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Nova Ads v. Metropolitan Transport Corporation

Writ Petition (Civil) · Neutral citation not assigned (Writ Petition (Civil) No. 223 of 2009)Decided 12 Dec 2014
Writ Petition (Civil) No. 223 of 2009
Justice Dipak Misra · Justice Uday Umesh Lalit

Background

Advertising sponsors obtained Chennai bus shelter contracts from the Metropolitan Transport Corporation. The High Court held that the municipal corporation had the legal authority over the shelters, but the transport undertaking and sponsors subsequently negotiated long extensions. Nova Ads challenged arrangements that bypassed the municipality and competitive allocation.

Decision Breakdown

The Supreme Court affirmed the municipal corporation's authority and annulled the sponsors' contracts with the transport undertaking. A government order about vehicle stands could not confer powers over passenger shelters contrary to the municipal statute. Neither the sponsors' expenditure nor their negotiated settlement justified continuing an arrangement made without legal authority. The municipality was directed to take over the shelters immediately and allocate them through a fair, transparent tender or auction. The six named sponsors were each ordered to pay the municipality ₹5 lakh in costs within eight weeks.

Lesson Learnt

Before investing in a public contract, check that the body awarding it has legal authority. Spending money or negotiating an extension does not protect an unauthorised contract that bypasses a lawful public allocation process.

Official source (sci.gov.in)View Judgment (PDF)

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