Right of way for telecom projects a State subject: Madhya Pradesh HC dismisses challenge to Smart Poles project

In a judgment that is likely to have far reaching effects on the Centre–State relationship, particularly when it comes to the implementation of the smart city mission projects, the Madhya Pradesh High Court has approved a tender for the installation of smart poles across smart cities in the state. .In doing so, it has paved the way for building a robust IT infrastructure in the smart cities of Madhya Pradesh..Factual Background.The Indore Smart City Development Company had floated a Notice Inviting Tender (NIT) for installation of smart poles across six cities identified by the Ministry of Urban Development under its smart city mission..The smart pole is an integrated infrastructure providing facilities such surveillance cameras, environment sensors, WiFi spots, street lighting etc. Under the NIT, the concessioner is given an exclusive right of way for erecting this infrastructure, which will then be made available to other service providers at rates decided by a committee of experts. .Reliance Jio and Bharti Infratel Ltd. had participated in the bid, and after a round of competitive bidding, Reliance Jio was declared the successful bidder. A writ petition came to be filed before the Indore Bench of Madhya Pradesh High Court, by the Tower & Infrastructure Providers Associate (TIAPA), an association of telecom infrastructure providers..The Dispute.The petitioner, represented by Senior Advocate BL Pavecha and Advocate Raghvendra Singh Raghuvanshi, essentially challenged two clauses in the NIT that purportedly conferred exclusivity to the concessioner in relation to the right of way for erecting the infrastructure. Interestingly, Bharti Infratel Ltd. is a prominent member of this association, and had participated in the bidding process in the hope of securing the exclusive right of way. .The case turned interesting when Union of India (Department of Telecommunications), being one of the respondents in the petition, came in support of the petitioner on the ground that the state government cannot erect or cause to erect telecom infrastructure since it is an exclusive privilege of the Central Government under Section 4 of the Telegraph Act, 1886. .It thus became a dispute between the petitioner and Reliance Jio on the one hand, and Union of India and Indore Smart City Development Co. on the other; both being co-respondents..While the petitioner claimed that the two impugned clauses conferred exclusivity in favour of the successful bidder (Reliance Jio), Union of India contended that the entire project conceived by the Indore Smart City Development Company was contrary to the provisions of Telegraph Act, 1886..In response, Indore Smart City Development Company, represented by Senior Advocate Anand Mohan Mathur and Advocate Manoj Munshi, contended that the entire bidding and consequent award of the tender has been conducted in a fair and transparent manner, which is not under challenge. The project is of great public importance and will have long term benefits across smart cities in which it is implemented, it was argued..Reliance Jio, represented by Senior Advocate Ashok K Chitale and Advocate Akshay Sapre, contended that the project is essentially that of providing a right of way relating to land, which is an exclusive domain of the state under List II. No license under Section 4 Telegraph Act is being granted under the NIT..The petitioners are only license holders and have no absolute right to claim right of way for establishing telecom infrastructure, it was contended. The Court, under Article 226 cannot modify the terms of a contract, especially when the same is being performed..High Court Verdict .A Division Bench of Justices SC Sharma and Shailendra Shukla, in a 48-page long judgment, dismissed the petition, holding that:.The grant of Right of Way for establishing and maintaining the underground and overground telecom infrastructure pertains to land, which is a state subject under List II in the Seventh Schedule of the Constitution of India and therefore, vests with the state government;A bidder who has participated with open eyes after going through the terms and conditions of the NIT is estopped for challenging the terms and conditions of the NIT after he has been declared as unsuccessful in the open competition, specially in light of fact that he has suppressed the factum of his participation;Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether a choice or decision is made “lawfully” and not to check whether it is “sound”. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer is made out..While dismissing the petition, the Court has also imposed costs of 1 lakh on the petitioners for delaying a project of great public importance. Regarding participation of Bharti Infratel Ltd as one of the bidders, the High Court has observed:.“The most astonishing aspect of the case is that one of the member of the petitioner Association has participated with open eyes namely M/s. Bharti Infratel Ltd. by submitting a bid and the bid of respondent No.5 has been accepted. The petitioner has not furnished details in respect of the aforesaid and has deliberately concealed the aforesaid fact before this Court. Not only this, one of the member of the petitioner Association is carrying out the same kind of work in respect of Bhopal Smart City and therefore, the present petition is nothing but a sponsored litigation in order to create hindrance in a public project of great paramount importance”..[Read the Judgment].Image taken from here. .Bar & Bench is available on WhatsApp. For real-time updates on stories, Click here to subscribe to our WhatsApp. .Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.