Bundel Khand Advertising Association And 5 Others vs. State Of U.P. And 8 Others

Facts

The petitioners, an advertising association and its members, challenged the re-allotment of a contract for displaying advertisements on hoardings within the Nagar Nigam, Jhansi, to respondent no. 5, Midas Infra Tech Private Limited. The original contract with respondent no. 5 was cancelled due to non-handover of sites by the petitioners. Respondent no. 5's representation for dispute resolution was allowed by the Municipal Commissioner, leading to a fresh agreement dated January 4, 2017, for two years. The petitioners also sought renewal of their advertisement display permissions, which were initially rejected. The Nagar Nigam had previously issued multiple tender notices for the advertisement rights, with no response until the fourth notice, to which respondent no. 5 and two others responded. The petitioners did not participate in the tender process due to certain conditions. The petitioners had also filed several previous writ petitions and a civil suit, some of which were dismissed or withdrawn.

Held

The Court held that the re-allotment of the contract to respondent no. 5 was valid. The Court noted that the Nagar Nigam had followed the procedure of inviting tenders, and respondent no. 5 was the highest bidder. The subsequent re-allotment was made pursuant to a representation allowed by the Municipal Commissioner, which was a consequence of the cancellation of the earlier contract and the liberty granted by the Court to approach the authority concerned. The Court found that the petitioners had no lawful claim to apply for renewal of their permissions because the advertising rights had been settled with respondent no. 5 through a contract that prohibited the Nagar Nigam from granting permission to any third party for displaying advertisements during its subsistence. The Court also observed that the petitioners' conduct, including obstructing the contract execution, filing frivolous litigation without disclosing full facts, and continuing to display advertisements illegally, disentitled them to any relief under Article 226 of the Constitution. The Court also addressed certain clauses in the agreement regarding extension of the term, stating they would not be enforceable, and directed the Nagar Nigam to proceed with enforcing impugned notices and removing unauthorized hoardings, and to realize license fees for the period of unauthorized use. The Court also noted that the renewal of permission for members of the Association for 2016-17 was a stop-gap arrangement made without following the prescribed procedure.

Key Issues

1. Whether the order dated October 20, 2016, passed by the Municipal Commissioner, re-allotting the contract to respondent no. 5, and the subsequent agreement dated January 4, 2017, are valid and legal, considering the petitioners' contention that the Nagar Nigam failed to follow the prescribed tender process and that the re-allotment was arbitrary and illegal? The petitioners argued that the Nagar Nigam should have followed a proper tender process and that the re-allotment was made without proper justification. They relied on the principles of natural justice and fair play. The respondents contended that the re-allotment was made pursuant to a representation allowed by the Municipal Commissioner in accordance with Clause 19 of the original agreement, after the cancellation of the initial contract, and that the petitioners had no lawful claim to the sites as the advertising rights were settled with respondent no. 5. They also highlighted the petitioners' conduct in obstructing the contract and engaging in frivolous litigation. 2. Whether the petitioners are entitled to renewal of their permissions for displaying advertisements for the years 2016-17 and 2017-18, given that the advertising rights for these periods were settled with respondent no. 5?