# M/S. NOVAADS v. METROPOLITAN TRANSPORT CORPORATION AND ORS

- **Citation:** [2014] 13 S.C.R. 244
- **Court:** Supreme Court of India
- **Decided:** 2014-12-12
- **Bench:** Dipak Misra, Uday Umesh Lalit
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-novaads-v-metropolitan-transport-corporation-and-ors-29580
- **Pages:** 47

## Headnote

Chennai City Municipal Corporation Act, 1919 -
ss.203, 285, 285-A, 295-8, 285-C - Power to deal with
erection of bus shelters for passengers - Held: It is the
Corporation who has power to deal with the bus shelters and
o the MTCL has no power or authority to deal with the same.
Legislation - Held: The Rules, Regulations and the
Notification cannot transgress the postulates engrafted under
the statute.
E
Equity- Grant of- Held: Cannot be granted in violation
of the law.
Interpretation of Statutes - Grammatical/Ordinary
Sense of words - Held: Every provision and every word must
F be looked at generally before any provision or word is
attempted to be construed - The words in the statute have to
be construed in grammatical sense.
Contracts- Government contracts- Tender- Held: A
G public authority should not enter into private negotiations
without calling for a tender - Whenever a contract is to be
awarded or a licence is sought to be given, it is obligatory on
the part of public authority to adopt a transparent and fair
method.
H
244
M/S. NOVAADS v. METROPOLITAN TRANSPORT
245
CORPORATION
Disposing of the appeals, the Court
A
HELD: 1. The analysis of Section 203 would show
that all public streets and their appurtenances which are
not reserved under the control of the Central or State
Government shall vest in the Corporation. Sub-section B
2 of Section 203 enables the State Government to issue
a notification withdrawing any street, drain, drainage,
tunnel, culvert or tree from the control of the Corporation.
As per section 203(1 ), public streets which have been
vested in the Corporation, unless it is reserved for the c
Central Government or the State Government or unless
a notification is issued to withdraw in respect of certain
streets and other things from the control of the
Corporation, it has the absolute control. Section 204
envisages that it is the duty of the Corporation to D
maintain, repair and improve the streets which afe
necessary and expedient for public safety and
convenience. The key words are "safety" and
"convenience" and that is the responsibility of the
Corporation. Section 214 provides for protection of E
appurtenances and materials of streets.· it lays down that
it shall not be lawful for any person, without the
permission of the Commissioner, to displace, take up or
make any alteration in the fence, posts, pavement, flags
or other materials of any public street. . The F
Commissioner is the Commissioner of the Corporation .
. [Paras 15to18][266-F-H; 267-B-H; 268-A]
2. Section 285 empowers the C~mmissioner to
construct or provide public landing places, halting G
places, cart-stand, cattle-shed and cow-house and for
levy of fees for the use ofthe same, which is determined
by the standing committee of the Corporation. The cartstand includes stand for carriages including motor
vehicles within the meaning of Motor Vehicles Act, 1939. H
246
SUPREME COURT REPORTS
[2014] 13 S.C.R.
A Section 285-B deals with recovery of cart-stand fees, etc.
On a scrutiny of the said provision, it is limpid that the
Commissioner of the Corporation has the power to take
appropriate action for the purpose of recovery, if the fee
leviable under sub-Section (1) of Section 285·8 is not
B paid. Section 285-C deals with licence fee for private
cart-stand. The provision also postulates that no person
shall open a new cart-stand or keep open a private-cart
stand unless he obtains from the Commissioner a
licence to do so and the owner of a place is required to
C apply for licence. [Paras 19, 22 and 23][268-B; 270-C-D;
271·C·E]
3. Section 285-A authorises the Commissioner to
prohibit use of public place or sides of public street as
D
car~·stand, etc. by any person within such distance
which has to be determined by the standing committee.
The proviso carries out an exception which stipulates
that nothing contained in Section 285-A shall be deemed
to authorise the Commissioner to prohibit the use of any
E place in the city by the State Government a

## Text

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A
B
c
[2014] 13 S.C.R. 244
M/S. NOVAADS
v.
METROPOLITAN TRANSPORT CORPORATION AND
ORS.
(Writ Petition (C) No. 223 of 2009)
DECEMBER 12, 2014
[DIPAK MISRA AND UDAY UMESH LALIT, JJ.)
Chennai City Municipal Corporation Act, 1919 -
ss.203, 285, 285-A, 295-8, 285-C - Power to deal with
erection of bus shelters for passengers - Held: It is the
Corporation who has power to deal with the bus shelters and
o the MTCL has no power or authority to deal with the same.
Legislation - Held: The Rules, Regulations and the
Notification cannot transgress the postulates engrafted under
the statute.
E
Equity- Grant of- Held: Cannot be granted in violation
of the law.
Interpretation of Statutes - Grammatical/Ordinary
Sense of words - Held: Every provision and every word must
F be looked at generally before any provision or word is
attempted to be construed - The words in the statute have to
be construed in grammatical sense.
Contracts- Government contracts- Tender- Held: A
G public authority should not enter into private negotiations
without calling for a tender - Whenever a contract is to be
awarded or a licence is sought to be given, it is obligatory on
the part of public authority to adopt a transparent and fair
method.
H
244
M/S. NOVAADS v. METROPOLITAN TRANSPORT
245
CORPORATION
Disposing of the appeals, the Court
A
HELD: 1. The analysis of Section 203 would show
that all public streets and their appurtenances which are
not reserved under the control of the Central or State
Government shall vest in the Corporation. Sub-section B
2 of Section 203 enables the State Government to issue
a notification withdrawing any street, drain, drainage,
tunnel, culvert or tree from the control of the Corporation.
As per section 203(1 ), public streets which have been
vested in the Corporation, unless it is reserved for the c
Central Government or the State Government or unless
a notification is issued to withdraw in respect of certain
streets and other things from the control of the
Corporation, it has the absolute control. Section 204
envisages that it is the duty of the Corporation to D
maintain, repair and improve the streets which afe
necessary and expedient for public safety and
convenience. The key words are "safety" and
"convenience" and that is the responsibility of the
Corporation. Section 214 provides for protection of E
appurtenances and materials of streets.· it lays down that
it shall not be lawful for any person, without the
permission of the Commissioner, to displace, take up or
make any alteration in the fence, posts, pavement, flags
or other materials of any public street. . The F
Commissioner is the Commissioner of the Corporation .
. [Paras 15to18][266-F-H; 267-B-H; 268-A]
2. Section 285 empowers the C~mmissioner to
construct or provide public landing places, halting G
places, cart-stand, cattle-shed and cow-house and for
levy of fees for the use ofthe same, which is determined
by the standing committee of the Corporation. The cartstand includes stand for carriages including motor
vehicles within the meaning of Motor Vehicles Act, 1939. H
246
SUPREME COURT REPORTS
[2014] 13 S.C.R.
A Section 285-B deals with recovery of cart-stand fees, etc.
On a scrutiny of the said provision, it is limpid that the
Commissioner of the Corporation has the power to take
appropriate action for the purpose of recovery, if the fee
leviable under sub-Section (1) of Section 285·8 is not
B paid. Section 285-C deals with licence fee for private
cart-stand. The provision also postulates that no person
shall open a new cart-stand or keep open a private-cart
stand unless he obtains from the Commissioner a
licence to do so and the owner of a place is required to
C apply for licence. [Paras 19, 22 and 23][268-B; 270-C-D;
271·C·E]
3. Section 285-A authorises the Commissioner to
prohibit use of public place or sides of public street as
D
car~·stand, etc. by any person within such distance
which has to be determined by the standing committee.
The proviso carries out an exception which stipulates
that nothing contained in Section 285-A shall be deemed
to authorise the Commissioner to prohibit the use of any
E place in the city by the State Government as a stand
solely for motor vehicles belonging to the Transport
Department of the State Government. As Section 285
uses the term "cart-stand" and by way of amendment, it
has been specified that a cart-stand would be 'stand' for
F a carriage including motor vehicles within the meaning
of 1939 Act. The proviso to Section 285-A also uses the.
phraseology "stand" solely for the "motor vehicles". The
words in a stah,1te have to be construed in their
G grammatical sense. Reasonableness or otherwise
becomes material only when the statute is not clear.
Thus, the stand for motor vehicles in its grammatical
connotation are quite explicit and conveys a definite
meaning. It basically means making provisions for
H stands for motor vehicle. The word used in Section 285
M/S. NOVAADS v. METROPOLITAN TRANSPORT
24 7
CORPORATION
is cart-stand. The explanation clearly states that the cartA
stand, for the purposes of this Act, would include motor
vehicles .. The Corporation has been authorised by the
Act to make provisions for cart-stands. When one thinks
of stand for motor vehicles, it only means, the parking
place. That is the popular meaning of the word. The B
"stand", if one would like to conceive that it would include
shelters for passengers, it will be a grossly unreasonable
interpretation. It has to be given the common parlance
meaning. [Paras 26, 27 and 29][272-D-F; 273-B-C;
247-G-H; 248-A-B]
C
4. The scheme of the entire Act, is to confer the
power on the Corporation to have control overthe public
streets and to make provisions for public convenience.
It is obligatory on the part of the Corporation to provide D
for stands. In addition, the Corporation or its authorised
officer, Commissioner, cannot prohibit a stand meant for
motor vehicles for the transport Corporation. The
legislative intent is absolutely clear from the language
used in various provisions of the Act. The purpose of E
interpretation is to understand and gather the mens or
sententia legis of the legislature. If the provisions are
understood on the touchstone of these principles
pertaining to statutory interpretation, there remains no
iota of doubt that the legislature has conferred power F
on the Corporation to take necessary action for public
convenience and make provisions for the cart-stand
which includes the motor vehicles. The exception carved
out by a proviso to Section 285-A of the Act does not G
remotely suggest that the legislature has even conceived
of ,any other body like MTCL, which is a State
undertaking, to even construct the bus shelters. What
has been engrafted in the proviso to Section 285-A of
the Act is that the Corporation or its agent cannot prohibit H
248
SUPREME COURT REPORTS
[2014] 13S.C.R.
A 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 of the Act has to
be read in juxtaposition with Section 285 of the Act and
by no stretch of suggestion, it can be read to include
B bus shelters. The word "stand" has to be understood
as per the common meaning given to it. That apart, the
text, context and the pattern of use of words do suggest
that it is meant for providing stand for the motor
vehicles.[Paras 30, 31][275-H; 276-A-B; 277-B-F]
c
5. It was held in* Utkal Contactors that no provision
if'! the statute and no word of the statute may be
construed in isolation. Every provision and every word
must be looked at generally before any provision or word
D is attempted to be construed. Applying the said principle,
a singular conclusion would be that the Corporation has
the authority to deal with cart-stand which includes the
motor vehicles and the 'stand' as used in proviso to
Section 285 of the Act only refers to the stand for motor
E vehicles and cannot include bus shelters. The "stand"
conveys the meaning of either a "parking place" or a
"halting place" for the motor vehicle.
In common
parlance, the "stand" and "shelter for passengers" are
quite different. They cannot be attributed the same
F meaning. The State Government could have issued a
notification specifying certain places as stands for motor
vehicles of the Transport Department which may include
State transport undertakings i.e. MTCL, but the State
Government has no statutory authority to issue a
G notification allowing the State transport undertakings to
provide shelters for passengers. It is well settled in law
that: neither the Rule nor a Regulation nor a Notification
can transgress the postulates engrafted under the Act.
H [Paras 31, 32 and 35][277-G; 278-A; E-F; 280-F-H; 281-A]
M/S. NOVAADS v. METROPOLITAN TRANSPORT
249
CORPORATION
*Utka/ Contractors & Joinery Pvt. Ltd. and others
A
v. State of Orissa and others (1987) 3 SCC 279:
1987 (3) SCR 317 - relied on.
6. In the case at hand, as it is the Corporation who
has the authority to deal with the bus shelters and not B
MTCL, the equity has ·to yield to law. The submission of
the appellants that they have spent huge amount in
erecting the structures and also doing certain ancillary
things in that regard and, therefore, appropriate
· extension should be granted is in the realm of equity. It C
cannot be granted as that will violate the law. The
contract between the MTCL and the appellants cannot
bind the Corporation. Had there been an irregularity in
the contract or any lapse, then the question of invoking
the principle of equity could have arisen but as it is D
perceptible, it is an agreement between two parties in
respect of an act, which one of the parties is not entitled
to enter into as it has no legal authority. That apart, while
dealing with the issue of equity, the conduct of the
parties is to be seen. The High Court had decided the E
writ petition in favour of the Corporation. The MTCL was
very much aware that it has no authority to enter into
any kind of contract for bus shelters as it was within the
domain of the Corporation. This Court, at no point of
time, had stayed the operation of the judgment passed F
by the High Court.
The MTCL entered into a
compromise/ settlement with the appellants and on the
basis of the compromise entered into an agreement. In
, the agreement, there is a reference to this Court's order G
describing that in pursuance of the order passed by this
Court, the agreement was entered into. This Court had
never passed any order/direction in that regard. The
Court had disposed of the matter on the basis of the
compromise. There .was no decision by this Court. In H
250
SUPREME COURT REPORTS .
[2014) 13 S.C.R.
A such a situation, when the parties entered into an
agreement and knowing fully well that the decision of
the High Court was still staring at them, which cannot
be countenanced. This was a clear deceit on the part of
the appellants in collusion with the MTCL to frustrate the
B legal rights of the Corporation. It is a deception intended
to get an advantage. It is another matter that the
Corporation did not wake up to save its own interest.
The writ petitioner, for his own individual interest, made
a prayer to recall of the order and thereafter, as we find,
C the Corporation has woken from slumber. It was a loss
to the Corporation and the Corporation is a public body
and it is expected to protect and handle its finances for
the benefit of the persons who are covered under the
Act. The conduct of the appellants, from any angle, is
D absolutely depreciable.[Paras 45, 46 and 51][283-D-G;
284-A-G; 287-B-D]
7. A public authority like the Corporation is not
supposed to enter into private negotiations without
E calling for a tender, especially while entering into a
contract for the purpose of providing bus shelters. It is
well settled in law that wherever a contract is to be
awarded or a licence is sought to be given, it is obligatory
on the part of the public authority to adopt a transparent
F and fair method. It serves two purposes, namely,
participation of all eligible competitors and giving a fair
opportunity to them and also generating maximum
revenue. There can be a situation for good reasons a
G contract may be granted by private negotiation but that
has to be in a very exceptional circumstance, for in the
absence of transparency the public confidence is not
only shaken but shattered. In the case at hand, as the
contract has been entered by way of some kind of
H understanding reason of which is quite unfathomable,
MIS. NOVAADS v. METROPOLITAN TRANSPORT
251
CORPORATION
such a contract has to be treated as vitiated, applying A
this principle also. [Paras 52, 53][287-F-H; 288-E·Gl
8. There was a deceit practiced by the appellants
in collusion with MTCL and the authorities of the MTCL
had acted with full knowledge against the statute and B
against the interest of the Corporation. The beneficiaries
are the appellants. As far as the MTCL functionaries are
concerned, certain proceedings are pending against the
functionaries of the MTCL. The Corporation should have
been vigilant to protect its own interests. The contracts c
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 b
recourse to procedure of tender or auction which should
be fair and transparent. [Paras 54, 55)[288·G·H;
289-A-B;·G·H; 290-A]
City of Victoria v. Bishop of Vancouver Island AIR
E
1921 PC 240; K.P. Varghese v. Income Tax
Officer, Emakulam and Another (1981) 4 SCC 173
: 1982 (1) SCR 629; Th~ Commissioner of Sales
Tax, Madhya Pradesh, Indore v. Mis. Jaswant
Singh Charan Singh AIR 1967 SC 1454: 1967
F
SCR 720; Grasim Industries Ltd. v. Collector of
Customs, Bombay (2002) 4 SCC 297 : 2002 (2)
SCR 945; Dalip Singh v. State of Uttar Pradesh
and Others (2010) 2 SCC 114: 2009 (16) SCR
111- relied on.
G
General Officer Commanding-in-Chief v. Dr.
Subhash Chandra Yadav (1988) 2 SCC 351 :
1988 (3) SCR 62; B.K. Garad v. Nasik Merchants
Co-op. Bank Ltd. (1984) 2 SCC 50 :_1984 (1) SCR
H
252
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2014] 13 S.C.R.
767: Additional District Magistrate (Rev.), Delhi
Administration v. Shri Ram (2000) 5 SCC 451 :
2000 (3) SCR 1019; Kedar Lal Seal and another
v. Hari Lal Seal AIR 1952 SC 47: 1952 SCR 179;
Raja Ram Mahadev Paranjype & Others v. Aba
Maruti Mali & Others AIR 1962 SC 753 : 1962
Suppl. SCR 739; P.M. Latha and Anr. v. State of
Kera/a and Ors. (2003) 3 SCC 541 : 2003 (2)
SCR 653; Raghunath Raj Bareja and Anr. v.
Punjab National Bank and Ors. (2007) 2 SCC
230; Madamanchi Ramappa v. Muthaluru
Bojjappa AIR 1963 SC 1633 : 1964 SCR 673;
Laxminarayan R. Bhattad v. State of Maharashtra
(2003) 5 sec 413 : 2003 (3) scR 409;
Nasiruddin v. Sita Ram Agarwal (2003) 2 SCC
577 : 2003 (1) SCR 634; E. Palanisamy v.
Palanisamy (2003) 1 SCC 123; India House v.
Kishan N. Lalwani (2003) 9 SCC 393 : 2002 (5)
Suppl. SCR522; Amar Singh v. Union of India
and others (2011) 7 SCC 69 : 2011 (6) SCR 403;
Westminster Corporation v. London & North
Western Railway (1905) AC 426; State of Bihar v.
Kameshwar Singh AIR 1952 SC 252: 1952 SCR
1056; Nagar Nigam, Meerut v. Al Faheem Meat
Exports (P) Ltd. & Others (2006) 13 SCC 382 :
2006 (10) Suppl. SCR 354 - referred to.
Case Law Reference:
AIR 1921 PC 240
1982 (1) SCR 629
1967 SCR 720
2002 (2) SCR 945
relied on
Para 27
relied on
Para 28
relied on
Para 29
relied on
Para 30
M/S. NOVAADS v. METROPOLITAN TRANSPORT
253
CORPORATION
1987 (3) SCR 317
relied on
Para 31
A
1988 (3) SCR 62
referred to
Para 36
1984 (1) SCR 767
referred to
Para 37
2000 (3) SCR 1019
referred to
Para 38
B
1952 SCR 179
· referred to Para 41
1962 Suppl. SCR 739
referred to Para42
2003 (2) SCR 653
referred to Para 43
c
(2001) 2 sec 230
referred to Para 44
1964 SCR 673
referred to Para 44
2003 (3) SCR 409
referred to Para 44
D
2003 (1) SCR 634
referred to
Para 44
(2003) 1 sec 123 .
referred to
Para 44
2002 (5) Suppl. SCR 522
referred to Para 44
E
2009 (16) SCR 111
relied on
Para 47
2011 (6) SCR 403
referred to
Para 48
1952 SCR 1056
referred to Para 50
F
2006 (10) Suppl. SCR 354 referred to Para 50
CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No.
223of2009.
Under Article 32 of the Constitution of India.
G
WITH
C.A. Nos. 11037, 11038 and 11039 of 2014
H
254
SUPREME COURT REPORTS
[2014] 13 S.C.R.
A
Mukul Rohatgi, A.G., Subramonium Prasad, AAG,
C.U. Singh, V. Giri, Ravindra. Srivastava, C.A. Sundaram,
Sr. Advs., B. Raghenth Basant, Ms. Liz Mathew, Ms. Shruti
Iyer, Nikhil Nayyar, Ambuj Agrawal, Dhananjay Baijal,
Ms. Akanksha, K.S. Natrajan, V. Ramasubramanian, Jayanth
B Muth Raj, Mrs. Malavika J., Sureshan P., B. Balaji, R. Rakesh
Sharma, Ms. R. Shase, Paramveer, Rajiv Dalal,
S. Thananjayan, T. Harish Kumar, V.N. Raghupathy for the
appearing parties.
c
The Judgment of the Court was delivered by
DIPAK MISRA, J. 1. Leave granted in all the special
leave petitions.
·
2. The present batch of appeals characterizes series of
D 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
E 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
F 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 watchdog, the petitioner in Writ Petition(C) No.223/2009, despite
G 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
H same. The painfully unusual thing, has been allowed to happen.
M/S. NOVAADS v. METROPOLITAN TRANSPORT
255
CORPORATION [DIPAK MISRA; J.]
3: The litigation has a history. The MTCL issued A
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 B
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 C
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 D
agreements had been entered into with the other sponsors for
construction an~ 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 E
226 of the Constitution. While the said writ petitions were
pending, K.S. Kumar Raja, the 9th respontlentto 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.
F
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. G
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 H
256
SUPREME COURT REPORTS·
[2014] 13 S.C.R.
A 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
B 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
C 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
0 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
E 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
F 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.
G
5. It was contended before the High Court that MTCL
has no jurisdiction/authority to erect the bus shelters on its own
or to give permission to the sponsors for erection as per the
provisions contained in Section 285 of the Chennai City
Municipal Corporation Act, 1919 (for brevity, 'the Act'). The
H Corporation filed its counter affidavit contending, inter alia, that
M/S. NOVAADS v. METROPOLITAN TRANSPORT
257
CORPORATION [DIPAK MISRA, J.]
the Government in G.O.Ms No. 14, Municipal Administration A
and Water Supply Department dated 11.1.1983 had allowed
the MTCL to provide bus shelters to passengers and also to
maintain them, and hence, it had the authority. Thus, the
Corporation conceded to the authority of the MTCL solely on
the basis of the aforesaid notification issued by the B
Government. The High Court, addressed itself with regard to
the competent authority under the Act who is entitled to build
bus shelters for passengers or enter into an arrangement for
the said purpose. Scanning the provisions of the Act and
appreciating the administrative instructions, it came to hold C
that none of the provisions of the Act empowers the
Government for issuing such notification; that reliance placed
on the Government Order is unacceptable; that the road margin
including the margin of public streets has to be controlled and 0
managed by the Corporation as they vest in it; that MTCL has
no jurisdiction to allow any sponsor either to erect or illuminate
the bus shelters; that the order passed by the Commissioner
requiring the petitioner therein to approach the MTCL was
inapposite and deserved to be quashed; that the tender E
notification issued by the MTCL was legally unsustainable; and
that the MTCL has no power either to grant or cancel the
allotment. Being of this view, the High Court dismissed the
writ petitions filed by the sponsors and allowed the writ petitions
filed by K.S. Kumar Raja. It is seemly to state here that the
F
High Court had issued certain directions, which we think it apt
to reproduce:
"(i) The Commissioner, Corporation of Chennai shall
identify the road margins for erection of bus shelters and G
for the said purpose he can take the opinion/ advice of
the Metropolitan Transport Corporation;
(ii) On such identification of the location for erection of
bus shelters, the Commissioner Corporation of Chennai
shall call for tenders from intending sponsors:
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SUPREME COURT REPORTS
[2014] 13 S.C.R.
(iii) The Corporation Council is also entitled to resolve to
allow Metropolitan Transport Corporation to locate bus
shelters and maintain the same and in such an event,
the Metropolitan Transport Corporation would identify the
locations and erect bus shelters on the basis of the terms
and conditions imposed by the Council.
(iv) The above exercise, viz., to identify the location and
advertise on its own or empower the Metropolitan
Tran sport Corporation to erect the bus shelters, shall be
implemented by the Corporation, on or before the end of
December 2006.
(v) Till such time, the petitioners viz., the sponsors are
entitled to continue their activities in relation to the
shelters established, subject to payment of Rs. 49,500/-
per shelter for one module of 20 x 4 size shelters and a
sum of Rs.99,000/- for the second module consists of
40 x 4 shelters.
(vi) The above said amount shall be paid to the
Corporation of Chennai entirely in advance along with a
copy of this order. On such payment, the Commissioner,
Corporation of Chennai shall allow the petitioner to
continue their business till the end of December 2006.
(vii) It is made clear that the above arrangement is
basically made only in the interest of the commuters as
they must be provided with the shelter and removal of
the shelter will not be in the interest of either the writ
petitioners or of the Metropolitan Trans port Corporation
or of the commuters in general.
Hence, the
Commissioner should strictly adhere to the timings
prescribed in this order for taking the decision, whether
to· go for an advertisement on its own or leave the entire
matter to the transport corporation the respective claims
both by the sponsors as well as the transport corporation
M/S. NOVAADS v. METROPOLITAN TRANSPORT
259
CORPORATION [DIPAK MISRA, J.]
arising out of the Contract are left open to be resolved A
by them before the appropriate forum".
6. Challenging the said order, the aggrieved parties filed
various special leave petitions and as has been stated earlier
MTCL had also fil~d special leave petition. This Court had B
initially issued notice, and passed an interim order but
thereafter during the pend ency of special leave petition~ the
MTCL and the aggrieved contracting parties entered into a
settlement. The settlement that was entered between the
parties is necessitous to be reproduced:
c
"(1) That the parties would refer all the past disputes and
their mutual claims to Arbitration in respect of the
disputed period: 01.02.2003 to 31.03.2005. All
payments made after 01.04.2005 will be adjusted as 0
against the then current dues as claimed by the
Petitioners.
(2) That the Petitioner in SLP {C) No. 276 and SLP;(C);.
No. 852 of 2007 would be entitled to 500 shelters and
they would be granted a 12 year license period with further E
extension, on condition that the entire 500 shelters, as
per list, would be converted into International Standard
Bus Shelters with Advertisement Space not exceeding
30 sq. mtrs per shelter, within 13 months time from the F
date of the order.
(3) The License Fee payable for this period would be
Rs. 30,000/- per annum with an escalation of 10% once
in every three years considering the huge investment
involved in erecting the international Standard Bus G
Shelters."
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:
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[2014] 13 S.C.R.
A
"SLP (C) No. 276/07 and SLP (C) No. 852/07, filed by
AIM Associate Ltd. and M/s Front Line Media Etc.,
respectively, are taken up on mentioning. Having regard
to I.A. No. 3/08 filed in SLP (C) No. 276/07 and I.A. No.
2(08 in SLP(C) 852/07, wherein it has been mentioned
B
that the matter has been settled between the parties, the
terms whereof are filed in the form of Memo, annexed to
the said applications, we disposed of both these Special
Leave Petitions by the following order.
c
The Memos signed by the petitioner and the Respondent
Metropolitan Transport Corporation duly supported by
the affidavit of the petitioner and the affidavit of Shri
Ramasubramaniam, Managing Director of Metropolitan
Transport Corporation, filed in the connected SLP(C) No.
D
16908 of 2006, are taken on record and these Special
Leave Petitions are disposed of in terms of the said
memos.
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The parties shall bear their own costs in these
proceedings.
SLP (C) No. 16908/06 filed by the Metropolitan Transport
Corporation, Chennai, Limited, is also taken up for
consideration along with I.A. No.2/08 filed therein. In view
of the Order passed hereinabove in the earlier two
Special Leave Petitions, no orders are necessary in this
Special Leave Petition. The Special Leave Petition is
disposed of accordingly and the question of law raised
in the petition is left open for decision in appropriate
proceeding."
8. Be it noted, to the said settlement, Chennai Municipal
Corporation was not a party. It needs no Solomon's wisdom
that by such a settlement t'1e interest of the Corporation was
seriously affected, for the High Court had categorically opined
M/S. NOVAADS v. METROPOLITAN TRANSPORT
261
CORPORATION [DIPAK MISRA, J.]
that it was within the authority of the Corporation to have control A
over the public roads as per the provisions contained in the
Act.
9. At this juncture, it is condign to mention that during the
pendency of the Special Leave Petitions, an agreement was 8
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 t~at has been entered into
between MTCL and M/s. Metro Multimedia, a firm controlled c
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 D
of the parties. The relevant clauses from the said agreements
are as follows:
"AND WHEREAS MTCL had permitted the firms for
erection of various bus shelters by entering into individual E
agreements.
AND WHEREAS a dispute arose between the firms and
MTCL, regarding the certain legal rights to continue with
reference to issues pertaining to payment of Royalty F
amounts for the period of 2003 to 2005.
AND WHEREAS both the MTCL, and the firms duly
agitated their respective rights before the Hon'ble
Supreme Court of India, subsequent to the disposal of
legal proceedings by the Hon'ble High Court of Madras. G
AND WHEREAS considering the overall issues all the
parties herein had agreed for arriving at an appropriate
settlement on such other terms and conditions and also
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[2014) 13 S.C.R.
A
agreed to resolve their past dispute once for all before
the Hon'ble Supreme Court of India.
AND WHEREAS the Hon'ble Supreme Court of India
had passed orders on 301h June 2008 in SLP(C) No.
B
16908/2006, 276/2007 and 852/2007 recording the
terms as set out in the Memo and had permitted both
MTCL, and the firms to implement the said order and
had disposed all the cases pending before the Hon'ble
Supreme Court of India.
c
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F
)()()()()(
xxxxx
)()()()()(
That in compliance with the orders of Hon'ble Supreme
Court of India in SLP(C) No. 16908/2006, 276/2007 and
852/2007 MTCL agrees to allot 500 Nos. of bus shelters
to the concessionaire for erection/re-erection of the
shelters of International standard for the benefit of the
waiting bus passengers and the concessionaire agrees
to convert the existing bus shelters of International
standard where there is no bus shelters. The
concessionaire agrees to erect the above bus shelters
of International standard at its own cost and in return
agrees to pay the royalty amount at the rates hereinafter
appearing.
)()()()()(
xxxxx.
xxxxx
The concessionaire agrees to buy royalty amount to
MTCL during the period of 12 years. The royalty amount
shall be paid at the rate of Rs.30000/- per year per
G
International Standard Bus Shelter with an escalation of
10% once in every three years over the previous rate.
The period of agreements as well as the royalty payment
starts from 01.09.2008.
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)()()()()(
)()()()()(
)()()()()(
M/S. NOVAADS v. METROPOLITAN TRANSPORT
263
CORPORATION [DIPAK MISRA, J.]
This agreement is valid for 12 years from 01.09.2008 A
with further extension on condition that the entire 500 bus
shelters, as per list, would be converted into International
Standard Bus Shelters with advertisement space not
exceeding 30 sq.mtrs per shelter, within 12 months from
01.09.2008."
B
~.,i
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:
''This writ petition has been filed. for recall of the order
passed by this Court on 30th June, 2008, in
SLP(C)No.16908 of 2006, filed by the Metropolitan
Transport Corporation against one K.S. Kumar Raja 0&
Anr., together with two other Special Leave Petitions filed
by some of the private parties, namely, AIM Associates
Ltd. and Mis. Front Line Media etc.
xrG
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9
2. By virtue of the said order, on a submission mad~'·t,~
the parties that a settlement has been arrived at, we:~~q ~
disposed of the Special Leave Petitions on the basis of
11 l !:1 ~ c: !
such submissions.
,', 'J •J)I 'f
3. In this writ petition, it has been sought to be indicated
that the said order had been passed despite an·' earlier fi
order in the same matter.
2·•,-:Jori"I
ifl~r°')(1!~?
4.
Having heard
learned counsel · for the
respective parties and in particular Mr. Mohan Parasaran,
learned ASG, that the subject-matter of the Speelal teave
cJ.G
Petitions was confined to 500 bus shelters, oufof -wh1Ch
a number of shelters had already been constructed t6' a
large extent, we recall the order which we liad passed
earlier on 30th June, 2008, and restore alF-the three
;l .::.:;'1 nuo'.j
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SUPREME COURT REPORTS
[2014] 13 S.C.R.
A
Special Leave Petitions to file. We also, however, clarify
that such order had been passed upon agreement by
the parties at that stage.
We also clarify that whatever
steps that have been taken so far on the basis of the
said order, will be subject to the final result of the Special
B
Leave Petitions.
c
5. This order is passed without prejudice to the rights
and contentions of the parties at the time of the hearing
of the Special Leave Petitions.
7. Liberty given to file additional documents.
11. Going back to the clauses in the agreement, it is
luminescent that there is a reference to the order passed by
the High Court and the order dated 30.6.2008 wherein this
D Court has recorded the settlement.
The High Court had
unequivocally held that the MTCL has no authority to enter into
any agreement in respect of the bus shelters and only the
Corporation has the authority under the law. The Chennai
Corporation was not a party to the settlement. It is interesting
E to note that from the clauses incorporated in the agreement, it
is reflective as if there was a direction by this Court to enter
into this kind of settlement. The disturbing part is that the MTCL
has entered into the agreement which has to remain valid for
F
12 years with the consortium of six firms without calling for
tenders. These facts are not only bewildering, but really
shocking.
12. In this background, the seminal question that is
required to be addressed first is whether under the Act it is the
G Corporation or the MTCL has the authority to deal with bus
shelters for passengers. Mr. C.A. Sundaram, Mr. V. Giri and
Mr. l~avindra Srivastava, learned senior counsel appearing for
various parties in different appeals would contend that the High
Court has fallen into error in its appreciation of the provisions
H
M/S. NOVAADS v. METROPOLITAN TRANSPORT
265
CORPORATION [DIPAK MISRA, J.]
of the Act and has erroneously come to hold that Corporation A
has the authority to exercise the powers for providing shelters
to the passengers and to deal with the shelters for any
commercial venture and the said transport undertakings are
to be controlled and managed by the Corporation and the
MTCL has no authority to grant permission for establishing B
the bus shelters or to deal with them in any manner. It is further
. urged by them that the High Court has failed to take note of the
fact that at the time the State Government had conferred the
power on MTCL to deal with the matter, the Corporation was
under supersession and hence, the State Government had the C
authority to act on behalf of the Corporation and delegate the
power/authority to MTCL and, therefore, there was no illegality
in dealing with the same. Resisting the aforesaid contentions,
it is submitted by Mr. Rohtagi, learrted Attorney General that 0
the analysis made by the High Court cannot be found fault with
because it is in consonance with the principles of
interpretation. Similar submission has also been canvassed
by Mr. Subramonium Prasad, learned AAG for the State of
Tamil Nadu and Mr. C.U. Singh, learned counsel for the writ E .
petitioner. As far as the authority of the State Government is
concerned, it is urged by them that by the time the notification
was issued, the elected body had come into existence and,
therefore, the State Government could not have acted on behalf
of the Corporation.
F
13. To appreciate the controversy, certain statutory
provisions need to be referred to. Sections 2(6) and 2(7) that
define "carriage" and "cart" respectively read as follows:
"Carriage - "Carriage" means any wheeled vehicle with G
springs or other appliances acting as springs and
includes any kind of bicycle, tricycle, rickshaw and
palanquin but does not include any motor vehicle within
the meaning of the [Motor Vehicles Act, 1939 (Central
ActlV of 1939)].
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[2014] 13 S.C.R.
Cart- "Cart" includes any wheeled vehicle which is not
a carriage but does not include any motor vehicle within
the meaning of the [Motor Vehicles Act, 1939 (Central
Act IV of 1939)]."
14. Keeping the said definitions in view, we shall proceed
to deal with certain other provisions of the Act. Chapter IX of
the Act deals Public Streets. Section 203 reads as follows:
"203. Vesting of public streets and their
appurtenances in corporation-(1 )All public streets
in the city not reserved under the control of [the Central
or the State Government], with the pavements, stones
and other materials thereof, and all works, materials
implements and other things provided for such streets,
all drains, drainage works, tunnels and culverts whether
made at the cost of the municipal fund or otherwise, in
alongside or under any street, whether public or private,
and all works, materials, implements and other things
appertaining thereto and all trees not being private
property growing on public streets or by the side thereof,
shall vest in the corporation.
(2) The State Government may by notification withdraw
any such street drain, drainage work, tunnel, culvert, or
tree from the control of the corporation."
15.