Holding

The corporation’s grant of permission to M&T Consultants was a valid exercise of its statutory power and not arbitrary or violative of Article 14; therefore the appeal is allowed and the Division Bench order is set aside.

Summary

M&T Consultants entered into a self‑financing agreement with the Hyderabad Municipal Corporation (HMC) to erect house‑numbering, sign‑boards and direction boards in selected circles as a pilot project. The corporation invited other advertisers through a circular, but the writ petitioner, S.Y. Nawab, claimed that the permission granted to M&T was arbitrary, violated Sections 126, 129A, 148, 420 and 421 of the Hyderabad Municipal Corporation Act and Article 14 of the Constitution, and sought a writ of certiorari. The High Court Single Judge dismissed the petition, but the Division Bench set it aside and ordered a fresh tender. The Supreme Court held that the corporation’s exercise of power was within its statutory authority, that non‑floating of tenders alone does not make an act unreasonable, and that the petition was not a genuine public‑interest litigation but a personal vendetta. Consequently, the appeal was allowed, the Division Bench order was set aside, and the Single Judge’s dismissal was restored.

Issues considered

The grant of permission to M&T Consultants without a public tender was arbitrary, illegal or violative of the Hyderabad Municipal Corporation Act and Article 14.
Whether the absence of a public tender or auction renders a public authority's action unreasonable or ultra vires.
Whether the corporation’s power under the Act extends to self‑financing projects that do not involve financial commitment from the corporation.
Whether the writ petition constituted a bona‑fide public‑interest litigation.

Legislation cited

Constitution of Indias. 14, s. 226

Subjects

municipal corporationpublic procurementself‑financing projecttenderingarbitrarinessArticle 14public interest litigationcontractstatutory interpretation

Judgment

5 M & T CONSULTANTS, SECUNDERABAD A
V.

S.Y. NAWAB AND ANR.

SEPTEMBER 26, 2003

[DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.] B

Municipal Corporations :

Hyderabad Municipal Corporation Act, 1955-Sections 126, 129~A,
148, 420, 42 I-Municipal Contracts involving great public interest-Self C
Financing Project-Permission granted to appellant to erect signboards
and direction boards-For other areas. Corporation invited advertisers .
without calling/or any invitation from general public-Writ petitioner did
not apply, however, approached Corporation for permission to erect
signboards without giving details ofany project/plan-Corporation did not D
respond-High Court allowed the Writ challenging the permission granted
to appellant as arbitr01)'-Correctness of-Held: Writ petitioner only
attempted to ventilate personal vendetta and exhibit revengeful attitude
rather than sincerely endeavouring to really seek relief-There was no
unreasonable and arbitrary exercise ofpower by C01poration to warrant
---+ interference under Article 226 of Constitution-Constitution of India, E
----( 1950-Articles 14, 226.
,
• Tenders or public auction-Non floating of-Effect-Held: Non-
jloating of tenders or absence of public auction or invitation alone is no
sufficient reason to castigate the move or an action of a public authority F
as either arbitrary or unreasonable or amounted to mala fide or improper
exercise or improper abuse of power by the authority concerned

Public authority-Exercise ofpower-Use and abuse of-Distinction
between-Discussed
, G
The appellant had volunteered to take up the rationalization of
house numbering in the twin cities of Hyderabad and Secunderabad
and had submitted detailed project report and even executed a sample
board, which was considered satisfactory by the Corporation. After
effecting certain modifications, Corporation finally granted permission H
187
. 188 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R .

, A to appellant to erect street signboatds and direction boards. For other
areas, Corporation issued a Circular inviting advertisers without
calling for any invitation from the general public and thereafter
convened the meeting, w~ich was attended by 30 private advertisers.
'''
ia Writ Petitioner who did not attend the meeting made representation
complaining about grant of permission to the appellant claiming at the
same time for sanction of arches/street sign boards across the roads
• • ~ • • • ' • I

and direction boards inside various housing colon!es, at the same terms
a~d conditions as offered by ~ppel!ant~o;~ith.out details of any of his
- • ~ > 1 .I: .. '• ~ I ) .. •

project plans, models or scheme. Corporation did not resptmd and he
c appr!>ached High Court' ~
with
,·. l
.

a writ
~ "
fr,~- t • ._ .•

•· ~\> t (l1\I..
• .. dll.
~fcertiorari.falli.ng for the .~ecords
. . l
·J·~~.it•
I •~,

··4

of the
..
Corporation' relating to thet
permission
. •
granted
. ..
~ -~;!
to the
- •
appellant
,. ':"~ ~ ~

and to the second respondent or to any other person and declare the
same to be ultra-vires the provisions ..of theJ Hyderabad Mu,nicipal
• • . .., • 't I ' - . • , ~- •.

Corporation Act and Article 14 of the Constitution .of India. Single
Judge dismi~sed writ petition.' Ori. ~ppea~, Divisio~ I B~nch allowed
>• i ~r ~1. ~ l II .j,

same. Hence the present appeal.
.
. •
,_
•. -- . •• . t ~

Allowing the appeal, the't:ourt
·'' ' I

HELD : 1. 'There is no·unreasonable or arbitrary exercise of
E power on part of Corporation· so as· tO warrant interference 'under
Article 226 of the Constitution of India. (207-B]

2. There. is nothing in ·the matter involving any great, public
interest, which can justify any public outcry through a public interest
F litigation. The desperateness of the.writ petitioner is betrayed by the
liberally invented incorrect averments about his alleged approach· to
the authorities prior to the filing of writ petition, when the fact remains
that notwithstanding public notice for selection of agents for similar
work in other areas, he did not respond like others and merely
appoached the court feigning ignorance of all that happened. The
G manner in which the writ petitioner was attempting to make bald
· claims after certain orders were passed by the Division Bench pending
fin'~j disposal of the appe~I, t~ explore possibilities
. .• . - • f
orirant Of work in
• ~
' . ~I • ~
his'favour without disclosing for the purpose concrete plans or models
'td. convince. the authorities ~f the genuineness of his' moves also
.H demonstrate; mere by his attempts tJ ·ven'tiiate personal vendetta ·and

_,
5 M & T CONSULTANTS v. S.Y. NAWAB 189

exhibit revengeful attitude rather than any of his sincere endeavours A
to really seek relief even for him. The writ petition itself deserved
summary dismissal and . the Division Bench committed a grave
error in interfering in the matter. The ·well-merited order of the Single
Judge ought not to have disturbed by the Division Bench of the High
Court. [204-A-E] B
3.1. The materials on record substantiated the absolute need and
necessity to undertake works of the. nature exetuted by the appellant,
in furtherance of great ·public interest and for larger public and
common good. The admitted dire financial position of the Corporation
and their inability to undertake suet) a project at. the cost o{, the . c
Corporation and the fact that the venture was long over due apparently
made the Corporation authorities to avail. of the project as unfolde~
and volunteered by the appellant, subject, of course, to further
revisions, modifications and suggestions in t.he best interests of the
Corporation. Not only the Municipal Corporation had no financial D
commitments in getting such works by any expenditure therefor, which
were to be executed by the appellant only on self-financing basis
generating the ' required funds for installation and continued
maintenance and their upkeep from sponsors by collecting premiums
for giving them the privilege to f!Vail of the space permitted by the E
Corporation for advertisements but ultimately the whole works have
to be left with the Corporation and it is not to be removed by the
appellants. [204-F-G, 205-B-C]

3.2. The fact that no other private advertising agencies, including
the writ petitioner could offer to undertake such a venture in the other F
available areas when their participation was sought for, belies the tall
claims of the writ petitioner now made, after finding the project to have
become successful and apparently fruitful - more perhaps then it could
have been thought of, initially by everyone. Perhaps irked by this only
the interests of the wdt petitioner seem to have gained momentum, to G
try in desperateness for the 'Shylock's pound of flesh', to ruin th~ very
proj~ct, unmindful of any concern for the Corporation, public good
and the. appellant. (205-D-EJ

4. It is by now well settled that non-floating of tenders or absence
of public auction or invitation alone is no sufficient reason to castigate H
190 SUPREME COURT REPORTS [2003} SUPP. 4 S.C.R.
A the move or an action of a public authority as either arbitrary or
unreasonable or amounted to malafide or improper exercise or improper
abuse of power by the authority concerned. Courts have always leaned
in favour of sufficient latitude being left with the authorities to adopt
its own techniques of management of projects with concomitant
B, economic expediencies depending upon the exigencies of a situation
guided by appropriate financial policy in the best interest of the
authority motivated by public interest, as well in undertaking such
ventures. Though now, an attempt is sought to be made by the writ
petitioner and surprisingly even by the Corporation too, attempting a
somersault and claiming non-compliance with certain :;tatutory
C formalities, such a move is not only a pure after thought, but really
unwarranted and not based upon a firm or sufficient ground or basis.
The very applicability of the regulations contained in Sections 126,
J29A, 148, 420 or 421 'of the Act to the case on hand wo_uld itself be
*triously doubtful. On the face of it they involve transactio~s envisaged
D thtreiii, when granted in favour of third parties, to be executed with
the Corporation funds and involving financial commitments or parting-
' . .
with the property or rights and privileges of the Corporation for value.I
consideration, and not to a self-financing scheme to be implemented
and maintained without any financial commitments or· expenditure to
E the Corporation. {205-G-H, 206-A-D)

Mis. kasturi Lal Lakshmi Reddy v. State of Jammu & Kashmir &
Anr., (1980) 4 SCC I; State ofMP. v. Nandila/Jaiswal & Others, (1986]
4 SCC 566; G.B. Mahajan & Others v. Jalgaon Municipal Council &
Others, (1991) 3 SCC 91; Sterling Computers Limited v. Mis M & N
F Publications Limited & Others, [1993] l sec 445; Tata Cellular v. Unibn
ofIndia, 11994) 6 SCC 651; G.D. Zalani & Anr., v. Union ofIndia & Ors.,
(1995] Supp. 2 SCC 512; Delhi Science Forum & Others Etc. v. Union
of India & Anr., (1996) l SCC 405; MP. Oil Extraction & Anr.Etc. v.
State of MP. & Ors., (1997) 7 SCC 592; Air India Ltd. Etc. v. Cochin
G International Airport Ltd. & Ors., [2000) 2 sec 617; W.B. State
Electricity Boardv. Patel Engineering Co. Ltd & Ors., (2001) 2 SCC 451;
Onkar Lal Bajaj & Ors. v. Union of India & Anr., (2003) 2 SCC 673;
Subhash Kumar v. State of Bihar.& Ors., (1991) 1SCC598 and Raunaq
International Ltd. /. V.R. Construction_ Ltd. & Ors., (1999] I SCC 492,
H referred to.
5 M & T CONSULTANTS v. S.Y. NAWAB [RA.JU, J.J 191
.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8103 of A
2002.

From the Judgment and Order dated 26.4.200 I of the Andhra Pradesh
High Court in W.A. No. 712 of 1995.

K.K. Ver.ugopal, P. Sridhar, P.S. Narasimha, Ananga Bhattacharya B
and G. Seshagiri for Mis. P.S.N. & Co. for the Appellant.

L. Nageswara Rao, Additional Solicitor General, R. Venkataramani,
Mohd. Wasay Khan, K.C. Sudershan, Jayanth Muthuraj, G. Ramakrishna
Prasad, M. Srinivas R. Rao, Srinivas Kotni, Nand Kishore, Ms. Uma C
Mishra and Ms. Neeru Vaid for the Respondents.

The Judgment of the Court was delivered by

RAJU, J. : I. Special leave granted.
D
2. The appellant. who was arrayed as second respondent in Writ
Petition No. 22227 of 1994 before the High Court of Andhra Pradesh, filed
by the first respondent in this Court, though succeeded before the learned
Single Judge, lost before the Division Bench in Writ Appeal No. 712 of
I 995, resulting in this appeal. The Writ Petition before the High Court was E
filed seeking for a writ of certiorari to call for the records of the Municipal
Corporation of Hyderabad relating to the permission granted by the
Corporation to the appellant to erect or display any advertisement/street
signs/direction boards/arches on the public roads/colonies etc. within the
twin cities of Hyderabad and Secunderabad and the permission granted for F
display thereon to the second respondent or to any other person and declare
the same to be ultra-vires the provisions of the Hyderabad Municipal
Corporation Act and Article 14 of the Constitution of India. The learned
Single Judge dismissed the writ petition on the ground that the writ
petitioner was not able to establish any illegality as alleged in tLe
transaction. The learned Judge also adverted to the salient features of the G
transaction and the circumstances under which the work came to be
entrusted to the appellant as well as the further fact that only two circles
were taken up for putting up the boards and the other circles are always
available for the petitioner or anyone else interested to approach the
Corporation and undertake such work. It was also observed therein that the H
192 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R.
A' assignment entrusted to the appellant was not shown to be of any g~nt' of
largesse, as it did not involve exploitation of any property. Aggrieved, the
writ petitioner moved the Division Bench and the Division ·Bench on
26.9 .95 seems to have passed on order recordin·g the willingness of parties
as hereunder : '·, '
·_. !.·I'

B
"After hearing the learned counsel .for the parties, we wanted 1to
• I" ' • .
know from the learned counsel for the Corporation· if on similar
terms and conditions the Corporation is prepared to' 'hward''the
contract to the Writ Appellant as was done earlier. Leanied
counsel submitted that.80% of the work is still.remained to' be
c completed and the Corporation will have no objection i<f'grarit to
)
the Writ Appellant as well. Learned Counsel for the writ appellant
· also show the willingness of the writ appellant to take the contract
on similar terms and conditions on which the second respondent
~n this writ appeal was granted contract. For setting the terms and
D the extent of the work to be entrusted to the writ appellant, in
pursuance of the mutual agreement expressed before us by the
learned counsel for the parties, both of them wanted some time.
Accordingly time till 12.10.95 is granted. Put up on 13.I0.95."
·'
E 3. Notwithstanding, the writ petitioner appears to have even' thereafter
withour availing of the said order, pursued the litigation, as if ori a public
interest litigation and the Division Bench of the High Court by its order
under challenge in this appeal allowed the appeal; as prayed for and
directed termination of the contract and proceed to make an exercise afresh
for.the.purpose. Certain relevant factual details have to be noticed for a
F proper appreciation of the respective contentions of the parties and the legal
principles that should be really applied in adjudging the same.
J"

4. The Corporation, though a metropolitan city; seems to have had
no road names display anywhere and there appears to have been also rto
G .proper house numbering and the one in vogue was of a confusing pattern.
The appellant appears to have volunteered to take up the rationalisation of
house numbering in the twin cities by assigning house numbers in
continuous series in each locality as house number, street number, locality, ·
and also erect street sign boards indicating the name of the locality, 'street
H number, details of house numbers etc. The Corporation seems to have also

I
5 M & T CONSULTANTS v. S. Y. NA WAB [RAJU, J.) 193
had an idea of erecting for the use and benefit of public road direction A
boards on various thoroughfares of twin cities. Though all these were said
. t~. have been on the agenda of the Corporation for long, financial
constraints seem to have stood in the way of its realization, due to
requirement of substantial sums of money to implement the same. Only
at this stage, the appellant was said to have approached in September, 1973 B
the ~orporation,with a proposal fonnulated by them, on an in depth study,
in the fonn of a Scheme and project and expressed their willingness to
undertake a fresh survey if the Corporation desired to take up the project.
, The appellant was asked to show various designs fonnuJated by them and
,r~isplar one of them for sample and it appears to have been done at a place C
.near Bakers inn on the existing electrical pole showing the direction
,,.t~wards Raj Bhawan Road. The then Commissioner and other officials who
inspected the work in November, 1993 were said to have been not
impressed and wanted the appellant to change the same by doing it without
using the electrical pole. After going through the various revised designs
submitted by them, one among them appears to have been chosen and the ·D
appellants were asked to execute a sample board during the second week
of November, · 1993 which was considererl to be satisfactory to the
concerned Authorities of the Corporation. A detailed project report was
said to have been submitted by the appellant on 25.11.93 after conducting
a survey and the sample street signboards and direction boards were E
executed, to ascertain the utility of them. As a test venture, the appellant
was said to have been asked to find out sponsors for meeting the cost of
street sign boards and take up the work in Circle No. 3 and Secunderabad
Division by a letter dated 30.3.94. Subsequently, also for further ascertaining
the satisfactory nature of ':he system, the Corporation was said to have F
asked for the erection of 3 sample boards at West Marredpally for
inspection and on such inspection by the commissioner, Additional
Commissioner (Project) Officer-in-Special Duty, and thereafter further
suggestions were said to have been also given as to increasing the height
of the board and after effecting alterations, modifications and corrections,
~he Corporation seems to have finally asked the appellant to erect street G
. signboards at Marredpally. Secunderabad Division in Gagan Mahal area
in Circle No. 3 duly specifying the dimensions, height, shape of board and
space to be left for sponsor, in the communication dated 23.6.94 of the
Commissioner of the Corporation. Thereupon it appears to appellant
submitted a proposal on 7.9.94 in respect of road direction boards for H
194 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R.
A erection on main through fares of twin cities along with a design and model
which was said to have b-;-en agreed t.o on principle by the Corporation and
asked the appellant to erect a sample of it at Patni Junction, Secunderabad
in the communication dated 16.8.94 of the Director of House Numbering
Cell. The appellant thereupon appears to have commenced the work as per
B the discussions held with the various authorities during the course of the
progress of work, who from time to time, have been inspecting an.d
checking upon the execution whereof. ·

5. Since the project in question to be implemented by the Corporation,
was thought to be first of its kind and after an analysis and consideration
C of all the factors of .the project for about an year as noticed above, a
decision seems to have been taken to undertake the work ~s a pilot project,
on experimental basis. Accordingly permission appears to have been
granted to the appellant for erection of street signboards in Circle No. 3
and Secunderabad Division by a communication dated 12.9.94/14.9.94 of
D the Commissioner of the Corporation with following terms and conditions
duly specifying at the same time that the work should be completed by . "
31. 12.94 :

"I. Location of the Street Sign Boards shall be strictly as per the
directions of the Director (HNC), MCH. · ·
E
2. On erection of Street Signs in each locality, a nominal charge
of Rs. 5 (Rupees Five only) shall be paid to MCH as cost of '
erection borne by your organization.

F 3. You are exempted from the advertisement fee and ground rent,
as you are displaying Street Sign Board along with your board at
your own expenses. However, the MCH will reserve the right to
impose the advertisement fee and ground rent if at any point of
time, if it is observed and substantiated by any impartial survey
that the maintenance is poor and/or the advertising space in more
G than stipulated in the agreement, and/or any other terms and
conditions are violated.

4. The advertisement space should not be used for any
political or religious matters i.e. message or slogans of whatsoever
H nature.
5 M & T CONSULT ANTS v. SY NAWAB [RAJU. J.] 195
5. Periodical maintenance should be done, and boards are kept A
neat and clean by the sponsor.

6. The sizes of Street Sign Boards should be as follows :

SI. No. Description Height from Dimension Sponsor
of the Board Ground Level of Board B
l Main Road 9' x O' 4'3" x 2' 3" 3' 3"xl' 6"
Board
2 Street Sign 8' x 6"
Boards
Lane 7'-10" 3' O" x l' 6" 22" DIA c
Boards :

7. You will meet the entire cost including civil works, fabrication,
erection, painting, lettering, maintenance and MCH will not incur
any money for this purpose. D
8. You can let out space provide for advertising purpose to any
of your clients at your own terms and conditions for 15 years from
the date of this letter, after which the same may be extended on
mutually agreed terms and conditions.
E
9. You must complete the erection of Street Sign Boards with
complete information within (15) days from the date of receiving
all relevant details/data locality-wise from the Director, House
Numbering Cell, MCH.
F
I 0. Mis. 5 M & T Consultants shall execute an agreement on
twenty rupees non-judicial stamp paper for due performance of
the contractual obligations under this order.

11. M/s. M & T Consultants shall alter and align the road
direction/Street Boards depending on the road widening as and G
when required."

6. Further, a similar order was said to have been issued for erection
of direction boards also at 27 locations, in a communication dated 12.9.94/
14.9.94 subject to the following conditions, duly specifying that the work H
196 SUPREME COURT REPORTS (2003] SUPP. 4 S.C.R.

A shall be completed before 2. !0.94 :
"I. Location of the Direction Boards shall be strictly as per the
direction of the Director (HNC). MCH.

2. On erection of each Direction Board, a fee of Rs. I 00 (Rupees
B One Hundred only) shall be paid by Ms. 5 M & T Consultants
to the MCH as the entire cost of erection is borne by yo~r
organization.

3. You are exempted from the advertisement fee and ground rent,
C as you are displaying direction boards along with board·with your
board at own expenses. However, the MCH will reserve theright•'
to impose the advertisement fee and ground rent if at any point
of time, it is observed and substantiated by any Impartial survey
that the maintenance is poor and/or the advertising space is more
D than stipulated in the agreement and/or any other terms- and
conditions are violated.

4. The Advertisement space should not be used for any political
or religious matters i.e. message or slogans of whatsoever nature.

E 5. Periodical maintenance should be done, and boards are kept
neat and clean by the sponsor.

6. In space provided for indicating direction to the localities
should be strictly followed as given below:
F
S. No. Area of Display Size
1. Right & Left Direction Boards (8'-0" x 6'-6") both sides
2. Along the road direction Board (30'-0" x 2'-9") both sides
"'
.). The Advertising Board (3'-9") Ht at Centre
(4-W on either side)
G 4. Minimum clear height from (18-0")
road level
5. Lettering of Direction Board (Radium Letters)

7. You will meet the entire cost including civil works, fabrication,
H erection, painting, lettering, maintenance and MCH will not incur
- 5 M & T CONSULTANTS v. S.Y. NAWAB [RAJU. J.]
any money for this purpose.
197

A
8. You can let out space provided for advertising purpose to any
of your client at your own terms and conditions for (15) years
from the date of this letter, after which the same may be extended
on mutually agreed terms and conditions."
B
It appears that though the appellant sought for 20 years period from
the date of the completion for work for realisation for their investment and
other expenditure incurred by them on this project and the maintenance to
be undertaken the currency of the period, the Corporation decided to accord
it for a period of 15 years only, to the appellant. C
7. Simultaneously, the Corporation seems to have issued a press
notification on 21.11.94 by publishing it in the daily newspapers of Telugu,
English and Urdu on 23.11.94 in Eenadu, Newstime and Siasat respectively,
in the following terms: D
"The MCH has taken up the rationalization of House Numbering
in twin cities of Hyderabad and Secunderabad. The present system
of Wards, Block, House Number is very confusing and causing
a lot of confusion and to common man, visitors, as well as to use E
departments in their day-to-day Urban Administration. Jnstead,
the MCH proposes to assign House Numbers in continuance series
in each locality as House Number Street No., Locality. It is
proposed to erect boards indicating the name of the locality, street
number, house number from - to and each board depending upon
its location. The Boards are designed such that there is space for F
private advertisement, which the sponsor can utilize. The MCH
invites the private.advertise to come forward and participate in the
program and avail the opportunity. A meeting is being convened
at MCH office at 11.00 A.M. on 25.11.1994 for
this purpose, advertising agencies may participate. The area G
available for allotment ward wise is circle No. I, 2, 4, 5 and 6 of
MCH."

It could be seen from the above that a very object was to mainly erect
street signboard by giving top priority to the said work, and that the project H
198 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R.

A entrusted with the appellant was on a trial basis being a pilot project. So
far as other areas are concerned, the Corporation invited advertising
agencies to participate in the areas indicated.

8. It is necessary at this stage to refer to the role of the writ petitioner
B and hie; attitude and approach to the issue before the ·court as also his move
towards the project undertaken by the Corpor~tion, for a proper
understanding of the nature of the proceedings instituted, his sole aim as
well as the merit of his claims. In the Writ Petition, the claim made was
that he was carrying on business in publicity and advertising; that the
C displays by such advertisers in such manner are regulated by sections 421
and 422 of the H.M.C. Act; that he approached Corporation on several
occasions for granting pennission and offered that he was prepared to erect
arches on main roads and junction at his own cost and he be permitted to
display thereon as per rules but the Corporation allegedly claimed to have
D informed him that there is no such policy to accord any such permission.
It should be noticed at this stage, except self-serving statements like them
which were seriously disputed by the Corporation, there is nothing on
record/writing to prove any such fancy cla~ms. In the last week prior to
the filing of the Writ Petition in December 1994, it is claimed that he came
E to know that the Corporation as granted permission to the appellant to erect
the arches and display thereon at M.G. Road, Secunderabad, near Telegraph
Office asserting at the same time vaguely that, the grant was opposed to
public duties cast on the Corporation, besides being opposed to the
principles of law and Article 14 of the Constitution of India, the same
being, according to the Writ Petitioner, arbitrary, unjust and opposed to the
F principles of natural justice, fair play and equal opportunity to all. It was
the further case of the writ petitioner th~t on coming to know that a Circular
dated 24. l 0.94 was issued to select a few advertisers without calling for
any invitation from the general public, he made representation on 6.12.94
complaining about the grant of permission to the appellant claiming at the
G same time for sanction of 200 arches/street sign boards across the roads
and 1000 direction boards inside vario1;1s housing colonies, informing that
they can undertake the work at the same terms and conditions as offered
by appellants. Such hollow and cryptic claims without details of any of his
project/plans, models or scheme and how he propose to execute them
H would belie the hollowness as well no half hearted nature of the attempts
5 M & T CONSULTANTS v. S.Y. NAWAB [RAJU. J.] 199

of the writ petitioner. A grievance was sought to be made that no response A
was received for the same and left with no further scope, he claims to have
approached the High Court with the Writ Petition. The counter affidavit
filed by the Corporation before the High Court categorically denied such
claims having been made at any point of time by the writ petitioner except
writing the said letter. It was also stated for the Corporation that he never B
entered into any dialogue with the authorities of the Corporation or sought
for any such direction. After the release of the Press Notification on
21.ll.94 through local Newspapers as indicated already inviting proposals
for private advertisers for erection of boards in Circles I, 2, 4, 5 and 6 of
the Corporation, a Meeting was said to have been convened on 26.11.94 C
in the Conference Hall when about thirty private advertisers seem to have
attended.

9. Though the writ petitioner did not attend the Meeting, instead he
addressed a letter dated 6.12.94 to the Corporation requesting for sanction D
of 200 arches street signs and l 000 Directions Boards, without having any
relative concept of his capacity to erect so many boards running to
approximately to several crosses of rupees, or in what manner he purports
to execute such works. The other thirty private advertisers including the
appellant, who participated in the deliberations. Were said to have been
infonned that the street sign boards project and the erection of Direction E
Boards have to go hand in hand and, therefore, the participants were asked
to give their concrete proposals immediately in order to complete the
revision of House Numbering System. The further claim of the Corporation
appeared to be that all Ad Agencies, who were present in the Meeting, were
asking for work relating to only direction boards but not street signs boards F
or house numbering and no private advertiser has evinced any interest to
give concrete proposal much less the writ petitioner, who never cared to
attend the Meeting. The entrustment of erection of street sign boards and
direction boards to the appellants was said to be a pilot project in Circle
No. 3 at Secunderabad and in certain junctions was not thrown as a surprise .G
and instead seem to and also claimed to have culminated after a prolonged
transaction involving innovative proposals made by the appellants after
much deliberations with the Corporation authorities, who, from time to
time, seem to have suggested certain improvements and changes to make
it not only acceptable but appreciable and at the same time ensure that no H
200 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R.
A financial commitment strain or involvement was made for the Corporation.
It was affirmed before the High Court by the Corporation that the work
was appreciated by several high dignitaries from different States in the
country. The Corporation in the counter affidavit also stoutly denied vague
allegations made against the authorities as· well as the appellants. That
B apart, it appears that when the Division Board passed a consent order to
give a chance to the writ petitioner also the same could not be allotted to
the writ petitioner due to lack of ability on his part to execute such works
for want of either the technical expertise .or .the financial ahility to perfonn
the work of erecting directions boards and sign boards and of maintaining
C them. After the order of the Division Bench noticed above, the writ
petitioner claims to have sent a communication dated 4.10.95 merely ,
disclosing the list of locations, which he desired to take up by vaguely
stating that they are willing to take up the work on same tenns as was given
to the appellants and followed the same by another letter dated 9.10.95 ·1 ii
D merely reiterating the request relating to road direction and street sign · ·
boards on same terms and conditions as laid down py the Corporation in " '
the case of the appellants, but even without submitting any plans or models
of his proposed execution. The Corporation, therefore, seems to have
replied on 8.12.95 that the request for grant of pennission was examined ·
and his request could not be considered at that stage since all the work for
E erection of street sign boards was by then. being done by the Corporation
itself departmentally and no new works are being erected anywhere in the -. •
twin cities either departmentally or otherwise, and if in future any private
agency participation is felt necessary, he will be intimated and given an
equal opportunity.
F ' I

10. Reference may now be made to some of the case law cited on
either side. In Mis. Kasturi Lal Lakshmi Reddy v. State of Jammu &
Kashmir & Another, [1980] 4 SCC I, this Court, while dealing with the
validity of a contract awarded for tapping of )0 to 12 lacs blazes annually
G for extraction of resin from the inaccessible chir forests in the State for a
period of 10 years, observed that in a given situation, when a private party ·.
comes before the State and offers to set up an industry, the State. would j l ="

not be committing breach of any constitutional or legal principle or
obligation if it negotiates with· him and agrees.to provide opportunities/
H resources. It was also observed therein that unless the tenns and conditions
5 M & T CONSULTANTS v. S.Y. NAWAB [RAJU, J.] 201

of the contract or the surrounding circumstances show that the State has A
acted malafide or out of improper or corrupt motive or in order to promote
private interests of someone at the cost of the State, the Court will not
interfere, merely because no advertisement was given or publicity made
or tenders invited. rn State of M.P. &-Ors. v. Nandlal Jaiswal & Ors.,
[ 1986] 4 sec 566. 1t was observed that grant of licenses by private B
negotiations without inviting tenders cannot by itself be held to be arbitrary
or unreasonable having regard to the circumstances, exigencies and
purpose of such grant, and all the more so when scope was left open to
others also to apply for similar grants and obtain it. In G.B. Mahajan &
Ors. v. Ja/gaon Municipal Council & Ors., [1991] 3 SCC 91, dealing with C
the case of a Municipal Council entering into contract with private
developer or builder for construction of a commercial complex involving
its execution on self financing basis subject to handing over it to the
Municipality the complex free of cost and allotting some shops at a fixed
rate I free of cost to certain specified persons while having right to dispose D
of the remaining accommodation at one's own discretion to allottees with
occupancy rights therein for 50 years and retain the premia received by
way ofreimbursement of the financial outlays of the developer plus profits,
it was observed that a project, otherwise legal, does not become any the
Jess perinissible by the mere reason that the local authority had entered into
an agreement directly with a developer for its financing and execution. A E
distinction between proper use and improper abuse of power was considered
to be relevant in adjudging the reasonableness of the exercise of power and
liberty to adopt appropriate techniques of management of projects with
concomitant economic expediencies which really pertain to matters of
economic policy, was conserved in the authority concerned, unless there F
was any violation of constitutional or legal limits of exercise of such
powers itself.

11. In Sterling Computers Limited v. Mis. M & N Publications
Limited & Ors., [I ~93] l SCC 445, it was observed that so-called executive G
necessities alone be no justification to flout the principles and precepts that
have to be followed in pubic interest and deprecated the grant being made
to one who was a proven defaulter affecting public interest and justified
interference when the grant was found to be vitiated on account of
irrelevant and extraneous considerations weighing .with the decision to H
202 SUPREME COURT REPORTS {2003] SUPP. 4 S.C.R.

A make such grant. In Tata Cellular V. Union of Ihdia.' [1994] 6 sec 651,
it Was observed that judicial review· of ·administrative action relating to
award of contracts is limited to a"review of the decision making process
and ·not the merits of the decision itself and that what is to 'be seen is
whether the action is vitiated by arbitrariness. unfairness, illegality,
B irrationality or 'Wednesbury unreasonableness', i.e: when decision is such
as no reaso11able person oil proper application of mind could take or
vitiated by procedural impropriety. In G.D. Zalani & Another v. Union
ofIndia & Ors., [ 1995] Supp. 2 SCC 512; it was observed that while selling
public property or granting lease, though the nonnal method is auction or
C calling for tenders, there may be exceptional situations where adopting of
such a course may not be insisted upon. Adverting to the peculiar nature
of the case therein, it was also observed that the case before Court was not
a simple case of granting of lease of a Government company but one where
the Government· company was tl)'ihg its best to obtain the best possible
D technology to advance its interests and what is to be seen in such cases
is only whether the actiOn· was fair and what has been done is the best
available arrangement in the circumstances. In Delh( Science' Forum &
Others v. Union of India & Another, [1996] 2 SCC 405, it was observed
that parting with privilege exclusively vested with the Government must
be reasonably rational and. in public interest besides conforming to law
E governing the ~ame and' the decision pertaining to the same can be
questioned only ofi grounds of bad faith, based on 'irrational or irrelevant
considerations non-compliance with prescribed procedure or· violation of
any constitutional or statutory provision and the onus in respect of
estal51ishing the same not only heavily rests on the person alleging it·but
F it is not satisfied by mereiy raising· a doubt in the mind of Court as to the
-validity of the decision.

12. In MP. Oil Extraction & Another, etc. v. State of MP. & Others.
[I 997] 7 SCC 592, while dealing with a case where an agreement was
G entered ·into by the State with selected industrial µnits which were
commissioned on invitation of State to undertake oil extraction operation
for ·assu'red supply of sal seeds at 'concessional rates ~o them, it was
observed that though open tender or public auction was preferable,
negotiation in certain ·cases was equally permissible, and Court's interference
H would not be called'for; if relevant considerations relating to the grant was
..
5 M & T CONSULTANTS v. S.Y. NAWAB [RA.TU . .I.] 203

duly considered before such grant. A

13. In Air India ltd. Etc. v. Cochin International Airport Ltd. &
Others, [2000] 2 SCC 617, it was observed that in awarding contracts the
State can choose its own method, and as long as it complied with the nonns,
standard and procedure; no interference by courts is warranted unless the B
decision-making process was found to be vitiated on ground of malafides,
unreasonableness or arbitrariness. In W.B. State Electricity Board v. Patel
Engineering Co. ltd & Others, [2001] 2 SCC 451, it was observed that
rule of law and constitutional values must be adhered to by public
authorities when awarding contract and that it was always open to the C
authority concerned to negotiate with the next lowest bidder for awarding
the contract on economically-viable price bid. In Onkar Lal Bajaj & Others
v. Union of India & Another, [2003] 2 SCC 673, while dealing with mass
scale and blanket cancellation of allotments made in respect of retail outlets
of petroleum products, LPG distributorships and SKO-LDO dealerships
during the entire period commencing from January, 2000 till date of orders D
of cancellation by one stroke, it was observed that treating all grants on
equal basis for cancellation irrespective of the fact whether an individual
grant is otherwise meritorious or deserving one, would be bad and that a
grant, which is otherwise found vitiatec!, could not be justified merely on
the plea that huge investments have been made, after such allotment and E
serious loss will be caused if cancellations are to be effected thereafter.
Reference made to decisions of English Courts are found to be not relevant
for the case on hand and it would be unnecessary to advert to them when
innumerable decisions of this court itself are available on the legal
principles governing an adjudication of the issues raised. F

14. In Sub hash Kumar v. State ofBihar & Others, [ 1991] I SCC 598,
it was observed that Public Interest Litigations should not be encouraged
when it is evident from the facts 9n record that the primary purpose/object
of the litigt1.tion is not to serve any public interest but only to further ones G
own self interest, and the so-called public interest is merely a garb to cover
up vested interests. In Raunaq International Ltd. v. /. V.R. Construction Ltd.
& Others, [ 1999] I SCC 492, it was observed that the professed public
interest litigation should be genuine, bona fide and really for public good
and not merely a cloak for attaining private ends. H
204 SUPREME COURT REPORTS [2003]SUPP. 4 S.C.R.
A 15. The facts averred in the writ Petition and the stand pursued before
this Court also would bring out the real object, i.e., vindication of his own
personal interests and there is nothing 'in the matter involving any great
public interest, which can justify any public outcry through a public interest
litigation. The· desperateness of the writ petitioner is betrayed by the
B liberally invented incorrect averments about his alleged approach to the
authorities prior to the filing of writ petition, when the fact remains that
notwithstanding public notice for selection of agents for similar work in
other areas, he did not respond like others and merely approached the court
feigning ignorance of all that happened._ The manner in which the writ
c petitioner was attempting to make bald claims after certain orders were
passed by the Division Bench pending final disposal of the appeal, to
explore possibilities of grant of work in his favour without disclosing for
that purpose concrete plans or models to convince the authorities of the
genuineness of his moves also demonstrate, mere by his attempts to
D ventilate personal vendetta and exhibit revengeful attitude rather than any
of his sincere endeavours to really seek relief even for him. The writ
petition itself deserved summary dismissal and the Division Bench committed
a grave error in interfering in the matter. The well-merited order of the
learned Single Judge ought not to have disturbed by the Division Bench
of the High Court.
E
16. The materials on record substantiated the absolute need and
necessity to undertake works of the nature executed by the appellant, in
furtherance of great public interest and for larger public and common good.
The admitted dire financial position of the Corporation and their inability
F to undertake such a project at the cost of the Corporation and the fact that
the venture was long over due apparently made the Corporation authorities
to avail of the project as unfolded and volunteered by the appellant, subject,
of course, to further revisions, modifications and suggestions in the best
interests of the Corporation. When it was undertaken as a pilot project on
G a trial basis there might not have been much certainty about the profitability
of the scheme as a business venture for the private party concerned and
the appellants were prepared to undertake the said risk and executed the
works to the satisfaction of the authorities and appreciation of public as
well. The risk involved is not only in recoupling the investments to be made
H for installations and constructions but to maintain them in good, proper and
5 M & T CONSULTANTS v. S.Y. NAWAB [RAJU. J.] 205

working condition without also sacrificing the beauty of the installations A
throughout the duration of 15 years. Conditions imposed on the appellants
involve great responsibilities and obligations and necessarily certain
concessions had to be shown to keep the project working and maintain
them in good shape. Not only the Municipal Corporation had no financial
commitments in getting such works by any expenditure therefor, which B
were to be executed by the appellant only on self-financing basis generating
the required funds for installation and continued maintenance and their
upkeep from sponsors by collecting premiums for giving them the privilege
to avail of the space permitted by the Corporation for advertisements but
ultimately the whole works have to be left with the Corporation and it is C
not to be removed by the appellants. As rightly observed by the learned
Single Judge the venture cannot be considered to be the grant of a largesse
or lease or contract in the conventional sense. The provisions in the
Municipal Corporation Act cannot be said to envisage situations of the
nature, when enacted. This appears to be a project more akin to the one
considered by this Court in G.B. Mahajan 's case (supra). The fact that no D
other private advertising agencies, including the writ petitioner could offer
to undertake such a venture in the other available areas when their
participation was sought for belies the tall claims of the writ petitioner now
made, after finding the project to have become successful and apparently
fruitful - more perhaps then it could have been thought of, initially by E
everyone. Perhaps irked by this only the interest of the writ petitioner seem
to have gained momentum, to try in desperateness for the 'Shylocks' pound
of flesh', to ruin the very project, unmindful of any concern for the
Corporation, public good and the appellant.
F
17. A careful and dispassionate assessment and consideration of the
materials placed on record does not leave any reasonable impression, on
the peculiar facts and circumstances of this case, that anything obnoxious
which require either public criticism or condemnation by courts of Jaw had
taken place. It is by now well settled that non-floating of tenders or absence G
of public auction or invitation alone is no sufficient reason to castigate the
move or an action of a public authority as either arbitrary or unreasonable
or amounted to malajide or improper exercise or improper abuse of power
by the authority concerned. Courts have always leaned in favour of
sufficient latitude being left with the authorities to adopt its own techniques H
206 SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R.

A of management of projects with concomitant economic expediencies
depending upon the exigencies of a situation· guided by appropriate
financial policy in the best interests of the authority motivated by public
interest, as well as undertaking such ventures. Though now, an attempt is
sought to made by the writ petitioner and surprisingly even by the
B Corporation too, attempting a somersault and claiming non-compliance
with certain statutory .formalities, we find that such a move is not only a
pure after thought, but really. unwarranted and not based upon a firm or
sufficient ground or basis. The very applicability of the regulations
contained in Sections 126, J 29A, 148, 420 or 421 of the Act to the case
C on hand would itself be seriously doubtful. On the face of it they involve
transactions envisaged therein, when granted in favour of third parties, to
be executed with the Corporation funds and involving financial commitments
or parting with the property or rights and privileges of the Corporation for
value/consideration, and not to a self-financing scheme to be implemented
D and maintained without any financial commitments or expenditure to the
Corporation. Section 124 seems to enable the Commissioner to undertake
such ventures even without going before the Committee, as is now sought
to be claimed. The provisions relating to Section 420/421 would also have
relevance only when any such installations are to be made for the benefit/
utility of private person/licensee, who executes it and not to a peculiar case
E like the .one wherein the installations are such which are to be normally
!l'ade and maintained by the Corporation for public good, but instead being
permitted to be made on its behalf and at its behest by a private property
for the use and benefit of public at large, which ultimately have to be left
as the property of the Corporation only, and that too when executed on a
F self-financial basis. The Commissioner or other authorities of the
Corporation, who seem to have undertaken this at a point of time when
there is no concrete scheme/project or sufficient funds with the Corporation,
appear to have embarked upon this venture in good faith, keeping in view
not only the public good but also in an earnest endeavour to secure such
G. a novel project executed without any financial commitments or expenditure
whatsoever either for the installations or subsequent upkeep and maintenance
for at least 15 years. Merely because as an ultimate outcome in the long
range, the appellant is able to make some more profit than what was
envisaged itself could not render the exercise undertaken or scheme
H executed vulnerable for being challenged to be either as one in improper
5 M & T CONSULTANTS i·. S.Y. NA WAB (RAJU. J.] 207

abuse of powers or by means of any reprehensible/condemnable conduct, A
calling for interference in the hands of Court of Law.

18. The Division Bench, except cataloguing the catena of decisions,
..., has not chosen to objectively consider the extent of their applicability,
relevance or otherwise of the principle befitting the merits of the peculiar B
facts of the case. The case on hand does not constitute or at any rate can
by no means said to be the outcome of any unreasonable or arbitrary
exercise of power so as to warrant interference under Article 226 of the
Constitution of India. The appeal is allowed, the order of the Division
Bench is set aside and the order of the learned Single Judge dismissing the C
writ petition filed before the High Court shall stand restored. No costs.

D.G. Appeal allowed.