Andhra HC (Pre-Telangana)
United Port & Dock Employees Union, ... vs The Government Of India,Rep By Its ... on 29 April, 2014
Author: P.Naveen Rao
Bench: P.Naveen Rao
THE HONBLE SRI JUSTICE P.NAVEEN RAO
WRIT PETITION 24835 of 2013 and batch
29-4-2014
United Port & Dock Employees Union, rep.by its General Secretary,
V.S.Padmanabha Raju s/o.Surapa Raju,R/o. Flat No.406, Sampath residency, Murali
Nagar,Visakhapatnam. Petitioner
The Government of India,Rep by its Secretary, Ministry of Shipping,Transport
Bhavan, # 1, Parliament Street New Delhi and others ... Respondents
Counsel for the petitioners : M/s. Srinivas Rao Bodduluri
Counsel for the Respondents: M/s. Indus Law Firm,
Sri P Veera Raju
Sri Rama Rao Gantannagiri
<Gist :
>Head Note:
?Cases referred:
(1981) 1 SCC 568
(2011) SCC 640
HONBLE SRI JUSTICE P.NAVEEN RAO
WRIT PETITION Nos.24835 and 34252 of 2013
Dated: 29.04.2014
This Court made the following:
HONBLE SRI JUSTICE P.NAVEEN RAO
WRIT PETITION No.24835 and 34252 of 2013
COMMON ORDER:
With the consent of the learned counsels for the parties, these writ petitions are heard and disposed of by this order.
2. In these two writ petitions, petitioners are the unions representing the workers working in Visakhapatnam Port Trust (VPT). Petitioners assail the invitation of tenders for qualification by VPT for upgradation of existing facility and creation of new facility for Iron Ore Handling (IOH) on Design, Build, Finance, Operate and Transfer (DBFOT) basis issued in October, 2012.
3. Visakhapatnam Port commenced its operations in the year 1936 and became one of the major ports in India. This port was initially administered by the Central Government directly through Port Administrative Officer. The Port Administrative Officer was treated as Head of Department and was vested with limited powers to take decisions at his level. Thus, on various aspects concerning operation of Port, several practical difficulties were faced and the businessmen, who use the port for export/import of goods have also complained to the Government of India of the difficulties experienced by them and the delays caused in seeking appropriate directions from the Central Government from time to time. The Central Government, therefore, felt it necessary to grant autonomy to the Visakhapatnam Port. By then, administration of three Ports, namely, Calcutta, Bombay and Madras were vested in Trusts. There were three more major ports at Visakhapatnam, Cochin and Kandla. Therefore, Government proposed to bring about legislation to administer the major Ports in India including Visakhapatnam. Indian Parliament passed The Major Port Trusts Act, 1963 (for short Act). This was enacted to make provision for constitution of port authorities for certain major ports in India and to vest the administration, control and management of such ports in such authorities. Visakhapatnam Port Trust is constituted in the said manner.
4. The port is having two harbours, i.e., outer harbour and inner harbour. Outer harbour is having six berths plus one mooring facility. The outer harbour can accommodate vessels upto 150,000 DWT vessels and 16.5 meters draft. One container terminal operated by contractor selected as BOT operator. Inner harbour is having 15 berths and one mooring facility. It can cater to Panamax vessels upto 11 meters draft. There are two berths built on BOT basis.
5. The Cargo profile of the Port comprises iron ore, manganese, thermal coal, coking coal, lime stone, marine products, fertilizers, fertilizers raw materials, food grains, granite, timber logs, crude oil, petroleum products, LPG, phosphoric acid, liquid ammonia etc. It owns a railway network of about 200 KMs of Broad-gauge connected to East Coast Railway and South Central Railway.
6. To cater to the future growing traffic needs, the authority decided to undertake upgradation of existing facility and creation of new facility for iron ore handling (IOH) through Public Private Partnership (PPP) on DBFOT basis. It has also taken up steps to improve the facilities in the Port, such as deeping of inner and outer entrance channel to accommodate vessels of bigger size, mechanising of coal handing facility, etc.
7. The Government of India approved the implementation of the project at an estimated cost of 845.41 crores. On 25.10.2012, Global tender Notice was issued. The request for qualifications were opened on 24.12.2012. Five applicants submitted Request for Qualification (RFQ) for the said project including M/s.Vadinar Oil Terminal Limited (VOTL) (3rd respondent). All the five applicants were issued with request for proposal documents fixing the due date of opening of the REF Bid as 28.03.2013. The Ministry of Shipping issued security clearance on 06.05.2013 and approval of implementation of project was received on 27.05.2013. Out of five, only two remained in the fray. Bids were opened on 28.05.2013. As a consequence, Trust decided to enter into a concession agreement with M/s.Vadinar Oil Terminal Limited. Based on the reports of consultant appointed by the trust, the concession agreement was considered by the trust board in the meeting held on 12.09.2013 and the Board has approved concession agreement. The concession agreement was signed on 13.12.2013.
8. In these two writ petitions, petitioners challenge the invitation for qualification and awarding of iron ore handling to a private company violating the mandate of the Act. In W.P.No.24835 of 2013, an additional contention is raised, that is awarding of contract to a private company would amount to violating the anti- monopoly policy of the Government of India.
9. Heard Sri V.Srinivas, Sri Srinivas Rao Bodduluri, counsels for the petitioners, Sri Ramanujam, Central Government standing counsel for respondent No.1, Sri. P.Veer Raju, standing counsel for respondent No.2 and Sri V.R.N.Prasanth for Indus Law Firm for third respondent.
10. Learned counsel Sri V.Srinivas submitted that VPT is governed by the Act 38 of 1963. As per Section 29 of the Act, the assets and liabilities of the Central Government were transferred to the Trust and it is responsibility of Trust to effectively manage and administer the assets transferred by the Central Government. Chapter-V deals with works and services to be provided at Ports. Section 35 in Chapter-V delineates the powers of the Board to execute works and provide appliances. Limited power is vested by Section 36 in the Board to lend any of its vessels or appliances or the services of any of its employees to any person for a period not exceeding three months. Section 42 delineates the power to undertake the services mentioned in Sub-section (1). Sub-Section 3, enables the Board to authorize any person to perform any of the services mentioned in sub-section (1) with the previous sanction by the Central Government. Sub-section 3-A empowers the Board to enter into any agreement or other arrangement to perform any of the services and functions assigned to the Board with the previous approval of the Central Government. Section 46 prohibits the erection of private whares etc., without the prior permission of the board. Referring to the above provisions and the scope of the Act as evident from the preamble, learned counsel submits that the entrustment of iron ore handling to a private person by the Board is without power or jurisdiction. The provisions referred to above do not vest such power in the Board for giving contract to private person to handle the iron ore. Learned counsel submitted that creation of infrastructure cannot be assigned to a private person as it is not contemplated by Section 42. He, therefore, submitted that action of the respondents 1 and 2 is illegal, without power and jurisdiction and it is against public interest. The Port Trust which has been effectively functioning for long cannot entrust the core activity to a private organization.
11. He further contended that in the year 2005, project was initiated for upgradation of IOH facilities to accommodate bigger vessels at outer harbour. The project was proposed with Overseas Development Loan (ODA) assistance from Japanese International Cooperation Agency (JICA). The Union Ministry communicated the administrative approval and the expenditure sanction, as early as on 14.11.2007. For the reasons best known, tenders calling for technical assistance was not finalized and subsequently, board withdrew the project from the scope of Japanese International Cooperation Agency assistance and to proceed further with an intention to meet the budget expenditure from internal resources. The Board took such decision on 2.11.2009. Accordingly, the Government of India directed the Board to prepare two proposals,
1) dredging from internal resources and 2) to modernize iron ore handling facilities on a Public Private Partnership (PPP) mode. Though the Board was initially in favour of upgradation by utilizing its own resources, it decided to go to PPP mode.
12. In the interest of the port, the employees working in the Port and in the larger public interest, the President of the petitioner union being a member of the Trust Board opposed such decision. Ignoring the opposition, the decision to entrust ore handling complex (OHC) to VOTL was taken.
13. In addition to the utilization of huge natural resources by a private organization, the immediate impact would be on the employees working in the Port and these are working in OHC and consequent to entrustment of OHC to a private company, all these employees have to be redeployed. Such redeployment creates lot of difficult in matters of seniority, promotions and other conditions of services.
14. The entrustment of OHC to a private company also would result in compromising the security of the country. It is not possible to maintain the same amount of vigil on with reference to the vessels which come from various countries and all other aspects.
15. Learned counsel Sri Srinivas Rao Bodduluri supplemented his submissions in addition to the submissions made by Sri Srinivas as under:
16. OHC is core of VPT. It is something like soul to VPT and without OHC, VPT will be body without soul. The Ore Handling Complex (OHC) is functioning well and earning good revenue. The reserve fund accumulated to Rs.2000 crores. Therefore, there is no good reason for privatization of the operations in OHC. It is permissible and possible for the Trust to generate funds internally to modernize the OHC. Even the private operator intends to approach banks for obtaining loans. There can be no good reason for the VPT not to approach the banks for financing the project. He therefore contended that when it is possible for the VPT to undertake modernization of the OHC, it is illegal to privatize the core activity. Such decision is against public interest. At a through away price, the private company was entrusted with the responsibility of operating OHC for very long period of 30 years. It is not in public interest to loss huge revenue that can be generated over a period of 30 years by directly operating the OHC by the Trust.
17. The direction of the Government of India to go for PPP mode is contrary to the provision of the Act. Such directions were issued without consulting the Board. Without obtaining the views of the Board, no decision can be taken by the Government of India, whereas the direction issued by the Government of India to go for PPP mode was without following mandate of Section 111 of the Act. Therefore, consequential action of the Trust of the Board to advertise for calling for tenders and awarding contract is illegal.
18. Learned counsel further submitted that Government of India in Circular dated 02.08.2010 laid down anti-monopoly policy. The policy mandates that if there is terminal/berth operator in a port for a specific cargo, the operator of that berth or his associates should not be allowed to bid for next terminal/berth for handing the same Cargo in the same Port. This condition is incorporated in the RFQ documents under the head-2 instructions to tenderers. Thus, the single agency cannot be given contract to operate the iron ore. Contrary to the Government policy and the contrary to the conditions of tender notifications, single agency was allotted side by side berths, ore berths 1 and 2 and west quay berth 1 to the company. Therefore on this ground also the action of the respondents is liable to be set aside.
19. The entrustment of the iron ore handling to a private party would adversely affect the service conditions of the employees and their interests are not protected.
20. Learned standing counsel for Visakhapatnam Port Trust Sri P.Veer Raju submitted that petitioners are the unions of the workers working in the Port trust. Such employees have no locus standi to challenge the entrustment of iron ore handling to private persons. The unions are only required to protect the interest of the employees insofar as their conditions of services are concerned. By the impugned decision, the conditions of service of employees of VPT are not altered/affected. Learned counsel further contended that the President of petitioner in WP No.34252 of 2013 is a member of the Board. He has participated in the deliberations in all Board meetings held on this issue. Deliberations were going on for more than nine months before a decision was taken. Even when final decision was taken by the Board, this President had participated in the Board meeting and had signed in the minutes accepting the resolution of the board to entrust iron ore handling to a private company. Thus, petitioner cannot challenge the tender notification. Petitioner cannot approbate and reprobate.
21. He further contended that by following the provisions of Major Port Trusts Act, and after obtaining prior permissions/ directions of the Government of India, the process was initiated. He further contended that Trust is competent to entrust the iron ore handling to private parties.
22. He further contended that while entering into the negotiations and awarding of contract, all the aspects were thoroughly considered at various levels. The Board has appointed the consultants and their advises and recommendations were considered and decisions were taken.
23. Learned standing counsel submitted that there have been lot of complaints of pollution spreading all over the city. Several complaints were filed before the Pollution Control Board and the District Collector and writ petitions were also instituted in this Court challenging the iron ore handling operations as it is emitting lot of dust and pollution. Several efforts were made by the VPT to reduce the pollution. The outer harbour was commissioned in the year 1976. Most of the equipments like stackers, reclaimers, tipplers, ship-loader, conveyers, feeders etc., were installed at the time of commencement of the project. This equipment completed their life span. Due to ageing, the overall performance of the plant has come down drastically. Since the equipments are of older design, the latest pollution control technologies were not available to monitor and control the pollution during operations. Due to increase in traffic, it is also necessary to upgrade the existing facilities and to modernize the same. The global competition is growing day by day and unless the Port is modernized and provided modern facilities to handle various kinds of goods being transported, the Port cannot be economically viable. If the Port is not modernized, it also has the impact on over all export and import of goods, which would have spiralling effect on various aspects of the economy. Thus, upgradation and modernization of the Port is essential. The resources available with the Trust are not sufficient to cater to the growing needs. Therefore, it was compelled to bring out side agencies to renovate and modernize the various activities of the Port. In the process, iron ore handling was proposed for entrustment to a private person under the PPP Mode. Learned counsel submitted that ownership of the land was not transferred to the contractor. Land is given on lease and the Trust gets lease amount during the lease period.
24. Learned counsel vehemently denies the contention that by entrusting the iron ore handling to the VOTL, anti-monopoly policy is violated. He justified the entrustment of the contract to a single contractor on the ground that ore berth-1 and ore berth-2 form a single finger jetty where the loading of iron ore is presently being carried out by VPT and the entire loading mechanism is common for both the berths with a single ship-loader and there is no possibility of splitting these berths into two and to process at different loading terminals. It would create operational difficulties if they are separated. Earlier the mechanization in the West Quay- 1 berth, inner harbour was treated a separate project and tenders were issued, but there was no response to the said project. It was therefore decided to cancel the bidding process of the said project and both the projects were clubbed i.e., mechanization at the West Quay-1 berth and the upgradation of the existing facility project at outer harbour. However, this could form Phase-II of the contract in terms of the concession agreement. These two projects were re- structured as a single project to enhance its viability. He, therefore, submitted that there is sufficient justification for taking impugned decision and such decision does not amount to compromising on anti-monopoly policy. He further submitted that insofar as iron ore handling is concerned, for various reasons, there has been lot of reduction of iron ore handling since the year 2011. In the financial year 2011-12, the quantity of iron ore handling was 10.01 million metric tonnes, whereas it reduces to 9.52 million metric tonnes during the financial year 2012-13. The excavation of iron ore at most places is now banned and there is no possibility of increase of iron ore in the near future. Thus, there is no compromise on the revenue to be generated by the Trust by entrusting to private persons.
25. Learned standing counsel representing the Central Government submitted that the Government of India has taken conscious decision to entrust the iron ore handling to private person under PPP mode. He submitted that Government has taken such decision in all sectors in order to upgrade and modernize infrastructure sectors in the country to raise to the level of international standards in all aspects. The handing of port being an important element in the import and export of goods, modernization of port is essential to increase the trade and commerce and to generate more revenue to the Central Government. Thus, it was a conscious decision taken to entrust to the private person and the said decision of Government of India is in accordance with the provisions of Act 38 of 1963.
26. In reply, on maintainability of writ petition by a Union, learned counsel Sri Srinivas Rao Bodduluri placing reliance on the decision of the Supreme Court in Fertilizer Corporation Kamgar Union (regd.), Sindri and others vs. Union of India and others , submitted that union can espouse cause against the sale of public property. The union has locus standi to maintain writ petition as it is opposing the sale of public property on the ground of arbitrariness, mala fides. The closer of an establishment in which workmen were working infringes their fundamental right to carry on an occupation and, therefore, the writ petition is maintainable. In the instant case, the workers working in iron ore handling unit are to be redeployed elsewhere and the same would offend their capacity to carry on the occupation and, therefore petitioner has locus standi to challenge the decision taken by the Trust to entrust the iron ore handling to a private person and thus, writ petition by a Union is maintainable.
27. The points that arise for determination are :
1) Whether the writ petitions by the Unions challenging the awarding of contract to a private company for handling the iron ore are maintainable ?
2) Whether the VPT is competent to entrust the OHC to private company ?
3) Whether handing over OHC exclusively to a private contract offends anti-monopoly policy ?
POINT NO 1:
28. The standing counsel representing VPT raised preliminary objection on maintainability of the writ petitions by the Unions and issue concerning the awarding of contract for handling of iron ore in the port to a private company. It is contended that the trade unions are only recognized for the purpose of protecting the service conditions of the employees and trade unions cannot agitate any other matter concerning functioning of the port. There is no merit in the said contention. In Fertilizer Corporation, Supreme Court held as under:
Maintainability of a writ petition which is correlated to the existence and violation of a fundamental right is not always to be confused with the locus to bring a proceeding under Article 32. these two matters often mingle and coalesce with the result that it becomes difficult to consider them in watertight compartments. The question whether a person has the locus to file a proceeding depends mostly and often on whether he possesses a legal right and that right is violated. But, in an appropriate case, it may become necessary in the changing awareness of legal rights and social obligations to take a broader view of the question of locus to initiate a proceeding, be it under Article 226 or under Article 32 of the Constitution. If public property is dissipated, it would require a strong argument to convince the court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligations.
.
.
In the present case a worker, who, clearly, has an interest in the industry, brings this action regarding an illegal wrongdoing by the Board of Management. Article 43-A of the Constitution confers, in principle, partnership status to workers in industry and we cannot, therefore, be deterred by technical considerations of corporate personality to keep out those who seek to remedy wrongs committed in the management of public sector. Locus standi and justiciability are different issues, as I have earlier pointed out. This takes us to the question of justiciability of questions like sale of public property by public bodies. Certainly, it is not part of the judicial process to examine entrepreneurial activities to ferret out flaws. The court is least equipped for such oversights. Nor, indeed, is it a function of the judges in our constitutional scheme. We do not think that the internal management, business activity or institutional operation of public bodies can be subjected to inspection by the court. To do so, is incompetent and improper and, therefore, out of bounds. Nevertheless, the broad parameters of fairness in administration, bona fides in action, and the fundamental rules of reasonable management of public business, if breached, will become justiciable.
If a citizen is no more than a wayfarer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the court will not be ajar for him. But, if he belongs to an organisation which has special interest in the subject matter, if he has some concern deeper than that of a busybody, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered. I, therefore, take the view that the present petition would clearly have been permissible under Article 226.
29. Thus, the Writ Petitions are maintainable. Furthermore, the cause in the writ petitions has not become infructuous, since this Court in the order dated 29.11.2013 held as under:
In the meantime, if any agreement is entered with the successful bidder, the respondents shall inform the successful bidder that the entire issue is subject to the outcome of the writ petition, pending before this Court.
POINT NO.2:
30. To appreciate the rival contentions, it is necessary to analyze the provisions of The Major Port Trusts Act, 1963. In accordance with provisions contained in Section 29, the entire assets of the Visakhapatnam Port, which were earlier vested in the Central Government, were transferred to VPT. As a consequent to such transfer, the Act regulates the duties and responsibilities of the trust and the board of the trust. Section 35 of the Act prescribes powers of Board to execute works and to provide appliances. It is an inclusive provision. From clauses (a) to (l), various aspects were incorporated, which can be executed by the Board. Since it is an inclusive provision, it has to be understood to mean that the execution of works are not restricted to the areas mentioned in clauses (a) to (l) of sub-section 2 of Section 35 of the Act, but applies to all aspects concerning the Visakhapatnam Port. Section 42 provides performance of services by Board or other person. The Board has power to undertake the services mentioned therein. It is an exhaustive provision encompassing all aspects of handling a Port.
31. With particular reference to the contentions urged in this writ petition, relevant provisions of Section 42 read as under:
Section 42. Performance of services by Board or other person.
(1) A board shall have power to undertake the following services:
.
(b) receiving, removing, shifting, transporting, storing or delivering goods brought within the Boards premises;
.
(f) developing and providing, subject to the previous approval of the Central Government, infrastructure facilities for ports.
.
(3) Notwithstanding anything contained in this section, the Board may, with the previous sanction of the Central Government, authorize any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon.
(3A) Without prejudice to the provisions of sub-
section (3), a Board may, with the previous approval of the Central Government, enter into any agreement or other arrangement, (whether by way of partnership, joint venture or in any other manner) with, any body corporate or any other person to perform any of the services and functions assigned to the Board under this Act on such terms and conditions as may be agreed upon.
32. According to Section 42(1)(b), Board has power to undertake the services of receiving, removing, shifting, transporting, storing or delivering goods brought within the Boards premises. In accordance with Section 42(1)(f), subject to the previous approval of the Central Government, Board can undertake the services of developing and providing infrastructure facilities for ports. According to section 42 (3A), the Board is also entitled to enter into any agreement or other arrangement whether by way of partnership, joint venture or in any other manner, with any body corporate or any other person to perform any of the services and functions assigned to the board with the previous approval of the Central Government. Section 46 also recognizes role of private person in various aspects of the Port. Thus, sweeping power is vested in the Board to enter into any agreement or other arrangement with any other person or body incorporate for entrustment of functions as provided in Section 35 and services as provided in Section 42 (1). Only requirement is that no such decision can be taken by the Board without previous approval/ sanction of the Central government. Only after orders of Central Government process was initiated.
33. The invitation to tender clearly states that authority has decided to undertake upgradation of existing facility and creating of new facility for iron ore handling in terms of the provisions referred to above. Thus, it cannot be said that the purpose of calling for invitation of tender is outside the power and competence of the Board vested by the Act. On proper construction of the provisions referred to above, I am of the opinion that the Board is competent to enter into contract with the private person or a corporate entity to entrust the work of iron ore handling and related aspects as mentioned in the invitation under the PPP mode. Thus, the contention that impugned invitation for tender is without power or jurisdiction and is in excess of jurisdiction vested in the Board is not valid and hence rejected.
POINT NO.3:
34. Learned counsel Sri Srinivas Bodduluri with great vigour and eloquence asserted that handing over the entire iron ore handling complex to private company amounts to monopolizing the iron ore handling facility by one person and is contrary to the anti- monopoly policy of the Government of India, as also the terms of invitation for tenders and RFQ documents. Learned counsel submitted that when there is a clear prohibition to entrust handling of same cargo in two berths to the same contractor, the entrustment of iron ore complex to a single contractor is not valid. It is not in public interest to monopolize the iron ore handling and it being an incorporated policy notified by the Government on 2.8.2010, the entrustment of contract is illegal.
35. Case of the respondents is the VPT was facing lot of criticism on account of pollution that was created by the existing method of handling iron ore. The consultant of the VPT has estimated the cost of modernization at approximately Rs.400 crores. At this stage, there has been drastic fall in iron ore handling from the financial year 2011-2012 onwards. Since there has been a ban on iron ore in various places and compelled by the necessity to modernize the iron ore handling to over come the serious objection of pollution, as also to ensure better handling of iron ore facility, the Government of India felt it more appropriate to go for the public private participation mode than the board itself investing for modernization and continue to handle iron ore facility. While doing so, initially the board called for a separate tender for mechanisation at west quay-1 berth at the inner habour. Project did not receive the response. Therefore, the proposal was dropped and decision was taken to club the proposal of mechanization at the West Quay-1 berth with the upgradation of existing facility project at outer harbour. Thus, two projects were restructured as a single project to enhance its viability. It is also felt that combining two projects together as a single project could address the technical and environmental requirements and also enable the operator to have a judicious distribution of vessels calling at the Port basing on the sizes. Thus, to achieve optimum utilization of the scarce waterfront it was felt that inner harbour facility should be planned to play a complementary role to the one at outer harbour. The project received good response and the competitive price. The project was awarded to the third respondent.
36. It is asserted by the VPT that anti-monopoly policy is not attracted since according to the said policy, if there is a existing private operator handling specific cargo in the Port and intends to participate for another terminal for the same cargo in the same port, that should not be permitted. In the instant case, it is not the case where two different terminals are existing and separately proposed for entrusting to a private person. Furthermore, technically also it was felt that it was not possible to separate ore berth 1 and ore berth 2 in the outer harbour. It is asserted by the 2nd respondent that ore berth 1 and ore berth 2 form a single finger jetty where the loading of iron ore is presently handled by a single ship-loader and there is no possibility of splitting these berths into two or to process the same as two different loading terminals, loading and unloading operations cannot be held in both berths simultaneously as the loader is only one for the same berths. It cannot be said that reasoning assigned by the port trust in making it as a single project and awarding it to a single contractor is amounting to violating anti-monopoly policy.
37. Anti-monopoly policy is primarily intended to ensure that there should be competition among the operators at the same place for better service and that by entrusting to a single person, a kind of monopoly would be created and the same is not in public interest. It is not the case that the trust and the Government were unaware of the policy and decision is taken deliberately to confer favour on third respondent at the cost of larger public interest. The reasons assigned by the 2nd respondent in the counter- affidavit cannot be said as not genuine and germane to the decision making process. The Board has not acted on its own. It has obtained the prior approval of the Central Government before initiating the process and before awarding the contract. Thus the decision making process cannot be said to be vitiated by arbitrary and mala fide exercise of power warranting interference by this Court. Provisions of Section 29, 35 and 42 of the Act would make it clear that board is competent to entrust such work to a private person. When statute vests power in the board to entrust functions/services to private company, it cannot be said that decision of the Board to entrust the work to private company on PPP mode would vitiate, on the ground that the same has violated anti-monopoly policy.
38. The VPT in their counter-affidavit have given detailed reasons treating the entire iron ore handling complex as one unit and entrusting to one contractor. The VPT handles various types of goods and services. One of them is iron ore. The iron ore may be a major contributor to the revenue of the VPT, but it is not the only item handled by the trust. Thus, only a portion of the activity of the VPT is entrusted to a private company on PPP mode. Thus, it does not amount to creating monopoly as contended by the learned counsel. The land continues to be in the possession of VPT. It leases the land on payment of lease amount. Furthermore, the reasoning assigned by the respondent-VPT cannot be said as extraneous to the decision making process. Decision was taken after considering various aspects concerning the iron ore handling.
39. It is the policy choice of the Central Government to adopt PPP mode with reference to OHC of VPT. The Central Government is vested power to take such decisions by the Act. Section 111 of the Act vests power in the Central Government to issue directions to the Board. Such directions can be on the questions of policy as the Central Government may give in writing from time to time. According to Sub-section (2) of Section 111 of the Act, what is question of policy is left for the Central Government to decide. Thus, when the Central Government directed the Board to adopt PPP mode and to resort to DBFOT basis with reference to handling of iron ore, it cannot be said that Central Government was not aware of the anti-monopoly policy. When the power is vested and decisions are taken in accordance with statutory mandate what policy choices can be exercised by the executive is not within the realm of judicial review.
40. Chapter-VA of the Act is inserted by way of Act 15 of 1997. This chapter deals with constitution of Tariff Authority for Major Ports. Tariff Authority is vested with wide powers to prescribe scales of rates, on which services specified can be performed by a Board or any other person authorized under Section 42. Thus, Act envisages independent tariff authority to fix tariff rates even to a person authorized under Section 42 to operate port services. Thus the apprehension expressed by the petitioner that 3rd respondent would monopolise iron ore handling is not well founded. Enough safe guards are provided in the Act. Contract of third respondent is regulated by the provision of the Act and the terms of agreement. VPT retains over all control.
41. In economic matters wider discretion is left to the Executive and in all economic matters, the decisions of the Executive are based on trial and error and Courts should exercise greater restraint.
42. In Bajaj Hindustan Limited vs. Sri Shadi Lal Enterprises Limited and another , Supreme Court held as under:
39. We should not be understood to have meant that the judiciary should never interfere with administrative decisions. However, such interference should be only within narrow limits e.g. when there is clear violation of the statute or a constitutional provision, or there is arbitrariness in the Wednesbury sense. It is the administrators and legislators who are entitled to frame policies and take such administrative decisions as they think necessary in the public interest. The Court should not ordinarily interfere with policy decisions, unless clearly illegal.
40. Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters.
45. In our opinion there should be judicial restraint in fiscal and economic regulatory measures. The State should not be hampered by the Court in such measures unless they are clearly illegal or unconstitutional. All administrative decisions in the economic and social spheres are essentially ad hoc and experimental. Since economic matters are extremely complicated this inevitably entails special treatment for distinct social phenomena. The State must therefore be left with wide latitude in devising ways and means of imposing fiscal regulatory measures, and the Court should not, unless compelled by the statute or by the Constitution, encroach into this field.
46. In our opinion, it will make no difference whether the policy has been framed by the legislature or the executive and in either case there should be judicial restraint. The Court can invalidate an executive policy only when it is clearly violative of some provisions of the statute or Constitution or is shockingly arbitrary but not otherwise.
43. Thus it is necessary to allow the experiment to operate. It is always permissible to renew the experiment. Petitioners can espouse the cause of public within the Board and outside if third respondent attempts to adopt monopolistic policies.
44. The primary apprehension of the petitioners is that the entrustment of OHC to private company would adversely affect the conditions of service of workers who have been working in the iron ore handling complex (OHC). It is the categorical assertion of the VPT as well as Government of India, that the conditions of service of workers working in the iron ore handling unit would not be altered to their disadvantage. It is stated that since they cannot continue to work in this iron ore handling complex as entire complex is handed over to the contractor, they would be relocated at other places wherever their services are required duly taking note of to their qualifications, suitability and the eligibility, but without affecting their conditions of service. This would mean that as per normal conditions of service, their entitlement for promotion, seniority, allowances etc., would not be affected. Thus, interests of the workers represented by the petitioners are sufficiently safeguarded in view of the categorical undertaking given by the Government of India and VPT.
45. There is no merit in the submissions made by the counsels for the petitioners, both writ petitions are dismissed. No costs.
Miscellaneous petitions if any pending in these writ petitions shall stand closed.
__________________________ JUSTICE P.NAVEEN RAO Date: 29.04.2014