Bombay HC Finds No Merit In PILs Based On News Report Alleging LED Lights Scam [Read Judgment]

The Bombay High Court recently dismissed a couple of PILs based on an article that appeared in The Times of India on June 21, 2018, with the headline: “LED lamps cost Rs 3,400 in market, NMC pays Rs 9,900”.

It was suggested in the story that a scam had taken place in the procurement of light-emitting diode (LED) lights by Nagpur Municipal Corporation (NMC) under the Rs 470-crore Smart Street Lighting project aimed at saving electricity and meant to be more economical.

While the first PIL was instituted after the court took suo motu cognizance of the news item, the other was filed by Advocate Abhigyan Bharate. However, the division bench of Justice BP Dharmadhikari and Justice MG Giratkar of the Nagpur bench concluded there were no merits in the contentions raised and dismissed the PILs.

Both the PILs challenged a resolution dated December 27, 2016, that approved the tendered bids and cleared the issuance of work order accordingly.

Amruta Gupta, amicus curiae in the matter, submitted that although NMC claimed that the tender floated inviting bids for these LED lights was a global tender, it was only restricted to contractors registered with NMC. She further submitted that although these lights are available in the market from anywhere between Rs 3,400 to 4,000, NMC agreed to Philips’ quotation of Rs 9,900.

Counsel for the petitioners SB Wahane supported her submissions and said that the initial cost envisaged by NMC was Rs 267 crores, however, the cost given by Philips was accepted without application of mind by the standing committee.

Appearing on behalf of NMC, Senior Counsel CS Kaptan asserted that the LED lights procured by NMC were of a much superior quality to others in the market that may be available for Rs 3,400 to 4,000. He submitted various features and functions that made the lights procured by NMC ‘smart’.

Kaptan stated that the operating voltage of LED is deliberately kept “low” as it avoids theft of electricity by putting a hook. The low energy does not permit and enable the thief to run any appliances at his home.

The TOI story had quoted Rs 3,400 as the standard market price of an LED street light based on a claim by Maheshwari Trading Company, however, Kaptan informed the court that burning hours of LED mentioned by Maheshwari Trading Company are only 25,000 hours, while life of LED lights being procured by Nagpur Municipal Corporation is 50,000 hours. LED lights procured by NMC have a standalone feature called '2-step dimming'. Under this feature, during night hours considering the traffic movement, the LED automatically emits less light and saves energy, Kaptan said.

Judgment

“For the purposes of execution of contract and convenience, the entire city has been divided into 10 zones and the submission that the offer made by the successful bidder is, partwise, therefore, appears to be misconceived. The tender itself divides the work into various parts like infrastructure and replacement. We can conveniently look into the resolution of the Standing Committee dated 27­12­2016, which considers these parts separately.”

The court noted before extensively looking into the procedure followed in the entire tendering process as well as the terms thereof. After going through the same and examining submissions by both parties, the court said:

“The overall impression after hearing the respective counsel is that with the help of experts in its employment, the NMC has devised a system which is expected to cater to street lighting for 99 months. The successful bidder has to render services as envisaged. The tender specifications are; to stop energy theft, bringing down electric consumption because of dimming facility and the burning hours of LED procured are twice the burning hours of standard equipment. We, therefore, do not find any merit in the challenges as raised.”

Thus, the petitions were dismissed.