The High Court of Delhi has recently quashed the decision of the Delhi Transport Infrastructure Development Corporation Ltd (DTIDC) and the Government of National Capital Territory of Delhi to award the contract for several hundred bus shelters (for operations, maintenance and marketing of the ad space) to JC Decaux. This was a 20-year contract extendable by five years.
The court has also directed that these bus shelters shall be maintained by DTIDC and in case it decides to award a fresh contract, it shall do so through a transparent mechanism open to all eligible bidders who meet the clearly laid down criteria and specifications.
The court was harsh in its judgement, describing the awarding of the contract to JC Decaux as "arbitrary, discriminatory and illegal. The same is in breach of all tenets of fair play and transparency". The Court also mentioned that it had taken note of "serious procedural improprieties" in the matter.
The Times company had argued that the authorities had acted arbitrarily and indiscriminately in awarding the contracts in respect of BQS. Its counsel said that they had "doled out state largesse for extraneous considerations and awarded a lucrative contract to respondent No.3 (JC Decaux) - a private entity, on nomination basis, without floating a public tender or even a limited tender."
It argued that contracts can be awarded on a nomination basis only under under exceptional circumstances such as natural calamities and emergencies, or where no bids are received despite repeated tenders. This was not the case, the petitioner argued. It also contended that JC Decaux could not be said to have any proprietary technology or special knowhow necessary for setting up or maintaining BQS which others, such as the petitioner, did not posess.
JC Decaux's counsel said that it had entered into the contract based on the representation and warranties given by DTIDC. As a consequence, it claimed that it had already invested about Rs 11.8 crore and the expenses were mounting daily. However, the court was unmoved noting that only nine months of the of the 20-year period had been completed.