Mundra International Container Terminal Private Ltd. & Anr. v. The Gujarat Maritime Board & Ors. - A S Dave [2008] INGJHC 1 (7 January 2008)
Bench: A S DaveMundra International Containerterminal Private Ltd. And Anr. vs The Gujarat Maritime Board And Ors. on 7/1/2008
JUDGMENT
Anant S. Dave, J.
1. This writ petition under Article 226 of the Constitution of India challenges communication dated 3rd November 2007 addressed by the first respondent and consequential communication dated 8th November 2007 addressed by respondent No. 2, as being contrary to law and violative of principles of natural justice, arbitrary, unreasonable, capricious and indicative of total non−application of mind, patently mala fide, collusive, illegal, ultra vires Articles 14 and 19(i)(g) of the Constitution of India and is null and void ab− initio and of no legal effect whatsoever. In paragraph 30 of the petition, the petitioners have prayed as under:
- a.
- for a writ of prohibition or a writ in the nature of prohibition, or in any other appropriate writ order or direction under Article 226 of the Constitution of India restraining the respondents, by themselves, their servants, agents, officers and subordinates, from taking any steps or measures or action whatsoever in any manner whatsoever, against the petitioners pursuant to and/or in implementation of and/or in furtherance of the said impugned letter dated 3.11.2007 [Annexure "O" hereto] and/or the consequential letter dated 8.11.2007 [Annexure "H" hereto]
- b.
- for a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction under Article 226 of the Constitution of India against the respondents:
- ordering and directing the 1st respondent to forthwith withdraw and cancel the said impugned letter dated 3rd November 2007 [Annexure "O" hereto]
- restraining the respondents, by themselves, their servants, agents, officers and subordinates, from taking any prejudicial steps or measures or actions whatsoever in any manner whatsoever against the petitioners pursuant to and/or in implementation of and/or in furtherance of the said impugned letter dated 3.11.2007 [Annexure "O" hereto] and/or the said consequential letter dated 8.11.2007 [Annexure "H" hereto].
2. Before adverting to the factual matrix and legal issues involved in this petition, it is necessary to notice certain abbreviations used in the present proceeding by both the parties for the sake of convenience. They are as under:
[a] MICTL : Mundra International Containers Private Limited, petitioner herein [sub−licensee], a Company incorporated under the Companies Act, 1956, engaged, inter alia, in the business of operation of container terminal at the Port of Mundra, State of Gujarat, petitioner No. 1 and sub−licensee under Sub− Concession Agreement [SCA] [sub−licensee].
[a1] MICTPL : Mundra International Containers Terminal Private Limited. Pursuant to change in name granted by the Registrar of Companies in exercise of power under Section 23(1) of the Companies Act, 1956, M/s. Adani Containers [Mundra] Terminal Limited became Mundra International Containers Terminal Private Limited, petitioner No. 1 and is wholly owned subsidiary of P & O Ports [Mundra] Private Limited. Mauritius
[b] GMB : Gujarat Maritime Board, respondent No. 1 herein [licensor] is constituted for administration, control and management of minor ports in the State of Gujarat and for the matters connected therewith, as per the Gujarat Maritime Board Act, 1981, and Licensor as per Concession Agreement [CA] [Licensor].
[c] MPSEZ : The Mundra Port and Special Economic Zone Limited, respondent No. 2 herein [licensee], erstwhile M/s. Gujarat Adani Port Limited [Licensee]
[c] GAPL : M/s. Gujarat Adani Port Limited
[d] ACTL : M/s. Adani Containers [Mundra] Terminal Limited.
[e] P&O Ports : An affiliation of P & O Ports [Mundra] Private Limited
[f] P&O Ports Mundra: P & O Ports [Mundra] Private Limited, a 100% shareholder of MICTL and a subsidiary of P & O Overseas Holding Limited, which is, in turn, held by P & O Property Holding Ltd.
[g] P&O Dover : P & O Dover [Holdings] Limited, a 100% shareholder of P&O Mundra and itself is 100% held by POSNCO.
[h] POSNCO : Peninsular & Oriental Steam Navigation Company, a 100% shareholder of P & O Dover, prior to March 2006 was listed in the London Stock Exchange. Thereafter, upon open offer to the shareholders, the shares were purchased by DPW, Dubai Port World on 9.3.2006. POSNCO is under DPW, which is again a sovereign company owned by the Government of Dubai.
[i] DPW : Dubai Port World
[j] FIPB : Foreign Investment Promotion Board
[k] GPIDCL : Gujarat Port Infrastructure Development Company Limited, a company incorporated under the provisions of the Companies Act and jointly promoted by the GMB and GIIC [Gujarat Industrial Investment Corporation Limited].
[l] BOOT : A package provided by resolution dated 29.7.1997 by the Department of Port & Fisheries, State of Gujarat, which means ’Built, Own, Operate, Transfer’ as per the policy announced by the Government of Gujarat in December 1995 for development of ports and related infrastructure in the State of Gujarat.
[m] CA : Concession Agreement
[n] SCA : Sub−Concession Agreement
[o] F.A. : Framework Agreement dated 8.11.2002
Details of nature of agreements, terms and conditions contained therein and inter−se relationship of the parties will be referred to hereinafter.
- At the outset, a preliminary objection is raised by the learned Advocate General appearing for respondent No. 1 on caveat about maintainability of the present petition under Article 226 of the Constitution of India.
- The first petitioner is a Company incorporated under the Companies Act, 1956, and engaged in the business of operation of a container terminal at the port of Mundra. The second petitioner is a Director and shareholder of the first petitioner and is a citizen of India. Respondent No. 2 is licensed by respondent No. 1 to operate and run the Port of Mundra and is empowered under the CA dated 17.2.2001 to grant sub−concessions to parties for the purposes of development
4.1 As per the record annexed with the petition, a frame−work agreement was entered into between the parties on 8.11.2002 in view of the certain stages contemplated under the SCA for the development and management of contracted assets. The first stage assets comprising of 632 meters quay wall in Navinal Creek and 38.48 hectares of the back up area came to be transferred to the petitioner on 18.7.2003 as stated earlier and achieved growth to the extent of 6 lacs TEUs per year. The SCA further envisaged transfer of second stage assets comprising of 618 meters quay wall and 19.633 hectares of back up area as per the Clauses of SCA. It is further to be noted that there was a non−compete provision vide Clause 17 read with Clause 11 of the SCA and Clauses 7 and 7.1 of F.A, which prohibited respondent No. 2 from developing or permitting the development of the container handling facility in the Port of Mundra save and except as per Clause 17. Earlier, FIPB granted approval for foreign collaborations vide letter dated 26.2.2003 on certain conditions.
4.2 On the basis of the terms and conditions laid down in the CA, on or about 7.1.2003, as amended on 17.4.2003, GAPL, now MPSEZ, entered into SCA with the petitioner for operating and maintaining container terminal at the Port of Mundra and, as per the letter dated 10.5.2003 addressed by respondent No. 1 to respondent No. 2, the State of Gujarat had approved in principle the transaction of transfer of 100% equity shares of ACTL now MICTL to P&O Mundra Ports. It was approved by the Government of Gujarat to allow GMB to grant permission to GAPL for transfer of quay wall [632 mt.length] to ACTL for container terminal under Clause 20(b) of the CA. It is to be noted that the above approval in principle was granted subject to execution of legally enforceable documents by respondent No. 2 and the shareholders of ACTL in respect of certain undertakings given vide letters dated 9th, 10th and 17th April 2003 and, in turn, the GMB granted permission to transfer 100% equity shares and quay wall for container terminal on certain conditions referred to later on.
4.3 The conditions of letter dated 10.5.2003 were based on the conditions imposed by FIPB in its letter dated 26.2.2003 of approval of foreign collaborations as applied. It appears from the record that, by letter dated 2.8.2005, the GMB once again asked respondent No. 2 to comply with certain lacunas on the terms of letter dated 10.5.2003 and undertaking given by the petitioner pursuant thereto.
4.4 Thereafter, the container terminal commenced operations on 18th July 2003 and handled increasing volumes of containers and, ultimately, the revenues collected from the container terminal have steadily increased from year to year and upto 31st October 2007, as per the unaudited report, it was Rs. 53540.75 lakhs.
4.5 As per the requirement of the SCA, respondent No. 2 is entitled to royalty being 10% of the gross revenue earned by the first petitioner and also to collect water front royalty from the users and pay to respondent No. 2 for payment to respondent No. 1. Thus, according to the petitioners, royalty amounting to Rs. 5206.64 lakhs paid to respondent No. 2 and in turn water front royalty paid by respondent No. 2 to respondent No. 1 upto 31.10.2007 is Rs. 1207.79 lakhs. Therefore, according to the petitioners, the above arrangement worked smoothly and efficiently and there was no blockage and was a boon to the industry, trade and economy of the State of Gujarat and the country in general. Investment worth more than Rs. 400 crores is made and other commercial enterprises also depend on the terminal for their business since their revenue earnings is 10% per annum of the above investment.
4.6 Later on, since respondent No. 2 commenced construction of container terminal at the Port of Mundra, which, according to the petitioner, was in breach of the above non−compete Clause 17 of the SCA and even the operations
commenced sometime in August 2007, therefore, proceeding under Section 9 of the Arbitration & Conciliation act, 1996 for injunction against respondent No. 2 was initiated invoking the arbitration provision of the said SCA, which came to be dismissed vide order dated 13th September 2007 by the learned Judge of the City Civil Court, Ahmedabad, against which, First Appeal is pending before this Court for hearing.
4.7 The challenge in this petition qua the impugned communications dated 3rd and 8th November 2007 addressed by respondent No. 1 and respondent No. 2, respectively, on the ground of breach of principles of natural justice, etc., has genesis in the letters dated 10.5.2003 and 2.8.2005 and the show cause notice dated 24.2.2006 issued by the Chief Engineer of respondent No. 1, a copy whereof was also addressed to respondent No. 2, calling upon to show cause why permission/approval granted to the SCA should not be withdrawn as P&O Ports had reportedly been taken over by DPW which amounted to dilution of equity by P&O Ports [Mundra] without prior permission or approval of respondent No. 1, as well as transfer of the undertaking, assets and property without prior consent of respondent No. 1. It was indicated that the first petitioner was in breach of the undertaking furnished on 26.5.2003 and SCA was not finally approved by the GMB.
4.8 By letters dated 31.3.2006, 27.7.2006, 28.8.2006, 29.5.2007 and 23.7.2007, replies were submitted by the petitioner and personal hearings were granted on 30.5.2006 and 31.7.2006 and even written submissions were filed on 19.6.2006 and 11.8.2006. As per the replies and written submissions, the petitioner pointed out every compliance of all requirements and undertaking given and non−acceptance of additional conditions suggested as amendments to the existing SCA. The petitioner also furnished documentary evidence to establish that there was no change whatsoever in the company and no breach of any of the conditions of the SCA and even after pre and post acquisition of POSNCO by DPW, the shareholding structure remained unchanged. It was pointed out that the first petitioner had not transferred any assets or property or undertaking and, according to the petitioner, final order was awaited.
4.9 It is the case of the petitioners that, however, respondent No. 2, due to strain relationship between the petitioners and respondent No. 2, willfully and deliberately refrained from supporting the first petitioner in the proceedings before respondent No. 1 and no submissions were filed and, indirectly, supported the said show cause notice.
- By the first impugned communication dated 3.11.2007, respondent No. 1 directed respondent No. 2 to immediately initiate legal action for termination of SCA and by the second impugned consequential communication dated 8.11.2007 by respondent No. 2 to the petitioner, it is stated by respondent No. 2 that SCA stood terminated. The above action, according to the petitioner, is contrary to the settled position of law, meaning thereby, no opportunity of hearing is given to the petitioners and without following any procedure of law, respondent No. 1 has acted illegally. That, after having issued show cause notice dated 24.2.2006 and in spite of various replies and written submissions filed by the petitioners, without pronouncing any verdict on it, the action of the termination of SCA on the part of the respondents, during the pendency of the above proceedings between the petitioners and respondent No. 1, amounts to colourable exercise of power by respondent No. 1, a statutory body constituted under the Statute of 1981 and duty bound to act in just, fair and reasonable manner. Therefore, the impugned communication dated 3rd November 2007 issued by the first respondent and consequential communication dated 8th November 2007 issued by respondent No. 2 deserve to be quashed and set aside by this Court in exercise of extra−ordinary jurisdiction under Article 226 of the Constitution of India.
- Dr. Abhishek Singhvi, learned Senior Counsel for the petitioners, submits that the challenge in this petition is against arbitrary, unreasonable and
5.1 It is next contended by the learned Counsel for the petitioners that respondent No. 1 is like a quasi−judicial authority and, when the dispute had arisen according to the Board, a procedure was required to be followed and a final decision on such enquiry is the necessity of the rule of law for any statutory authority, which is bypassed in the present case and, therefore, the exercise undertaken by respondent No. 1 in addressing communication dated 3.11.2007 deserves to be quashed and set aside.
5.2 It is next contended by the learned Counsel for the petitioners that even in the capacity of administrative authority under the statute, it is expected of the authority to act in just, fair and reasonable manner in exercise of its power even in the realm of contractual relationship, and respondent No. 1, being a public authority amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India, every action of such Authority is to be tested on the anvil of Article 14 of the Constitution of India and by raising a plea of non−maintainability of the petition, which is to be decided by this Court as a
preliminary issue, respondent No. 1, GMB, cannot be excluded from its statutory liability as contended above. It is also contended by the learned Counsel for the petitioners that without following the principles of natural justice as embodied in various decisions of the Apex Court and part and parcel of rule of law and having undertaken exercise of determining the issues between the petitioner and respondent No. 2 and the Board, issuance of direction to respondent No. 2 to terminate the contract and rendering the petitioner remedyless is nothing, but, exercise of power by the Authority in illegal manner and it amounts to malice in law, which deserves to be set right by this Court in exercise of power under Article 226 of the Constitution of India.
5.3 Even on merits also, learned Counsel for the petitioners has submitted that there is no violation of any Clauses of CA or SCA in as much as the position of the petitioner−company was explained through various communications to the Board and it was emphasized that there was no change whatsoever in the holding of equity shares held in MICTL by P&O Ports [Mundra] Pvt. Ltd., Mauritius [P&O Mundra]. It was further submitted that there was no alienation of any assets or substantially the whole or any of the undertakings since the time P&O Mundra acquired 100% of equity capital of MICTL. Not only that, but since November 2002 and right until 2004, the entire equity share capital of P&O Mundra was owned and held by P&O Overseas Holdings Limited. On December 8, 2004, the entire shareholding was transferred to P&O Dover (Holdings) Ltd, which in turn till date holds the entire equity share capital of P&O Mundra. Both P&O Overseas Holdings Limited and P&O Dover (Holdings) Ltd are wholly owned subsidiaries of P&OSNCO. Prior to March 2006, P&OSNCO was listed in the London Stock Exchange and, thereafter, DPW made an open offer to the shareholders and the shares were purchased on or around 9.3.2006. The above metamorphosis of the corporate structure of the companies from time to time had no bearing on the terms of SCA or CA and, therefore, according to learned Counsel Dr.Singhvi, the GMB could not have acted in arbitrary, unreasonable and unjust manner in violation of Article 14 of the Constitution of India.
5.4 Incidentally, it was submitted that, even the above change had no bearing on the violation of the any conditions of FIPB and even DPW is also a sovereign company owned by the Government of Dubai and opearting container terminals in 22 countries around the world including in India at various ports viz Visakhapatnam, Kochi, Chennai and other places. According to the learned Counsel, a similar issue was also raised by Jawaharlal Nehru Port Trust [JNPT] with regard to Nhava Sheva International Container Terminal Private Limited and upon clarification, the show cause notice was withdrawn. Therefore, when there was no dilution of equity or alienation or transfer of property as alleged, it was submitted that respondent No. 1 ought not to have issued any direction to respondent No. 2 for taking any legal action against the petitioner by placing reliance on certain terms of CA and SCA. According to the learned Counsel for the petitioners, invoking provision of Section 9 of the Arbitration & Conciliation Act, 1994, was with regard to a dispute, which had arisen between the petitioner and respondent No. 2 with regard to Clause 17, a non−compete Clause, and interpretation with regard to development of second stage assets, which has nothing to do with the relief prayed for in this petition, which is substantially against arbitrary, unreasonable, unfair and illegal action of respondent No. 1, a statutory authority within the meaning of Article 12 of the Constitution of India and not acting as required by Article 14 of the Constitution of India.
5.5 The learned Counsel for the petitioners has placed reliance on the following decisions
[i] Smt. Maneka Gandhi v. Union of India and Ors.
[ii] Smt. S.R. Enkataraman v. Union of India and Ors.
[iii] Kumari Shrilekha Vidyarthi v. State of U.P.
[iv] ABL International Limited and Anr. v.
Guarantee Corporation of India Limited and Ors.
and submitted that, as per the above decisions of the Apex Court, this Court, in exercise of power under Article 226 of the Constitution of India, can certainly look into even disputed questions of fact if any, which, of course, is not there in the present case, and the remedy is not barred under Article 226 of the Constitution of India to the aggrieved party against the Authorities of the State within the meaning of Article 12 of the Constitution of India to act in consonance with Article 14 of the Constitution of India.
6. Mr. Kamal Trivedi, learned Advocate General appearing for respondent No. 1−GMB, has vehemently opposed intervention of this Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India on the ground that no written contract, whatsoever, much less any statutory contract, exists between the petitioner and respondent No. 1. According to learned Advocate General, the subject matter and the issues raised in this petition are in the realm of interpretation of various Clauses, namely, terms and conditions of the agreement in the nature of either CA or SCA and compliance of conditions of approval letter dated 10.5.2003 in principle between respondent No. 1 [Licensor] and respondent No. 2 [Licensee] and consequential effect on the petitioner [sub−licensee] and any action taken in terms of the agreement do not fall within the purview of exercise of power under Article 226 of the Constitution of India and, when there is no issue to be adjudicated and no lis between the petitioner and respondent No. 1, and respondent No. 1 being not a quasi−judicial authority, the present petition under Article 226 of the Constitution of India invoking extra−ordinary jurisdiction deserves to be rejected in limine as it is not maintainable. Learned Advocate General has further contended that communication dated 3.11.2007 addressed by respondent No. 1 to respondent No. 2 is as per the terms of the CA between the licensor and licensee namely, respondent No. 1 and respondent No. 2, and, according to respondent No. 1, when the action of the petitioner, a sub−licensee, was not in consonance with the requirements of Clauses 7.2.[d][e] and 8.5 of CA, the direction to respondent No. 2 to terminate contract/SCA with the petitioner is just and legal. Learned Advocate General has further contended that the approval accorded by the State and the GMB to SCA was in principle and not final subject to compliance of certain conditions by the petitioners and, therefore, as early as on 10.5.2003, it was made specifically clear that the State Government had approved in principle transaction of transferring 100% equity share of MICTL to P & O Ports and may not give approval to allow GMB to grant permission to GAPL for transfer of quay wall [632 meter length] to ACTL for container terminal under the Clause pertains to assignment, viz, Clause 20(b) of CA. The above permission/approval in principle is granted by the Government subject to execution of certain legally enforceable documents and undertaking to be given, which was, in fact, given by the petitioner. Therefore, according to the learned Advocate General, the above approval was conditional and qualified and also on the line of an approval accorded by FIPB vide letter dated 26.2.2003 and, therefore, once again, letter dated 2.8.2005 was written by the GMB to respondent No. 2 for compliance of necessary lacuna and inconsistency in SCA of incorporating certain Clauses as reflected in paragraph 3 of the above letter. Thus, according to the learned Advocate General, the action of the Board of communicating the letter dated 3.11.2007 to respondent No. 2 in the capacity as a licensor to the licensee seeking compliance of various lacuna and to take action in accordance with the terms of the agreement cannot be said to be in any manner arbitrary, unreasonable, unfair, illegal or violative of principles of natural justice.
6.1 Learned Advocate General has further contended that even bare perusal of various Clauses of the contract, particularly, Clauses 3, 7.2(d)(e), 8.5(e) of CA read with Clause 2 of SCA about grant of sub−concession, the same is to be in
accordance with the terms and conditions of the agreement and approved project report and the agreement of sub−concession by the licensee, shall not be inconsistent with the terms and conditions of the concession agreement and being co−terminus with the same. According to the learned Advocate General, a duty is cast upon the sub−licensee to perform its obligations in the same manner that the licensee is required to perform, subject to Clause 7[d], its obligations under the concessional agreement. The learned Advocate General has placed heavy reliance on the phrase ’subject to xx xx’ ’ as appearing in Clauses F, H and 2, 1 of the amended agreement dated 17.4.2003, which binds the petitioner to act in terms of the above Clause.
6.2 Learned Advocate General has further contended that the contention of the petitioners about violation of principles of natural justice is misconceived in as much as respondent No1−Board had taken up a fact−finding enquiry of preliminary nature so as to satisfy itself as to whether the petitioners have acted in terms of the undertaking given to the Board and such action is as per the terms of CA and SCA as approved in principle. The above exercise, according to the learned Advocate General, indicates fair and reasonable approach of GMB in furtherance of compliance required under CA and SCA.
- Learned Advocate General has further contended that the application under Section 9 of the Arbitration & Conciliation Act, 1994 is rejected and, therefore, this is an attempt by the petitioners to seek a relief which is otherwise denied by the competent Court by interpreting various Clauses of the contract, against which, First Appeal is pending before this Court for hearing and decision. Not only that, but, according to the learned Advocate General, as provided under SCA and more particularly Clause 19, an in−built mechanism is provided for dispute resolution and, therefore, having partly invoked such mechanism and failed before one Forum, now, the petitioners cannot be permitted to have recourse to writ petition under Article 226 of the Constitution of India. Even otherwise also, a number of disputed question of facts arises, which needs the evidence to be led, scrutinized and appreciated by the competent Court and remedy of claiming damages is also available to the petitioners. Therefore, this Court will refrain from granting any relief to the petitioner, as prayed for. As per over all submissions of the learned Advocate General, considering the facts and circumstances of the case as submitted above, this is not a fit case, where, this Court would like to exercise power under Article 226 of the Constitution of India.
- Shri Dushyant Dave, learned Senior Counsel appearing for respondent No. 2, has defended the consequential letter dated 8.11.2007 by which, follow up action is taken by respondent No. 2 as per the directions given by respondent No. 1 for terminating the contract/SCA as directed, as per Clauses of CA between licensor and licensee. At the outset, according to Shri Dushyant Dave, learned Senior Counsel, this Court is to address itself to two questions, namely, [i] could this writ petition be maintainable and [ii] could it be entertained, and the answer, according to the learned Counsel, is in the negative. In support of the above, learned Senior Counsel, has drawn attention of this Court to the nature of pleadings, as appearing in the body of the petition and particularly paragraphs 5, 6, 10 and 11 of the petition and also grounds contained in paragraph 20, which recite about CA and SCA and violation of various Clauses contained therein and interpretation thereto. The above pleadings, according to learned Senior Counsel, should be the basis of a plaint and not of writ petition and even the relief claimed in paragraph 30 in the backdrop of the above pleadings cannot be considered by this Court in exercise of power under Article 226 of the Constitution of India. It is reiterated that no statutory right much less any fundamental or constitutional right is infringed and the dispute raised by the petitioners revolves round CA and SCA in terms of license and sub−license and, having consciously chosen a mechanism for dispute resolution under Clause 19 of SCA by the parties, invocation of writ jurisdiction under Article 226 of the Constitution of India is not permissible.
7.2 The learned Senior Counsel appearing for respondent No. 2 has relied upon the following decisions
[i] State of U.P. and Ors. v. Bridge & Roof Co.
[India] Limited.
[ii] [2003] 12 SCC 146 Food Corporation of India v. Rice Millers Association and Anr.
and submitted that, since remedy is available under the above Clause to the parties and disputed question of facts is involved, this Court will not exercise power under Article 226 of the Constitution of India and has thus distinguished the ratio laid down by the Apex Court in Shrilekha Vidyarthi [supra]. The learned Senior Counsel has also relied upon General Ratio & Appliances v. M.A. Khader for interpretation of word ’transfer’ in the context of transfer of property/asset and submitted that the present petition deserves to be rejected in limine.
- In rejoinder, Dr. Abhishek Singhvi, learned Senior Counsel for the petitioners has reiterated his submissions about maintainability of the petition for the relief claimed in this petition. He highlighted certain paragraphs in the decision of Smt. Maneka Gandhi [supra] and submitted that the statutory authority is duty bound to follow principles of natural justice and, according to the learned Senior Counsel, Clauses 7, 7.2(d) and (e) and 8.5 are not applicable to the petitioners and no compliance was necessary as stated by the GMB, as replied by the petitioners on various occasions. He further submits that when the show cause notice is issued by the GMB, it cannot be said that it was only a fact−finding−enquiry or preliminary enquiry, but, the same was in the nature of exercise of power by a quasi−judicial authority, for which the Authority is to act in just and fair manner and, therefore, this petition is required to be allowed with costs.
- Having heard the learned Counsel for the parties, upon perusal of voluminous record of the case containing various documents including CA and SCA, correspondence entered into between the parties and after considering rival submissions, the judicial review to be undertaken by the Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India is always in the backdrop of the factual context of each matter. The ambit and scope of Article 226 of the Constitution of India is to be examined by this Court in view of factual and legal backdrop of this case and a prayer is to the extent of quashing and setting aside communications in the form of impugned letters dated 3.11.2007 [Annexure "O"] and consequential letter dated 8.11.2007
9.1 No doubt, Article 226 may be a store house or embodiment of justice, equity and good conscience, but at the same time certain limitations are imposed on exercise of such power and that has to be seen in the backdrop of public law remedy, contractual rights and liabilities, tortuous liability, public policies, disputed question of facts, availability of alternative remedy, etc.
10. So far as the decisions of the Apex Court on the issues involved in this petition and analogous thereto and approach of the Court in such cases as laid down in the reported decision of State of U.P. v. Johri Mal , are concerned, it is profitable to refer to the ratio laid down by the Apex Court in the following decisions, and reliance is placed by the learned Counsel appearing for parties.
[i] Radhakrishna Agarwal and Ors. v. State of
Bihar and Ors.
[ii] Bareilly Development Authority and Anr. v.
Ajai Pal Singh and Ors.
[iii] State of U.P. v. Bridge & Roof Co. [India] Limited]
[iv] World Tel Inc. and Anr. v. Union of India and Ors.
[v] National Highways Authority of India v. Ganga Enterprises and Anr.
[vii] ABL International Limited and Anr. v. Export Credit Guarantee Corporation of India Limited and Ors.
[viii] National Textile Corporation Limited and
Ors. v. Haribox Swalram and Ors.
[ix] State of U.P. v. Johri Mal
10.1 In the case of Radhakrishna Agarwal and Ors. v. State of Bihar and Ors. , the Apex Court was concerned with
breach of contract when the State of Bihar revised rate of royalty payable by the petitioner under lease of 1970 and, thereafter, cancelled the lease, which was challenged as illegal.
- It is pertinent to note that the Apex Court elaborately dealt with manifold contentions about the action of the State or governmental authorities in the contractual field, where the action is controlled by the Article 14 of the Constitution of India i.e any statutory terms or obligations whether attract the application of Article 14 of the Constitution of India and also about breach to be committed and executive power of the State. In paragraphs 11 and 12 the Apex Court held as under:
- In the cases before us the contracts do not contain any statutory terms or obligations and no statutory power or obligation which could attract the application of Article 14 of the Constitution is involved here. Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are
- disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross−examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution of India. Such proceedings are summary proceedings reserved for extraordinary cases where the exceptional and what are described as, perhaps not quite accurately, ’prerogative’ powers of the Court are invoked. We are certain that the cases before us are not such in which powers under Article 226 of the Constitution could be invoked.
- In the cases before us the contracts do not contain any statutory terms or obligations and no statutory power or obligation which could attract the application of Article 14 of the Constitution is involved here. Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are
- The Patna High Court had, very rightly, divided the types of cases in which breaches of alleged obligation by the State or its agents can be set up into three types. These were stated as follows:
[ii] Where the contract entered into between the person aggrieved and the State is in exercise of a statutory power under certain Act or Rules framed thereunder and the petitioner alleges a breach on the part of the State; and
[iii] Where the contract entered into between the State and the person aggrieved is non−statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complains about breach of such contract by the State.
In paragraph 23, with regard to contention of following principles of natural justice and exercise of power by the authorities, the Apex Court observed as under:
23. A rather desparate argument which has been addressed to us on behalf of the appellants is that they were entitled to an opportunity to show cause against the cancellation of lease. It was urged, on the strength of A.K. Kraipak
v. Union of India that the distinction made between administrative
and quasi−judicial action is thin and a vanishing one. This argument appears to us to be wholly irrelevant inasmuch as a question of the distinction between an administrative and quasi−judicial decision can only arise in the exercise of powers under statutory provisions. Rules of natural justice are attached to the performance of certain functions regulated by statutes or rules made thereunder involving decisions affecting rights of parties. When a contract is sought to be terminated by the officers of the State, purporting to act under the terms of an agreement between parties, such action is not taken in purported exercise of a statutory power at all.
10.3 In the case of Bareilly Development Authority and Anr. v. Ajai Pal Singh and Ors. , the Apex Court, while
dealing with the sale of house by Bareilly Development Authority on installments, escalation Clauses, rate and terms and conditions, held in paragraphs 22 and 23 as under:
- There is a line of decisions where the contract entered into between the State and the persons aggrieved is non−statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Article 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple − Radhakrishna Agarwal v. State of Bihar , Premji Bhai Parmar v. Delhi Development Authority , and DFO v. Biswanath Tea Co. Limited
- .
- In view of the authoritative judicial pronouncements of this Court in the series of cases dealing with the scope of interference of a High Court while exercising its writ jurisdiction under Article 226 of the Constitution of India in cases of non−statutory concluded contracts like the one in hand, we are constrained to hold that the High Court in the present case has gone wrong in its finding that there is arbitrariness and unreasonableness on the part of the appellants herein in increasing the cost of the houses/flats and the rate of monthly instalments and giving directions in the writ petitions as prayed for.
maintainability in view of alternative remedy, etc. whether dispute was relating to terms of private contract and it involved interpretation of the terms of the contract and also of the order issued under the statutory provisions of Section 7D and proviso to Section 8D(i) of the U.P. Trade Tax Act, 1948. The Apex Court held that the order of the High Court was just and proper in not going into the dispute since it involved interpretation of the terms of contract. In paragraphs 16 and 17, the Apex Court held as under:
- Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant−Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, via., to restrain the Government from deducting a particular amount from the writ petitioner’s bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer.
- Secondly, whether there has been a reduction in the statutory liability on account of a change in law within the meaning of Sub−clause (4) of Clause 70 of the contract is again not a matter to be agitated in the writ petition. That is again a matter relating to interpretation of a term of the contract and should be agitated before the arbitrator or the civil court, as the case may be. If any amount is wrongly withheld by the Government, the remedy of the respondent is to raise a dispute as provided by the contract or to approach the civil court, as the case may be, according to law. Similarly if the Government says that any overpayment has been made to the respondent, its remedy also is the same.
10.5 In the case of World Tel also the Apex Court set aside the order of the Division Bench of the High Court of Delhi in a matter arising from contractual obligations and held that the High Court ought not to go into merits of the contentious issues under Article 226 of the Constitution of India. Instead, the parties should have been directed to a civil court so that the hotly disputed issues could have been resolved in a civil litigation. The claim made is basically one arising from contractual obligations.
10.6 In the case of National Highways Authority of India v. Ganga Enterprises and Anr. , the Apex Court,
while dealing with the contract of guarantee and nature of, and scope of judicial interference with regard to enforcement of such contract, held that disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. It was further held that on account of maintainability only the petition was required to be dismissed by the High Court.
10.7 In the case of ABL International Limited and Anr. v. Export Credit Guarantee Corporation of India Limited and Ors. , the Apex Court was dealing with the case whether the respondent, Export Credit Guarantee Corporation of India Limited, who had insured risk of payment of consideration that was involved in the contract of export and having covered under the risk policy, refused to recoup the loss suffered by the petitioner since Kazakhastan Government failed to fulfill its guarantee, and interpretation of various Clauses with regard to payment of consideration by a particular mode by the parties and whether any disputed question of fact is involved and maintainability of writ petition under Article 226 of the Constitution of India, after discussing various decisions including K.N. Guruswamy v. State of Mysore , GSFC v. Lotus Hotels (P) Ltd. and Ramana Dayaram Shetty v. International Airport Authority of India , LIC of India v. Escorts Limited. (1986) 1 SC 264 and State of U.P. v. Bridge & Roof Co. (India) Ltd. , Shri Anadi Mukta Sadguri Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani , VST Industries Limited v. Worker’s Union (2001) 1 SCC 298, the Apex Court in paragraphs 27 and 28 held as under:
27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:
[a] In an appropriate case, a writ petition against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.
[b] Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.
[c] A writ petition involving a consequential relief of monetary claim is also maintainable.
28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The court has imposed upon itself certain restrictions in the exercise of this power See Whirlpool Corporation v. Registrar of Trade Marks And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.
Thereafter, in paragraph 52, the Apex Court quoted the law laid down in Shrilekha Vidyarthi [supra] that;
The requirement of Article 14 should extend even in the sphere of contractual matters for regulating the conduct of the State activity. Applicability of Article 14 to all executive actions of the State being settled
and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, the State cannot thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applicable to private individuals whose rights flow only from the terms of the contract without anything more. The personality of the State, requiring regulation of its conduct in all spheres by requirement of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts, which cannot coexist. The Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the preamble. Therefore, total exclusion of Article 14 − non−arbitrariness which is basic to rule of law − from State action in contractual field is not justified. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.
Unlike the private parties the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly, and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non− arbitrariness at the hands of the State in any of its action
and held in paragraph 53 that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution of India and, therefore, in the factual situation of that case, the relief was granted as prayed for. Thus, having held in paragraphs 27 and 28 as above, the Apex Court found that this limited area of dispute can be settled by looking into the terms of the contract of insurance as well as the export contract, and the same does not require consideration of any oral evidence or any other documentary evidence other than what is already on record without any external aid. Accordingly, the relief was granted and the appeal was allowed to that extent.
10.8 In the case of National Textile Corporation Limited and Ors. v. Haribox Swalram and Ors. , the Apex Court,
in paragraphs 15, 16 and 17, found that the writ petition involved disputed questions of fact and can be proved by leading evidence in a properly constituted suit which was not required to be investigated in writ petition. The Apex Court further held that in order to issue a writ of mandamus or to compel authorities to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. The Apex Court refused to issue writ of mandamus on the ground that the case on hand was of pure and simple business contract.
10.9 What should be the approach of the Court in a case where an action of the State or its instrumentality is challenged on the anvil of Articles 14 and 19(1)(g) of the Constitution of India, particularly when such impugned action has genesis in an agreement/contract entered into, is aptly summarized by the Apex Court in the case of State of U.P. v. Johri Mal . After taking into
consideration various case−laws, the Apex Court, speaking through Hon’ble Mr. Justice S.B. Sinha, described the scope of judicial review in paragraphs 22, 23 and 24 as under:
22. The power of judicial review is now well−defined in a series of decisions of this Court. It is trite that the Court will have no jurisdiction to entertain a writ application in a matter governed by contract qua contract [assuming such professional engagement to be one], as therein public law element would not be involved. See. Life Insurance Corporation v. Escorts Ltd and Ors. , FCI and Ors. v. Jagannath Dutta and Ors. , State of
Gujarat and Ors. v. Meghji Pethraj Shah Charitable Trust and Ors. , Assistant Excise Commissioner and Ors. v. Issac Peter and Ors. , National Highway Authority of
India v. Ganga Enterprises and Anr. .
- In any event, the modern trend also points to judicial restrain in administration action as has been held in Tata Cellular v. Union of India (1994) 6 SCC 651. See also Monarch Infrastructure {P} Ltd v. Commissioner, Ulhasnagar Municipal Corporation and Ors. and W.B. State Electricity Board v. Patel
- Engineering Co. Ltd and Ors. (2001) 2 SCC 451 and L.I.C. and Anr. v. Consumer Education and Research Centre and Ors. .
- The legal right of an individual may be founded upon a contract or a statute or an instrument having the force of law. For a public law remedy enforceable under Article 226 of the Constitution, the actions of the authority need to fall in the realm of public law be it a legislative act of the State, an executive act of the State or an instrumentality or a person or authority imbued with public law element. The question is required to be determined in each case having regard to the nature of and extent of authority vested in the State. However, it may not be possible to generalize the nature of the action which would come either under public law remedy or private law field nor is it desirable to give exhaustive list of such actions.
28. The scope and extent of power of the judicial review of the High Court contained in Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi judicial or administrative. The power of judicial review is not intended to assume a supervisory role or done the robes of omnipresent. The power is not intended either to review governance
under the rule of law nor do the Courts step into the areas exclusively reserved by the supreme lex to the other organs of the State. Decisions and actions which do not have adjudicative disposition may not strictly fall for consideration before a judicial review Court. The limited scope of judicial review succinctly put are:
[i] Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies.
[ii] A petition for a judicial review would lie only on certain well− defined grounds.
[iii] An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal.
[iv] A mere wrong decision without any thing more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a Court is limited to seeing that Tribunal functions within the limits of its authority and that is decisions do not occasion miscarriage of justice.
[v] The Courts cannot be called upon to undertake the Government duties and functions. The Court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a Judge should not be invoked as a substitute for the judgment of the legislative bodies See Ira Munn v. State of Ellinois 1876 (94) US [Supreme Reports] 113
In paragraph 29, His Lordship has referred to pages 33−35 of Wade’s Administrative Law, 8th Edition and, in paragraph 30, observed as under:
30. It is well−settled that while exercising the power of judicial review the Court is more concerned with the decision making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the Court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision maker’s opinion on facts is final. But while examining and scrutinizing the decision making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the Court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be well−nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touch−stone of the tests laid down by the Court with special reference to a given case. This position is well settled in Indian Administrative Law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the Court to review the evaluation of facts by the decision maker.
After referring to various authoritative writings of Prop. Bernad Schwartz, Prof. Clive Lewis, Grahme Aldous and John Alder with regard to judicial review in American context, judicial remedies in public law, and perception about applications for judicial review, law and practice and again referring to pages 551−552 in Wade’s Administrative Law, 8th Edition, Their Lordships concluded that a writ of or in the nature of mandamus, it is trite, is ordinarily issued where the petitioner establishes a legal right in himself and a corresponding legal duty in the public authorities. In paragraph 61 with reference to Shrilekha Vidyarthi and a paragraph quoted therein, it is observed that, ’we have our own reservations about the aforementioned principles of law, but for
the purpose of this case, it is not necessary to advert thereto and the case on hand was decided on its own merit.
11. By keeping in mind the above aspects, it is necessary to refer to various constitutional and statutory provisions with regard to power of Union of India and the State Governments and its instrumentalities to carry on any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose, as envisaged under Article 298 of Part XII, Chapter III, of the Constitution of India and Article 299 which provides that all contracts made in exercise of executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of the power shall be executed on behalf of the President or the Governor by such persons and in such manner as may be directed or otherwise.
11.1 Respondent No. 1−Gujarat Maritime Board is established under Section 3 of the Gujarat Maritime Board Act, 1981, an enactment to make provision for the constitution of a maritime board for minor ports in the State of Gujarat and to vest the administration, control and management of such ports in that Board and for matters connected therewith.
11.2 Section 24 is with regard to making of contracts by the Board for the purposes of this Act. The above section empowers the Board to execute contract and if the contract is in respect of leasing of waterfront, jetty, waterway and corresponding infrastructural facilities thereof for a term exceeding five years, shall have to be made by the previous approval of the State Government on such terms and conditions as it may think fit. Chapter XI of the Act is pertaining to supervision and control of the State Government which includes, as per Section 95, power of the State Government to give directions to the Board.
11.3 So far as the Government of Gujarat is concerned, in December 1995, it announced the port policy which integrates the development of ports with industrial development, power generation and infrastructure development. The above port policy envisaged development of ten green−field ports, six of them as fully private and four as joint sector ports. The Gujarat Maritime Board is to act as Co−ordinating Agency in the implementation of the above policy. By resolution dated 29.7.1997, the Government announced package of BOOT Principles as a next action of the Government, which will serve as a framework for involvement of private sector in the construction and operation of these new ports. Accordingly, certain guiding principles were also framed for BOOT Principles. The above resolution dated 29.7.1997 along with the guiding principles of the BOOT policy are annexed with the compilation at pages 147 to
156.
11.4 Thereafter, shareholders agreement between Gujarat Port Infrastructure and Development Company Limited, GPIDL, incorporated under the provisions of the Companies Act, 1956, [a company jointly promoted by Gujarat Maritime Board and Gujarat Industrial Investment Corporation Limited and M/s. Adani Port Limited, a company incorporated under the provisions of Companies Act, 1956] and M/s. Gujarat Adani Port Limited [GAPL] [a company jointly promoted by M/s. Gujarat Port Infrastructure Development Company Limited and M/s. Adani Port Limited] came into existence. That the shareholding of GPIDCL in the joint−sector company Gujarat Adani Port Limited was reduced to 11% from 26% subject to certain conditions that GPIDCL or the Government will not provide any collateral guarantee to GAPL and the GPIDCL will nominate the Chairman and one Director in GAPL. That the formality to amend the shareholders agreement was to be carried out later on.
- On 17.2.2001, respondent No. 1−GMB licensor granted certain rights to respondent No. 2 a licensee by CA under the BOOT policy. The relevant Clauses of CA are reproduced hereunder:
- 2. Definitions and Interpretation
- 1. Definitions
- ’Approved Capital Cost’/’Approved DPRs’ means the Detailed Project Report approved by the Licensor for the development of the various phases of Port, the approved form of which shall be signed for identification by the parties and shall include any amendments to the DPRs approved by the Licensor in accordance with this Agreement.
- ’Approved Development Plan’ [ADP] means the detailed development plan approved by the Licensor for the development of the port, which includes any amendments to the Approved Development Plan by the Licensor in accordance with this agreement.
- ’Contracted Assets’ means the assets listed in Annexure −7 of the Approved DPR Phase−I as have been agreed upon by the Licensor and such other assets as subsequently approved and included by the Licensor on submission of subsequent DPRs as a part of Approved DPR by the Licensor as Contracted Assets in accordance with this Agreement.
- ’Core Assets’ means the assets strategic to the development and operation of the Port, the change in ownership of which would be subject to the approval of the Licensor and which have been identified in Annexure −8 to the Approved DPR Phase−I and subsequently approved and included by the Licensor on submission of subsequent DPRs.
1. Grant of Concession
The Licensor hereby grants to the Licensee the right and authority during the term of this Agreement to develop, finance, design, construct, operate and maintain the Contracted Assets and the Port and provide services to the users and the Licensee accepts the Concession granted to it by the Licensor and agrees to implement the Project in accordance with the terms and conditions of this Agreement and the Approved Project Report.
2. Composition of Shareholders:
[d] During the term of this Agreement, on acquisition of more than 10% direct or indirect interest in the Licensee Company by any person [either alone or together with its associates] shall require and shall be subject to the prior approval of the Licensor, which approval shall be withheld if, inter alia, such acquisition, is in the opinion of the Licensor, prejudicial to the national interest;
[e] Any change in shareholding [other than those which require the Licensor’s approval] shall be intimated to the Licensor by the Licensee.
8. Construction Phase
1. Length of Construction Period
[a] The Scheduled Construction Period for Phase−IB of the project shall be the period of 3 years from the date of environment/CRZ approved by the Government of India for which Licensee has already made the necessary application. The licensee hereby undertakes to complete the construction of Phase−IB within this period.
[b] For all subsequent phases of development of the Port, the period of construction of the Contracted Assets shall be the period of 3 years from the date of Environment/CRZ approval by the Government of India for the respective phases.
2. Obligations to Construction
The Licensee shall construct or cause to be constructed the Contracted Assets at the time and in the manner required by this Agreement.
5. Sub−Concession for the construction of assets
[a] The Licensee may fulfill its obligation to construct and operate in Contracted Assets by granting sub−concessions to third parties.
[b] The Licensee shall obtain the prior written consent of the Licensor for granting sub−concession in respect of Core Assets.
[c] Unless otherwise agreed to by the Licensor, all sub−concessions granted by the Licensee to third parties and long term commercial agreements entered into by the Licensee with third parties shall not be inconsistent with the terms and conditions of this Agreement, and shall terminate on termination of this Agreement.
[e] The Licensee shall:
[i] ensure that the assets created and/or constructed pursuant to the sub− concession vest in the Licensor at the expiry or termination of this Agreement or as per Clause 8.5(d) above;
[ii] be liable for payment of Waterfront Royalty for any cargo handled by the sub−concessionaire:
[iii] ensure that the sub−concessionaire performs its obligations in the same manner that the Licensee is required to perform its obligations under this Agreement; and
[iv] deliver copies of all contracts with sub−concessionaries to the Licensor.
[h] In the event of termination of this Agreement in accordance with the terms thereof, the counter parties to all such sub−concession agreements and/or long terms commercial agreements [being the sub−concessionaire or, as the case may be] entered into between the Licensee and such third parties, shall be entitled to construct and operate the assets in accordance with this Agreement and this Agreement shall continue to operate and the counter party shall be entitled to rights and shall be liable to perform all the obligations of the Licensee as if such counter party were the Licensee under this agreement, provided that such party executes a new deed in a form mutually agreed to between such third party, the Licensor and the New Licensee, agreeing to be bound by the terms of this Agreement.
[i] In the event of early termination or expiry of this Agreement the sub− concessionaire shall be entitled and be liable to perform its rights and obligation as per the tripartite agreement executed as per Clause No. 8.5[d] between the Licensee, Licensor and sub−concessionaire.
Thereafter, on 12.10.2001, SCA came to be entered into between Gujarat Ports Limited and Adani Container [Mundra] Terminals Limited, now MICTL and petitioner, and the relevant Clauses of the SCA dated 7.1.2003 as amended vide Amendment Agreement dated 17.4.2003 read as under:
whereas
E. In accordance with the terms of the Concession Agreement, the Licensee may construct, operate and maintain the Contracted Assets and the Core Assets by granting sub−concessions to third party.
F. Vide its letter dated September 30, 2002, GMB has accorded its consent in terms of Clause 8.5(b) of the Concession Agreement, for the grant of a sub− concession by the Licensee in favour of the Sub−Licensee in relation to the assets of the Container Terminal including the quay wall in Navinal Creek, subject to there being no inconsistency with the provisions of the Concession Agreement and the sub−concession being co−terminus with the Concession Agreement.
G. The Licensee has developed the Project and the Sub−Licensee has agreed to operate and maintain the Container Terminal. In this Agreement, the Parties wish to record the terms and conditions upon which the Sub−Licensee shall have the right to finance, design, operate and maintain the Contracted Assets and provide Services to the Users.
H. The Licensee has agreed to grant to the Sub−Licensee rights under this Agreement to operate and maintain the Container Terminal in accordance with and subject to the terms and on the conditions provided herein.
I. Definitions and Interpretation
1. Definitions
’Contracted Assets’ shall mean the assets specified in Annexure 2 and any replacements and substitutes thereof and such other assets as are used by the Sub−Licensee at the Container Terminal and the Container Freight Station from time to time, with the approval of the Licensor, wherever required.
’Core Assets’ shall mean the assets specified in Annexure 3.
’First Stage Assets’ shall comprise of the of 632 metres quay wall in the Navinal Creek and 38.482 hectares of unpaved back−up area.
’Licensor’ means GMB
’Second Stage Assets’ mean the Core Assets comprising 618 metres quay wall in the Navinal Creek as detained in Annexure II including 19.633 hectares of back−up area for container storage, which have been agreed by the Parties as being connected with the operation of the Contracted Assets:
’Sub−Concession’ means the rights granted by the Licensee to Sub−Licensee in accordance with this Agreement.
’Sub−Concession Agreement’/’Agreement’ means this Sub−Concession Agreement.
2. Licensing Framework
1. Grant of Sub−Concession
The Licensee hereby grants to the Sub−Licensee during the Term of this Agreement the right and authority to finance, design, operate and maintain the Contracted Assets and provide the Services to the Users and the Sub−Licensee accepts the Sub−Concession so granted by the Licensee and agrees to operate and maintain the assets at the Container Terminal, the Container Freight Station including the Contracted Assets in accordance with the terms and conditions of this Agreement. All rights and obligations of the parties under this Agreement shall be subject to and exercised and discharged in compliance with the
Concession Agreement.
2. Additional Assets for the Container Terminal
The Sub−Licensee may, from time to time, require assets in addition to the Contracted Assets to be construed or installed at the Container Terminal at no additional cost to the Licensee. The Licensee shall make reasonable efforts to obtain any approval, wherever required, from GMB for the construction, development or deployment of such additional assets at the Container Terminal. The Sub−Licensee shall extend full co−operation and provide all such information to the Licensee as may be required for the purposes specified in this Section
2.2
8. Dredging and other Infrastructure Services
3. Container Freight Station
- The Sub−Licensee shall construct the Container Freight Station for the purpose of operating and maintaining container handling facilities within the land of 20 hectares as identified in the diagram contained in Annexure 12.
- The Sub−Licensee shall start providing Container Freight Station services within two years from the Date of Commencement of Operations.
- The Licensee shall ensure that within the Navinal Island, no other competing container freight station shall be permitted to be established.
- The land so allocated for the container freight station shall revert to the Licensee at the expiry or Termination of this Agreement in accordance with the terms and conditions contained in this Agreement.
2. Second Stage Assets
11.2.1 Upon the occurrence of the earlier of either (a) container traffic handled at the Container Terminal reaching 700,000 TEUs within a Operating Year or (b) eight (8) years from the Date of Commencement of Operation, the Sub− Licensee shall be entitled to (but shall not be obliged to) give the Licensee a written notice of 30 months requiring the handover of the Second Stage Assets. For the avoidance of doubt, it is clarified that transshipment of a container shall be computed as one (1) move.
11.2.2 If Sub−Licensee has given notice in terms of Clause 11.2.1 above, the Licensee shall, 18 months from the issue of such notice, handover, and cease to use, 30% of the back−up area for the Second Stage Assets, measuring six (6) hectares, to the Sub−Licensee.
11.2.3 Upon the completion of the 30−month period referred to above, the Licensee shall cease to use and hand over the balance of the Second Stage Assets to Sub−Licensee
11.2.4 The handover of the Second Stage Assets by the Licensee to the Sub− Licensee shall be subject to mutually agreed terms between the parties in this regard.
11.2.5 The Licensee may construct or procure the construction of the Second Stage Assets at any time from the Effective Date and use it for the purposes of handling cargo etc. provided however that the handover of the same shall occur in accordance with the procedure and time specified above and if the Sub− Licensee has exercised its option in terms of Section 11.2.1 above. The Second Stage Assets shall be constructed as per technical specifications consistent
with the specifications applied for construction of the First Stage Assets.
11.2.6 The right to operate the Second Stage Assets for the purpose of the Container Terminal shall be co−terminus with the Concession Agreement.
17. Non−Compete
17. The Licensee shall not develop, or permit the development of, any other container handling facility in the Port of Mundra save and except in accordance with the provisions of this Section.
17.2 The Licensee shall be within its rights to permit operation of another container terminal in the Port of Mundra when the throughput at the Container Terminal reaches a level of 2.5 [two point five] million TEUs in a calendar year, or 12 years from the date of Commencement of Operations of the Container Terminal, whichever is earlier. For the avoidance of doubt, it is clarified that transshipment of a container shall be computed as one (1) move.
17.3 In the event of such operational level being reached and the Licensee then intends to permit operation of a new container handling facility in the Port of Mundra [’Proposed Development’], the Licensee shall be entitled to discuss the Proposed Development with third parties. Provided however, prior to any binding agreement being concluded between the Licensee and any third party in respect of the finalized terms of the Proposed Development, the Licensee shall give the Sub−Licensee a first right of refusal to match such finalized terms of the Proposed Development by a written notice of all such terms and condition. The Sub−Licensee shall have a period of 60 days from the date of such written notice by the Licensee to match such offer/terms and enter into a binding agreements with the Licensee for this purpose. Such first right of refusal as prescribed herein shall not be available to the Sub−Licensee in the event of the Sub−Licensee not exercising it’s option in terms of Clause 11.2.1. Furthermore, in the event that the Sub−Licensee exercises its option in terms of Clause 11.2.1, the Licensee shall not be involved in the operation of the Proposed Development.
19. Dispute Resolution [between the petitioner and respondent No. 2]
19.1 Save as expressly stated to the contrary in this Agreement or where this Agreement provides that a dispute shall be referred to the Expert committee for resolution, any dispute or difference of whatsoever nature howsoever arising under or as may be agreed by the parties, out of, or in connection with this Agreement between the parties shall be referred to the dispute resolution procedures as set out hereafter.
19.2 Each party shall select and appoint one senior representative within a period of 7 days from the day on which the notice of dispute has been sent by one party to the other. The representative shall meet in Mumbai as and when necessary from time to time and attempt in good faith and use their best endeavours at all times to resolve the dispute and produce written terms of settlement.
19.3 If the dispute has not been resolved as evidenced by the signing of the written terms of settlement within 30 days after the receipt of the notice as provided in Section 19.2 above, the provisions of Section 19.4 herein below shall be applicable.
19.4 In the event that the dispute has not been resolved in accordance with the provisions of Sub−Sections 19.1−19.3 herein above, such dispute shall be submitted to arbitration and shall be finally determined in accordance with the provisions of Arbitration and Conciliation Act, 1996 or any statutory modification or re−enactment thereof. Each Party shall have a right to appoint one arbitrator within a period of 15 days from the expiry of the 30−day period
provided in Section 19.3 above, and the two arbitrators so appointed shall appoint the third arbitrator, who shall act as the Presiding Officer of the Arbitral Tribunal.
19.5 The venue of arbitration shall be Mumbai and the language of arbitration shall be English.
19.6 Each Party shall appoint one arbitrator, who shall appoint a third ’arbitrator’ who shall preside over the said arbitration tribunal.
11.6 It is to be noted that FIPB granted approval for foreign collaboration to AC{M}TL vide letter dated 26.2.2003 on the following conditions:
[i] The permission can be modified keeping in view the National Defence and security consideration.
[ii] M/s. P&O Mundra Port Pvt. Ltd will not sell or otherwise transfer their equity holdings in the licensee company without prior written consent.
[iii] Participation of M/s. P&O Mundra Port Pvt. Ltd should be consistent with the terms and conditions of the Concession Agreement signed between Gujarat Maritime Board and Gujarat Adani Port Ltd. For the development of Mundra Port.
[iv] The commercial terms for development and handling of container terminal such as waterfront, royalty should be mutually discussed with all concerned before finalisation; and
[v] Further specific approval of Government of Gujarat has to be obtained with regard to the concession and sub−lease agreement and all other approvals related to the proposed port operation.
11.7 It is also to be noted that the State of Gujarat and respondent No. 1−GMB granted permission/approval in principle of acquisition of share of AC(M)TL by P&O Ports by letter dated 10.5.2003 at Annexure SC, on certain terms and conditions, as under:
[a] The whole amount of equivalent Indian Rupees of US$ 60 million which is to be received by the shareholders of ACTL shall be brought into GAPL, for development of infrastructure projects in Gujarat.
[b] That the amount shall be brought into GAPL in such a manner that the 11% Equity Capital of GAPL held by the Government of Gujarat through GPIDCL is not diluted.
[c] The amount of equivalent Indian Rupees of US$ 60 million shall be brought in by way of a non interest bearing instrument repayable only after the expiry of the concession period.
[d] As undertaken by Adani Group to transfer to GPIDCL, the zero percent debt instruments for the amount calculated @ 11% of equivalent Indian Rupees of US $ 60 million brought into GAPL.
[e] The sub licensee shall pay water front royalty for container cargo to licensee for onward payment to licensor as may be fixed and notified by the Government. The water front royalty at the rate of Rupees 10 per 20 feet TEU shall be recovered till such time the rates are notified by the Government. This is provisional arrangement and the full water front royalty and concessional water front royalty notified by the Government for container under schedule of port charges shall be applicable. The accounts shall be settled as per notified rates and will be binding to GAPL and ACTL.
[f] The approved capital cost of the Core Assets and contracted assets of
container terminal which needs to be included as annexure in the sub concession agreement shall be subject to the cost limit shown in the main concession agreement.
[g] P & O Ports shall not dilute its equity without prior permission of GMB and it shall maintain a minimum equity of 51% in ACTL for 7 years from the date of their entry in ACTL.
[h] Licensee’s agreement that notwithstanding anything contained in the concession agreement, the royalty concession as made available on container terminal to the licensee under the concession agreement shall stand deducted from the compensation payable to the licensee upon the expiry or earlier termination of the concession agreement.
- [i]
- For any further transfer of property, assets and undertaking of sub− licensee, the prior consent of licensor shall have to be obtained. The following germane criteria must be considered for any such approval from GMB.
- [i]
- Technical competence and its ability to fulfill the obligations undertaken.
[iii] Track record and experience as a developer and operator of Ports in general and the specific activity of container cargo handling especially safety record and compliance with environmental regulations.
[iv] Suitability from the stand point of question of strategic importance such as national security etc.
[v] Any other criteria as per international standard and practice shall be fulfilled.
12. Therefore, in view of the above legal and factual aspects, if rival submissions of the parties are considered keeping in mind the determination of the State Government to develop minor ports in the State of Gujarat, BOOT policy, coordinating role of the Gujarat Maritime Board and the grant of licence by GMB to respondent No. 2 by CA as licensee and in turn by SCA grant of sub− licence by respondent No. 2 to the petitioner, as sub−licensee, role of the GMB surfaces when the GMB accorded its consent in terms of Clause 8.5(b) of the CA for grant of sub−concession by licensee respondent No. 2 in favour of sub− licensee, the petitioner, in relation to assets of container terminal. That respondent No. 2 decided to dispose of container terminal business at Mundra Port to P&O Ports Mundra Limited and thereafter a framework agreement was executed, which also included Clause 5.2 for second stage assets and non−compete Clauses 7 and 7.1. The above frame work agreement and interpretation of Clauses
11.1.2 and 17 of SCA about rights of the parties were subject matter of the proceeding under Section 9 of the Arbitration and Conciliation Act and, against the decision of the Civil Court rejecting the said application, First Appeal is pending before this Court and the matter being sub−judice and not much relevant at this stage for deciding the issue in question, I do not refer and discuss herein.
- Later on, a transaction of transferring 100 equity shares of ACTL to P&O Ports was approved in principle by the letter of GMB to the Managing Director of GAPL on certain terms and conditions which were already reproduced in the foregoing paragraphs for which correspondence took place between the petitioner and the GMB, arising out of agreements in the form of SCA or CA entered into between the parties. If both CA and SCA are perused, respondent No. 1−GMB has not entered into any contract or any agreement with the petitioner. That, all rights and liabilities accrue to any of the parties emanate from various Clauses of terms and conditions as indicated in CA and/or SCA. That, specific Clause of
- CA, as reproduced in the earlier paragraphs, namely, Clause 3 is about licensing framework which includes grant of concession and particularly Clause 8.5 refers to sub−concession for construction of assets which mandates the licensee to fulfill all obligations to construct and operate in contracted assets by granting sub−concession to third parties and the licensee is also to obtain prior written consent of the licensor for granting sub−concession in respect of core assets and all sub−concessions granted by the licensee to third parties and long term commercial agreements entered into by the licensee with third parties have to be consistent with the terms and conditions of the agreement and co− terminus also. Clause 8.5[e][iii] mandates the licensee to ensure that the sub− concessionaire performs its obligations in the same manner that the licensee is required to perform its obligations under the CA.
- At the same time, SCA dated 7.1.2003 provides Clause 2 as licensing framework and Clause 2.1 is grant of sub−concession. The SCA entered into between respondent No. 2 and the petitioner clearly mentions that all rights and obligations of the parties under this agreement shall be subject to and exercised and discharged in compliance with the Concession Agreement. Clause 17, non−compete Clause, and Clause 19 of SCA provide for dispute resolution between licensee and sub−licensee. Therefore, a bare perusal of the above agreements namely CA and SCA, reveals that any breach of Clauses of SCA will have to be resolved as envisaged in Clause 19 of the SCA.
- Thus, relationship between the petitioner and the Gujarat Maritime Board, respondent No. 1, is nowhere governed by any agreement much less a statutory agreement. CA is between respondent No. 2 and respondent No. 1 and SCA between respondent No. 2 and the petitioner. No direct agreement exists between the GMB and the petitioner. If the GMB takes a decision directing respondent No. 2 to take an action against the petitioner in consonance with the CA for breach of any of the Clauses of SCA and CA as stated in the impugned communications, it cannot be said to be a decision or State action, which is required to be tested on the anvil of Articles 14 and 19(1)(g) of the Constitution of India in exercise of power under Article 226 of the Constitution of India. The whole exercise undertaken by the GMB by way of addressing letters to the petitioner was in the realm of ascertaining the nature of change in corporate structure, if any, and to satisfy itself, prima−facie, whether there was any breach of Clauses of CA or SCA or letter dated 10.5.2003 approved in principle by the State. In view of this, the learned Advocate General is right in his submission that the above exercise of GMB was a preliminary enquiry for finding out certain facts, for which, no lis did exist and there was no question of adjudicating any issues in the capacity as a quasi−judicial authority.
- What is impugned in this petition, if carefully perused, along with nature of pleadings as contained in paragraphs 15, 16, 17 and grounds contained in paragraph 20 of the petition referring to termination of SCA and alleged breach of various Clauses, apparently is communication dated 3.11.2007 addressed by respondent No. 1 to respondent No. 2 and communication dated 8.11.2007 addressed by respondent No. 2 to the petitioner, inter alia, alleging breach of Clauses 7.2[d] and 7.2[e] and Clause 8.5 of CA, which refer to approval in principle by the GMB of CA which was executed on 17.2.2001 between respondent No. 2 and respondent No. 1 and also of SCA dated 7.1.2003 signed and revised on 17.4.2003 between respondent No. 2 and the petitioner. It further refers to seeking various clarifications since respondent No. 1, vide letter dated 10.5.2003, based upon the approval given by the FIPB dated 26.2.2003 and the State Government, approved in principle the transaction of transfer of 100% equity shares of ACTL to P&O Ports and the transfer of core assets by GAPL to ACTL for container terminal, now respondent No. 2 to the petitioner. It also refers to letter dated 2.8.2005 addressed by GMB to respondent No. 2 to remove the inconsistencies in SCA which have been not complied with. Clauses 7.2[d] and 7.2[e] of CA are already reproduced in the earlier part of this judgment and the same are referred to in the impugned communication dated 3.11.2007 and, according to respondent No. 1, there appeared to be breach of above Clauses of
- CA. Though denied, the above disputed facts and applicability of Clauses of CA and SCA and interpretation of such Clauses need detailed examination of oral and documentary evidence and, therefore also, the present petition under Article 226 of the Constitution of India is not maintainable. Any letter addressed to respondent No. 2 for taking action emanates from the contractual terms and conditions and it is exclusively a matter between respondent No. 2 and respondent No. 1 and any consequential effect upon the petitioner as per the impugned communication dated 8.11.2007 addressed by respondent No. 2 against the petitioner of terminating SCA is exclusively in the realm of contract, for which, power under Article 226 of the Constitution of India cannot be exercised on the basis that respondent No. 1 is a statutory body/instrumentality of the State and amenable to the writ jurisdiction of this Court for its action of directing respondent No. 2 to terminate the agreement and the remedy, whatsoever, for the second impugned communication by respondent No. 2 to the petitioner for terminating the SCA, is exclusively out of purview of exercise of power under Article 226 of the Constitution of India and, as stated earlier, respondent No. 1−GMB had no, statutory or otherwise, direct agreement with the petitioner.
- What is impugned in this petition, if carefully perused, along with nature of pleadings as contained in paragraphs 15, 16, 17 and grounds contained in paragraph 20 of the petition referring to termination of SCA and alleged breach of various Clauses, apparently is communication dated 3.11.2007 addressed by respondent No. 1 to respondent No. 2 and communication dated 8.11.2007 addressed by respondent No. 2 to the petitioner, inter alia, alleging breach of Clauses 7.2[d] and 7.2[e] and Clause 8.5 of CA, which refer to approval in principle by the GMB of CA which was executed on 17.2.2001 between respondent No. 2 and respondent No. 1 and also of SCA dated 7.1.2003 signed and revised on 17.4.2003 between respondent No. 2 and the petitioner. It further refers to seeking various clarifications since respondent No. 1, vide letter dated 10.5.2003, based upon the approval given by the FIPB dated 26.2.2003 and the State Government, approved in principle the transaction of transfer of 100% equity shares of ACTL to P&O Ports and the transfer of core assets by GAPL to ACTL for container terminal, now respondent No. 2 to the petitioner. It also refers to letter dated 2.8.2005 addressed by GMB to respondent No. 2 to remove the inconsistencies in SCA which have been not complied with. Clauses 7.2[d] and 7.2[e] of CA are already reproduced in the earlier part of this judgment and the same are referred to in the impugned communication dated 3.11.2007 and, according to respondent No. 1, there appeared to be breach of above Clauses of
- Therefore, it is not possible to accept the submissions of the learned Senior Counsel appearing for the petitioners that this petition directed against arbitrary, unreasonable, unjust, unfair and colourable exercise of power of the GMB in directing respondent No. 2 to terminate licence is maintainable since there is negation of Article 14 of the Constitution of India and power under Article 226 of the Constitution of India requires to be exercised. Thus, remedy for redressal of the grievances of the petitioner does not lie before this Court by invoking Article 226 of the Constitution of India, but elsewhere. This Court, while exercising power under Article 226 of the Constitution of India cannot adjudicate upon a dispute arising out of breach/violation of Clauses of agreement and pass a verdict on legality or otherwise of such alleged breaches of contractual terms.
- The contention of the learned Senior Counsel for the petitioner about breach of principles of natural justice is also not of much substance, in as much as, even if the communication addressed by the GMB to the petitioner is perused, it reflects just and fair approach on the part of the Board in seeking explanation and clarification with regard to prior approval of the Government in principle which was not final and for which the petitioner was not only heard but also permitted to submit its version in writing and, therefore, the action of the Board from the above angle also is non−arbitrary and reasonable. If any adverse effect upon the petitioner of the direction given by the GMB in the capacity as a licensor to respondent No. 2 a licensee to terminate the contract/licence in terms of CA and SCA and if respondent No. 2 has taken such consequential action, recourse can be taken as per inbuilt Clauses of SCA, for which power under Article 226 of the Constitution of India cannot be invoked.
- As clearly borne out from the record, even the principles of natural justice are also not violated since GMB even for finding out certain facts, had given ample opportunity by permitting the petitioner to file written statement and even personal hearing was given and, therefore, the reliance placed by the learned Counsel for the petitioner in the case of Smt. Maneka Gandhi [supra], is of no help to the case of the petitioners.
- So far as other contentions about arbitrary exercise of power by respondent No. 1 and failure to defend the cause of the petitioner by respondent No. 2 before respondent No. 1−GMB, are concerned, it will again be a case which is required to be looked into by the appropriate forum and not in exercise of Article 226 of the Constitution of India. So far as respondent No. 1 is concerned, it has acted within the framework of CA in the capacity of a licensor when it was not satisfied with the explanation rendered by the petitioner about various clarification as sought for, which emanated from the letters dated 10.5.2003, 2.8.2005 and notices issued thereafter and it was open for the GMB to
- direct its lisencee to take action immediately in terms of SCA and, for any grievance arises therefrom, the petitioner is to seek remedy elsewhere.
- So far as other contentions about arbitrary exercise of power by respondent No. 1 and failure to defend the cause of the petitioner by respondent No. 2 before respondent No. 1−GMB, are concerned, it will again be a case which is required to be looked into by the appropriate forum and not in exercise of Article 226 of the Constitution of India. So far as respondent No. 1 is concerned, it has acted within the framework of CA in the capacity of a licensor when it was not satisfied with the explanation rendered by the petitioner about various clarification as sought for, which emanated from the letters dated 10.5.2003, 2.8.2005 and notices issued thereafter and it was open for the GMB to
- In Shrilekha Vidyarthi (supra), the Apex Court was concerned with en−mass termination of appointments of District Government Counsel in all Districts of
- In ABL International Limited {supra}, insurance contract of covering risk arising out of payment of consideration by a particular mode was covered and alternative mode of payment inserted by addendum on the very same day as original agreement required interpretation in the context of the fact that whether risk of payment by alternative mode was also covered under the clause of contract and, thus, after considering various aspects, as reproduced in earlier paragraphs of this judgment, namely, paragraphs 27, 28 and 52, wherein Shrilekha Vidyarthi (supra) is also discussed, the Apex Court found that the policy of insurance covering risk of appellants was issued by the first respondent after seeking all required information and receiving the huge sums of money as premium and, on facts, it was found that terms of policy do not give any room for ambiguity as to risk covered by the first respondent. In the present case, no contractual liability arises so far as GMB is concerned and, as held in paragraph 28, ’plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 of the Constitution of India’.
- Even in Radhakrishna Agarwal (supra), argument about an opportunity to show cause against cancellation of lease was found to be wholly irrelevant in as much as a question and distinction between an administrative and quasi−judicial decision only arises in exercise of power under the statutory provision and rules of natural justice are attached to the performance of certain functions regulated by Statute or Rules made thereunder involving decision affected rights of parties and when contract is sought to be terminated by the officers of the State purporting to act under the terms of agreement between the parties, such action is not taken in purported exercise of a statutory power at all. In the facts of the present case, GMB has taken action only under the terms of licence directing its licensee to act in accordance with the terms of licence and any action taken by the licensee against the sub−licensee, the petitioner herein, that too in terms of sub−licence, cannot be said to be an action of the State or its instrumentality to be decided on the touch−stone of Article 14 of the Constitution of India.
- Even the contention of the learned Counsel for the petitioners on the basis of malice on fact and malice in law has no substance and the reliance placed on Smt. S.R. Venkataraman v. Union of India and Anr. is also misplaced, since no material in support of the above contention is produced on record except vague averments of mala fide and this Court cannot hold a roving enquiry into such allegations. Considering the overall aspects, as discussed above, this contention is also negatived.
- So far as the development of second stage assets comprising of 618 meters quay wall and 19.633 hectares of back up area for container storage is concerned, the dispute, which has arisen between respondent No. 1 and respondent
- No. 2, is now pending before this Court by way of First Appeal, since the application under Section 9 of the Arbitration and Conciliation Act filed by the petitioner is rejected by the City Civil Court.
- So far as the development of second stage assets comprising of 618 meters quay wall and 19.633 hectares of back up area for container storage is concerned, the dispute, which has arisen between respondent No. 1 and respondent
- It is to be noted that, when there is paradigm shift in the economic policy of the government and liberalization, privatization and globalisation are basic concepts of such shift, along with advantages of LPG, certain abrasions or scars do take place and the private sector has to gear itself and prepare to face such consequences as a part of their business affairs. Any grievance, which may arise, in the backdrop of the above economic policy, unless it is clearly brought within the purview of Articles 14, 19 and 21 of the Constitution of India or patent breach of any fundamental right of a person, invocation of writ jurisdiction under Article 226 of the Constitution of India is unwarranted and the ambit and scope of the Court to exercise such power is circumscribed as discussed in the earlier paragraphs and the law laid down by the Apex Court.
- Therefore, in view of Radhakrishna Agarwal v. State of Bihar paragraphs 16 and 17 of State of U.P. v. Bridge & Roof Co. (India) Limited, National Highways Authority of India v. Ganga Enterprises, State of U.P. v. Johrimal (supra) having discussed the law on the issue, the action of the GMB cannot be said to be contrary to public good and public interest, unfair, unjust, unreasonable in its contractual, statutory or constitutional obligations against the constitutional guarantee as found in Article 14 of the Constitution of India and, therefore, the present petition is not maintainable.
- It is pertinent to note that, in paragraph 30 in the case of Johri Mal (supra), it is observed by the Apex Court that while examining and scrutinizing the decision making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested on the grounds of illegality, irrationality or procedural impropriety. How far the Court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. Therefore, it is always open to the Court to a limited extent of scrutinizing the decision making process to review the evaluation of facts by the decision maker. In view of the above, this Court has not indulged to examine the legality or validity of the action of the respondents otherwise than the grounds of challenge in this petition for a limited purpose.
- As a result of foregoing discussion, this petition is rejected. There shall be no order as to costs.
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