity.
In case of illegal contract incurring huge expenditure is of no relevance.

Headnote:(a) Chennai City Municipal Corporation Act, 1919 – Section 285 – Corporation has the power to control the cart-stand – Cart stand includes a stand for carriages including motor-vehicles – Corporation also has power to levy fees and provide for licence, even for private cart-stand. (Para 22 to 24)

       (b) Interpretation of statute – Words in a statute – Have to be construed in their grammatical sense – Reasonableness or otherwise becomes material only when the statute is not clear – Words should be given their common parlance meaning. (Para 27, 29)

       AIR 1921PC 240; (1981) 4 SCC 173; AIR 1967 SC 1454 – Relied upon

       (c) Interpretation of statute – Purpose of interpretation – To understand and gather the mens or sententia legis or intention of the legislature. (Para 30)

       (2002) 4 SCC 297 – Relied upon

       (d) Chennai City Municipal Corporation Act, 1919 – Section 285 and 285A – Corporation empowered to take necessary action for public convenience and make provisions for the cart-stand including motor vehicles – Proviso to Section 285-A not empowering any other body like MTCL to construct bus shelters – Proviso to Section 285-A only providing that Corporation or its agent cannot prohibit the use of any place in the city to be used for motor vehicles belonging to Transport Department of the State Government as a stand –Section 285-A read in juxtaposition with Section 285, Corporation authorised to deal with cart-stand including motor vehicles – ‘Stand’ in proviso to Section 285 means stand for motor vehicles – Cannot include bus shelters. (Para 31, 32)

       (1987) 3 SCC 279 – Relied upon

       (e) Chennai City Municipal Corporation Act, 1919 – eSection 204 – Read with other provisions, Corporation has the authority to deal with the ‘stands’ – It is also obliged to control and manage bus shelters for public convenience. (Para 33)

       (f) Chennai City Municipal Corporation Act, 1919 – Section 285-A – “Stand” means either a “parking place” or a “halting place” for the motor vehicle – “Stand” and “shelter for passengers” quite different – State Government could have notified certain places as stands for motor vehicles of the Transport Department including MTCL – But it could not allow State transport undertakings to provide shelters for passengers. (Para 36, 39)

       (g) Interpretation of statute – Neither a Rule nor a Regulation nor a Notification can transgress the postulates engrafted under the Act – If subordinate legislation conflicts with statute, statute shall prevail – Further, a rule making authority cannot make a rule inconsistent with or repugnant to the enabling Act. (Para 36, 37, 38)

       (1988) 2 SCC 351; (1984) 2 SCC 50; (2000) 5 SCC 451 – Relied upon

       (h) Administrative Law – Contract between two parties – One party not competent to enter into the contract – Party competent not in picture – Principle of equity cannot be invoked – Claim of equity has also to be adjudged on the bedrock of truth. (Para 45, 47)

       AIR 1952 SC 47; AIR 1962 SC 753; (2003) 3 SCC 541; (2007) 2 SCC 230; AIR 1963 SC 1633; (2003) 5 SCC 413; (2003) 2 SCC 577; (2003) 1 SCC 123; (2003) 9 SCC 393; (2010) 2 SCC 114 – Relied upon

       (i) Administration of Justice – Equity – Conduct of parties – High Court had decided in favour of Corporation – MTCL fully aware of not having any authority to enter into any contract for bus shelters – High Court order never stayed – Despite all this MTCL entering into settlement and on that basis into an agreement with sponsors for construction of bus shelters ostensibly in pursuance of Supreme Court orders when there was no order – Parties shamelessly indulging in falsehood – MTCL being a State Government instrumentality clearly transgressing its authority. (Para 46, 51)

       (2010) 2 SCC 114; (2011) 7 SCC 69; (1905) AC 426; AIR 1952 SC 252 – Relied upon

       (j) Government contract – High Court directing Corporation to call for tenders for bus shelters – MTCL entering into agreements on basis of private negotiations for a period of 12 years – Not permissible being not fair and depriving State of valuable revenue – Contracts may be granted on private negotiation, but in rare cases – Instant contract vitiated – Contracts annulled. (Para 52, 53, 55)

       (2006) 13 SCC 382 – Relied upon

       (k) Administrative Law – Appellants entering into illegal contract with MTCL constructing and operating bus shelters – Contracts annulled – Appellants praying, in the name of equity, to allow them to continue for two years – So allowing will add premium for illegal activities – Spending huge amount of money by appellants is of no relevance. (Para 54, 56)

       Facts of the case:

       The Metropolitan Transport Corporation Ltd. (MTCL) issued advertisements for erection and maintenance of certain bus shelters in Chennai, 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.

       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, approached the High Court. 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.

       Dealing with all the writ petitions, the High Court passed a common order on 5.9.2006.

       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 informed 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.

       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.

       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 informed 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.

       High Court dismissed the writ petitions filed by the sponsors and allowed the writ petitions filed by K.S. Kumar Raja.

       Challenging the said order, the aggrieved parties filed various special leave petitions and MTCL had also filed special leave petition.

       During the pendency of special leave petitions the MTCL and the aggrieved contracting parties entered into a settlement.

       To the said settlement, Chennai Municipal Corporation was not a party.

       M/s. Nova Ads, filed the Writ Petition (Civil) No. 223/2009 for recall of the order passed by Supreme Court.

       The Chennai Corporation was not a party to the settlement. The disturbing part is that the MTCL has entered into the agreement which has to remain valid for 12 years with the consortium of six firms without calling for tenders. These facts are not only bewildering, but really shocking.

       In this background, the seminal question that is required to be addressed first is whether under the Act it is the Corporation or the MTCL has the authority to deal with bus shelters for passengers.

       Finding of the Court:

       Opinion expressed by the High Court is absolutely justified in law.

       Result: Appeals dismissed with cost of 5 lacs each appellant.