Supreme Court orders Times OOH & Prithvi Associates to retain rights on BEST bus shelters for 15 years
Wednesday, 02 December 2009 13:51 (IST)
NEW DELHI: In a major development, the Supreme Court has ordered out-of-home media companies Times OOH and Prithvi Associates to retain the rights for refurbishing BEST bus shelters and continue with the beautification project initiated by BEST in 2006. The apex court gave its judgement on the Brihan Mumbai Electric Supply Transport (BEST) vs Laqshya Media and others case.
The apex court in its judgement has allowed Times OOH to refurbish approximately 1,300 old BEST bus-shelters that were awarded to them by BEST in lieu of adverting rights for a period of 15 years from 2008 to 2023. Similarly, Prithvi Associates has also been ordered to refurbish approximately 700 old bus-shelters in lieu of advertising rights for the same period.
Speaking to network2media, Sunder Hemrajani, managing director, Times OOH, said, "We are fully committed to the Mumbai beautification project and will replace the old bus-shelters with new ones. We have also made significant investment in the project. This judgement sets a good precedence for a successful public-private-partnership model. It is win-win situation for stakeholders, citizens who are the beneficiaries from the project, BEST, advertisers and media owners."
Manan Soni, partner, Prithvi Associates, said, "We have already replaced about 70 per cent the old bus-shelters and we hope to complete this project by March 2010, as per the deadline set by BEST. We will have the advertising rights on these 700 shelters for 15 years."
BEST bus shelter in Mumbai
Earlier, in 2007, Laqhya Media and Alok Jalan of Mumbai had filed a writ petition in Bombay High Court objecting to the contracts assigned by BEST to Times OOH and Prithvi Associates, which provided for the replacement of around 1,300 old bus-shelters by Times OOH and 700 old bus-shelters by Prithvi Associates and retain the advertisement rights over the properties for a period of 15 years. In the petition Laqshya had appealed for BEST to invite fresh tenders as required under Section 460M of the Mumbai Municipal Corporation Act, 1888 (MMC Act).
In its order, the Bombay High Court had subsequently ordered BEST to invite fresh tenders after terminating the contracts awarded to Times OOH and Prithvi Associates. According to the appellants, on March 31, 2005, BEST had floated a tender for awarding contracts of sole agency for advertisement rights on bus-shelters in Brihan Mumbai for 2005-2008. For operational ease, the entire area of Brihan Mumbai was divided into three lots, namely, Lt No.I - Eastern Suburbs, Lot No. II - the Western Suburbs and Lot No.III - the City. The tenderers then were required to offer hefty display charges for the period of contract, that is, till December, 2008.
Later, in December, 2006, BEST floated an offer document for erection of bus-shelters in place of existing bus-stop poles and display of advertisement under the 'First Finder Scheme'. BEST had then awarded the rights for about 1300 bus-shelters to Times OOH and about 700 bus-shelters to Prithvi Associates.
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MUMBAI: BrihanMumbai Electric Supply & Transport Undertaking (BEST) has blacklisted Prithvi Associates permanently and Laqshya Media for a period of five years. Mumbai’s public transport authority has accused both the agencies of trying to “sabotage the sanctity of the tendering process”. The Mumbai High Court too has turned down the petition of the affected parties after they approached it challenging BEST's decision.
Prithvi Associates has now appealed to the Supreme Court against the Mumbai HC judgment.
What the HC said
Disposing of the petition filed independently by the agencies, the Mumbai HC’s Justices Muzumdar and Sayyed delivered a judgment in Writ Petition No. 1853 of 2008 that said: “Looking to the conduct of Petitioner and looking to the factual aspect of matter, in our view no relief can be granted to the present Petitioners. It cannot be disputed that the Petitioner has tried to form a cartel and insisted for reducing the minimum reserve price and as per the say of first Respondent, they were also asked to give their bid, still they have chosen not to put their bid. Considering the factual scenario, in our view, it cannot be said that the first Respondent (read BEST) has committed any procedural error or acted arbitrarily in reaching conclusion of awarding the contract to Respondent No. 3 whose bid was found to be double than which was granted last time to M/s Prithvi Associates.”
BEST comes down heavily
Subsequently, in a strongly worded order, an order issued by Uttam Khobragade, general manager, BEST, says: “It is proved beyond doubt that Laqshya Media Private Limited along with Prithvi Associates resorted to carteling to sabotage the tender. Moreover, Laqshya Media prepared false pre-dated documents to show that they were ready to respond to the tender with a quote of Rs 34 crore and they tried to mislead the court of misrepresentation; naturally, a Government agency cannot deal with such notorious manipulators. Hence, I direct that Laqshya Media should be blacklisted from taking part in any of the tender of BEST undertaking for 5 years from the date of this order.”
Prithvi Associates was also blacklisted by BEST for carteling of the tenderers on July 24, 2008, as the agency, according to BEST, allegedly tried to sabotage the process of tendering, so that it can continue with its earlier contract at half the price than what BEST got.
The BEST order has also come down heavily on Prithvi Associates for trying to use political pressure. Said the BEST order: “They provided false information to politicians and tried to instigate them against the administration and also got published the defamatory letters written by politicians at their instance in the newspapers. They also approached media, gave false information and got published false, defamatory news against the BEST administration.”
How it transpired on the tender opening day
The BEST document also describes the course of events on the date of the tender. It says: “On the date of tender, i.e., August 24, 2008, four agencies, namely, Alakh Advertising, Pioneer Outdoor Advertising, Laqshya Media and Prithvi Associates, came to the place of opening of the tender and deposited the EMD amount. However, all the four agencies stated in the same voice that the upset price should be brought down. That time, officers on the spot responded that upset price is their best price and the agencies may quote their best price and the issue will be settled during the auction to be followed.”
It further said: “In spite of the request by the officers to tenderers to offer their best price, they did not respond to the tender. Rather than responding, the persons representing Laqshya Media and Prithvi Associates simply walked away from the place where tenders were being opened. It was difficult to understand if the upset price was more as per their contention, or why did they come to the place of tender, deposited EMD so that they become eligible to quote the tender and thereafter pressurized the officer in one tone that upset price should be reduced, thereby trying to sabotage the tendering process.”
According to BEST, this clearly was a predetermined move to sabotage the tender and also amounted to cartelization.
After the tender was finalized, the contract was awarded by the BEST committee to the third respondent, namely, Pioneer Publicity Corporation.
Smear campaign, alleges BEST
The BEST order finally said: “All the findings from the date of opening of tender to mid-August, 2008, almost one month, conclusively prove that not only Ashok Soni of Prithvi Associates tried to bring pressure on the administration, but planted defamatory news against the administration in newspapers. This smear campaign of one month, his earlier conduct of grabbing two contracts at half the price conclusively proves that he is past master in the art of corrupting the administration and bringing political pressure on the administration to force them for illegal act and any type of dealing with this entity by the administration is a guarantee for allowing political interference and corruption.”
The order further said: “Considering the conduct of Prithvi Associates in this case which I dealt above, I have no other option but to safeguard the purity of public administration. I must opt for blacklisting Prithvi Associates and all partners of the said partnership firm and hereby I order that Prithvi Associates and all partners mentioned in this order or any other partnership firm where any of these partners are associated, be blacklisted from dealing, making and contract or take part in the tender process of the BEST undertaking, permanently.”
Contention of agencies
When contacted, Ashok S Soni, managing director of Prithvi Associates, had a different story to tell. He said, “I am a victim of babudom and conspiracy. I was not involved in any carteling whatsoever. There were only four bidders and all had complained about the reserve price being too high. BEST said that they can’t reduce the price. But on the same day, at around 5 pm in the evening, BEST turned the tender in the favour of Pioneer at Rs 21 crore instead of Rs 33 crore and blacklisted us.”
He further alleged, “Laqshya Media, Alakh Advertising and I had moved court alleging that BEST had arbitrarily and illegally deviated from tender conditions to favour Pioneer Publicity. The contract was awarded to Pioneer at Rs 21 crore instead of Rs 33 crore without issuing a fresh tender. We also had challenged BEST’s decision to blacklist us for allegedly forming a cartel to lower the minimum reserve price for the contract. After that, the Mumbai High Court upheld BEST’s move to award the contract to Pioneer, which agreed to raise its offer to Rs 33 crore, stating that it found no procedural error or arbitrariness in the action.”
Regarding the blacklisting, Soni said, “As far as blacklisting is concerned, the High Court held that BEST should not have passed the order without giving reasonable opportunity of hearing.”
After this, BEST called them for personal hearing – Laqshya Media on January 7, 2009 and Prithvi Associates on December 22, 2008. Said Khobragade’s order: “But in the hearing it was proved that both the agencies Laqshya Media as well as Prithvi Associates were at fault and do not believe in fair dealing with a government undertaking. Hence, Laqshya should be blacklisted for five years and Prithvi Associate permanently. However Alakh Advertising was not blacklisted as one its representative was present at the time of opening a bid.”
Prithvi Associates has now appealed to the Supreme Court against the High Court judgement. The hearing will take place in October.
Source:n2m
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