1. The Greater Hyderabad Municipal Employees' Union, represented by its President C.Satish Kumar filed the present Writ Petition challenging the agreement dated 21.02.2009 entered into by the second respondent with the third respondent for the purpose of developing integrated MSW management system in second respondent corporation area as illegal, arbitrary and opposed to public interest.
2. The averments, in brief, of the affidavit filed in support of the Writ Petition may be stated as follows:
Petitioner is a registered trade union representing employees working in the Greater Hyderabad Municipal Corporation (for short, hereinafter referred to as 'GHMC'). In order to protect the interest of its members and also to see that respondents 1 and 2 are kept within the bounds of the provisions of the Greater Hyderabad Municipal Corporation Act, 1955 (for short, 'GHMC Act, 1955') and the Municipal Solid Wastes (Management and Handling) Rules, 2000 (for short, hereinafter referred to as 'MSW Rules, 2000'), in the matter of disposal of Municipal Solid Wastes (MSW), this Writ Petition is filed. The city of Hyderabad has an area of 638 square kilometers and its population as in the year 2009 was 77.92 lakhs. By virtue of merger of the outskirt municipalities in the year 2007, GHMC came into existence, which is divided into five zones. It is estimated during the year 2009 that solid waste generated in the city is around 4350 metric tones per day. GHMC arranged 3259 dumper bins. The waste is collected from the dumper bins and open points and transported through dumper placers, tippers and tractors to the transfer station. The contents of these smaller vehicles are transferred directly into bigger long haul tipper vehicles through a specially designed hopper. These big tipper trucks take the waste to the final disposal site. At present, there are three transfer stations in operation i.e. Lower Tankbund, Yousufguda and Imliban. The disposal sites are situated at Jawahar Nagar, Fatullaguda, Shamshiguda, BHEL, Auto Nagar and Gandamguda. There is an existing and a proposed waste processing facility in GHMC area and both the facilities are based on the concept of conversion of waste to RDF and generating power from it. The second respondent has agreements with M/s. Selco International Limited and M/s. RDF Power Projects Limited whereunder the said companies would be supplied with the solid waste for the purpose of generating power from the processing of the waste, and the said companies pay Rs.10/- per metric ton to the second respondent and under the above mentioned agreements, the companies are supplied with 700 TPD each of MSW. From the provisions of Chapter XIV of the GHMC Act, 1955, it is clear that it is for the second respondent to do all the things provided therein and to discharge all the obligations imposed thereunder. There is no provision for handing over all the functions relating to scavenging and cleaning of the corporation area and the functions like collection of the solid waste from the primary sources, installation of the receptacles, transportation of the solid waste, disposal of the same to a third party. The Government of India framed the Municipal Solid Wastes (Management and Handling) Rules, 2000 (for short, hereinafter referred to as 'MSW Rules, 2000') in exercise of powers under Sections 3, 6 and 25 of the Environment (Protection) Act, 1986. The Rules make it clear that it is the responsibility of the municipality to arrange for the collection of the solid waste, its storage and transportation. It is only for the purpose of disposal of the solid waste that the municipality can involve a private person that too on certain conditions pertaining to the supply of solid waste. These rules do not empower the corporation to totally handover all the functions relating to collection of the solid waste from the primary sources, storage, transportation and final disposal to a private party in toto. The first respondent issued G.O. Rt. No.859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008 approving proposal for establishment of integrated solid waste management project for GHMC under public private partnership mode and also under Jawaharlal Nehru National Urban Renewal Mission (for short, hereinafter referred to as 'JNNURM') with a total estimated cost of Rs.897 crorers with JNNURM funds subject to the conditions that if the proportionate share of the Government of India and the State Government of the eligible project cost under JNNURM is not materialized, the GHMC shall bear that cost and the rest of the project cost shall be borne by the Concessionaire. In order to execute such a huge project, the second respondent ought to have invited global tenders but did not do so and instead received bids from only two parties i.e. the third respondent herein and M/s. Gujarat Enviro Protection and Infrastructure Limited. Respondents 1 and 2 agreed to pay tipping fee to the Concessionaire for the purpose of collection and transportation of the solid waste and basing on the rates quoted by the above mentioned bidders, the bid of the third respondent herein was accepted. The third respondent accepted for the tipping fee of Rs.1431/- per metric ton of solid waste and accordingly the Government has issued G.O.Ms.NO.136, Municipal Administration and Urban Development (J) Department, dated 19.2.2009 approving the L1 bid of the third respondent herein with tipping fee of Rs.1431/- per metric ton for implementation of the integrated MSW management programme in GHMC, and the second respondent was directed to take necessary further action. The second respondent entered into impugned agreement dated 21.2.2009 with the third respondent, known as 'Concession Agreement', for the purpose of collection, transportation, processing and disposal of MSW and several clauses of the said agreement are not only contrary to law but are biased in favour of the third respondent and injurious to the public at large. The terms of the agreement enable the third respondent to have a total control over all the operations pertaining to the collection of MSW from all the primary sources, storing the MSW, transportation and final disposal of the same. The third respondent is given with a power to collect @ Rs.25/- from each individual household of the GHMC excluding slum dwellers and households below poverty line, and it is authorized to collect from the commercial establishments at the rates prescribed by the Director of Municipal Administration. The second respondent will pay @ Rs.1431/- per ton of MSW to the third respondent. The third respondent is authorized to use the MSW for any purpose and dispose of the same in any manner and also to appropriate the proceeds from the utilization of the MSW to the fullest extent. The tipping fee is subject to yearly upward revision @ 5%. The present dump sites of the GHMC would be under the control of the third respondent and the same can be used by it towards providing parking facilities without anything to be paid to GHMC. The project site of Ac.320.00 at Jawahar Nagar will also be under the control of the third respondent and the employees/officers of the GHMC cannot have any right to interfere with the operations of the third respondent. Appointment of independent engineer and replacement of the engineer, would be done subject to the choice of the third respondent. All the existing infrastructure like dumber binds, vehicles, transfer stations will stand handed over to the third respondent for its exclusive usage. The third respondent would be employing its own men for implementing the project which would result in removal of the existing staff of GHMC connected with the solid waste disposal. Terms and conditions of the Concession Agreement dated 21.2.2009 are contrary to the provisions of Chapter XIV of GHMC Act, 1955 and MSW Rules, 2000. Neither of them empowers respondents 1 and 2 to completely handover all the functions pertaining to collection of the MSW from the primary sources, storage, transportation and disposal to a third party exclusively. As per the Act, MSW is a property of the municipality and hence, proceeds derived from the treatment of MSW shall belong to the second respondent, but not to third respondent. But, the terms of the Concession agreement run contrary to the above and totally detach the second respondent from all its statutory duties and confer the same on the third respondent for its benefit. Further, the fixing of the tipping fee with the periodical upward revision is a gross abuse of power on the part of respondents 1 and 2 and it is intended to cause undue and immense benefit to the third respondent in a calculated manner. At present, the second respondent is incurring cost of Rs.570/- per metric ton of MSW towards collection, transportation and dumping and there are no justified reasons for fixation of the tipping fee at Rs.1431/- per metric ton when all the existing infrastructure, dump yards and project site of GHMC are being transferred in favour of the third respondent free of cost. The impugned agreement is intended to benefit the third respondent in a large scale at the cost of public exchequer and at the cost of infringing the law and it is mala fide, colourable exercise of power on the part of respondents 1 and 2. There is likelihood of hundreds of existing employees of GHMC being removed from service as soon as the third respondent starts implementing the agreement. The petitioner, which is deeply interested in protecting rights of its members and also in seeing that the second respondent functions in accordance with the provisions of the GHMC Act, 1955, is having locus standi to file this Writ Petition. Though the investment of the third respondent is only partial, benefits derived by it are undue leading to illegitimate enrichment of the third respondent. At present, the second respondent is incurring around Rs.595/- per metric ton for collection and disposal of the solid waste, whereas under the impugned agreement, an amount of Rs.1431/- is agreed to be paid to the third respondent. Apart from the tipping fee, the third respondent is benefited substantially in various ways by collecting amounts from household, ice cream parlours, bakeries, corporate hospitals, hotels, lodging places, etc. at the rates mentioned in proceedings No.2807/AC(H&S)/GHMC/2010, dated 29.07.2010 issued by the first respondent. Respondents 1 and 2 do not have any power to delegate right to collect garbage charges to a third party permitting him to appropriate such an amount without accounting it to the municipal fund. Apart from above, by virtue of the impugned agreement, the third respondent would be entitled to -sell, distribute compost/manure/energy and other recyclables derived from MSW for a period of 25 years; to receive all revenue that may be generated through advertising using the movables, fixed assets of the project including those transferred from GHMC; right to appropriate, possess and control etc. all the buildings, structures and infrastructures that may be existing with reference to MSW management in GHMC as of the date of agreement and the GHMC shall hand over existing infrastructure like dumber bins, vehicles, transfer stations, etc., which will be used free of cost by the third respondent. Further more, 50% of the project cost would be borne under JNNURM scheme by the Central and State Governments failing which GHMC is going to bear it. There is no provision in the impugned agreement to absorb the existing staff or to continue the existing staff by the third respondent. Third respondent is not under obligation to carry on MSW collection storage and transport operations through the existing employees of GHMC. Hence, this Writ Petition.
3. The first respondent filed counter affidavit stating inter alia that the agreement between respondents 2 and 3 is made with due respect to the national laws and following all the required procedures as laid down by the GHMC for this purpose and also in consonance with the MSW Rules, 2000. The petitioner union is not a recognized one. The second respondent is trying its best to provide good civic amenities to citizens living in GHMC area in accordance with MSW Rules, 2000. The object of public and private partnership is to provide a transparent and efficient services to the citizens by providing good infrastructure, mobilizing finances. The project cost as shown in G.O.Ms. NO.136, dated 19.2.2009 is Rs.897 crores is reduced subsequently to Rs.792.95 crores during scrutiny, and even this cost is further reduced to Rs.434.91 crores based on its eligibility as per guidelines of JNNURM. As per the Government Order, the second respondent invited expression of interest in national papers as per the procedure followed by other major cities in India and followed transparent procedure in selection of the third respondent. Government of Andhra Pradesh constituted both technical and state level committees to undertake Techno Economic Assessment of bids received for MSW Processing Plants in various Municipal Corporations and Municipalities in the Andhra Pradesh. Technical committee shall scrutinize the proposals and evaluate the bids received to establish the MSW plants and give recommendations to the State Level Official Committee, which shall take further action based on the recommendations of the Technical Committee. The first respondent also constituted a technical committee and a tender approval committee consisting of officers to examine bidding the techno legal financial aspects. The second respondent utilized services of M/s. Infrastructure Corporation of Andhra Pradesh (INCAP) for techno, economic and legal analysis and to evaluate the process of bidding and finalization as per rules. INCAP had taken services of IDFC, Bangalore, a best professional company in the country in providing consultancy services in the field of infrastructure development including solid waste management. The Concessionaire Agreement is not violating the provisions of Chapter XIV of GHMC Act, 1955 and MSW Rules, 2000. MSW management sector in India is currently guided by MSW Rules, 2000. The rules seek to achieve management of solid waste from door to door collection to treatment and disposal on scientific basis resulting in healthy environment. Significantly, open dumping is recognized as a practice in GHMC area which is against law. Pursuant to the Hon'ble Supreme Court initiatives, Ministry of Environment and Forests, Government of India formulated the MSW Rules, 2000 which makes it mandatory for every municipal authority to implement a scientific solid waste management system. In order to achieve the mega city status and to provide better services to its citizens, a need was felt for development and implementation of a comprehensive MSW management system. JNNURM Guidelines stipulates participation of private sector in development, management and financing of urban infrastructure projects which involve long term implementation with high dose of technology and investment. Primary collection, transportation and segregation of waste will play an important role in successful functioning of the treatment and scientific disposal facilities. The activities relating to IMSWM are required to be handled by a single agency rather than multiple agencies because each activity of ISWM is interconnected to other activities. Presently, the second respondent is incurring cost of Rs.800-900 per metric ton of MSW towards collection, transportation and open disposal. The tipping fee of Rs.1431/- permitting the third respondent to take the revenue coming from the treatment and disposal and authorized to collect the user charges from the households and commercial establishments is based on the techno commercial viability of the project. Concessionaire agreement is totally in line with all the existing rules and regulations guiding MSW management sector in the country. 4118 Nos. of permanent employees and 15623 Nos. of outsourcing employees are working in MSW collection, transportation and dumping in the second respondent. The permanent work force of the second respondent under MSW activity would still be under the rolls of the second respondent in other activities like street sweeping, cleaning of drains, collection and transportation of debris, etc., and the GHMC proposes to hand over all the outsourcing employees presently working in MSW activities to the fold of the third respondent as and where is condition without detrimental to the interest of the workforce and the third respondent would honour all the existing terms and conditions of the outsourcing workforce and there is no retrenchment. The agreement under challenge had already commenced its operations in Jawaharnagar dumpsite. Independent Engineer approved the Master Plan for the said dumpsite, designs for establishing for treatment and disposal faculties are prepared by the third respondent and submitted to the Engineer for scrutiny and approval. Land development activities are in full swing at the dumpsite. The petitioner does not have any locus standi to challenge the agreement executed in favour of the third respondent by the second respondent. The third respondent addressed letter dated 22.9.2009 to the second respondent asserting that none of the employees would be retrenched and the Rickshaw pullers would not be disturbed. So, the petitioner need not apprehend that the employees would loose their jobs. Such a grievance cannot be canvassed by the union unless the parties are particularly affected. G.O. Ms. No.136, dated 19.2.2009 was issued after duly complying with all the procedure contemplated under the Rules. The said G.O. has not been challenged and without challenging the said G.O., the petitioner does not have any right to challenge the consequential agreement that was executed pursuant to the Government Order. Only after taking all the accruable to the Concessionaire, the short-listed bidders had quoted the tipping fee, otherwise, the tipping fee would have been much more. Hence, the first respondent prayed to dismiss the Writ Petition.
4. The second respondent filed counter affidavit denying the averments made in the writ affidavit and stating inter alia that as per clause of the MSW Rules, 2000, every Municipal Authority shall be responsible for implementation of the said Rules and for any infrastructure development for collection, segregation, storage, transportation, processing and disposal of MSW. It is often misunderstood that commodities like compost gas and energy can be generated out of municipal water and that any operator could sustain with the sale proceeds of such commodities derived out of municipal waste without any support revenue in the for of tipping fee. On the other hand, royalty is sought by such developers to be paid to municipality for letting the operator to use the resource of municipal waste to derive commodities. Such royalty based projects did not take off and in some cases these developers who offered royalty defaulted on payment of royalty or have not paid at all. M/s.Selco International Limited, one of the processing facilities in the area of GHMC, defaulted on payment of royalty due to the corporation to the extent of several hundreds of lakhs and the same is defunct since 2009. The petitioner heavily relied upon the royalty payment with a mistaken version that such a royalty payment ought to have been structured in the tender to benefit the corporation. The corporation has been dumping waste at several places and on being served with several notices by Pollution Control Board of the State, the dumping of the waste at these places was discontinued and a new site at Jawahar Nagar was identified in the year 2004 and it has a 60 lakh tones of waste today and 90% of Ac.331.00 of land is filled with waste and the said site presents a distressing scenario with open burning which is prohibited by the MSW Rules, 2000, leach ate stagnation causing environmental degradation. JNNURM is a mission launched by the Ministry of Urban Development, Government of India to improve urban infrastructure like roads, highways, water, sewage and solid waste sectors under the scheme and the municipalities would submit a detailed project reports to the Government of India to obtain grant of JNNURM funds after technical due diligence by the Government of India. Cities like Bangalore, Mumbai, Chennai, Delhi and many other cities in the country have undertaken MSW management under various public private partnership frameworks. The corporation is trying its best to provide good civic amenities to the citizens living in the corporation area. The object is to provide transparent and efficient services to the citizens by providing good infrastructure mobilizing services. In pursuance of G.O.Rt.No.859, dated 20.12.2008 issued by the Government of Andhra Pradesh, GHMC invited expression of interest by giving wide publicity on 17.06.2008 through national news papers and as per the existing procedures followed by the other major cities in India for MSW management. In pursuance of the agreement impugned, an independent engineer, a third party agency was appointed as per the condition stipulated in the agreement and subsequently the third respondent had taken over the dump yard at Jawaharnagar and leveled the land and also started constructions for establishing necessary infrastructure and the scientific treatment plant and the work is in progress. The fixation of the tipping fee and its yearly upward revision are purely based on the commercial viability of the project. GHMC permitted the third respondent only for access into the site and to set up all the facilities required for treatment and disposal of sewage waste as per the said agreement. GHMC has right to interfere with the operations of the third respondent at any time. The staff position in the transport department is also indicated in the counter. The counter affidavit reiterated the contentions raised by the first respondent-government in its counter affidavit. For carrying out collection of municipal sewage waste from secondary collection points and transporting to dump sites, GHMC is spending Rs.90.00 crores to Rs.100.00 crores which works out approximately to Rs.700/- to Rs.800/- per metric ton. As per the agreement impugned, GHMC has to pay Rs.859/- per ton (60% of the tipping fee of Rs.1431/-) to the concessionaire for collection, transportation and open disposal, which is less than the present expenditure. In fact, the GHMC is spending Rs.700/- to Rs.800/- per ton for operation and maintenance only, but for Rs.859/- per ton, the concessionaire has to not only operate and maintain the existing system but also has to improve it by deploying additional vehicles and equipments, upgrade the three existing transfer stations, develop five new transfer stations, work shop facilities and parking areas. The waste generation in GHMC area is around 3800 TPD, which is worked out to Rs.198.48 crores tipping fee per annum and not Rs.231.82 crores as mentioned. Out of the total tipping fee of Rs.1431/-, 40% i.e. Rs.572/- per ton will be paid for processing and disposal of MSW at dump site. For this purpose, the concessionaire has to establish and operate integrated MSW management facilities at dump site, which include segregation plant, compost plant, RDF plant, waste to energy, landfill, leachate, collection and treatment plant, green belt, support infrastructure, etc. including capping of 60 lakhs tones of cumulative dumped waste. The tipping fee has been arrived by taking into account the revenues, which the concessionaire might generate by selling compost/electricity. These revenues are quite low to recover the cost of capital and recurring investments. The tipping fee would have been high without JNNURM grant. Provision of annual increase at 5% in the tipping fee is made to neutralize inflation effect especially the fuel price. GHMC provided tricycles to operators for door to door collection of MSW, and the operators are informally charging Rs.20/- to Rs.25/- per month for the collection. The charges are higher in some posh areas of GHMC. The concessionaire agreed to allow the existing tricycle operators to continue their work and will not interfere in their business. It is the responsibility of the Corporation to collect and dispose of inverts, which also involves cost. By entrusting the project to the third respondent, who will undertake a comprehensive SWM system wherein the entire responsibility vests with the respondent. Hence, it is prayed to dismiss the Writ Petition.
5. The second respondent filed additional counter affidavit stating inter alia as follows. At the instance of the Government of India and on the insistence of Andhra Pradesh Pollution Control Board and Central Pollution Control Board for implementation of MSW Rules, 2000, the second respondent corporation initiated an integrated solid waste management project for collection segregation, storage, transportation, processing and disposal of MSWs scientifically to prevent the pollution in the GHMC area. After following transparent procedure, the second respondent selected the third respondent for execution of the said work and entered into the impugned agreement dated 21.2.2009 and in pursuance of the same, handed over garbage dump yard at Jawaharnagar and Shameerpet and the work has already been commenced. There is no apprehension for the permanent employees or contingent employees working in the second respondent corporation of loosing their employment with the said agreement. The petitioner union, representing a small group of employees working in the corporation, has no locus standi to question the agreement.
6. The third respondent filed counter affidavit denying the averments in the writ affidavit and stated inter aia that the petitioner is unrecognized union of GHMC. GHMC followed all the procedures contemplated by law for issuing the tenders and selection of successful tendered. This respondent invested crores of rupees to prepare infrastructure to remove and process garbage as per the statutory provisions. The basic infrastructure has to be constructed for disposal of garbage without spoiling the land and environment by investing huge amounts. Considering various aspects of the project, its technical and financial viabilities and capacity to invest and in view of the track record of the third respondent with bigger municipal corporations only, second respondent awarded the agreement. It is not out of place to mention that garbage already dumped in various dumping yards became health hazard to the nearby residential areas and some of the persons are already suffering from diseases. The underground water is getting contaminated and it is necessary to cap some of the areas, otherwise, the gases may emanate and cause danger to the public life as well as pollute entire environment. There is no privity of contract between the contesting respondents and this respondent to be adjudicated. On the face of the writ affidavit, it looks like that of public interest litigation and not for real enforcement of any legal right. It is learnt that according to the estimates of the second respondent, the area in its operation is generating 3800 metric tones of solid waste every day and because of day-to-day increase in the population in the urban areas, the material solid waste disposal has become very critical. As per the MSW Rules, 2000, the second respondent prepared infrastructure, machinery, equipment, transporting vehicles and engaged manpower including contract labour manage the solid waste, but in view of the voluminous increase in the solid waste and the technologies involved for the treatment of the same, compliance of the statutes and rules applicable to it has become a major challenge. The pollutants emerged from the solid wastes which are the direct and indirect cause for contamination of water and air, posed a serious threat for the public health. In view of complexity of nature of work requiring huge amount of finance to carry out the works, the Government of India put in place the guidelines on the public private partnership for undertaking MSW projects. In pursuance of the same, the second respondent with the consent of the first respondent, proposed to have a comprehensive, integrated solid waste management system complying with MSW Rules by utilizing the modern technology, and accordingly, invited expression of interest from reputed firms. This respondent is one of the bidders with offered lowest tipping fee of Rs.1449/- per ton. This respondent has a good track record of expertise and technical skills to execute management of the solid waste and also enjoying status of a reputed company in the country, and proved to be successful in other cities in the country. The agreement impugned is based on the tender conditions and draft of the said agreement formed part of tender documents, as such, the allegation of the petitioner that clauses in the agreement were designed to give undue benefit to this respondent is totally incorrect. As a part of public-private partnership, the second respondent towards its participation, contributed the project site of Ac.320.00 of land at Jawaharnagar as dumping yard which was already use as dumpling yard for solid waste and also provide the existing available vehicles in as and where condition for the said purpose. The second respondent, in order to comply the parameters fixed by the Hon'ble Supreme Court of India as well as MSW Rules, 2000 and provisions of GHMC Act, 1955, opted to operate through an expert operating agency after following due procedures contemplated under the statutes and rules. The second respondent is empowered to operate even through a private agency as per the provisions of the MSW Rules, 2000, which is also admitted by the petitioner in paragraphs 7 and 8 of the writ affidavit. Under the agreement impugned, there are mutual obligations on the part of both the parties. The Concession period for the third respondent is for 25 years and this respondent is mandated to upgrade, supplement and maintain the infrastructural facilities from time to time every 4 to 5 years during the tenure of the contract at its expense and to be handed over to the second respondent once the project period is completed. The third respondent communicated to the second respondent that it would take over the project 'as is where is' basis and shall not resort to retrenchment of the contract workers and rickshaw pullers shall not be disturbed in their present activities. The third respondent started its activity at Jawaharnagar as well as other sites from 28.12.2009 and communicated the same to the second respondent. Works costing over Rs.17.74 crores have been completed and Rs.30.00 crores of work is under progress. The version of the petitioner is inconsistent and is not even well versed with the rules and laws of the land. There is no grievance as far as the parties to the impugned contract, which is pre-concluded one, and the petitioner, being third party to the contract impugned, has no locus standi and cannot question with reference to the tender and its value. The tipping fee is for entire gamut of activities starting from primary collection from each house to better management of municipal solid waste. Solid waste management is one of the top priority components of JNNURM which includes other infrastructures, such as bridges, roads, water supply, sewerage, and transport fleet, etc. and the scheme encourages execution of these projects under Public Private Partnership basis through an open tender process to select the concessionaire, wherein the respondent was selected in the case on hand. Therefore, the averment that this respondent is benefited by way of undue enrichment is far from truth and based on concoction of conjectures. The cost incurred by the second respondent is limited to the scope of secondary transportation and dumping of MSW without any treatment. As per clause 5.18 of the agreement impugned, the second respondent would have control on the measurement of the municipal solid waste. No act was done in a secretive manner to emerge surprise to one and all. Draft concession agreement is incorporated in the tender document which is a public document, and the petitioner had the opportunity to raise objections when the project was conceived and conceptualized, but it did not do so. The petitioner failed to establish the mala fide intentions in the conclusion of the agreement. The Government and the second respondent are benefited and deemed to comply the statutory obligations and stipulation laid by the Hon'ble Supreme Court of India without any hassles and also there is no health hazard at all. The project was commenced in East and West Zones and after satisfactory performance of this respondent only, it would be extended to other zones. The third respondent started construction and other activities at Jawaharnagar site and work is in progress. Once the treatment and disposal facility is ready for operation, GHMC will handover East and West Zones for collection and transportation of waste. The sweeping of roads and its maintenance to keep it clean, where maximum manpower is employed by GHMC, is not the part of the contract at all. To accommodate the existing manpower working in MSW is the responsibility of respondents 2 and 3, and the permanent employees working in MSW will be retained by GHMC. All the contract workers engaged in MSW activity will be accommodated by the third respondent. It is the policy decision of the Government of Andhra Pradesh as well as the second respondent to outsource the solid waste management on Public-Private Partnership mode and design built, operate and transfer mechanism with its statutory obligation and one cannot interfere with such decision on the alleged ground that manpower connected to second respondent may be removed. The intrinsic economic value of recoverable of the municipal waste is lesser when compared to the capital and operating costs to be employed for processing. Hence, it is prayed to dismiss the Writ Petition.
7. The first and foremost contention is that the job of collection of the solid waste from the primary sources, installation of the receptacles, transportation of the solid waste, disposal of the same, etc. is within the domain of Commissioner and the second respondent cannot privatize the obligation cast on it under Chapter XIV of the GHMC Act, 1955, and therefore, the contract dated 21.2.2009 entered into between the respondents 2 and 3 is not in accordance with the provisions of the GHMC Act, 1955. On the other hand, the learned Assistant Government Pleader appearing for the first respondent contended that with prior approval of the Government only, the second respondent entered into the contract and there is no prohibition to enter into such a contract for the purpose of scavenging and cleansing of all the streets and premises and removal of garbage, etc. It is also his contention that without challenging G.O. Rt.No.859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008, which is the approval for the proposal for establishing an integrated solid waste management project for the second respondent corporation, and also G.O. Ms. No.136, Municipal Administration and Urban Development (J) Department, dated 19.02.2009 approving the L1 bid of the third respondent, challenge to the consequential agreement dated 21.2.2009 does not lie. The learned Standing Counsel appearing for the second respondent contended that a reading of Sections 480 and 481 of the GHMC Act, 1955 would clearly demonstrate that the Commissioner has got power to enter into the contract. The learned counsel for the third respondent contended that Section 124 of the GHMC Act, 1955 expressly provides for power of the Commissioner to execute contracts on behalf of the Corporation for any purposes under the Act and that if Sections 480 and 481 of the Act are read together in a juxta position as they have got to be, it is clear that scavenging and cleansing work can be entrusted to the Contractors, and therefore, he prays to dismiss the Writ Petition.
8. It is not in dispute that till the date of the agreement impugned dated 21.02.2009, GHMC was transporting and dumping over 3800 tons of waste everyday in the dump yard at Jawaharnagar site. The Corporation is having an area of 638 square kilometers and its population as in the year 2009 was 77.92 lakhs. The sewage waste generated in the city is around 4350 metric tons per day. The corporation established 3259 dumper bins. It is not in dispute that waste is collected from the dumper bins and open points and is transported through dumper placers, tippers and tractors to the transfer station. There are three transfer stations in the city viz. Lower Tankbund, Yousufguda and Imliban. The disposal sites are situated at Jawahar Nagar, Fatullaguda, Shamshiguda, BHEL, Auto Nagar and Gandamguda. In view of notices issued by the Pollution Control Board, dumping of the waste at the above places was discontinued and a new site at Jawahar Nagar was identified in the year 2004. Ever since, all the waste has been transported by the Corporation to Jawaharnagar site place which has a deposit of 60 lakh tones of waste today and 90% of Ac.331.00 of land is filled up with waste. The present system of open burning is prohibited by the MSW Rules, 2000. GHMC has considered to relocate the waste provided impervious lining systems and to prevent contamination of ground water and to cap such relocated waste. The Corporation, with the object of establishing a suitable mechanism to manage collection, transportation, processing and disposal of MSW generated from the corporation area by utilizing scientific advancements in the field with a view to meet environment regulations and to improve public health and hygiene; with a vision to improve MSW management in the city, and to develop and implement a viable and environmentally sustainable integrated MSW management system which would scientifically collect, transport, process and dispose of the MSW, constituted a State Level Technical Committee with a view to scrutinize the proposals and evaluate the bids received to establish the solid waste management plants in various municipal corporations and municipalities in Andhra Pradesh in G.O.Rt. No.122, Municipal Administration and Urban Development (F2) Department, dated 15.02.2001 consisting of -the Engineer-in-Chief as the Chairman; Senior Environmental Engineer of State Pollution Control Board, Nominee or Chairman of APGENCO, Nominee or Managing Director of NEDCAP, and Nominee or Director, Environmental Protection Training and Research Institute (EPTRI) as Members. A State Level Official Committee was constituted consisting of Principal Secretary, Municipal Administration and Urban Development Department as the Chairman; the Principal Secretary, Environment, Forest, Science and Technology, the Principal Secretary (W&P) Fin. & Plg. Department, the Member Secretary, A.P. Pollution Control Board, the Director, Environmental Protection Training and Research Institute, and the Commissioner and Director of Municipal Administration as Members.
9. By virtue of G.O. Rt. No.859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008, the Government constituted a Technical Committee consisting of - the Engineer-in-Chief (PH) as the Chairman; the Special Commissioner, GHMC as the Convener; and the Managing Director, INCAP, the Engineer-in-Chief, GHMC, Senior Environmental Engineer of APPCB, the Director General of EPTRI/Nominee, the Chairman, AP GENCO/Nominee and the Managing Director, NEDCAP/Nominee as Members. By virtue of the said G.O., the Government also constituted a Tender Approval Committee consisting of the Commissioner & Spl. Officer & EO Principal Secretary, Municipal Administration and Urban Development as the Chairman; the Principal Secretary to the Government, Finance Department/nominee, the Secretary to the Government, Municipal Administration and Urban Development, the Secretary to the Government, Law Department/nominee, the Secretary to the Government, Infrastructure & Investment Department, the Commissioner and Director of Municipal Administration and the Special Commissioner, GHMC and The Managing Director, INCAP, as the Members.
10. On 17.06.2008, the second respondent called for expression of interest for Development of Integrated Municipal Solid Waste Management Project and the receipt of the expression of interest was on 9.7.2008. In pursuance thereof, 22 agencies submitted their proposals. Thereafter, the State Level Technical Committee convened a meeting to evaluate the proposals received and shortlist the firms for this purpose. Accordingly, the Committee short listed six agencies. The Technical Committee scrutinized the RFP Document. Thereafter, the State Level Official Committee met and approved the project. Later, the committee conducted a pre-bid meeting on 11.11.2008. 24.11.2008 was the last date for submission of bids. On 1.12.2008, two bids i.e. M/s. Gujarajat Enviro Protection & Infrastructure Limited and of the third respondent, were received. The Committee has opened the bids and thereafter tender of the third respondent was accepted by the Tender Approval Committee. After negotiations, the Committee submitted a proposal to the Government. Vide G.O.Ms.NO.136, Municipal Administration and Urban Development (J) Department, dated 19.2.2009, the Government approved the bid of the third respondent to implement the Integrated Municipal Solid Waste Management Project under Public-Private Partnership mode in the Corporation with a tipping of Rs.1431/- per metric ton, and in pursuance thereof, a Concessionaire agreement was signed between respondents 2 and 3 on 21.2.2009. Admittedly, the said G.O.Ms. No.136, dated 19.2.2009 is not under challenge. Only the Concessionaire Agreement dated 21.1.2009 is under challenge.
11. Chapter XIX of the GHMC Act, 1955 deals with Sanitary Provisions, which include scavenging and cleansing. Section 480 of the GHMC Act, 1955 reads thus: "Commissioner to provide for cleansing of streets and removal of refuse: For the purpose of securing the efficient scavenging and cleansing of all streets and premises, the Commissioner shall take measures for securing -
(a) the daily surface cleaning of all streets in the City and the removal of the sweeping therefrom;
(b) the removal of the contents of all receptacles and depots of the accumulations at all places provided or appointed by him under Section 484 or 485 for the temporary deposit of any of the matters specified in the said section. Section 481 of the GHMC Act, 1955 reads thus: Refuse, etc. to be the property of the Corporation: All matters collected by municipal servants or contractors in pursuance of the last preceding section and of Section 484 shall be the property of the Corporation. Both the provisions have to be read together for the purpose of ascertaining the true intention of the legislature.
12. According to the learned counsel for the petitioner, the words 'shall take measures' referred in Section 481 of the Act cannot be interpreted in a manner that the Commissioner can hand over the job mentioned in the said Section to a private agency. Words of a statute are first understood in their natural, ordinary or popular sense, and the phrases and sentences are construed according to their grammatical meaning, unless that leads to some absurdity or unless there is something in the context or in the object of the statute to suggest the contrary. If the said words are read in grammatical sense, the Commissioner shall take measures for the purpose of providing cleansing of all streets and premises and removal of refuse. So, the Court will adopt that which is just, reasonable and sensible rather than the restricted meaning. If the grammatical construction leads to some absurdity, it may be departed from, so as to avoid that absurdity. The Court should, as far as possible, avoid a construction which results in anomalies. Therefore, the words 'shall take measures' occurring in Section 480 of the GHMC Act, 1955 means the Commissioner can take measures through its employees or by contractors or by engaging private persons for the purpose of scavenging and cleansing. The Section gives an idea as to how the Commissioner can exercise his duties.
13. Under Section 481 of the Act, all matters collected by municipal servants or contractors in pursuance of the last preceding section and of Section 484 shall be the property of the Corporation. If these two provisions are read together in juxta position as they have got to be, it is clear that the Commissioner has got every power to take steps for scavenging and cleansing of all the streets and premises by municipal servants or contractors. For the purpose of the GHMC Act, 1955, Section 124 of the Act specifically empowers the Commissioner to execute contracts on behalf of the Corporation. But, such a contract should be for any purpose as expressly provided under the Act. Section 482 of the Act stipulates that the Commissioner shall provide public receptacles, depots and places for temporary deposit of final disposal of dust, ashes, refuse and rubbish. Under Section 483 of the Act, it shall be incumbent on the owners and occupiers of all premises to cause all dust, ashes, refuse, rubbish and trade refuse to be collected from their respective premises and to be deposited at such times as the Commissioner, by public notice from time to time specifies, in the public receptacle, depot or place provided by the Commissioner. Under Section 484 of the Act, the Commissioner shall take measure for daily collection and removal and disposal of certain matters and also will implement the same. Defaulters are liable for certain punishment under Section 487 of the Act. So, from the reading of Sections 480 and 481 of the Act, it is clear that either the municipal servants or the Contractors can be entrusted the work of scavenging and cleansing in all streets and premises. Therefore, under Chapter XIV of the Act, the Commissioner can discharge his functions with regard to sanitary provisions through municipal servants or entrusting the same to the Contractors. The contention of the learned counsel for the petitioner that Chapter XIX of the GHMC Act, 1955 does not provide for entrustment to the Contractors for scavenging and cleansing of the streets and premises, is wholly untenable and devoid of merit. Therefore, the contention that the Commissioner has no source of power to enter into agreement with the third respondent, cannot be countenanced.
14. In pursuance of the directions by the Hon'ble Supreme Court of India, the Ministry of Environment and Forests (MoEF), Government of India formulated MSW Rules, 2000 which makes it mandatory for every municipal authority to implement a scientific solid waste management system. As per the Rules, the Corporation has to comply the following.
(i) Improvement of existing landfill sites as per provisions of these rules by 31.12.2001 or earlier;
(ii) Identification of landfill sites for future use and making site(s) ready for operation by 31.12.2002 or earlier;
(iii) Setting up of waste processing and disposal facilities by 31.12.2003 or earlier For several years, the GHMC has not complied with the above requirements. The Andhra Pradesh Pollution Control Board had issued several notices to the GHMC to comply with the Rules. Therefore, the Corporation thought it fit that the projects requiring investments for proposed municipal sewerage water management project can be implemented successfully under Public-Private partnership. As JNNURM provides the above infrastructure development projects based on city development plan, one such project identified in the plan is 'Integrated Sewerage Water Management Project'. Therefore, the Corporation sought financial help from JNNURM. As a matter of fact, granting of funds from JNNURM and also the Corporation was specifically mentioned in the expression of interest. There was transparent procedure adopted by the first respondent in inviting the tenders, its finalization and in approving the project.
15. To what extent, this Court can interfere with the contracts entered into by the State or Instrumentalities of the State, is the question. It is well settled that every action of the State must be uniformed by reason and should not be susceptible to the vice of arbitrariness. This is the crux of the Article 14 of the Constitution of India and basis of Rule of Law. In appropriate cases, actions uniformed by reasons may be questions as arbitrary or unreasonable in proceedings under Article 226 of the Constitution of India. On this aspect, it is pertinent to refer to a decision in Raunaq International Limited v. I.V.R. Construction Limited & Others,1 wherein it is held thus: (paras 22 & 23) "( 22. ) In Tata Cellular v. Union of India, (1994) 6 SCC 651 : (1994 AIR SCW 3344), this Court again examined the scope of judicial review in the case of a tender awarded by a public authority for carrying out certain work. This Court acknowledged that the principles of judicial review can apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of that power of judicial review. The Court also observed that the right to choose cannot be considered as an arbitrary power. Of course, if this power is exercised for any collateral purpose, the exercise of that power will be struck down. "Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters and the need to remedy any unfairness. Such an unfairness is set right by judicial review." After examining a number of authorities, the Court concluded as follows:-
(1) The modern trend points to judicial restraint in administrative action.
(2) The Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made.
(3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasi-administrative sphere. However, the decision can be tested by the application of the "Wednesbury principle" of reasonableness and the decision should be free from arbitrariness, not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. ( 23. ) The same view has been reiterated in Asia Foundation and Construction Ltd. v. Trafalgar House Construction (I) Ltd., (1997) 1 SCC 738, the Court observing that judicial review of contractual transactions by Government bodies is permissible to prevent arbitrariness, favouritism or use of power for collateral purposes. This Court added a further dimension to the undesirability of intervention by pointing out that where the project is a high cost project for which loans from the World Bank or other international bodies have been obtained after following the specifications and procedure of such a body, it would be detrimental to public interest to interfere. The same principles have been also reaffirmed in New Horizons Limited v. Union of India, (1995) 1 SCC 478: (1995 AIR SCW 275), with this Court again emphasising the need to allow for certain flexibility in administrative decision-making, observing that the decision can be challenged only on the Wednesbury principle of unreasonableness i.e. unless the decision is so unreasonable that no sensible person would have arrived at such a decision, it should not be upset. In Delhi Science Forum v.Union of India, (1996) 2 SCC 405 : (1996 AIR SCW 953), this Court once again observed that if a reasonable procedure has been followed, the decision should not be challenged except on the Wednesbury principle of unreasonableness." From the above decision, it is clear that the decision can be tested by application of wednesbury principle of reasonableness and the decision should be free from arbitrariness and not affected by bias or actuated by mala fides.
16. 'Arbitrariness' means a conduct or act based alone upon one's will and not upon any course of reasoning and exercise of judgment. A pre-disposition to decide for or against one party without proper regard to the true merits of the dispute is 'bias'. Before a decision is invalidated, bias must be shown to have been present or where a reasonable person present would have a reasonable suspicion from the circumstances of the case, that bias might have infected the decision. There cannot be any dispute that every power, either statutory or under common law, must be exercised by authorities lawfully, reasonably and in good faith. If the power is exercised unlawfully, improperly, unreasonably or in bad faith, the exercise is bad and the action is illegal. 'Mala fide' may mean want of good faith, personal prejudice, grudge, ill-will or improper. It is not the case of the petitioner that the respondents 1 and 2 acted mala fidely so as to give the contract to the third respondent. There is no allegation in the writ affidavit attributing bad faith against respondents 1 and 2.
17. Learned counsel for the petitioner contended that the municipal authority shall have to discharge the duties cast on it under the MSW Rules, 2000 and cannot transfer them to operator of a facility in toto. According to the learned counsel, the word 'agency' as mentioned in the definition of 'operator of a facility' must relate to the municipalities or panchayats as mentioned in the definition.
18. In exercise of the powers conferred by Sections 3, 6 and 25 of the Environment (Protection) Act, 1986, the Central Government made the MSW Rules, 2000 to regulate the management and handling of MSWs. By virtue of these Rules, every municipality is responsible for collection, segregation, storage, transportation, processing and disposal of the MSW. In these Rules, 'Municipal Authority' is defined as, "Municipal Corporation, Municipality, Nagar Palika, Nagar Nigam, Nagar Panchayat, Municipal Council including Notified Area Committee (NAC) or any other local body constituted under the relevant statutes, where the management and handling of municipal solid waste is entrusted to such agency." Similarly, 'Operator of a facility' means, 'a person who owns or operates a facility for collection, segregation, storage, transportation, processing and disposal of municipal solid wastes and also includes any other agency appointed as such by the municipal authority for the management and handling of municipal solid wastes in the respective areas.' If the intention of the legislature is that municipal corporations or panchayats are only to manage the MSW, the word 'agency' would not have been incorporated in the definition. The word 'agency' can be defined as an agent acts on behalf of the principal and often uses his name and his acts in that capacity are attributable to the principal'. Corporations, municipalities, panchayats and Nagara Paliks are statutory bodies conferred with certain powers relating to towns, municipalities and panchayats. Whereas the agency is a contract between two persons whereunder an Agent has to act at the will and pleasure of the principal. The word 'agency' cannot be construed to mean that it belongs to the same category of statutory bodies. Therefore, the Rule of Ejusdem generis has no application to mean that agency can be equated of the same class or category of municipality or corporation. Therefore, the use of the word 'any other agency' does not bring into the principle of Ejusdem generis for municipal corporation or municipality. They do not belong to single genus. Further, the word 'person' as mentioned in the definition of 'operator of facility' can be said to be a person to whom the statutory bodies entrusted the work of management and handling of MSW. If the intention of the legislature is to fix responsibility on the municipal bodies or panchayats, there is no need to define 'operator of a facility' and the word 'agency' would not have been incorporated within the definition of the 'municipal authority'.
19. Rule 4 of these Rules provides every municipality shall, within the territorial area of the municipality, be responsible for the implementation of the provisions of these rules, and for any infrastructure development for collection, storage, segregation, transportation, processing and disposal of municipal solid wastes. No doubt, under the above Rule, the municipal authority shall be responsible for implementation of the provisions of these Rules. The first clause does not contain that 'operator of a facility' cannot be made responsible for implementation of the provisions. But, sub-rule (2) of Rule 4 provides that municipal authority or an operator of a facility shall make an application in Form-I for grant of authorization for setting up waste processing and disposal facility including landfills from the State Board or the Committee in order to comply with the implementation programme laid down in Schedule-I. Language used in the sub-section provides that either the municipal authority or the operator of a facility can set up waste processing and disposal facility relating to MSW. Under Rule 7 (1) of the Rules, any municipal solid waste generated in a city or a town shall be managed and handled in accordance with the compliance criteria and the procedure laid down in Schedule-II. Sub-rule (2) of Rule 7 provides that waste processing and disposal facilities to be set up by the municipal authority on their own or through an operator of a facility shall meet the specifications and standards as specified in Schedules III and IV. Schedule-II provides for steps to be taken by the municipal authority with regard to collection of MSW. Paragraph 5 of Schedule-II deals with Processing of municipal solid wastes. Paragraph 5 (ii) provides that Municipal authorities shall adopt suitable technology or combination of such technologies to make use of wastes so as to minimize burden on land fill, and adopt the following criteria, (i) ...... (ii) mixed waste containing recoverable resources shall follow the route of recycling; incineration with or without energy recovery including pelletisation can also be used for processing wastes in specific cases; municipal authority or the operator of a facility wishing to use other state-of-the-art technologies shall approach the Central Pollution Control Board to get the standards laid down before applying for grant of authorization. Therefore, from the above provisions, it is clear that the municipal authority or the corporation or panchayat or nagar-palika either can manage or handle the municipal solid waste or entrust to an agency for the said purpose. There is a clear distinction between the municipal authority and an operator of a facility. Under the MSW Rules, 2000, GHMC has got power to entrust the job to a Contractor or an agency the whole job of garbage collection, storage, transportation and disposal of the municipal solid waste. Therefore, the contention that the management and handling of MSW cannot be entrusted to a person or agency, cannot be accepted.
20. One of the contentions raised by the learned counsel for the petitioner is that the municipal corporation cannot authorize a private agency to collect money from household people or from commercial establishments for the primary collection of garbage. According to the learned counsel, there is no provision under the GHMC Act, 1955 providing for imposing service charge on the household people or commercial establishments either by GHMC or by a private agency authorized by the municipal corporation. The learned standing counsel for the GHMC and the learned counsel appearing for the third respondent contend that the Corporation is not collecting money from the household people and it is not imperative to pay such amount.
21. The Concessionaire agreement dated 21.02.2009 in para 2.2 (f) authorizes the third respondent collect Rs.25/- per month from individual household towards service charge. It also authorizes collection of similar service charges from the commercial establishments as per the guidelines of the Commissioner. Under Section 197 of the GHMC Act, 1955, the Corporation can impose certain taxes like- tax on lands and buildings; octroi; tax on vehicles; taxes on animals and boats; taxes on advertisements; tax on transfer of immovable property, etc. The Corporation may also impose tax other than those specified under sub-section (1) subject to the previous sanction of the Government. Under Section 199 of the GHMC Act, 1955, property taxes refer to general tax, water tax, drainage tax, lighting tax and conservancy tax. No doubt, the provision of imposition of tax for primary collection of MSW cannot be traceable to any of the provisions of the GHMC Act or the Rules made thereunder. But, it is not a statutory tax which has to be paid compulsorily by the household people or any other establishments like hospitals or manufacturers of any products. Even as per the existing system prior to contract, payment of Rs.25/- per month by household people to tri-cyclists who used to collect the garbage from the houses, is only optional. The tri-cyclists used to collect solid waste by going to the houses. There is no statutory obligation on the part of the household people or any other establishment to pay the said amount to the tri-cyclists. The tri-cyclists go to door to door for collection of MSW. If the household people do not want to pay Rs.25/- to them, they have to take solid waste to the nearby place where a dust bin is provided and throw the same in it.
22. On this aspect, the learned counsel for the petitioner placed strong reliance on a decision in Pampa Suryanarayana & 22 others v. Srikakulam Municipality2, wherein it is held thus:
"In the decision in Government of Andhra Pradesh. V. Hindustani Machine Tools (2) AIR 1975 SC 2037 the Supreme Court has said that the expenses incurred by a Gram Panchayat or a Municipality in discharging its obligatory functions are usually met by the imposition ot a variety of taxes. For justifying the imposition of fees the public authority has to show what services are rendered or intended to be rendered individually to the particular person on whom the fee is imposed. The laying of roads, or providing access to new buildings, provision for drainage and lights are not services rendered individually. The lading of roads, and drainage or the supply of street lights are a statutory function of public authorities.| There is, therefore, no warrant for the levy of permission fee which was levied. There the Supreme Court was considering the validity of levying Permission Fee for construction of buildings." The above decision has no application to the facts of the present case for the simple reason that municipality is not levying any fee on the owners or occupier of houses or buildings within the municipal or corporation area. When a statutory authority levies tax, the person is bound to pay the tax. But, in this case, there is no imperative obligation for payment of Rs.25/- to the tri-cyclists or to the third respondent in pursuance of the contract impugned. Discretion is given to the household persons to pay Rs.25/- to the third respondent in case the employees of the third respondent lift MSW from the house of an individual. So, collection of service charge by the second or third respondent for the primary collection of garbage from the household people and commercial establishments is not a statutory obligation. It is entirely within the discretion of the individuals to pay the said charges. In case he takes the solid waste to the nearly dust bin and threw into it, there is no need to pay the service charges.
23. It is also contended by the learned counsel for the petitioner that the municipality has transferred immovable property in favour of the third respondent for about 25 years without following the provisions of the GHMC Act, 1955 or the Rules made thereunder. It is his contention that, as the power was conferred on the third respondent by the second respondent to dispose of MSW, the Commissioner has no power to lease or sell or otherwise dispose of the immovable property without the previous sanction of the Government. The counsel appearing for the respondents contend that it is not a 'transfer' but only a 'license'.
24. As seen from Article 3 of the contract impugned, Corporation shall license the site to the third respondent on a nominal fee of Rs.1,000/- per annum for a period of 25 years. The extent of site is Ac.320.00 located in Jawaharnagar, Hyderabad including the dumping sites at Fathullaguda, Shamshiguda, Gandamguda and transfer sites located at Lower Tank Bund, Yousufguda and Imliban. In terms of the contract, the third respondent shall have a right to use the site in accordance with the provisions of the Act. The third respondent is entitled to remain in peaceful possession and enjoyment of the site during the term of 25 years and would develop the project facilities for management, treatment, processing and disposal of the MSW.
25. No doubt, the Government has not given any previous sanction specifically under sub-section (3) of Section 148 of the GHMC Act, 1955. It is not as if the second respondent entered into agreement with the third respondent with regard to this project without the knowledge of the first respondent-government. In pursuance of the letter addressed by the Commissioner and Special Officer, GHMC, Hyderabad proposing to enter into agreement with regard to management project inter alia providing for disposal of the solid waste, the Government approved the proposal for establishment of integrated solid waste management project vide G.O. Ms. No.859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008. So, after taking the approval from the Government, the second respondent entered into agreement with the third respondent. Further more, the Government has also constituted a Technical Committee and Tender Approval Committee for the purpose of final selection of developer or concessionaire. From the above discussion, it is clear that entire project is established under the guidance of the State Government. Therefore, when the project itself is approved by the first respondent, it cannot be said that no previous sanction was obtained for disposal of solid waste as required under sub-section (3) of Section 148 of the GHMC Act, 1955. Therefore, the contention of the learned counsel for the petitioner is wholly untenable and devoid of merit.
26. It is also contended by the learned counsel for the petitioner that as per Rule 8 of the HMC (Acquisition and Disposal of Immovable Property) Rules, 1970, every case of transfer or lease of immovable property shall be done by publishing a notice in the A.P. Gazette giving full particulars of the property and the name of the transferee. No doubt, the above provision has not been followed by the second respondent in transferring the property to the third respondent. But, the said Rules come into operation only in case of transfer or lease of immovable property belonging to the municipality. On this aspect, learned counsel for the third respondent contended that transfer of the land is only by way of license for a particular period and it is not a lease. There is a clear distinction between 'lease' and 'license'. 'Lease' is defined under Section 105 of the Transfer of Property Act, which reads 'a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, on consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." Whereas, 'license' is defined under Section 52 of the Indian Easements Act, 1882, which reads : "Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called licence."
27. On this aspect, the learned counsel for the petitioner placed strong reliance on a decision in Associated Hotels of India Ltd. v. R.N.Kapoor3, wherein it is held thus: (para 27)
"The following propositions may, therefore, be taken as well-established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties -whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document, a party gets exclusive possession of the property, 'prima facie' he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease." In view of the above decision, one of the tests is when a document creates an interest in a property, it is of lease, but if it only permits another to make use of the property of which the legal possession is continued with the owner, it is a licence.
28. As per the agreement impugned, possession of the site was given to the third respondent so as to construct a waste disposal project by incurring huge cost. For making constructions, the third respondent has to take approvals of the second respondent corporation for effective utilization of the property. As seen from the agreement, it is clear that the third respondent will carryout the activities on behalf the GHMC and is under the overall control of the GHMC. An independent engineer will monitor the work carried out by the third respondent and certify the same. Further, GHMC permitted the third respondent only for access into the site and set up all facilities required for treatment and disposal of MSW as per the said agreement and the GHMC always has the right to interfere with the operations of the third respondent at any time. For this purpose, an 'independent engineer', who is a third party, shall be the nodal person for supervision and monitoring of compliance by concessionaire with respect to the construction requirements and O&M requirements, more particularly to undertake, perform, carry out the duties, responsibilities, services and activities set forth in the bid documents consisting of the agreement and the RFP. It is also clear from the Article 3 of the agreement impugned that without prior written approval of the corporation, the third respondent cannot use the project facilities for any purpose other than the purpose of the project and purpose incidental or ancillary thereto. The third respondent shall allow access to and use of the site for laying/installing/maintaining telegraph lines, electric lines or for such other public purposes as GHMC may specify. Various representatives of the Corporation have access to the project facilities for the purpose of ascertaining the compliance of the terms, conditions and covenants of the agreement. It is also clear that all movable assets including site and civil structures created for compost plant, project facility and landfill site shall remain with the GHMC. Therefore, from the recitals of the agreement, it is clear that GHMC permitted the third respondent only for access into the site and to set up all the facilities, and the Corporation has right to interfere with the operations of the third respondent at any time.
29. One of the contentions of the learned counsel for the petitioner is that the Corporation cannot permit the third respondent to make use of the MSW. Under clause 2.6 of the agreement impugned, the third respondent shall be free to sell or otherwise dispose of any components of MSW and products derived from the plant as a consequential undertaking processing of the MSW including compost or electricity. By virtue of this agreement, the third respondent shall have a right to sell or otherwise dispose of such products at such price and to such persons and enter into such agreements with third parties.
30. Under Section 481 of the GHMC Act, 1955, all matters collected by municipal servants or contractors in pursuance of Sections 480 and 484 of the Act shall be the property of the corporation. Under Section 169 of the Act, all the proceeds of the disposal of the property by or on behalf of the corporation shall form part of the municipal fund. At present, GHMC is transporting and dumping over 3800 tons of waste every day at Jawaharnagar site and this massive waste along with the already accumulated waste so far is causing irreparable damage to the environment and polluting air, water and soil. Therefore, GHMC needs to develop a facility for scientific processing and disposal of the waste on regular basis along with capping of the more than 60,00,000 tons of existing waste dumped. Under Section 484 of the GHMC Act, 1955, it shall be lawful for the Commissioner to take measures for the daily collection, removal and disposal of such matter from all premises situated within the municipal corporation. The word 'take measures' occurring in the above section includes that he can entrust the work to contractors or agencies for the purpose of collection, removal and disposal of MSW. Similarly, Rule 7 (2) provides for disposal of MSW by the municipal authority on their own or through an operator of a facility. Therefore, the disposal of the MSW by the third respondent to make use of MSW is completely in accordance with the provisions of the GHMC Act, 1955 and the Rules made thereunder.
31. It is contended that all proceeds of the disposal of the property by or on behalf of the Corporation shall be credited to the fund which shall be called as 'municipal fund'. Sale proceeds from out of the proceeds derived from the MSW, according to the learned counsel for the petitioner, have to be credited to municipal fund and so using of the sale proceeds by the third respondent is contrary to Section 169 of the GHMC Act, 1955. When the Government has power to give sanction to the Corporation for disposal of the movable or immovable property belonging to the Corporation and the Commissioner exercised the power after obtaining prior sanction, it cannot be said that the solid waste would be the property of the municipality. The contract was granted with the approval of the Government in terms of G.O. Ms. No. 859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008.
32. The contention of the learned counsel for the petitioner is that the respondents 1 and 2 cannot enter into agreement with a private party in entrusting statutory functions of the second respondent at the cost of the job guarantee of the workman. It is his contention that, no doubt, as per the agreement, the third respondent has to maintain good industrial relations among the personnel employed in connection with the performance of its obligations under the agreement, and that there is no legal obligation cast on the third respondent to continue the existing personnel who are presently engaged in the job of garbage collection and disposal. The Concessionaire has given commitment to the GHMC that the present workers of Transport Department will not be retrenched. During the meeting with the employees' unions, the third respondent reiterated that it is not going to retrench the existing workers working in the Transport Section. Similarly, the third respondent filed counter stating that sweeping of roads and its maintenance to keep it clean, where maximum manpower is employed by GHMC is not a part of the contract at all, and to accommodate the existing manpower working in MSC is the responsibility of the respondents 2 and 3, and that permanent employees working in MSW would be retained by GHMC, and all the contract workers engaged in MSW activity will be accommodated by the third respondent and this fact was informed to the second respondent stating that they are not going to retrench anybody from the existing contract manpower. Therefore, in view of the above averments, the contract would not in any manner affect the rights and duties of the existing employees working in the GHMC.
33. It is contended by the learned Government Pleader appearing for the first respondent that G.O.Ms.NO.136, Municipal Administration and Urban Development (J) Department, dated 19.2.2009 is not under challenge in this Writ Petition, and that without challenging the said G.O., challenge to the consequential Concessionaire agreement is of no use. G.O.Ms.NO.136, Municipal Administration and Urban Development (J) Department, dated 19.2.2009 permitted the Concessionaire to enter into the agreement. In pursuance of the said G.O., the Government accepted the proposal of the Commissioner and approved the L1 bid of the third respondent as successful bid with a tipping free of Rs.1431/- per metric ton for implementation of the integrated MSW management programme in GHMC as per the conditions stipulated in G.O. Rt. No.859, Municipal Administration and Urban Development (J) Department, dated 20.12.2008. The agreement impugned is a consequential proceedings in pursuance of the said G.O., but the said G.O. has not been challenged in this Writ Petition, and therefore, without challenging G.O. Ms. No.136, dated 19.2.2009, challenge to the consequential Concessionaire agreement is of no value.
34.On the aspect of parameters of judicial review under Article 226 of the Constitution of India, both the counsel placed reliance on a decision in Balco Employees' Unijon (Regd.) v., Union of India & others4 case, wherein it is held thus:
"Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the Courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is the Parliament and the Court. Here the policy was tested and the Motion defeated in the Lok Sabha on 1/03/2001. In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself.: On the other hand, learned counsel appearing for the third respondent placed reliance on para 46 of the above judgment, which reads thus: "It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our Courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical." So, from the above decision, it is clear that unless it is demonstrated that the policy is contrary to any of the statutory provisions of the Constitution of India or that there is an illegality in the decision making process, it is not for the courts to consider the economical policies of the State Government. As already observed by this Court, under Sections 480 and 481 of the GHMC Act, 1955, the Commissioner shall take measures for cleansing of all the streets and premises and removal of garbage through municipal servants or through contractors.
35. It is contended by the learned counsel for the petitioner that in order to confer undue benefits on the third respondent, the whole agreement has been designed and that cost of the project is going to be funded partly by Central Government and partly by the State Government and it is not a case where the third respondent is incurring total expenditure for the project, and that when the power is given to do certain things in a certain way, the things must be done in that way and the modes of performance thereof is forbidden. On this aspect, the learned counsel for the petitioner relied on a decision in Ramachandra Murarilal Bhattadi v. State of Maharashtra5 wherein it is held thus: (para 47). "Reliance has also been placed on State of Uttar Pradesh vs. Singhara singh and Ors. [ AIR 1964 SC 358 : (1964) 4 SCR 485], wherein this Court quoted with approval the decision in Taylor v. Taylor [( 1 Ch. D. 426, 431] for the proposition that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. There is again no quarrel over the aforementioned proposition of law. Here the Authority has not exercised any power forbidden by law. The Authority has also not exercised its power in the manner which is not in accordance with law." It is stated by the learned counsel for the second respondent that the second respondent is incurring cost of Rs.700/- to Rs.800/- per metric ton of MSW towards collection, transportation and open disposal and the tipping fee of Rs.1431/- per metric ton permitting the third respondent to take the revenues coming from the treatment and disposal and authorized to collect the user charges from the households and commercial establishments is based on the techno commercial viability of the project and the same has been incorporated in the RFP to get low price quote for tipping fee on per on basis. It is not in dispute before this Court that the tipping fee is for entire gamut of activities. It is a viability to assist and supplement to receivables. The contractor has to sustain with the revenues of sale of compost, sale of power generated and tipping fees in the long run as the investment for the power project, is three times higher than the investment of thermal power project. The gamut of activities covered under the tipping fee are as follows:
1) Primary collection from each house;
2) Provision storage bins at street level for storage of waste;
3) Secondary transportation of waste from the streets to the transfer station;
4) Construction of 5 additional new transfer stations with state of art technology and upgradation of existing 3 transfer stations and maintenance of the same.
5) Transshipment and transport to the treatment site;
6) For processing of waste, establishment of complete infrastructure comprising segregation units, material recovery facilities, processing units and associated plant and machinery.
7) Scientific landfill;
8) Effluent (leachate) treatment for the waste water released from waste;
9) Green belt development around the integrated waste management facility;
10) Capping of the existing 4 dump sites where the existing waste is the tune of 7 to 8 million tones;
11) Operation and maintenance of the system for a period of 25 years by providing the required number of vehicles for the entire concession period;
12) Post closure maintenance of the dump site for 15 more than after the 25 years of the concession period;
13) For better management of municipal solid waste, four integrated waste management facilities with complete infrastructure to be established during the term of the contract. Considering all these aspects, fixing of tipping fee at Rs.1431/- per metric ton to the third respondent would be based on techno commercial viability of the project. In fixing the tipping fee, the committee has taken into consideration the fee existing in various cities like Bangalore, Delhi and Chennai. In Bangalore, the distance of the treatment and disposal facilities from the city is 20 to 25 KM and the tipping fee for collection and transportation is Rs.1,000/- per metric ton. In Delhi, the distance of the treatment and disposal facilities from the city is 20 to 30 KM and the tipping fee for collection and transportation is around Rs.700/- per metric ton. In Chennai, the distance of the treatment and disposal facilities from the city is 15 to 20 KM and the tipping fee for collection and transportation is Rs.1,100/- per metric ton. In case of GHMC, the average distance is 60 KM from the city. Tipping fee of Rs.1431/- per metric ton is the lowest quotation offered by the third respondent. So, the tipping fee has agreed by the GHMC cannot be said to be on higher side, on the other hand, it is less and competitive price. Therefore, the contention of the learned counsel for the petitioner on this aspect is untenable.
36. Though it is not seriously argued that the petitioner union has no locus standi to file the Writ Petition challenging the Concessionaire agreement dated 21.02.2009, the petitioner is a registered trade union representing employees working in the GHMC. Even otherwise, as citizens, they are interested in the proper functions of the GHMC if the acts of the latter are not in accordance with law. It need not confine interest of the petitioner protecting the rights of the members, but they can question the actions of the GHMC. On this aspect, learned counsel for the petitioner relied on a decision in Balco Employees' Union (Regd.) ( 4 supra), wherein it is held thus:
"With regard to the question of the locus standi of the workmen, who feared large-scale retrenchment, to challenge the validity of action taken by the Company, it was observed at page 589 as follows :-
"If a citizen is no more than a wayfarer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the Court will not be ajar for him. But, if he belongs to an organisation which has special interest in the subject matter, if he has some concern deeper than that of a busybody, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered. I, therefore, take the view that the present petition would clearly have been permissible under Article 226". It must be shown that action of the second respondent in entering into the contract with the third respondent with regard to transport and disposal of MSW is not in accordance with the provisions of GHMC Act, 1955. If the petitioner shows that the Corporation has no source of power under the Act, then, certainly, it can be said that the agreement is illegal. When a power is conferred on the Commissioner to take steps for cleansing and disposal of MSW through its employees or contractors, that power has been exercised by the Commissioner with prior approval of the Government.
37. One of the contentions of the learned counsel for the third respondent is that the Writ Petition is liable to be dismissed on the ground of lapses and delay. It is not in dispute before this Court that under Article 226 of the Constitution of India, power of a High Court is discretionary. It is imperative that if the petitioner wants to invoke the extraordinary remedy available under Article 226 of the Constitution of India, he should come to the Court at the earliest reasonably possible opportunity. On this aspect, the learned counsel for the petitioner contended that the Writ Petition is filed seeking cancellation of the agreement impugned dated 21.02.2009; the petitioner union gave a representation on 29.06.2009 to the GHMC, they sought various details pertaining to the agreement under the Right to Information Act, 2005 and the Corporation has furnished the same on 02.08.2010. Therefore, the petitioner was not keeping quiet all through and that approval of EPTRI was given on 21.2.2011 and immediately the Writ Petition was filed in the month of February, 2011. On the other hand, the learned counsel for the third respondent contended that the contract was executed on 21.02.2009 to the knowledge of all the persons as it was pursuant to open global tender that was published in all news papers; that after acquiring knowledge about the contract, the workers went on strike from 6.7.2009 to 8.7.2009, and therefore the matter was referred to the Government, and pursuant to the assurance given by the third respondent and clarification of the Government, this was explained to all the unions and that the work at Jawaharnagar project site was commenced on 29.12.2009 and after lapse of one year five months, without giving any explanation, the present Writ Petition was filed. The counsel relied on a decision in Delhi Development Authority v.Rajendra Singh & others6, wherein it is held thus: (para 52) "In Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664 para 229 : (2000 AIR SCW 4809), this Court has held that the PIL should be thrown out at the threshold if it is challenged after the commencement of execution of the project. It was also held that no relief should be given to persons who approach the Court without reasonable explanation under Articles 226 and 32 after inordinate delay."
38. Similarly, in a case in Raunaq Internationalk Limited v. I.V.R. Construction Limited & others,7 it is held thus: (para 17) "Normally before such a project is undertaking, a detailed consideration of the need, viability, financing and cost effectiveness of the proposed project and offers received takes place at various levels in the Government. If there is a good reason why the project should not be undertaken, then the time to object is at the time when the same is under consideration and before a final decision is taken to undertake the project. If breach of law in the execution of the project is apprehended, then it is at the stage when the viability of the project is being considered that the objection before the appropriate authorities including the Court must be raised. We would expect that if such objection or material is placed before the Government the same would be considered before a final decision is taken. It is common experience that considerable time is spent by the authorities concerned before a final decision is taken regarding the execution of a public project. This is the appropriate time when all aspects and all objections should be considered. It is only when valid objections are not taken into account or ignored that the Court may intervene. Even so, the Court should be moved at the earliest possible opportunity. Belated petitions should not be entertained."
39. Therefore, in this case also, the work has been started by the third respondent immediately after execution of the agreement and the work worth of Rs.17.74 crores has been completed and Rs.30.00 crores of worth work is under progress. Apart from this, the third respondent submitted a performance guarantee in the form of bank guarantee for a sum of Rs.18.00 crores. Therefore, as rightly contended by the learned counsel for the third respondent, the petitioner approached the Court belatedly after commencement of the project and investment of crores of rupees by the third respondent.
40. The learned counsel for the third respondent relied on a decision in M&T Consultants, Secunderabad v. S.Y. Nawab & another,8, wherein it is held thus: "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 to undertake such a project at the cost of the corporation and the fact that the venture was long overdue 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 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 recouping the investments to be made for installations and constructions but to maintain them in good, proper and working condition without also sacrificing the beauty of the installations 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 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 not to be removed by the appellants." On this aspect, the stand taken by the GHMC that the corporation has to comply with the improvement of existing landfill sites as per the provisions of the MSW Rules, 2000 by 31.12.2001 or earlier; identification of landfill site for future use and making the site ready for operation by 31.12.2002 or earlier, and set up waste processing and disposal facilities by 31.12.2003 or earlier. The said obligations have not been fulfilled by the corporation. Because this project is found to be uphill task to the corporation with regard to technical, administrative and financial constraints at their command and disposal, successful agreements of Public, Private, Partnership (PPP) are being given preference as cities like Bangalore, Mumbai, Chennai and Delhi have undertaken MSW management under various PPP frameworks.
41. It is one of the contentions of the learned counsel for the petitioner that total estimated cost of the project is Rs.897.00 Crores with JNNURM funds subject to condition that if the proportionate share of the Government of India and the State Government of the eligible project cost under JNNURM is not materialized, GHMC shall bear that cost and the rest of the project cost shall be borne by the Concessionaire. In order to execute such a huge project, the second respondent ought to have invited global tenders but it did not do so. The second respondent filed counter affidavit stating that cost of the project is reduced to Rs.434.91 crores based on its eligibility and as per the existing procedure followed by the other cities in India for MSW management project, the second respondent invited expression of interest in national papers. As seen from the agreement, it is clear that only 35% of the approved project cost will be funded by JNNURM and 15% share by Government of Andhra Pradesh and the Concessionaire has to make necessary arrangement for balance funds. According to the third respondent, the project cost is about Rs.800.00 crores excluding the cost of setting up power plant out of which JNNURM admissible cost is only Rs.470.00 crores and 50% of the cost i.e. Rs.235.00 crores is eligible under JNNURM as grant and the rest of Rs.565.00 crores have to be invested by the third respondent, and that in addition to the main expenditure, there is regular O&M for fuel, operating crew, repairs, etc. besides incurring maintenance expenditure day to day. The availability of such grant is revealed in the tender and that energy recovery facilities are to be set up by the third respondent on its own funds and capital costs. Therefore, the contention of the learned counsel for the petitioner on this aspect that funding of the project to an extent of 50% is beneficial to the third respondent cannot be accepted in view of the fact that this aspect of the case has been clearly mentioned in the tender notification.
42. For the foregoing discussion, the Writ Petition is devoid of merits and is, accordingly, dismissed. No costs.