Gujarat High Court
Centre For Public Interest Litigation ... vs Union Of India Thru Secretary on 23 January, 2020
Equivalent citations: AIRONLINE 2020 GUJ 367
Author: Harsha Devani
Bench: Harsha Devani, Sangeeta K. Vishen
C/WPPIL/49/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/WRIT PETITION (PIL) NO. 49 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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CENTRE FOR PUBLIC INTEREST LITIGATION THRU GENERAL
SECRETARY KAMINI JAISWAL
Versus
UNION OF INDIA THRU SECRETARY
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Appearance:
MR KR KOSHTI(1092) for the Applicant(s) No. 1
MR KSHITIJ AMIN for MR DEVANG VYAS(2794) for the Opponent(s) No. 1
MR MIHIR JOSHI, SENIOR ADVOCATE with MR DHAVAL D VYAS(3225) for
the Opponent(s) No. 2
MR SN SOPARKAR, SENIOR ADVOCATE with MR ARCHIT P JANI(7304)
for the Opponent(s) No. 3
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CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
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Date : 23/01/2020
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition, which has been filed by way of a public interest litigation, the petitioner seeks the following reliefs:-
"12. In view of the facts and circumstances of the case, the petitioner prays as follows:
A) Issue appropriate writ directing the Union of India and Deendayal Port Trust to cancel the tender dated 28.3.2014 awarded to respondent No.3 in April 2015 for allotment of land of 50 acres for the purpose of liquid storage tanks Or, in the alternative to direct respondent No.3 to pay the Port authorities Rs.207 crores along with interest;
B) Issue appropriate writ directing the respondent No.2 to cancel the old way-leave permission of laying pipelines from jetties to Terminal granted in the name of FSWAI and direct the respondent No. 3 to obtain fresh pipeline permission as per specific provisions in the tender and also cancel all the statutory permissions issued by various statutory authorities in the name of FSWAI, during the possession of lease hold rights of the land under the lease deed, which expired in 2011 and direct the respondent No.3 to obtain all approvals, permissions and licenses from different Statutory and Regulating Authorities like clearance from Gujarat Pollution Control Board, Coastal Regulatory Zone (CRZ), Environment and Forest Department, Chief Controller of Explosives, Nagpur and other statutory clearance from various department as per explicit tender provision under terms and conditions No.4.27 of tender;
(C) Issue appropriate writ setting aside allotment of additional land to respondent No.3 without any lease deed and recover the annual lease rent at the same rate that is being charged for 50 acres from the retrospective date of actual occupation/encroachment.
(D) Pass any other order as this Hon'ble Court may
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deem fit and proper."
2. The petitioner is Centre for Public Interest Litigation, a registered society formed for the purpose of taking up causes of grave public interest and conducting public interest litigation in an organised manner. The subject matter of the present petition is land admeasuring 50 acres forming part of 1010 acres situated in Deendayal Port, Gujarat, previously known as Kandla Port Trust (hereinafter referred to as "the KPT"), which came to be allotted on lease to one United Salt Works and Industries Limited in 1974 for the purpose of salt manufacturing. On 16.11.1985 United Salt Works and Industries Limited sold 1010 acres to the third respondent Friends Salt Works and Allied Industries (hereinafter referred to as "the third respondent/FSWAI") for a consideration of Rs.22 lakhs. It is the case of the petitioner that there was no provision for selling lease rights for consideration and that in between 1987 to 1995, in connivance with the officials of the KPT, FSWAI group managed to get converted about 75 acres out of the total of 1010 acres of salt land into commercial land, that is, 50 acres for liquid cargo terminal and 25 acres for dry cargo terminal at a trifling rate of Rs.11 per square metre. The present petition relates to the 50 acres of land for liquid cargo terminal.
2.1 It is further the case of the petitioner that the initial leases were not renewable, despite which they were renewed on two occasions and that the original lease holders had transferred the leases without the consent of the Central Government and that the lease on such land was renewed in violation of the land and Central Government's own guidelines. It is alleged that the Union of India and the KPT allowed undue Page 3 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT pecuniary advantages to a few business houses that were in illegal occupation of thousands of acres of precious land resources at Deendayal Port, thus denting revenue of the exchequer by hundreds of crores.
2.2 It is the case of the petitioner that having regard to the illegalities in the grant and renewal of leases, the petitioner herein filed a writ petition being Writ Petition (Civil) No.11550 of 2009 before the High Court of Delhi and sought an investigation into the land scam where nearly 16,112 acres of land worth lakhs of crores of rupees near the Deendayal Sea Port in Gujarat had been leased out to salt manufacturing firms in 1960s and 1970s on nomination basis at negligible rates. The High Court of Delhi passed various interim orders directing CBI investigation, ordering eviction of trespassers (erstwhile lessees) and auctioning of the port land after eviction of trespassers. Ultimately in 2015, the same lands were allotted through e-auction/e-tenders under the orders passed by the High Court of Delhi.
2.3 Various orders were passed by the Delhi High Court in those proceedings in the aforesaid PIL, pursuant to which, eviction proceedings came to be initiated against FSWAI under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. The Estate Officer appointed under the said Act directed eviction of FSWAI vide order dated 31.3.2012 whereafter the KPT had written to FSWAI calling upon it to remove the inventory, machinery and equipments from the land at its own costs. It is the case of the petitioner that FSWAI, instead of removing its structures, challenged the eviction order in various forums. Ultimately, the third respondent - FSWAI Page 4 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT envisaging its confirmed defeat in the courts, gave an unconditional undertaking on 13.11.2013, whereby it declared that it will unconditionally relinquish and withdraw all claims of whatsoever nature with reference to 1010 acres of land of which the present 50 acres of land forms a part. On 28.3.2014, the Port Trust implemented Land Policy Guidelines, 2014 issued by the Government for all major ports and invited e- tenders cum auction for allotment of land of 50 acres on which FSWAI had constructed the liquid storage tank terminal division. It is further averred in the petition that the liquid storage tank terminal was built-up for storage of hazardous chemical liquid cargo falling under classified categories of type A, B and C, non-classified and edible oils for import and export in and out of India. The liquid storage terminal is connected with oil jetties of Port Trust through more than 3 kilometres long pipeline for transferring the liquid cargo from ships/vessels to tanks of the terminal and vice versa. From the storage terminal, liquid cargo is loaded into Tanks Lorries through loading gantries and sent to inland destinations in the hinterland of port by road. The dock pipelines are integral part of the storage terminal and way-leave/right of way permissions for laying such pipelines are granted in the name of storage terminal only, that is, FSWAI. The connecting dock pipelines are the main nerves or lifeline of the liquid storage terminal, without which the whole terminal, including all structures constructed on it, becomes useless and redundant.
2.4 It is further the case of the petitioner that the terminal was situated in eco-sensitive area near coastal town of Kandla and since its stores hazardous chemicals, it has been constructed with permissions from environment clearance Page 5 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT authorities. The storage terminal stores hazardous liquid cargo therefore, it is essentially required to be constructed as per OISD Standards/Codes issued by Oil Industry Safety Directorate, a government regulatory and technical organisation established by the Ministry of Petroleum, Government of India. The above standards are enforced by Petroleum and Explosive Safety Organisation, Government of India. It is mandatory on the part of the terminals storing hazardous chemicals to obtain approval of layout plans before starting construction and again obtain approval for commission after completion of construction.
2.5 It is alleged by the petitioner that the tender of 50 acres liquid storage terminal for e-tender-cum-auction was prepared in an arbitrary manner with the sole intention to favour FSWAI and with a view to create roadblocks for participants other than FSWAI to kill the competition. The alleged arbitrary provisions and roadblocks for bidders other than FSWAI and special favours to FSWAI are enumerated as under:-
(a) Non-inclusion of Dock Pipelines connecting Storage Terminal and Oil jetties of Port.
(b) Fresh statutory licenses for all bidders under Tender Condition No.4.27, but non-enforcement of the same condition on Friends.
(c) Inclusion of arbitrary clause for bidders other than Friends to compensate the Friends to the tune of Rs.207 crores.Page 6 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020
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(d) No clarification about the applicability of relevant
clause of Land Policy Guidelines - 2014 under Tender Condition No.4.7 III for invitation of e-tender cum auction of the subject land.
(e) Illegally allotment of extra 7.50 acres of land over and above 50 acres of land for which the tenders were invited.
2.6 It is alleged that all the conditions in the tender were put in a manner so as to give undue advantage to the third respondent - FSWAI and deny a level playing field to the other participants, which created such a negative situation that almost all other participants left the participation before final bidding.
2.7 It is contended that in terms of the Petroleum Rules, 2002, FSWAI had ceased to have a right to the site for storing petroleum on account of expiry of lease deed and resumption of land by the second respondent. It was the duty of FSWAI to disclose this fact to the Petroleum and Explosive Safety Organisation while applying for renewal of licence in 2013, but such fact was not disclosed and renewal of licence was obtained fraudulently.
2.8 Various illegalities stated to have been committed by FSWAI for the purpose of obtaining consent and permissions have been set out. It is alleged that the port authorities instead of raising objections to the fraudulently obtained permissions and licences simply accepted and filed the same, which makes it evident that there was clear collusion between Page 7 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT the port authorities and FSWAI. According to the petitioner, In other words, the match was fixed in 2013 itself whereby the land along with terminal was again going to be allotted to FSWAI. It has been contended that the tender contained a clause whereby the bidders had to compensate FSWAI of an amount of Rs.207 crores since the said amount was the estimated value of the existing assets standing on the proposed land. Furthermore, FSWAI was a bidder was not liable to pay the above mentioned amount since it had constructed the unit. It is further contended that the Port authorities conducted the process of evaluation of the structures built by FSWAI on the 50 acres of land by K.M. Thacker and Associates who evaluated the structures at Rs.207 crores. That after receipt of the final report, the port authorities referred the said report to the Institute of Science and Technology for Advanced Studies and Research, Vallabh Vidyanagar (hereinafter referred to as "ISTAR"), for reviewing the same. That ISTAR reviewed the said valuation report and submitted its review report on 23.1.2015, which indicates that the valuation was done in collusion with FSWAI to disadvantage other bidders by Rs.207 crores. It is contended that there was no mandatory clause in the lease agreement whereby the port authorities had the contractual obligation to compensate FSWAI. Further there was a statutory obligation on FSWAI to remove the structures on the expiry of the lease. It is contended that the introduction of the clause for reimbursement of Rs.207 crores to FSWAI in the tender is illegal and arbitrary since it was the responsibility of the FSWAI to remove the structures before the expiry of the lease and that the additional burden of Rs.207 crores on other bidders put them at a significant disadvantage and ensured that the said tender would be awarded to FSWAI.
Page 8 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT 2.9 It is further alleged that the second respondent had invited in the tender for 50 acres of land but while inspection by the participants during the tendering system, it was found that actually the area of land was 57.38 acres in respect of which M/s. Adani Ports and Economic Zone Limited had raised a query. It is alleged that the third respondent - FSWAI was in possession of 7.38 acres of additional land illegally since the beginning, which was not allotted to it and that it had constructed the terminal in such a way as if it was part of the terminal legally without which entry to some of enclosures was restricted. It is alleged that after finalisation of tender, the second respondent allotted 50 acres of land and entered into a lease deed, but subsequently, allotted additional land of 7.38 acres to the third respondent - FSWAI in the name of greenery/green belt without entering into lease deed, which is illegal and against the tender provisions. It is in the aforesaid backdrop, that the petitioner has filed the present petition seeking the reliefs noted hereinabove.
3. Before adverting to the rival submissions, at the outset it may be noted that on 20.12.2019, this court passed the following order:-
"Mr. K. R. Koshti, learned advocate for the petitioner prays for time on medical grounds. At his request, the matter is adjourned to 24th December, 2019. It is clarified that on that day, no sick note or leave note shall be entertained and no adjournment shall be granted. To be listed immediately after the fresh matters."Page 9 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020
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4. The matter was thereafter listed on 16.1.2020, on which date, the learned advocate for the petitioner prayed for time as he was occupied in filing a matter in the registry and wanted to move it urgently. At his request, the matter was listed on the next day, that is, on 17.1.2020 at the top of the board. When the matter was called out for hearing, Mr. Koshti submitted that he had to attend an urgent matter before a learned Single Judge and requested that the matter be taken up after some time. Upon asking him as to at which serial number such matter was listed before the learned Single Judge, he had stated that the matter was listed at serial No.22. The court, thereafter, turned down the request as the present case was listed at serial No.1 before this Division Bench and propriety demanded that the learned advocate for the petitioner, attend this matter first. The learned advocate started making his submissions with an eye on the display board, and after a short while, submitted that his matter was likely to be called out before the learned Single Judge and sought permission to leave the court. Since the learned advocate was actually on his legs and making submissions before the court and such request was not reasonable, this court turned down the request, nonetheless, to the shock and surprise of the court, the learned counsel for the parties and the other advocates present in the court room, the learned advocate left the court room in the midst of arguments to attend the matter before the learned Single Judge saying that the court may hear the learned counsel for the respondents in the meanwhile. Considering the shocking and reprehensible conduct of the learned advocate, the court could have dismissed the matter for non-prosecution; however, passing such order would only have served the purpose of the learned Page 10 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT advocate, who for reasons best known to him, on one pretext or the other, was not ready and willing to proceed with the hearing of the matter. The court, therefore, proceeded to hear the learned counsel for the second respondent and after conclusion of his submissions, heard the learned advocate for the petitioner, inasmuch as while the conduct of the learned advocate for the petitioner was deplorable, the petitioner cannot to be blamed for such conduct.
5. Mr. K. R. Koshti, learned advocate for the petitioner, invited the attention of the court to the history of the case as referred to in the memorandum of petition; the litigation that had been carried out at the instance of the petitioner in connection with the illegal extension of lease by the Kandla Port Trust in favour of different parties; and how FSWAI came to be evicted from the premises occupied by it pursuant to the proceedings initiated under the Public Premises Act under the orders of the Delhi High Court. It was submitted that despite the aforesaid position, on one ground or the other, Kandla Port Trust seeks to grant the subject land to the third respondent - FSWAI and for this, it has incorporated conditions in the contract which lean in favour of the third respondent, and which has ultimately resulted in grant of the lease in favour of the third respondent. The learned advocate also drew the attention of the court to the history of the case to demonstrate as to how and why the subject land came to be put up for auction.
5.1 The attention of the court was invited to clause 16.3(c) of the Policy Guidelines for Land Management by Major Ports, 2014 (hereinafter referred to as the "Policy Guidelines, 2014"), Page 11 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT which provides that if any structure has been constructed by the earlier lessee on the leased land, it would be valued by a third party valuer to be agreed upon by the Port Trust and the earlier lessee and the successful bidder has to remit the value of the structure which would be passed on to the previous lessee. It was submitted that the said clause is applicable to renewal of leases only. It was submitted that if action had been taken well in advance before expiry of lease and before taking over possession of the land as per the guidelines contained in clause 16.3 (j) which provides that the process of renewal of existing leases should be initiated by the respective Ports well in advance, before the term of lease expires; the automatic renewal of existing leases should be preferably done within three months of receipt of such application for renewal; this would have been made applicable. However, in this case, the original lease period of thirty years expired in 2004 which was illegally extended up till 2011 without any agreement, and subsequently the notice for eviction was issued on 26.8.2011, after which, the matter was referred to the Estate Officer and finally possession of the land was taken over after a long legal battle. It was submitted that since the maximum allowable lease period had already expired, the second respondent had no power for further renewal and hence, clause 16.3(c) which provides for renewal of existing leases, cannot be made applicable.
5.2 Reference was made to clause 16.3(h) of the Policy Guidelines, 2014, to submit that in terms of the said clause, the third respondent (lessee) was required to remove its structure and hand over the vacant possession of land to the second respondent. That on expiry of the lease period, the Page 12 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT second respondent should have finalised the contract with the third respondent in accordance with the explicit and clear provisions of the lease agreement. Thus, there was no scope for the respondents to invite the tenders under clause 16.3(c) in the present case. It was contended that while inviting the fresh tenders for allotment of the subject land, the second respondent should have followed the Policy Guidelines properly and invited tenders under clause 16.2 after finalizing the contract with the earlier lessee as per the provisions in the agreement.
5.3 It was submitted that even according to the Land Policy of Major Ports, 2010, the structures were required to be removed by third respondent at its own cost and that there was no scope for compensating the third respondent to the tune of Rs.207 crores against the existing structures. It was submitted that this condition put in the tender regarding payment of Rs.207 crores by the highest bidder to the KPT for reimbursement to the third respondent was not in consonance with the Land Policy and had been incorporated merely with a view to favour the third respondent.
5.4 Next it was contended that even the valuation of the assets on the subject land at Rs.207 crores was highly exaggerated. It was pointed out that the report made by the valuer namely, K.M. Thacker and Associates, whereby the assets on the land in question came to be valued at Rs.207 crores was reviewed by ISTAR, which found that the valuation had not been carried out properly.
5.5 Reference was made to what is stated to be part of the Page 13 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT balance sheet of the third respondent - FSWAI, to submit that the assets of the liquid storage tank terminal division of the third respondent were valued at Rs.48,34,04,191.11 by the said respondent, whereas the valuer engaged by Kandla Port Trust has valued it at Rs.207 crores which far exceeds its actual value. It was alleged that such condition has been incorporated in the tender after exaggerating the value of the land only with a view to put the third respondent - FSWAI in a favourable position as against the other bidders.
5.6 Reference was made to queries No.7, 50 and 51 recorded in the minutes of the pre-bid meeting held on 13.8.2014, wherein a query has been raised at serial No.7 regarding earnest money deposit of Rs.30.53 crores; a query has been raised at item No.50 as to whether it would be necessary for FSWAI to make payment of the existing assets valued at Rs.207 crores as mentioned in the tender and in the event of the party not emerging successful, the amount of Rs.207 crores representing the value of existing assets created by them as valued by approved valuer, would be received by FSWAI in what period. The attention of the court was invited to the addendum to the pre-bid clarifications and more particularly to serial No.50, wherein, in response to the query as to whether it would be necessary for FSWAI to make payment of the existing assets valued at Rs.207 crores as mentioned in the tender, it is replied that it would not be necessary for FSWAI to deposit assets value.
5.7 It was submitted that the reply given by the second respondent clearly favours the third respondent. It was submitted that the previous history of the case also suggests Page 14 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT that the second respondent and its officials dishonestly or ignorantly are taking decisions in favour of the respondent No.3 - FSWAI. It was submitted that on account of condition for other bidders to pay Rs.207 crores to the previous lessee, it was ensured that the third respondent gets the tender.
5.8 Reference was made to the undertaking filed by the third respondent - FSWAI, wherein it has conceded the position that KPT has taken possession of the land parcels in question and they give up all disputes regarding taking up of possession by KPT and that they undertake not to pursue any case or litigation claiming to be in possession of the land in question or right of possession of land or renewal of lease of land in question.
5.9 The attention of the court was invited to the order dated 31.3.2012, made under sub-section (1) of section 5 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, to submit that it has been observed therein that the respondent continued to occupy the public premises without any authority and failed and neglected to hand over the vacant and peaceful possession of the public premises and that in terms of the said order, the third respondent had been directed to vacate the said premises within fifteen days of the publication of the said order. It was contended that the third respondent was required to hand over the vacant possession of the subject land, which means that they had to vacate the premises by removing all the assets and superstructures put up thereon.
5.10 Reference was made to paragraph 4.22 of the Page 15 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT
memorandum of petition, wherein it has been stated thus:
"4.22 Respondent No.2 has given permissions for laying and operating the pipelines from its 5 Oil Jetties, where the Ships/Vessels berth along to deliver imported liquid cargo and receive export cargo for foreign destinations. Copies of these permissions are annexed hereto and marked as Annexure M. These pipelines are connected with Tanks of FSWAI, in which the cargo is transferred from Ships/Vessels through these pipelines for storage. These pipelines, referred as Dock Pipelines, are the integral part of FSWAI Terminal. Without these pipelines the Terminal will be useless and redundant. For operating the terminal, these pipelines are essentially required. Any investor, who plans to invest hundreds of crores of rupees to acquire the Terminal, shall be interest only if it is possible for him to operate the Terminal. Without Dock Pipelines, it would be almost not possible for the investor to operate the Terminal, hence he would lose the interest to acquire such a useless Asset. Port Authorities i.e. respondent No.2 did not cancel the pipeline permissions given to FSWAI along with taking over possession of land. Pipelines remained in the possession of the FSWAI. Port authorities did not include these pipelines in the tender with the intention to create an invincible roadblock that will automatically kill the competition against FSWAI.
Almost all the participating bidders raised queries in this regard in pre-bid meeting as well as prior to pre-bid meeting through their communications to the Port.
Page 16 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT AEGIS, a well-known industrialist, who already owns similar terminals in various part of India, raised the query under para 2 of its e-mail dated 21.04.2014 that "it is important to note that there is no mention of Jetty Pipelines in the facilities that are being auctioned. Thus a clarity is required regarding the number of jetty pipelines that are part of the auctioned facility and their respective connectivity to the berths."
Another major bidder and investor, M/s. IMC Limited, a highly reputed industrialist and owner of similar terminals, raised the query under para 3(b) that - Do the pipelines from oil jetties to the tank farm are also part of assets under bidding? Will the jetty pipelines also be handed over to the successful bidder as part of assets? M/s. IMC Limited further raised a query under para 17(2) asking the Port authorities to clarify whether the value of assets under Annexure-A include the Jetty pipelines also.
M/s. Adani Port & Special Economic Zone Ltd., a multinational industrialist and owner of the biggest private port also asked under para 12 about providing clarity about usage of Dock Lines.
The Port authorities clarified through prototype reply that successful bidder has to obtain fresh way-leave permission as per the Land Policy Guidelines- 2014.
This reply provides enough evidence that the pipelines, which were most important and an integral part of Terminal, without which it was not possible to Page 17 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT operate the terminal, were not included into the Tender. Copies of queries raised through various letters by bidders and reply of respondent No.2 to their queries are annexed hereto and marked as Annexure-N. Even if an investor applies for a Fresh Way-Leave permission for laying new Dock Pipelines, the permission by ports itself takes about an year to get sanctions of competent authority for such permission, which is evident from the pipeline permissions given to new 17 plot allottees. The pipeline to these allottees were given after more than a year after allotment of plots for construction liquid storage terminals. Moreover, the pipeline route passes through CRZ area and carry hazardous chemicals, therefore, getting permissions from other regulatory authorities, viz. CRZ/Environment clearances from State and Central Government authorities and Explosive licences from Petroleum and Explosive Safety Organization may take another year and thereafter laying and construction of pipelines and licenses for commissioning from concerned regulatory authorities may further take another year because the corridor reserved for these pipelines has existing petroleum pipelines adjacently, which always remain charged with Petroleum products. Therefore, it is not possible to fabricate the pipelines unless the hot work for fabrication is permitted by DPT fire brigade on day to day basis.
This situation, created intentionally by the Port authorities, put commissioning of the whole project into Page 18 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT uncertainty. An investor, who invests hundreds of crores in this project, will never put investments in a project which lack certainty.
In comparison to other participants, FSWAI had readily available pipelines in its possession, which were not cancelled and hence FSWAI was capable of commissioning the Terminal on day one of getting its possession. Thus, a level playing field was intentionally denied to other participants, which created such a negative situation that almost all the participants left the participation during final bidding."
5.11 It was submitted that the condition of payment of Rs.207 crores by the bidders other than the third respondent - FSWAI is illegal and the second respondent - KPT [now DPT] is not justified in collecting Rs.207 crores on behalf of the third respondent.
5.12 As regards the delay caused in filing the petition, reference was made to the contents of paragraphs 4.58 and 4.59 of the petition, to submit that the delay has occasioned as the petitioner had first approached the Delhi High Court by filing a writ petition being WP (C)No.5235 of 2018 with the same set of prayers as in the present petition and that the Delhi High Court, by an order dated 01.10.2018, had held that the petition was not maintainable before it on the ground of territorial jurisdiction and had granted liberty to the petitioner to approach the appropriate forum in accordance with law. That against the judgment and order passed by the Delhi High Court, the petitioner had approached the Supreme Court by Page 19 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT way of a special leave petition being Special Leave to Appeal (C) No.32621 of 2018, which came to be dismissed by an order dated 11.1.2019, confirming the view of the Delhi High court which required the petitioner to move the appropriate jurisdiction, that is, the High court of Gujarat raising its grievance in the subject matter before the said High Court. It was submitted that it is in these circumstances that the delay has occasioned in filing the present petition.
5.13 It was also pointed that in the first instance the petitioner had approached the Delhi High court in Writ Petition (C) No.11550 of 2009 by way of C.M. No.15376/2018, which came to be disposed of by an order dated 20.4.2018, whereby the petitioner sought permission to withdraw the application with liberty to file substantive petition in accordance with law. Reference was further made to the averments made in paragraph 3 of the affidavit-in-rejoinder filed on behalf of the petitioner, wherein it has been stated thus:-
"3. That it is denied that the instant writ petition suffers from the vice of delay and laches since it is filed after a period of more than five years. It is submitted by the petitioner herein that the letter of allotment of the disputed land in favour of the respondent No.3, subsequent to the sham tender, is dated 17.04.2015 and the petitioner herein got hold of the tender and related documents in dispute only in the month of February 2018. Immediately thereafter, after carefully perusing the same, on 11.4.2018, the petitioner herein filed C.M. No.15376 of 2018 in Writ Petition No.11550 of 2009, seeking similar relief prayed in the instant writ petition Page 20 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT i.e. cancellation of the lease of 50 acres of awarded through a sham tender to respondent No.3. However, the said application was withdrawn by the petitioner herein with the liberty to file substantive writ petition as the application sought relief in regard to an independent cause of action than that of Writ Petition No.11550 of 2009. Thereafter, when the petitioner herein filed a writ petition WP (C) No.5235/2018, with the same set of prayers as in the instant petition, before the Hon'ble High Court of Delhi, the Hon'ble High Court vide its order dated 01.10.2018 held the said petition as not maintainable because of lack of territorial jurisdiction. Thereafter, when the petitioner herein assailed the order dated 01.10.2018 passed by the Hon'ble High Court of Delhi before the Hon'ble Supreme Court by filing a Special Leave Petition [SLP(C) No.32621/2018], the Hon'ble Supreme Court, vide its order dated 11.01.2019, dismissed the same and granted liberty to the petitioner herein to move this Hon'ble Court. Thus, the aforesaid sequence of events sufficiently and cogently explains the alleged delay in filing the instant writ petition before this Hon'ble Court."
5.14 It was submitted that the delay caused in filing the petition stands duly explained.
5.15 It was, accordingly, urged that the condition imposed in the tender for which other bidders have to pay Rs.207 crores for the storage tank, which itself restrained other bidders from participating is illegal and arbitrary and made with a view to favour the third respondent - FSWAI and hence, the tender is Page 21 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT required to be cancelled. It was urged that the prayers in the petition deserves to be allowed.
6. Mr. Mihir Joshi, Senior Advocate, learned counsel for the second respondent Deendayal Port Trust (earlier Kandla Port Trust) invited the attention of the court to the notice dated 27.6.2012 issued by Kandla Port Trust to FSWAI, wherein it has been stated thus:-
"It is further informed that the Kandla Port Trust has taken over possession of land, however considering the hazardous nature of cargo lying in the tank and perishable cargo lying in the warehouses, it would be the responsibility of M/s. Friends Salt Works & Allied Industries to deploy its personnel for maintenance of existing cargo. It may be noted that permission would be granted to such personnel for the purpose of maintenance and safety measures only. It would be the sole responsibility of M/s. Friends Salts Works & Allied Industries for maintenance of Liquid Cargo particularly considering the consequence thereof."
6.1 It was submitted that the cargo was under customs detention and hence, could not be removed which necessitated the third respondent - FSWAI to take care of the cargo.
6.2 The attention of the court was invited to the averments made in paragraph 25 of the affidavit-in-reply filed on behalf of the second respondent wherein it has been stated thus:
Page 22 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT "25. It is respectfully submitted that there was liquid cargo stored at the terminal under bond of Customs Department, pending clearances after Customs duty payment as also some cargo stored therein was seized by Customs/DRI Department, and the terminal operator was duty bound to ensure safety of cargo (hazardous in nature) which necessitated that all permits/licence were kept in force. The KPT had therefore categorically shifted the responsibility of safe keeping of cargo - hazardous in nature - to the erstwhile Lessees though it had taken possession of the land as also structures thereon under communication dated 27.6.2012."
6.3 It was submitted that this explains as to why the third respondent continued with the maintenance of the cargo. It was submitted that for the purpose of maintaining the cargo, the third respondent was required to have the necessary permissions, approvals and licences and it is, therefore, that the permissions, approvals and licences were granted to the third respondent. The attention of the court was invited to the order dated 2.5.2013 of the Government of India, Ministry of Shipping, conveying the decision of the Ministry on the representation of the third respondent. Reference was made to the letter dated 27.5.2013 of the KPT to M/s. K.M. Thacker and Associates for valuation of existing assets on KPT land. Reference was made to Annexure-S to the petition, which is a communication dated 10.7.2013 of K. M. Thacker and Associates submitting the valuation report of existing assets of KPT on 50 acres of land. Reference was made to the Policy Guidelines, 2014, to point out that clause 16.3 thereof provides for renewal of existing leases and clause (c) thereof inter alia Page 23 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT provides that in cases of renewal of existing leases, without automatic renewal option at the end of the lease term, the land will be put to tender-cum-auction with the first right of refusal to be extended to the existing lessee. The existing lessee should be allowed to match the H-1 bid. If any structure has been constructed by the earlier lessee on the leased land, it would be valued by a third party valuer to be agreed upon by the Port Trust and the earlier lessee and the successful bidder has to remit the value of the structures which would be passed on the previous lessee. The bidding and auction would be only on the reserve price of the land. It was submitted that fresh lease would indicate an absolute green/vacant field without any structure and that in the present case there being a structure on the subject land, it would be a renewal of existing lease. It was submitted that the contention of the petitioner that an asset created of a value on the subject land should be taken away for the purpose of creating similar assets once again, is misconceived and contrary to public policy. It was submitted that clause 16.3 clearly contemplates payment of the price of the structure to the existing lessee. It was submitted that there is no prohibition insofar as fresh lease is concerned in making payment of the value of the structure to the existing lessee. It was further submitted that the decision to reimburse the value of the structure to the third respondent is a decision taken by the Port Trust in its commercial wisdom, and this court in exercise of powers under article 226 of the Constitution of India would ordinarily not interfere with such decision.
6.4 Reference was made to paragraph 8.10 of the affidavit- in-reply of the second respondent wherein it has been stated Page 24 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT that after issuance of Land Policy Guidelines, 2014, the Ministry of Shipping, Government of India, directed expeditious auction and detailed time-line for such action of land in a time bound manner. Accordingly, the DPT submitted tentative time- line indicating the procedure of auction to start from 3.3.2014 and to be completed by 30.4.2014 subject to adherence to auction proceedings in line with LPG-2014. It was pointed out that some of the trustees had raised serious concern over non- utilisation of available liquid storage capacity and resultant diversion of liquid cargo and had suggested that to immediately reduce the shortage of liquid storage capacity, the Port should come out with a suitable proposal to the Board to permit the use of liquid storage space on ad hoc/ interim arrangements to the existing lessee on leave and licence basis till the tender-cum-auction process as provided in Land Policy Guidelines, 2014 was completed. It was submitted that it was with a view to comply with clause 16.3(c) of the Land Policy Guidelines 2014, that a professional agency (Government Approved Valuer) was appointed through a competitive tendering process from six bidders. The selected agency, that is, M/s. K.M. Thacker & Associates, Gandhidham - a Government approved valuer, was entrusted the task of valuation of the assets over the subject land. The Valuer has given a detailed report valuing the structures over the subject land at Rs.207 crores.
6.5 It was submitted that in the absence of any provision in the Policy Guidelines, 2014, it was not possible to allow operation of 50 acres tank farm facility on leave and licence basis. Realising the dire necessity to increase the storage capacity by operationalising existing unused 50 acre tank farm Page 25 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT facility, the Board of Trustees of KPT, after deliberations, and as provided in the Policy Guidelines, 2014, resolved to auction 50 acres of land (including structures) for liquid storage tank terminals (hazardous and non-hazardous) for thirty years lease through e-tender cum e-auction process. Accordingly, a NIT was issued in leading newspapers on 5.4.2014 and the pre-bid meeting was held on 22.4.2014 in accordance with the Policy Guidelines, 2014. It was pointed out that in the meantime, the delay in the auction of 50 acres of tank farm facility was helping only a few existing tank farm owners having installation on Kandla land, who had started charging exorbitant rates from the importers. It was submitted that any delay was not in the interest of DPT, as DPT was losing liquid cargo and revenues, and neither was it in the interest of importers who were forced to pay exorbitant monthly rentals.
6.6 It was further pointed out that the second respondent had entrusted the e-auction of the land to a reputed Government of Gujarat organization namely, M/s (n) Code Solutions, Ahmedabad, who has also been entrusted the e- auction work by various other organisations of the Government of Gujarat. It was pointed out that after pre-qualification of three bidders, the price bids were opened on 3.1.2015 and e- auction amongst the qualified bidders was carried out by M/s
(n) Code Solutions, Ahmedabad on 12.1.2015. Two parties, namely M/s IMC Limited and M/s Friends Salt Works and Allied Industries (the respondent No.3 herein) participated in the e- auction during which both the parties quoted very aggressive bids. After fierce competitive bidding by both the parties, M/s. Friends Salts Works and Allied Industries emerged as highest bidder by quoting Rs.1056.17 per square metre per year (with Page 26 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT 2% annual escalation) against the reserve price of Rs.906.17 per square metre per year, which was Rs.150/- per square metre per year higher than the reserve price.
6.7 The attention of the court was invited to the tender documents for e-tender cum e-auction for work of allotment of land for the purpose of liquid storage tanks (hazardous/non- hazardous) (including structures) on thirty years lease on as is where is basis, at Kandla and more particularly to paragraph 4.7 thereof wherein under clause (III), it has been stated that the land will be put to tender-cum-auction as provided under clause No.16.2 or 16.3 of the Land Policy Guidelines, 2014. In this regard, a clarification from Ministry of Shipping will be obtained. The bids will be received after receiving the clarification from the Ministry and the rates approved by the TAMP. The attention was invited to the form of price bid which indicates reserve price bid and also shows that the existing assets standing on proposed land is valued at Rs.2,07,72,38,300.00 and further provides an undertaking that the bidder shall abide to deposit the amount of Rs.2,07,72,38,300.00. It was submitted that, therefore, the procedure adopted by the second respondent was transparent and that the condition requiring the bidders to deposit an amount of Rs.207 crores was provided along with the price bid form.
6.8 Referring to the pre-bid queries dated 11.8.2014 raised by Adani (Annexure-N to the petition), it was pointed out that during the course of the tender proceedings, queries were raised by those who participated in the tender process and those were duly replied by the second respondent.
Page 27 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT 6.9 Reference was made to the list of parties forming part of
Annexure-R, to submit that, in all, twelve parties had submitted tenders. Reference was made to the minutes of the pre-bid meeting held on 13.8.2014, wherein the details of queries and replies thereto are set out. It was pointed out that the query at serial No.14 relates to the payment of amount of Rs.207 crores by the prospective lessee to KPT on account of existing assets installed at the premises. That item No.15 refers to a query relating to valuation report of the existing assets. The query at item No.27 seeks a detailed break-up of the value of existing assets and the basis, etc. and the queries at items No.50 and 51 also relate to the amount of Rs.207 crores. It was submitted that thus all the parties who had participated in the tender proceedings were duly aware of such conditions and none of them had challenged the incorporation of such conditions in the tender. It was submitted that one of the parties had approached this court by way of a writ petition challenging the tender process but the same was not in the nature of a PIL. It was pointed out that, in all, three parties participated in the price bid. It was pointed out that on account of aggressive bidding between the parties, the third respondent quoted Rs.1056.17 per square metre as against the reserve price of Rs.906.17 per square metre. It was submitted that there is not a line in the petition which says that the reserve price is not proper and that no case of suppression or clandestine clause is coming up in the petition. It was submitted that the petitioner has not challenged the reserve price of Rs.906.17 per square metre as being inadequate. Moreover, TAMP has approved the reserve price, which is not in dispute.
Page 28 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT 6.10 The attention of the court was invited to item No.24
(Annexure-Z/C) of the resolution of the Board of DPT, and more particularly to paragraph 3 thereof, wherein it is recorded that regarding fixing of reserve price/market value, the Board has already approved the rate structure of Kandla Land, vide resolution No.236 dated 10.6.2014, which was subsequently sent to TAMP for approval and notification. Thereafter, the TAMP vide Notification No.350 dated 4.12.2014, has approved and notified the rates for Kandla land. It was pointed out that the said resolution further records that the legal opinion of the learned advocate was sought for, who had given his legal advice dated 26.9.2014 that this being a high stake matter, it is advisable to take second opinion of the Solicitor General/ Retired Judges of the Supreme Court. Accordingly, expert legal opinion was sought for from the Solicitor General of India who had given his opinion dated 28.10.2014. It was pointed out that thus, the second respondent had duly followed the procedure in accordance with law after taking the opinion of a Senior Advocate as well as the opinion of the learned Solicitor General.
6.11 It was further submitted that from the facts as emerging from the record, it is evident that, in all, twelve parties had participated in the tender process and ultimately, three parties had taken part in the final bidding process. All the conditions were duly incorporated in the tender documents and the proceedings were transparent. It was submitted that even according to the petitioner, at least three parties who are referred to in the memorandum of petition were represented and out of the contesting bidders, one of the bidders, namely, Page 29 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT M/s. IMC Limited had approached this court by way of a writ petition challenging the tender process, though on other grounds, which demolishes the contention of the petitioner that the tender was a sham. It was submitted that having regard to the facts of the case, it cannot be said that the conditions imposed in the tender are in any manner onerous.
6.12 With regard to tender being sham, it was submitted that considering the nature of the challenge in the petition namely that the conditions are made with a view to favour one party, the averments would be required to be made that all the parties in the tender proceedings had colluded. It was submitted that in this case the price has not been challenged, the value received by the second respondent is adequate, TAMP has accepted the reserve price and there is no issue of loss to the public exchequer. It was submitted that there are only two grounds for judicial review, namely, that the tender is sham or that it affects public exchequer. It was submitted that neither of the two grounds are made out in the present petition.
6.13 Next, it was pointed out that the lease deed in favour of the third respondent came to be executed on 4.8.2015 and the writ petition came to be filed before the Delhi High Court after a period of two and a half years thereafter, which was after a considerable delay. It was submitted that if the delay is considered from the first day of moving the Delhi High Court, the petition would still be belated.
6.14 Reliance was placed upon the decision of the Supreme Court in the case of R&M Trust v. Koramangala Residents Page 30 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT Vigilance Group, (2005) 3 SCC 91, wherein the court held thus:-
"23. Next question is whether such public interest litigation should at all be entertained and laches thereon. This sacrosanct jurisdiction of public interest litigation should be invoked very sparingly and in favour of vigilant litigant and not for the persons who invoke this jurisdiction for the sake of publicity or for the purpose of serving their private ends.
24. Public interest litigation is no doubt a very useful handle for redressing the grievances of the people but unfortunately lately it has been abused by some interested persons and it has brought a very bad name. Courts should be very very slow in entertaining petitions involving public interest: in very rare cases where the public at large stand to suffer. This jurisdiction is meant for the purpose of coming to the rescue of the downtrodden and not for the purpose of serving private ends. It has now become common for unscrupulous people to serve their private ends and jeopardise the rights of innocent people so as to wreak vengeance for their personal ends. This has become very handy to the developers and in matters of public contracts. In order to serve their professional rivalry they utilise the service of the innocent people or organisation in filing public interest litigation. The courts are sometimes persuaded to issue certain directions without understanding the implications and giving a handle in the hands of the authorities to misuse it. Therefore, the courts should not exercise this jurisdiction lightly but should exercise in very rare and few cases involving public interest of a large number of people who cannot afford litigation and are made to suffer at the hands of the authorities. The parameters have already been laid down in a decision of this Court in the case of Balco Employees' Union (Regd.) v. Union of India,(2002) 2 SCC 333, wherein this Court has issued guidelines as to what kind of public interest litigation should be entertained and all the previous cases were reviewed by this Court. It was observed as under:
"77. Public interest litigation, or PIL as it is more commonly known, entered the Indian judicial process in 1970. It will not be incorrect to say that it is primarily the Page 31 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT judges who have innovated this type of litigation as there was a dire need for it. At that stage, it was intended to vindicate public interest where fundamental and other rights of the people who were poor, ignorant or in socially or economically disadvantageous position and were unable to seek legal redress were required to be espoused. PIL was not meant to be adversarial in nature and was to be a cooperative and collaborative effort of the parties and the court so as to secure justice for the poor and the weaker sections of the community who were not in a position to protect their own interests. Public interest litigation was intended to mean nothing more than what words themselves said viz. 'litigation in the interest of the public'.
78. While PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, petitions have been entertained in other spheres, Prof. S.B. Sathe has summarised the extent of the jurisdiction which has now been exercised in the following words:
'PIL may, therefore, be described as satisfying one or more of the following parameters. These are not exclusive but merely descriptive:
-- Where the concerns underlying a petition are not individualist but are shared widely by a large number of people (bonded labour, undertrial prisoners, prison inmates).
-- Where the affected persons belong to the disadvantaged sections of society (women, children, bonded labour, unorganised labour etc.).
-- Where judicial law-making is necessary to avoid exploitation (inter-country adoption, the education of the children of prostitutes).
-- Where judicial intervention is necessary for the protection of the sanctity of democratic institutions (independence of the judiciary, existence of grievances redressal forums).
-- Where administrative decisions related to development are harmful to the environment and jeopardise people's right to natural resources such as air or water.'
79. There is, in recent years, a feeling which is not without any foundation that public interest litigation is Page 32 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT now tending to become publicity interest litigation or private interest litigation and has a tendency to be counterproductive.
80. PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. There have been in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasise the parameters within which PIL can be resorted to by a petitioner and entertained by the court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re-emphasise the same."
25. In this connection reference may be made to a recent decision given by this Court in the case of Dattaraj Nathuji Thaware v. State of Maharashtra,(S.L.P.(c) No.26269 of 2004), in which Hon'ble Pasayat, J. has also observed as follows:
"12. Public interest litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that behind the beautiful veil of public interest, an ugly private malice, vested interest and/or publicity-seeking is not lurking. It is to be used as an effective weapon in the armoury of law for delivering social justice to citizens. The attractive brand name of public interest litigation should not be used for suspicious products of mischief. It should be aimed at redressal of genuine public wrong or public injury and not be publicity-oriented or founded on personal vendetta."
26. We fully share the views expressed in the aforesaid decision of this Court and reiterate that it should go as a warning to the courts that this extraordinary power should be used sparingly and absolutely in necessary matters involving downtrodden people.
27. In this connection learned counsel has rightly pointed out that delay is very material. He has invited our attention to a number of decisions of this Court where this Court has declined to interfere on account of delay.
Page 33 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT
28. In the case of State of M.P. v. Bhailal Bhai, AIR 1964 SC 1006, it was observed as follows:
"The provisions of the Limitation Act do not as such apply to the granting of relief under Article 226. However, the maximum period fixed by the legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be measured. The Court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the Court to hold that it is unreasonable."
29. In the case of Rabindranath Bose v. Union of India, AIR 1970 SC 470, it was observed as follows:
"No relief can be given to petitioners who, without any reasonable explanation, approach Supreme Court under Article 32 of the Constitution after inordinate delay. The highest court in this land has been given original jurisdiction to entertain petitions under Article 32 of the Constitution. It could not have been the intention that Supreme Court would go into stale demands after a lapse of years. Though Article 32 is itself a guaranteed right, it does not follow from this that it was the intention of the Constitution-makers that Supreme Court should discard all principles and grant relief in petitions filed after inordinate delay.""
"31. In the case of Ramana Dayaram Shetty v. International Airports Authority of India, AIR 1979 SC 1628, even five months' delay was considered to be fatal. It was observed as follows:
"Moreover, the writ petition was filed by the appellant more than five months after the acceptance of the tender of Respondent 4 and during this period, Respondent 4 incurred considerable expenditure aggregating to about Rs 1,25,000 in making arrangements for putting up the restaurant and the snack bars and in fact set up the snack bars and started running the same. It would now be most iniquitous to set aside the contracts of Respondent 4 at the instance of the appellant. The position would have been different if the appellant had filed the writ petition immediately after the acceptance of the tender of Respondent 4 but the appellant allowed a Page 34 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT period of over five months to elapse during which Respondent 4 altered their position. We are, therefore, of the view that this is not a fit case in which we should interfere and grant relief to the appellant in the exercise of our discretion under Article 226 of the Constitution."
32. In the case of Ashok Kumar Mishra v. Collector, Raipur, AIR 1980 SC 112, it was observed that when the final electoral roll was published on 15-11-1978 it was notified that the nominations could be filed on and after 25-11-1978 and the poll, if necessary, would take place on 31-12-1978. After 25-11-1978, a large number of nominations were received by the returning officer. It was only on 5-12-1978 for the first time that a letter was addressed by the petitioner to the Collector drawing his attention to the error that had crept into the notice published under Rule 4(1) of the Rules. By that time, the nominations had all been received. The final list of candidates for the election with their symbols was published on 20-12-1978. The writ petition itself was filed on 28-12-1978 while the poll had to take place on 31-12- 1978. In that context, Their Lordships observed as follows:
"No satisfactory explanation was given in the course of the petition by the petitioners as to why they delayed the filing of the petition till 28-12-1978 even though they knew that there was an error in the notice issued under Rule 4(1) of the Rules in the month of October 1978 more than 2 months before the date on which it was filed."
Their Lordships dismissed the petition as there was no satisfactory explanation for the delay in preferring it.
33. In the case of State of Maharashtra v. Digambar, (1995) 4 SCC 683, Their Lordships observed as follows:
"The power of the High Court to be exercised under Article 226 of the Constitution, if is discretionary, its exercise must be judicious and reasonable, admits of no controversy. Persons seeking relief against the State under Article 226 of the Constitution, be they citizens or otherwise, cannot get discretionary relief obtainable thereunder unless they fully satisfy the High Court that the facts and circumstances of the case clearly justified the laches or undue delay on their part in approaching the Court for grant of such discretionary relief. Therefore, where the High Court grants relief to a citizen or any other person under Article 226 of the Constitution against any person including the State without considering his Page 35 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT blameworthy conduct, such as laches or undue delay, acquiescence or waiver, the relief so granted becomes unsustainable even if the relief was granted in respect of alleged deprivation of his legal right by the State."
34. There is no doubt that delay is a very important factor while exercising extraordinary jurisdiction under Article 226 of the Constitution. We cannot disturb the third-party interest created on account of delay. Even otherwise also why should the Court come to the rescue of a person who is not vigilant of his rights?"
6.15 Reliance was also placed upon the decision of the Supreme Court in Delhi Development Authority v. Rajendra Singh, (2009) 8 SCC 582, wherein the court held thus:-
"49. Now, let us consider whether the writ petitions filed in the High Court in the year 2007 is justifiable and ought to have been dismissed on the ground of delay/laches. Though an objection was raised by all the official respondents before the High Court about the inordinate delay in filing the writ petitions by the petitioners, the said aspect was not either adverted to or considered by the Division Bench.
50. We have already referred to the fact that the site in question was changed to "public and semi-public" way back on 21.9.1999. Before re-classifying the site, the DDA and the concerned authorities issued public notice calling for objections/suggestions. The particulars furnished by the official bodies clearly show that after getting the suggestions from the public change of land use for the site falling in zone `O' was changed on 21.9.1999 from "agricultural and water body" to "public and semi-public" purpose. Apart from this, the decision of hosting the Commonwealth Games at Commonwealth Games Village site was taken in 2003. The Department also issued a Global Tender process for Public Private Partnership ("PPP") participation in the residential portion of the Commonwealth Games project which was floated in December 2006 and was completed in June 2007.
51. Apart from these materials, it was also highlighted before the High Court as well as before this Court to the effect that Environmental Clearance was granted on Page 36 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT 14.12.2006 3 8 permitting permanent structures on the site after taking into consideration that the MoEF had stated "since environmental significance and public open space amenity of the river flood plain should be recognized, it was urged that the concerned authorities (DDA) that an extension of similar development in the area between Yamuna and its flood protection bunds must not be proposed without due environmental planning and prior environmental clearance." It was highlighted that in the light of the suggestions of Ministry of Environment and Forests, studies were carried out and after completion of such studies permanent structures were permitted to be constructed on the site in April 2007. Unfortunately, the High Court has lost sight with regard to these material aspects.
52. In Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664, this Court has held that the PIL should be thrown out at the threshold if it is challenged after the commencement of execution of the project. It was also held that no relief should be given to persons who approach the Court without reasonable explanation under Articles 226 and 32 after inordinate delay.
53. We reiterate that the delay rules apply to PILs also and if there is no proper explanation for the delay, PILs are liable to be summarily dismissed on account of delay.
In the case on hand, it is not in dispute that both the petitioners though claiming that they are very much conversant with environment and ecology, approached the High Court only in the middle of 2007, hence on the ground of delay and laches, the writ petitions were liable to be dismissed."
6.16 It was submitted that apart from the fact that no public interest is involved in the present petition, the petition is also required to be dismissed on the ground of delay and laches.
7. Mr. S. N. Soparkar, Senior Advocate, learned counsel for the third respondent, submitted that the petition has been filed after considerable delay and that there is not a word of explanation as to why there was a delay of two years and eight Page 37 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT months and that no attempt was made to explain such delay. Reference was made to the decision of the Supreme Court in R&M Trust v. Koramangala Residents Vigilance Group (supra), to submit that the explanation put forth in paragraph 3 of the affidavit-in-rejoinder wherein it has been stated that the letter of allotment of the disputed land in favour of the respondent No.3 subsequent to the sham tender, is dated 17.4.2015 and the petitioner got hold of the tender and related documents in dispute only in the month of February, 2018 and immediately thereafter, after perusing the same on 11.4.2018, the petitioner filed C.M. No.15376 of 2018 in Writ Petition No.11550 of 2009 seeking similar relief prayed in the instant writ petition i.e. cancellation of the lease of 50 acres of land awarded through a sham tender to respondent No.3; is merely a bald statement explaining the delay and is ex facie unbelievable. It was submitted that the petitioner claims that it is at its instance that KPT was required to terminate all leases; and that all the orders of the Delhi High Court in this regard have been passed at the instance of the petitioner; under the circumstances, the statement that they came to know only in February 2018 is highly doubtful.
7.1 It was submitted that the petitioner has contended that the property in question should be put to auction and it is the case of the third respondent - FSWAI that the petition has been filed at the instance of a competitor of the third respondent. It was submitted that the delay unless explained is fatal and that the ground stated in the petition is not an acceptable explanation.
Page 38 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT 7.2 It was next submitted that considering the cause of action in the present petition, the petitioner has no locus to file the present petition. In this regard, reference was made to the decision of the Supreme Court in Delhi Development Authority v. Rajendra Singh (supra). It was submitted that a public interest litigation cannot be broadly based on article 14 of the Constitution of India; but it can be based on article 21, when it is found that the State is trampling on the rights of the downtrodden.
7.3 Reliance was placed upon the decision of the Supreme Court in BALCO Employees' Union (Regd.) v. Union of India, (2002) 2 SCC 333, wherein the court held thus:-
"77. Public interest litigation, or PIL as it is more commonly known, entered the Indian judicial process in 1970. It will not be incorrect to say that it is primarily the Judges who have innovated this type of litigation as there was a dire need for it. At that stage, it was intended to vindicate public interest where fundamental and other rights of the people who were poor, ignorant or in socially or economically disadvantageous position and were unable to seek legal redress were required to be espoused. PIL was not meant to be adversarial in nature and was to be a cooperative and collaborative effort of the parties and the court so as to secure justice for the poor and the weaker sections of the community who were not in a position to protect their own interests. Public interest litigation was intended to mean nothing more than what words themselves said viz. "litigation in the interest of the public".
78. While PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, petitions have been entertained in other spheres. Prof. S.B. Sathe has summarised the extent of Page 39 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT the jurisdiction which has now been exercised in the following words:
"PIL may, therefore, be described as satisfying one or more of the following parameters. These are not exclusive but merely descriptive:
-- Where the concerns underlying a petition are not individualist but are shared widely by a large number of people (bonded labour, undertrial prisoners, prison inmates).
-- Where the affected persons belong to the disadvantaged sections of society (women, children, bonded labour, unorganised labour etc.).
-- Where judicial law making is necessary to avoid exploitation (inter-country adoption, the education of the children of the prostitutes).
-- Where judicial intervention is necessary for the protection of the sanctity of democratic institutions (independence of the judiciary, existence of grievances redressal forums).
-- Where administrative decisions related to development are harmful to the environment and jeopardize people's right to natural resources such as air or water."
79. There is, in recent years, a feeling which is not without any foundation that public interest litigation is now tending to become publicity interest litigation or private interest litigation and has a tendency to be counterproductive.
80. PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. There have been, in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasize the parameters within which PIL can be resorted to by a petitioner and entertained by the court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re-emphasize the same.
81. What public interest litigation is meant to be has been explained at length in S.P. Gupta v. Union of India,1981 (Supp) SCC 87. Public interest litigation in that Page 40 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT case was filed relating to the appointment and transfer of Judges and it is in this connection that the question arose with regard to the locus standi of the petitioner to file the writ petition. While deciding this aspect, this Court examined as to what is the nature of the public interest litigation and who can initiate the same. At p. 215, Bhagwati, J. observed as follows:
"It is for this reason that in public interest litigation -- litigation undertaken for the purpose of redressing public injury, enforcing public duty, protecting social, collective, 'diffused' rights and interests or vindicating public interest, any citizen who is acting bona fide and who has sufficient interest has to be accorded standing."
82. The limitation within which the Court must act, and the caution against the abuse of the same is referred to by Bhagwati, J. at p. 219-20 as follows:
"24. But we must be careful to see that the member of the public, who approaches the court in cases of this kind, is acting bona fide and not for personal gain or private profit or political motivation or other oblique consideration. The court must not allow its process to be abused by politicians and others to delay legitimate administrative action or to gain a political objective. Andre Rabie has warned that 'political pressure groups who could not achieve their aims through the administrative process' and we might add, through the political process, 'may try to use the courts to further their aims'. These are some of the dangers in public interest litigation which the court has to be careful to avoid. It is also necessary for the court to bear in mind that there is a vital distinction between locus standi and justiciability and it is not every default on the part of the State or a public authority that is justiciable. The court must take care to see that it does not overstep the limits of its judicial function and trespass into areas which are reserved to the executive and the legislature by the Constitution. It is a fascinating exercise for the court to deal with public interest litigation because it is a new jurisprudence which the court is evolving, a jurisprudence which demands judicial statesmanship and high creative ability. The frontiers of public law are expanding far and wide and new concepts and doctrines which will change the complexion of the law and which were so far as embedded in the womb of the future, are beginning to be born.Page 41 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020
C/WPPIL/49/2019 JUDGMENT
25. Before we part with this general discussion in regard to locus standi, there is one point we would like to emphasise and it is, that cases may arise where there is undoubtedly public injury by the act or omission of the State or a public authority but such act or omission also causes a specific legal injury to an individual or to a specific class or group of individuals. In such cases, a member of the public having sufficient interest can certainly maintain an action challenging the legality of such act or omission, but if the person or specific class or group of persons who are primarily injured as a result of such act or omission, do not wish to claim any relief and accept such act or omission willingly and without protest, the member of the public who complains of a secondary public injury cannot maintain the action, for the effect of entertaining the action at the instance of such member of the public would be to foist a relief on the person or specific class or group of persons primarily injured, which they do not want."
(emphasis added)
83. In Sachidanand Pandey v. State of W.B., (1987) 2 SCC 295, V. Khalid, J. observed as follows:
"61. It is only when courts are apprised of gross violation of fundamental rights by a group or a class action or when basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience that the courts, especially this Court, should leave aside procedural shackles and hear such petitions and extend its jurisdiction under all available provisions for remedying the hardships and miseries of the needy, the underdog and the neglected. I will be second to none in extending help when such help is required. But this does not mean that the doors of this Court are always open for anyone to walk in. It is necessary to have some self-imposed restraint on public interest litigants."
84. After referring to the decision in Subhash Kumar v. State of Bihar,(1991) 1 SCC 598, and other cases on the point, in Janata Dal v. H.S. Chowdhary,(1992) 4 SCC 305, it was observed at p. 348 as follows:
"109. It is thus clear that only a person acting bona fide and having sufficient interest in the proceeding of PIL will alone have a locus standi and can approach the court to wipe out the tears of the poor and needy, suffering from violation of their fundamental rights, but not a person for personal gain or private profit or political Page 42 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT motive or any oblique consideration. Similarly, a vexatious petition under the colour of PIL brought before the court for vindicating any personal grievance, deserves rejection at the threshold."
85. Referring to the litigants standing in queues waiting for the cases to be listed in courts at p. 349, Pandian, J. had observed as follows:
"[T]he busybodies, meddlesome interlopers, wayfarers or officious interveners having absolutely no public interest except for personal gain or private profit either for themselves or as proxy of others or for any other extraneous motivation or for glare of publicity break the queue muffling their faces by wearing the mask of public interest litigation, and get into the courts by filing vexatious and frivolous petitions and thus criminally waste the valuable time of the courts and as a result of which the queue standing outside the doors of the court never moves which piquant situation creates a frustration in the minds of the genuine litigants and resultantly they lose faith in the administration of our judicial system."
86. While dealing with a case where PIL had been filed in relation to an award of contract, the factors which the courts have to consider have been dealt with in the following observations. In Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492 at page 502:
"17. Normally before such a project is undertaken, a detailed consideration of the need, viability, financing and cost-effectiveness of the proposed project and offers received takes place at various levels in the Government. If there is a good reason why the project should not be undertaken, then the time to object is at the time when the same is under consideration and before a final decision is taken to undertake the project. If breach of law in the execution of the project is apprehended, then it is at the stage when the viability of the project is being considered that the objection before the appropriate authorities including the court must be raised. We would expect that if such objection or material is placed before the Government, the same would be considered before a final decision is taken. It is common experience that considerable time is spent by the authorities concerned before a final decision is taken regarding the execution of a public project. This is the appropriate time when all aspects and all objections should be considered. It is only when valid objections are not taken into account or Page 43 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT ignored that the court may intervene. Even so, the court should be moved at the earliest possible opportunity. Belated petitions should not be entertained.
18. The same considerations must weigh with the court when interim orders are passed in such petitions. The party at whose instance interim orders are obtained has to be made accountable for the consequences of the interim order. The interim order could delay the project, jettison finely worked financial arrangements and escalate costs. Hence the petitioner asking for interim orders in appropriate cases should be asked to provide security for any increase in cost as a result of such delay or any damages suffered by the opposite party in consequence of an interim order. Otherwise public detriment may outweigh public benefit in granting such interim orders. Stay order or injunction order, if issued, must be moulded to provide for restitution."
87. Lastly, we need only to refer to the following observations in the majority decision in Narmada Bachao Andolan case, (2000) 10 SCC 664:
"232. While protecting the rights of the people from being violated in any manner utmost care has to be taken that the court does not transgress its jurisdiction. There is, in our constitutional framework a fairly clear demarcation of powers. The court has come down heavily whenever the executive has sought to impinge upon the court's jurisdiction.
233. At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions. The courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to defend the values of the Constitution and the rights of Indians. The courts must, therefore, act within their judicially permissible limitations to uphold the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters of policy the court will not interfere. When there is a valid law requiring the Government to act in a particular manner the court ought not to, without striking down the law, give any direction which is not in accordance with law. In other words, the court itself is Page 44 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT not above the law.
234. In respect of public projects and policies which are initiated by the Government the courts should not become an approval authority. Normally such decisions are taken by the Government after due care and consideration. In a democracy welfare of the people at large, and not merely of a small section of the society, has to be the concern of a responsible Government. If a considered policy decision has been taken, which is not in conflict with any law or is not mala fide, it will not be in public interest to require the court to go into and investigate those areas which are the function of the executive. For any project which is approved after due deliberation the court should refrain from being asked to review the decision just because a petitioner in filing a PIL alleges that such a decision should not have been taken because an opposite view against the undertaking of the project, which view may have been considered by the Government, is possible. When two or more options or views are possible and after considering them the Government takes a policy decision it is then not the function of the court to go into the matter afresh and, in a way, sit in appeal over such a policy decision."
88. It will be seen that whenever the Court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation of Article 21 or of human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to court due to some disadvantage. In those cases also it is the legal rights which are secured by the courts. We may, however, add that public interest litigation was not meant to be a weapon to challenge the financial or economic decisions which are taken by the Government in exercise of their administrative power. No doubt a person personally aggrieved by any such decision, which he regards as illegal, can impugn the same in a court of law, but, a public interest litigation at the behest of a stranger ought not to be entertained. Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the court is satisfied that there has been violation of Article 21 and the persons adversely affected are unable to approach the court.
89. The decision to disinvest and the implementation thereof is purely an administrative decision relating to Page 45 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT the economic policy of the State and challenge to the same at the instance of a busybody cannot fall within the parameters of public interest litigation.
90. On this ground alone, we decline to entertain the writ petition filed by Shri B.L. Wadhera."
"97. Judicial interference by way of PIL is available if there is injury to public because of dereliction of constitutional or statutory obligations on the part of the Government. Here it is not so and in the sphere of economic policy or reform the court is not the appropriate forum. Every matter of public interest or curiosity cannot be the subject-matter of PIL. Courts are not intended to and nor should they conduct the administration of the country. Courts will interfere only if there is a clear violation of constitutional or statutory provisions or non-compliance by the State with its constitutional or statutory duties. None of these contingencies arise in this present case."
7.4 It was submitted that public interest litigation can be filed by a person who stands in proxy for the affected persons who are not able to come to the court. It was contended that this litigation is a benefit in disguise for persons who would benefit in the tender process.
7.5 Next, it was submitted that as to whether the amount is required to be reimbursed to the third respondent - FSWAI, is a conscious policy decision taken by the second respondent and it is not in conflict with any law. Reliance was placed upon the decision of the Supreme Court in Villianur Iyarkkai Padukappu Maiyam v. Union of India, (2009) 7 SCC 561, wherein it has been held thus:-
"113. As far as second preliminary objection regarding locus standi of the appellant to challenge the Award of the Contract for the development of the Pondicherry Port to the respondent No. 11 is concerned, this Court finds that the contract assailed in the writ Page 46 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT petitions is purely commercial in nature. Neither the parties, which had participated in the process of selection of the consultant/Developer nor one of those, who had expressed desire to develop the Pondicherry Port but was not selected, has come forward to challenge the selection procedure adopted by the Government of Pondicherry or the selection of the respondent No. 11 as Developer of the Pondicherry Port.
114. The question of locus standi in the matter of awarding the contract has been considered by this Court in BALCO Employees' Union (Regd.) v. Union of India, [(2002) 2 SCC 333]. This Court, after review of law on the point, has made following observations in paragraph 88 of the judgment: -
"88. It will be seen that whenever the Court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation of Article 21 or of human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to court due to some disadvantage. In those cases also it is the legal rights which are secured by the courts. We may, however, add that public interest litigation was not meant to be a weapon to challenge the financial or economic decisions which are taken by the Government in exercise of their administrative power. No doubt a person personally aggrieved by any such decision, which he regards as illegal, can impugn the same in a court of law, but, a public interest litigation at the behest of a stranger ought not to be entertained. Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the court is satisfied that there has been violation of Article 21 and the persons adversely affected are unable to approach the court."
From the passage quoted above it is clear that the only ground on which a person can maintain a PIL is where there has been an element of violation of Article 21 or human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to the court due to some disadvantage.
115. On the facts and in the circumstances of the case, this Court is of the view that the only ground on which the appellants could have maintained a PIL before the High Page 47 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT Court was to seek protection of the interest of the people of Pondicherry by safeguarding the environment. This issue was raised by the appellants before the High Court and the High Court has issued directions regarding the same, which are to be found in paragraph 24 of the impugned judgment. After the High Court's directions the element of public interest of the appellants' case no longer survives. The appellants cannot, therefore, proceed to challenge the Award of the Contract in favour of the respondent No. 11 on other grounds as this would amount to challenging the policy decision of the Government of Pondicherry through a PIL, which is not permissible. Thus on the ground of locus standi also the appeals should fail."
7.6 Reliance was placed upon the decision of the Supreme Court in the case of Chairman & MD, BPL Ltd. v. S.P. Gururaja, (2003) 8 SCC 567, wherein the court noted that allotment was made in the year 1995 and the writ application was filed after one year. By that time, the company had not only taken possession of the land but also made sufficient investment and that delay of this nature should have been considered by the High Court to be of vital importance. It was submitted that in the present case, there is a delay of more than two and a half years in filing the present petition.
7.7 Reliance was also placed upon the decision of the Supreme Court in the case of Printers (Mysore) Ltd. v. M.A. Rasheed, (2004) 4 SCC 460, wherein the court held that the writ petition should not have been entertained keeping in view the fact that it was filed about three years after making of the allotment and execution of the deed of sale. The court held that the High Court should have dismissed the writ petition on the ground of delay and laches on the part of the first respondent. The court further noted that the Division Bench of the High Court also did not appear to have considered the plea Page 48 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT taken by the appellant therein to the effect that the first respondent had been set up by certain interested persons. The court observed that in a public interest litigation, the court should, when a plea is raised, determine the same.
7.8 Reference was made to the decision of the Supreme Court in the case of Reliance Telecom Ltd. v. Union of India, (2017) 4 SCC 269, wherein the court held thus:-
"58. We have already discussed that the condition to put a cap and make a classification not allowing certain entities to bid is not an arbitrary one as it is based on the acceptable rationale of serving the cause of public interest. It allowed new entrants and enabled the existing entities to increase their cap to make the service more efficient. The Court cannot get and dwell as an appellate authority into complex economic issues on the foundation of competitors advancing the contention that they were not allowed to bid in certain spheres. As the stipulation in the tender was reasonable and not based on any extraneous considerations, the Court cannot interfere in NIA in exercise of the power of judicial review. The contention is that the State cannot hoard the spectrum as per 2G case [(2012) 3 SCC 1]. We are disposed to think that in the case at hand, it cannot be said that there has been hoarding. The directions given in 2G case [(2012) 3 SCC 1] had been complied with and the auctions have been held thereafter from year to year. The feasibility of communication, generation of revenue and its maximisation and subserving of public interest are to be kept in view. The explanation given by the Union of India for not putting the entire spectrum to auction is a reasonable one and it is put forth that an endeavour would be made to put it to auction when it becomes available in sufficient quantum. The Court cannot interfere with the tender conditions only on the ground that certain amount of spectrum has not been put to auction. The submission is that whatever has been put to auction and is available should have been notionally added so that the entities which have certain quantum of spectrum in praesenti could have participated in the auction and put forth their bids for a higher quantum.Page 49 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020
C/WPPIL/49/2019 JUDGMENT This argument may look attractive on a first blush but pales into insignificance on a studied scrutiny. As is evincible, one of the petitioners had earlier more than 65 MHz in a band and because of the limited auction and non-addition of available spectrum on notional basis, it has obtained less quantum. With this submission, the contention of legitimate expectation has been associated. We have already repelled the submission pertaining to legitimate expectation. If there has been a reduction for a particular entity because of the terms and conditions of the tender, it has to accept it, for he cannot agitate a grievance that he could have obtained more had everything been added notionally. Notionally adding up or not adding up, we think, is a matter of policy and that too a commercial policy and in a commercial transaction, a decision has to be taken as prudence would command. In this regard, reference to the decision In Asia Foundation & Construction Ltd v Trafalgar House Construction (l) Ltd. [(1997) 1 SCC 738] would be apt. In the said case, the Court referred to the authority in Tata Cellular [(1994) 6 SCC 651] and thereafter opined that though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in a matter of award of a contract power has been exercised for any coIIateraI purpose. In the instant case, we are unable to perceive any arbitrariness or favouritism or exercise of power for any collateral purpose in NIA. In the absence of the same, to exercise the power of judicial review is not warranted. In the case at hand, we think, it is a prudent decision once there is increase of revenue and expansion of the range of service.
59. It needs to be stressed that in the matters relating to complex auction procedure having enormous financial ramification, interference by the courts based upon any perception which is thought to be wise or assumed to be fair can lead to a situation which is not warrantable and may have unforeseen adverse impact. It may have the effect potentiality of creating a situation of fiscal imbalance. In our view, interference in such auction should be on the ground of stricter scrutiny when the decision-making process commencing from NIA till the Page 50 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT end smacks of obnoxious arbitrariness or any extraneous consideration which is perceivable."
7.9 It was submitted that in this case, the auction took place by e-auction. Reference was made to the decision of the Delhi High Court in Centre for Public Interest Litigation v. Union of India, C.W.P. 3020/97 and C.W. 335/97 rendered on 25.1.1999, wherein it has been held thus:-
"18. ... There is no doubt that the Government has freedom of contract and is allowed a fair play in the joints but its decision has to be free from arbitrariness and not affected by bias or actuated by mala fides and if it is so, the Court is duty bound to quash the same despite the fact that it relates to matter of contract and irrespective of a competitor having not challenged it. If a contract is result of arbitrariness, bias or mala fides resulting in distribution of State Iargesse to individuals, the Court will not hesitate in quashing it when such irregularities are brought to its notice by a public spirited person by filing a public interest litigation or in ordering an independent enquiry or investigation if strong case for Issue of such directions is made out. The Court would not, however act on mere suspicion and surmises of the petitioner. In public interest litigation relating to grant of a contract by the Government, a really strong case will have to be shown by the petitioner alleging corruption and bribe and then only the Court will exercise jurisdiction in clear and rare cases and not in cases where reasonably plausible explanation exists for grant of contract, The Court will not act as a super auditor and take the Government to task even if Government has faltered so long as it has acted fairly. The Government is allowed certain amount of flexibility in such matters and its decision would be quashed only by applying Wednesbury principle that the decision is so unreasonable that no sensible person would have arrived at it. While deciding such a case the Court would of course keep in view, as one of the factors, of a competitor having not challenged the award of contract. It is different matter that when a public interest writ petition in such a matter of contract is filed, the Court would be more careful in examining the matter so as to Page 51 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT ward off the possibility of a competitor having set up the petitioner. It has also to be borne in mind that an investor - in particular a foreign investor, should not be entangled in avoidable litigation as foreign investment is one of the important aspect of open economy.
19. The thrust of the petition is that commercially terms of contract are so one sided in favour of ENRON & RIL so as to warrant presumption of contract having been procured by corrupt means. For this plea the main base of the petition is the report of CAG. It is sought to the supplemented by the statement of Mr. Safaya made before CBI under Section 161, CrPC and the fact of Mr. Mehrotra and Mr. Khosla after leaving Government & ONGC and Mr. Handique after, leaving Oil India, having joined the Joint Venture partners and the failure of CBI to conduct honest investigation.
20 . Before examining the terms of the contract to form prima facie opinion whether the same are so unreasonable as to suggest the payment of bribe of hefty amounts and corruption at high levels, requiring further independent probe, it may be noticed that while examining these aspects it would also be relevant to bear in mind that the writ petition was filed in July, 1997, whereas bids were invited in 1992, and the contract awarded in 1994. We are however, conscious of the explanation offered by the petitioner that the case came to light on examination of matter by CAG. At the same time it is also to be kept in view, as noticed earlier, that no bidder has challenged the Production Sharing Contract and also that there have been successive Governments headed by different political parties and none of them had questioned the contract. Moreover, neither the petitioner has alleged nor CAG report suggests that any other bidder had offered better commercial terms. The ENRON & RIL were evidently highest and best bidders. This is the background under which we are called upon to decide whether it is a fit case for issue of directions for further independent probe into the matter."
7.10 It was submitted that according to the petitioner, the terms of the contract are bad. However, the conditions put in Page 52 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT the contract are in accordance with the statutory policy which has not been challenged. The attention of the court was invited to amended policy dated 17th July, 2015, which was introduced after the tender was accepted but before the lease deed was executed. Referring to the policy introduced on 13th January, 2014, it was pointed out that paragraph 16.3 thereof made provision for renewal of leases and clause (c) thereof provided that if any structures had been constructed by the earlier lessee on the leased land, it would be valued by a third party valuer to be agreed upon by the Port Trust and the earlier lessee and the successful bidder has to remit the value of the structures which would be passed on to the previous lessee.
7.11 It was submitted that this clause related only to renewal of existing leases. Referring to the amended guidelines introduced on 17th July, 2015, it was submitted that paragraph 11.3 thereof relates to existing/earlier leases and clause (c) thereof provides that if any structures had been constructed by the earlier lessee on the leased land, it would be valued by a third party valuer to be agreed upon by the Port Trust and the earlier lessee and the successful bidder has to remit the value of the structures which would be passed on to the previous lessee. It further provides that the provision of first right will also apply to expired lease (possession has been taken by the Port) also in addition to existing leases. It was submitted that while the amended policy came into force on 17.7.2015, which is after the contract was accepted on 16.4.2015, it was brought in before the lease deed was executed on 4.8.2015. It was submitted that the present petition challenges the action of reimbursement of the amount towards value of Page 53 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT superstructures, but not the policy and that in the absence of any challenge to the policy, once action is taken in accordance with the policy, such challenge should necessarily fail. It was pointed out that moreover, the original lease deed executed on 7.4.1979 itself contemplates this situation. In this regard reference was made to clause (i) of paragraph 4 of the lease deed wherein it has been provided thus:
"(i) In case at the time of determination of this lease deed, there exist some buildings or structures on the demised premises, the lesser shall within reasonable time of his having taken over the same pay reasonable compensation to the lessee for the said-building and/or structures. Such compensation shall invariably be determined by the Chairman, Kandla Port Trust, and will be equal to the difference between the then market value of the demised premises with and without the said buildings and/or structures."
It was submitted that thus there was an arrangement made between the parties, way back in the year 1979, and that today the second respondent has acted in accordance with the agreement between the parties.
7.12 The attention of the court was invited to the provisions of section 108 of the Transfer of Property Act. Reference was made to clause (h) thereof which provides that the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased, but not afterwards, all things which he has attached to the earth; provided he leaves the property in the state in which he received it. It was submitted that these are important projects for storage of cargo which serve the public purpose of making Page 54 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020 C/WPPIL/49/2019 JUDGMENT available liquid cargo to the people of Gujarat. Removal of the tanks from the land in question would be a waste of natural resources. Therefore, if the parties have adopted a practical course of action which prevents waste of natural resources, the decision cannot be regarded as an arbitrary one. It was argued that the decision to reimburse the third respondent - FSWAI cannot be said to be arbitrary, inasmuch as, it was known to everyone and no bidder has objected to such condition.
7.13 It was submitted that when the bidders who participated in the tender process did not find the condition to be objectionable, it is not open to a rank stranger to say that it is objectionable. It was submitted that the persons in the field did not make any allegation in this regard. Moreover, this aspect came to be clarified from time to time. In this regard reference was made to the queries and response thereto recorded in the minutes of the pre-bid meeting held on 13.8.2014, reference to which has already been made hereinabove.
7.14 The attention of the court was invited to paragraph 6.2.2.2 of the Land Policy of 2010, which makes provision for renewal of existing leases. Reference was made to clause (f) thereof, which reads thus:-
"(f) For existing leases, at the time of expiry/termination/ determination of lease the provisions related to removal of structures will be applicable. If no such provisions exist, the lessee shall remove all structures at his own cost within three (3) months of expiry/termination/determination failing which these will vest with the port free from all encumbrances. If the port so decides for reasons to be recorded, it may also take over the structures on terms mutually agreed with the lease holder."
Page 55 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020C/WPPIL/49/2019 JUDGMENT 7.15 It was submitted that the first part of the clause says
that it will be governed by the lease terms. In this case, the lease deed did carry such a covenant. It was submitted that the second part relates to determination of the lease. In this case, the third respondent was not permitted to take the structures back and in order to continue availability of storage space for cargo the last part would apply, then what would happen would be on mutually agreed terms. It was urged that the policy is an All India Policy and such policy has not been challenged. Therefore, the terms of the tender which are in consonance with the policy cannot be challenged, that too, in a public interest litigation.
7.16 It was submitted that there is very limited scope of challenge to tender conditions in a public interest litigation and that even by a contesting bidder, the scope of such challenge is very limited. In this regard, reference was made to the decision of the Supreme Court in the case of Michigan Rubber (India) Limited v. State of Karnataka, (2012) 8 SCC 216, wherein the court has held thus:-
"23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play.
These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
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(b) Fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government.
24. Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached"; and
(ii) Whether the public interest is affected? If the answers to the above questions are in negative, then there should be no interference under Article
226."Page 57 of 97 Downloaded on : Sun Jun 14 17:37:32 IST 2020
C/WPPIL/49/2019 JUDGMENT 7.17 It was submitted that apart from the fact that the
petitioner has no locus to challenge the tender conditions, unless it is pointed out that the condition was put maliciously, the court would not interfere.
7.18 Reference was made to the averments made in paragraphs 8.2, 8.3 and 8.5 of the affidavit-in-reply filed on behalf of the second respondent. It was submitted that the meeting was chaired by the Minister for Shipping. Therefore, there was a genuine urgency to complete the tender process. It was submitted that the petitioner's case is that the third respondent should have been asked to remove the structures. In this regard, reference was made to the averments made in paragraph 4.22 of the memorandum of petition which have already been reproduced hereinabove. It was submitted that if the petitioner's argument is accepted, it would take three more years to commission the project; and hence, in these circumstances, the decision to reimburse the third respondent for the existing structures situated on the subject land, cannot be said to be mala fide.
7.19 Dealing with the contention regarding the structures having been valued excessively, it was submitted that the petitioner's case is twofold; firstly, that ISTAR has given a report doubting the valuation report submitted by the valuer; and secondly that the balance-sheet of the third respondent shows its value at Rs.48 crores. It was submitted that the petitioner wants the court to reject the report of M/s. K.M. Thacker and Associates by saying that it is bad and, therefore, says that on the strength of the report of ISTAR, the successful Page 58 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT tenderer should not have been directed to pay Rs.207 crores. It was submitted that the petitioner has deliberately not chosen to place on record the report submitted by M/s. K.M. Thacker and Associates. The attention of the court was invited to paragraph 4.34 of the petition wherein the petitioner has inter alia stated that a copy of the relevant pages of the valuation report of M/s. K.M. Thacker and Associates dated 10.7.2013 is annexed hereto and marked as Annexure-S. It was pointed out that Annexure-S is comprised of two pages, the first page is a forwarding letter dated 10.7.2013 by K.M. Thacker and Associates submitting valuation report of existing assets on Kandla Port Land (50 acres land); the second page is probably the first page of the report which only shows the name of the project, description, name of client and the valuation amount. It was submitted that the actual report has not been placed on record and that in the absence of the report, how would it be possible for the court to hold that the report is bad without even looking at it? It was submitted that for the reasons best known to the petitioner, it has not produced the report on the record, and hence, an adverse inference is required to be drawn against the petitioner. It was contended that in the absence of production of the report, the challenge to the report must necessarily fail.
7.20 It was submitted that the genuineness of the documents relating to ISTAR is in serious doubt, inasmuch as, the second respondent - DPT says that it has not asked for or paid for the report. The petitioner in the rejoinder is totally silent about the same. It was submitted that in absence of the genuineness of the report of ISTAR being established, this court would not be Page 59 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT in a position to reject the report prepared by M/s K.M. Thacker and Associates, which has not even been produced on record. Referring to the contents of the report prepared by ISTAR, it was submitted that ISTAR has acted as an auditor over the report of M/s K.M. Thacker and Associates and has not valued the assets. Reference was made to certain findings recorded in paragraphs 4.0, 6.0 and 7.0 of the said report, to submit that these findings are not adverse in nature. Referring to paragraph 8.3 which deals with valuation of Civil Construction (Phase I to V), it was pointed out that it is recorded therein that Summary page of Phase I to V is not legible in the copy provided to them. Reference was also made to paragraph 10.3 of the report wherein it has been inter alia stated thus:
"We do not assume any responsibility for correctness of built up area of various structures, land area and even arithmetical working. We have not visited the site."
7.21 It was submitted that neither did the petitioner provide a legible copy of the report to ISTAR, nor did the concerned officials of ISTAR make a site visit. Attention was invited to clause 10.1.2 of the report which bears the heading, "Depreciated Reproduction Cost Basis" and reads thus:
"If as per the contract, lessee has to be reimbursed with the present depreciated reproduction cost, then the method adopted in this report (method-I) is justified."
7.22 It was submitted that thus even in terms of the said report; the method adopted by the valuer is justified. Reliance was placed upon the decision of the Calcutta High Court in J.N. Bose v. Commissioner of Wealth Tax, [1976] 104 ITR 83 (Cal) wherein the court has referred to the decision of the House of Lords in the case of Gold Coast Selection Trust Ltd. v.
Page 60 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020C/WPPIL/49/2019 JUDGMENT Humphrey (Inspector of Taxes), [1948 AC 459,-[1949]17 ITR (Supp) 19, wherein it has been held thus:
"Valuation is an art, not an exact science. Mathematical certainty is not demanded nor indeed is it possible. It is for the Commissioners to express in the money value attributed to them to the asset their estimate, and this is a conclusion of fact to be drawn from the evidence before them. .. From the said decisions, the following principles emerge:
(a) In respect of immovable property there is no fixed market, such as market for share, or for other commodities like sugar, cloth, etc.
(b) There must be certain amount of guess - but the guess must be an intelligent one based on certain objective factors which have a rational nexus with the valuation.
(c) There are different methods - and which one would be suitable for a particular property must depend upon the particular features of the property; of these methods the one should be preferred which can provide more objective data for reliance..."
It was submitted that in the aforesaid premises, reliance placed on the report submitted by ISTAR is misconceived.
7.23 Insofar as the cost of the assets shown in the balance sheet is concerned, it was submitted that the third respondent
- FSWAI is a partnership firm and its accounts are not required to be filed anywhere; therefore, the source from which the petitioner has obtained a copy of the third respondent's balance sheet is questionable. It was contended that the market value of the assets of Rs.207 crores has nothing to do with the cost thereof. It was submitted that the costs reflected in the balance sheet is the historical value. Therefore, cost to the third respondent is irrelevant for the purpose of deciding Page 61 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT the market value of the assets. It was further pointed out that the petitioner has misread the balance-sheet and that even as per the balance sheet the cost of the assets was in the vicinity of Rs.150 crores and that the amount of Rs.48 crores mentioned in the balance-sheet refers to the written down value. It was further submitted that during the tender process, some of the bidders had asked for the valuation. Referring to items No.15 and 27 of the Minutes of the pre-bid meeting held on 13.8.2014, it was pointed out that to those, whom it mattered, the details were given and they did not raise any issue. It was contended that if the bidders who are in the business, did not object, it is not permissible for a third party to say that the valuation is high. It was submitted that, therefore, the whole bogey that the valuation is high must necessarily fail.
7.24 Insofar as the third argument regarding approvals from different authorities is concerned, reference was made to paragraph 4.27 of the tender which pertains to approvals from statutory authorities. It was submitted that it is not the case of the petitioner in the rejoinder that the explanation of the second respondent - DPT regarding why the third respondent was asked to maintain the cargo is to be believed. It was submitted that if the tender had been invited immediately after termination of the lease, this contention would not have been available to the petitioner. It was emphatically argued that there is no public interest involved in this case as it would delay the entire project by three years and in the meanwhile DPT's competitors would thrive,.
Page 62 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020C/WPPIL/49/2019 JUDGMENT 7.25 As regards the contention that the third respondent was
holding an extra piece of land, it was submitted that such contention is factually incorrect as has been explained by the learned counsel for the third respondent. It was submitted that the petition has not been filed in public interest but has been filed with an oblique motive. In conclusion, it was submitted that the petition must therefore, necessarily fail with appropriate observations.
8. In rejoinder Mr. Koshti, learned advocate for the petitioner invited the attention of the court to the lease deed dated 7th April, 1979 between KPT and United Salt Works and Industries Limited, and more particularly clause (viii) thereof which reads thus:
"(viii) On expiry of the lease or its sooner determination by the lease in accordance with the terms of this lease, the leases shall remove all their machinery, structures of whatsoever nature put up by them, and restore the demised premises in its reimbursed conditions without being in any way entitled to be reimbursed for any or damage suffered by them by such determination, and yield up the demised premises to the lesser."
8.1 Reference was also made to paragraph 4(i) of the lease deed, which reads thus:
"In case at the time of determination of this lease deed, there exist some buildings or structures on the demised premises, the lesser shall within reasonable time of his having taken over the same pay reasonable compensation to the lessee for the said building and/or structures. Such compensation shall invariably be determined by the Chairman, Kandla Port Trust, and will Page 63 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT be equal to the difference between the then market value of the demised premises with and without the said buildings and/or structures."
8.2 It was submitted that Kandla Port Trust cannot impose condition of recovery of Rs.207 crores in the tender as otherwise it will be a clear favour to the third respondent since the third respondent is not liable to pay such amount. Reference was made to paragraph 16.2 of the Policy Guidelines, 2014, to submit that the same provides for fresh leases and does not contain any clause for reimbursing the earlier lessee. It was submitted that the present case relates to allotment of a fresh lease and hence, paragraph 16.2 of the policy would apply, whereas the procedure followed by DPT is the procedure provided for renewal of lease.
8.3 The attention of the court was invited to the history of litigation in respect of the subject land, to submit that KPT (now DPT) has been continuously favouring the third respondent. The contents of paragraph 4.22 of the petition were reiterated. It was submitted that the tender contained a clause whereby the bidders had to compensate FSWAI an amount of around Rs.207 crores since the said amount was the estimated value of the existing assets standing on the proposed land. Furthermore, FSWAI as a bidder was not liable to pay the above mentioned amount since it had constructed the unit. It was submitted that the prospective bidders questioned the over valuation of the structure in a pre-bid meeting held on 13.8.2014 but the Port authorities dismissed the said query on the ground that the valuation had been done by a Government approved valuer as per the provisions of the Page 64 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT Land Policy Guidelines 2014. The minutes also made it clear that FSWAI would not be liable to pay the amount of existing assets. It was argued that the contention of the third respondent that the compensation clause was placed pursuant to the requirements of the Land Policy Guidelines of 2014 is highly misplaced and is not legally tenable. It was submitted that the subject e-tender was not governed by clause 16.3(c) of the Policy Guidelines, 2014 (which provides for compensation) as it is applicable only to the renewal of existing leases, whereas the impugned lease was a fresh lease, as directed by the order of the Delhi High Court and all the fresh leases are governed by clauses 15.1 and 16.2 of the Policy Guidelines, 2014 which relate to fresh allotment of land and do not have any provision regarding payment of compensation.
8.4 It was, accordingly, urged that taking the facts in their entirety, though there were no provisions to sell the lease without permission of the Chairman of KPT, it was sold to the third respondent on expiry of lease; in 2004 also without giving public tender it was renewed by KPT. In 2011, the proceedings took place, eviction proceedings were initiated and the third respondent filed an undertaking. It was submitted that the e- tender ought to have been proceeded under clause 16(2) of Land Policy 2014 and that in this case, it was proceeded with as if it was a case of renewal of lease instead of fresh lease. It was submitted that the condition of the Land Policy, 2010 on which reliance has been placed on behalf of the third respondent, is not available because there is no condition in the original agreement also. It was submitted that all these Page 65 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT acts by the KPT expressly favour the third respondent - FSWAI enabling it to win the tender. It was, therefore, urged that the tender process is arbitrary, mala fide and tailor made to favour the third respondent and is sham and is required to be cancelled. It was, accordingly, urged that the petition be allowed and the reliefs as prayed for in the petition be granted.
9. In the above backdrop, the first question that arises for consideration is, whether the present petition which has been filed by way of a public interest litigation, can be entertained?
10. On behalf of the respondents, it has been contended that the petition suffers from delay and laches, and hence, cannot be entertained; that no public interest is involved in the present case; that the conditions of a tender cannot be subject matter of a public interest litigation; that a public interest litigation can be filed for violation of article 21 of the Constitution of India and not in the context of article 14 thereof; that the contesting bidders were well established players in this field and were competent to protect their interest, and that they not having raised any grievance against the tender conditions, such conditions cannot be subject matter of challenge in a writ petition. In this regard, a brief reference may be made to the decisions on which reliance has been placed by the learned counsel for the respondents.
10.1 In R&M Trust v. Koramangala Residents Vigilance Group (supra), the Supreme Court held that public interest litigation jurisdiction is meant for the purpose of coming to the rescue of the downtrodden and not for the purpose of serving private ends. The courts should not exercise this jurisdiction Page 66 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT lightly but should exercise in very rare and few cases involving public interest of a large number of people who cannot afford litigation and are made to suffer at the hands of the authorities. The court also held that there is no doubt that delay is a very important factor while exercising extraordinary jurisdiction under article 226 of the Constitution as the court cannot disturb the third-party interest created on account of delay. The court observed that even otherwise also, why should the court come to the rescue of a person who is not vigilant of his rights?
10.2 In Delhi Development Authority v. Rajendra Singh (supra), the court reiterated that the delay rules apply to PILs also and if there is no proper explanation for the delay, PILs are liable to be summarily dismissed on account of delay. The court observed that in the case on hand, it was not in dispute that both the petitioners though claiming that they are very much conversant with environment and ecology, approached the High Court only in the middle of 2007 and hence, on the ground of delay and laches, the writ petitions were liable to be dismissed.
10.3 In BALCO Employees' Union (Regd.) v. Union of India, (supra), the Supreme Court held that a PIL was not meant to be adversarial in nature and was to be a cooperative and collaborative effort of the parties and the court so as to secure justice for the poor and the weaker sections of the community who were not in a position to protect their own interest. The court held that PIL may, therefore, be described as satisfying one or more of the following parameters which are not exclusive but merely descriptive:-
Page 67 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020C/WPPIL/49/2019 JUDGMENT - Where the concerns underlying a petition are not
individualist but are shared widely by a large number of people (bonded labour, undertrial prisoners, prison inmates).
- Where the affected persons belong to the disadvantaged sections of society (women, children, bonded labour, unorganised labour etc.).
- Where judicial law making is necessary to avoid exploitation (inter-country adoption, the education of the children of the prostitutes).
- Where judicial intervention is necessary for the protection of the sanctity of democratic institutions (independence of the judiciary, existence of grievances redressal forums).
− Where administrative decisions related to development are harmful to the environment and jeopardize people's to natural resources such as air or water.
The court further held that PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. The court observed that it is also necessary for the court to bear in mind that there is a vital distinction between locus standi and justiciability and it is not every default on the part of the State or a public authority that is justiciable. The court referred to its earlier decision in the case of Sachidanand Pandey v. State of West Bengal, (1987) 2 SCC 295, wherein it was observed that if a considered policy decision has been taken, which is not in conflict with any law or is not mala fide, it will not be in public interest to require the court to go into and investigate those areas which are the function of the executive. For any project which is approved Page 68 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT after due deliberation the court should refrain from being asked to review the decision just because a petitioner in filing a PIL alleges that such a decision should not have been taken because an opposite view against the undertaking of the project, which view may have been considered by the Government, is possible. The court observed that it may be seen that whenever the court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation of article 21 or of human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to court due to some disadvantage. The court added that public interest litigation was not meant to be a weapon to challenge the financial or economic decisions which are taken by the Government in exercise of their administrative power. No doubt a person personally aggrieved by any such decision, which he regards as illegal, can impugn the same in a court of law, but, a public interest litigation at the behest of a stranger ought not to be entertained. Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the court is satisfied that there has been violation of article 21 and the persons adversely affected are unable to approach the court.
10.4 In Chairman & MD, BPL Ltd. v. S.P. Gururaja (supra), the Supreme Court held that where the writ petition was filed after one year, by which time the company had not only taken possession of the land but also made sufficient investment, delay of such nature has to be considered to be of vital importance.
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10.5 In Printers Mysore Ltd. v. M.A. Rasheed (supra),
the Supreme Court held that a writ petition should not have been entertained keeping in view the fact that it was filed about three years after making of the allotment and execution of the deed of sale.
10.6 In Reliance Telecom Ltd. v. Union of India (supra), the Supreme Court stressed that in the matters relating to complex auction procedure having enormous financial ramification, interference by the courts based upon any perception which is thought to be wise or assumed to be fair can lead to a situation which is not warrantable and may have unforeseen adverse impact. It may have the effect potentiality of creating a situation of fiscal imbalance.
10.7 In Centre for Public Interest Litigation v. Union of India, (supra), the Delhi High Court held that there is no doubt that the Government has freedom of contract and is allowed a fair play in the joints but its decision has to be free from arbitrariness and not affected by bias or actuated by mala fides and if it is so, the court is duty bound to quash the same despite the fact that it relates to matter of contract and irrespective of a competitor having not challenged it. If a contract is result of arbitrariness, bias or mala fides resulting in distribution of State largesse to individuals, the court will not hesitate in quashing it when such irregularities are brought to its notice by a public spirited person by filing a public interest litigation or in ordering an independent enquiry or investigation if strong case for issue of such directions is made out. The court, would not, however, act on mere suspicion and Page 70 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT surmises of the petitioner. In public interest litigation relating to grant of a contract by the Government, a really strong case will have to be shown by the petitioner alleging corruption and bribe and then only the court will exercise jurisdiction in clear and rare cases and not in cases where reasonably plausible explanation exists for grant of contract. The court will not act as a super auditor and take the Government to task even if Government has faltered so long as it has acted fairly. The court observed that while deciding such a case, the court would of course keep in view as one of the factors, of a competitor having not challenged the award of contract. It is different matter that when a public interest writ petition in such a matter of contract is filed, the court would be more careful in examining the matter so as to ward off the possibility of a competitor having set up the petitioner.
11. The facts of the case may now be examined in the light of the above principles. In this case, the tender notice was published in the newspapers on 5.4.2014. On 12.1.2015, e- auction was conducted and FSWAI emerged as the highest bidder at a bid of Rs.1056.17 per square metre. The letter of intent came to be awarded on 17.4.2015 and on 18.4.2015 possession note was issued in favour of FSWAI. On 10.7.2015, an order came to be passed by this court in Special Civil Application No. 7024 of 2015 filed by M/s. IMC Limited, whereby the second respondent DPT consented for bidding before the High Court and M/s. IMC Limited was granted opportunity to raise its bid. On 23.7.2015, the above petition came to be dismissed with costs and on 4.8.2015 lease deed came to be executed between DPT and FSWAI.
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12. On 11.4.2018, after a period of more than two and a half years from the date of execution of the lease deed, the petitioner filed an application under section 151 of the Code of Civil Procedure in Writ Petition (Civil) No.11550 of 2009, which was filed before the Delhi High Court. The said application came to be withdrawn by the petitioner seeking permission to file a substantive petition. Thereafter, the petitioner filed Writ Petition (Civil) No.5235 of 2018 before the Delhi High Court, which came to be dismissed on the ground of maintainability because of lack of territorial jurisdiction, leaving it open for the petitioner to approach the appropriate forum. The petitioner carried the matter before the Supreme Court by way of a special leave petition being Special Leave to Appeal (C) No.32621 of 2018, which came to be dismissed by an order dated 11.1.2019, whereby the petitioner was relegated to move this High Court to raise its grievance on the same subject matter. Thereafter, the present petition came to be presented on 1st March, 2019.
13. A perusal of the contents of the petition shows that except for reference to the writ petition filed before the Delhi High Court and the special leave petition filed before the Supreme Court, no averments have been made explaining the delay of more than three and a half years in filing the present petition. However, in response to the contentions raised in the affidavits-in-reply filed on behalf of the respondents No.2 and 3, in paragraph 3 of the affidavit-in-rejoinder filed on behalf of the petitioner, it has been averred thus:
Page 72 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020C/WPPIL/49/2019 JUDGMENT "3. That it is denied that the instant writ petition suffers from the vice of delay and Iaches since it is filed after a period of more than five years. It is submitted by the Petitioner herein that the letter of allotment of the disputed land in favour of the Respondent No.3, subsequent to the sham tender, is dated 17.04.2015 and the Petitioner herein got hold of the tender and related documents in dispute only in the month of February 2018. Immediately thereafter, after carefully perusing the same, on 11.04.2018, the Petitioner herein filed C.M No. 15376 of 2018 in Writ Petition No.11550 of 2009, seeking similar relief prayed in the instant writ petition i.e. cancellation of the lease of 50 acres of awarded through a sham tender to Respondent No.3. However, the said application was withdrawn by the Petitioner herein with the liberty to file substantive writ petition as the application sought relief in regard to an independent cause of action than that of Writ Petition No.11550 of 2009. Thereafter, when the Petitioner herein filed a writ petition WP (C) No. 5235/2018, with the same set of prayers as in the instant petition, before the Hon'ble High Court of Delhi, the Hon'ble High court vide its order dated 01.10.2018 held the said petition as not maintainable because of lack of territorial jurisdiction. Thereafter, when the Petitioner herein assailed the order dated 01.10.2018 passed by the Hon'ble High Court of Delhi before the Hon'ble Supreme Court by filing a Special Leave Petition [SLP (C) No.3262/2018], the Hon'ble Supreme Court, vide its order dated 11.01.2019, dismissed the same and granted liberty to the Petitioner herein to move this Hon'ble Court. Thus, the aforesaid sequence of events sufficiently and cogently explains the alleged delay in filing the instant writ petition before this Hon'ble Court."
14. Thus, from the averments made in the rejoinder, it is evident that the sole ground put forth for explaining such delay is a bald assertion that the petitioner got hold of the tender and related documents in dispute only in the month of February. 2018. In this regard it may be pertinent to note that the petitioner claims that it is at its instance that the second respondent DPT was required to terminate all leases; all the Page 73 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT orders of the Delhi High Court in this regard have been passed at the instance of the petitioner; therefore, initially the petitioner filed an application in Writ Petition No.11550 of 2009. In this background, it is difficult to believe that the petitioner came to know about the tender process and the execution of the lease in favour of the third respondent only in February 2018. Moreover, the delay has to be computed from the date when the cause of action has arisen and not from the date when the petitioner came to know about it, inasmuch as, this court would not exercise its writ jurisdiction, that too, in a public interest litigation, where the petitioner is not vigilant and comes to the court after considerable delay. Hence, the petition does not deserve to be entertained on the ground of delay alone.
15. Another aspect of the matter is that as held by the Supreme Court in the above referred decisions, public interest litigation is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public-spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the court for relief. In the facts of the present case, the petitioner has challenged the tender dated 28.3.2014 on the ground that the conditions of the tender are such that favour the third respondent - FSWAI. From the averments made in the petition, as reproduced in the earlier part of the judgment, it is evident that pursuant to the tender notice, twelve parties had submitted bids. Admittedly even according to the petitioner, at least three parties referred to in paragraph Page 74 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT 4.22 of the petition namely, AEGIS, M/s. IMC Limited and M/s Adani Port & Special Economic Zone Ltd. are highly reputed parties. It cannot be gainsaid that such parties were in a position to defend their rights and challenge any condition of the tender if it was found to be violative of article 14 of the Constitution of India. The parties were well aware of the condition of depositing Rs.207 crores for reimbursing the third respondent - FSWAI and had even raised queries about the valuation of the structures on the subject land. M/s. IMC Ltd had also challenged the tender process by filing a writ petition before this court, albeit on other grounds. Therefore, this was a tender process wherein the parties who were affected by the tender conditions did not deem it fit to challenge the same. The Delhi High Court in Centre for Public Interest Litigation v, Union of India (supra) has held that while deciding such a case, the court would keep in view as one of the factors of the competitor not having challenged the award of contract. In the present case, the public interest litigation has not been filed to protect basic human rights of the weak or the disadvantaged but challenging conditions of a tender, wherein the affected parties, namely the parties who had participated in the tender process, were reputed parties, who had the wherewithal to challenge the relevant conditions of the contract. Under the circumstances, the present petition at the instance of the petitioner challenging the tender conditions, which were not challenged by any of the participating bidders, does not deserved to be entertained on this ground also.
16. Having held that the petition does not deserve to be entertained, it would not thereafter be necessary for this court to deal with the merits of the case. However, considering the Page 75 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT fact that the learned counsel appearing on behalf of the respective parties have addressed the court on the merits of the case at length, and this court has invested a considerable amount of time in hearing the matter, the court deems it fit to deal with the case on merits also.
17. In the memorandum of petition as well as arguments advanced by the learned counsel for the petitioner, reference has been made to various proceedings that took place earlier, for the purpose of pointing out the conduct of the second respondent - KPT/DPT as well as the third respondent - FSWAI. While it is true that the allotment of land and renewal of leases by the KPT to various parties including the third respondent, has a chequered history; however, the prior illegalities have been dealt with by the Delhi High Court in the orders passed by it from time to time in the public interest litigation filed before it by the petitioner. Pursuant to the orders passed by the Delhi High Court in the PIL, proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, came to be initiated against the third respondent - FSWAI culminating into an order against it whereby it was ordered to be evicted from the premises. After considerable litigation, the possession of the lands held by the third respondent came to be taken over by the second respondent and the third respondent has filed an undertaking, the relevant terms whereof have been referred to earlier. The present case, however, is limited to the reliefs claimed in the present petition, which are three fold, viz. (i) to cancel the tender dated 28.3.2014 awarded to the third respondent in April 2015 for allotment of 50 acres of land for the purpose of liquid storage tanks or in the alternative, direct the third respondent to pay Page 76 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT the Port authorities, Rs.207 crores along with interest; (ii) to direct the second respondent to cancel the old way-leave permission of laying pipelines from jetties to terminal granted in the name of FSWAI and direct the third respondent to obtain fresh pipeline permission as per specific provisions in the tender and also cancel all the statutory permissions issued by various statutory authorities in the name of FSWAI while it was possessing the leasehold rights of the land under the lease deed which expired in 2011 and to direct the third respondent to obtain all approvals, permissions and licences from different statutory and regulating authorities like clearance from Gujarat Pollution Control Board, Coastal Regulatory Zone (CRZ), Environment and Forest Department, Chief Controller of Explosives, Nagpur and other statutory clearances from various department as per explicit tender provision under terms and conditions No.4.27 of tender; (iii) to set aside allotment of additional land to the third respondent without any lease deed and recover annual lease rent at the same rate that is being charged for 50 acres with retrospective effect from the date of actual occupation/encroachment.
18. Insofar as the first prayer is concerned, the main plank of the submissions of the learned advocate for the petitioner is that the DPT does not have any authority to recover any amount for the purpose of reimbursing the third respondent - FSWAI for the assets put up by it on the subject land; that the valuation of the assets on the subject land far exceeds its actual value; and that such condition was inserted to put the third respondent in a favourable position as against the other bidders.
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19. In this regard reference may be made to the lease deed dated 7th April, 1979 between United Salt Works and Industries Limited and Kandla Port Trust. The petitioner has placed reliance upon clauses (viii) and (ix) thereof, to submit that the third respondent was required to hand over vacant possession of the premises and was not entitled to any reimbursement for any loss suffered by it. Furthermore in terms of clause (ix), the lease could not have been assigned, sub-let or transferred by United and hence, the transfer of lease in favour of FSWAI was not in consonance with the conditions of the lease deed.
20. In this regard, it may be noted that while condition (viii) of the lease deed requires the lessee to remove the structures on the land upon termination of the lease, clause 4(i) thereof says that in case at the time of determination of the lease deed, there exist some buildings or structures on the demised premises, the lesser shall within reasonable time of his having taken over the same, pay reasonable compensation to the lessee for the said building and/or structures. Such compensation shall invariably be determined by the Chairman, Kandla Port Trust, and will be equal to the difference between the then market value of the demised premises with and without the said buildings and/or structures. In the opinion of this court, in the light of the condition contained in clause (i) of paragraph (4) of the lease deed, it is not correct to say that the lease deed does not provide for reimbursement for the structures thereon.
21. Insofar as the contention based upon clause (ix) of the lease deed is concerned, clause (ix) provides that the lessee shall not assign, sublet, transfer or otherwise part with the Page 78 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT demised premises or any part thereof without prior permission in writing from the Chairman, Kandla Port Trust or such officer or agent as the lesser may authorise in this behalf... It may be noted that in the communication dated 14th January, 1986 of KPT addressed to United Salt Works, it has been stated that its application for transfer of lease hold rights of the land admeasuring 1010.156 acres which includes the subject land, in favour of FSWAI has been considered by the Chairman, KPT and that he has approved the proposed transfer. Evidently, therefore, the requirements of clause (ix) of paragraph (2) of the lease deed stands satisfied.
22. It may further be noted that pursuant to the directions issued in the writ petition filed by the petitioner before the Delhi High Court, proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act came to be initiated against FSWAI which culminated into an order dated 31.3.2012 of the Estate Officer calling upon it to vacate the premises within fifteen days. The said order however, was followed by a notice dated 27.6.2012 of KPT addressed to FSWAI informing it that KPT has taken over possession of land, however considering the hazardous nature of cargo lying in the tank and perishable cargo lying in the warehouses, it would be the responsibility of M/s. Friends Salt Works and Allied Industries to deploy its personnel for maintenance of existing cargo. It is further stated that it may be noted that permission would be granted to such personnel for the purpose of maintenance and safety measures only. It would be the sole responsibility of M/s. Friends Salts Works & Allied Industries for maintenance of liquid cargo, particularly considering consequences thereof.
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23. Thus, the second respondent KPT had called upon FSWAI to maintain the liquid cargo lying in the tanks. Reference may be made at this juncture to paragraph 25 of the affidavit-in- reply filed on behalf of the second respondent - KPT/DPT wherein it has been stated that there were liquid cargo stored at the terminal under bond of Customs Department, pending clearances after custom duty payment as also some cargo stored therein was seized by Customs/DRI Department, and the terminal operator was duty bound to ensure safety of cargo (hazardous in nature) which necessitated that all the permits/licence were kept in force. The KPT had therefore, categorically shifted the responsibility of safe keeping of cargo
- hazardous in nature - to the erstwhile lessees though it had taken possession of the land as also structures thereon under communication dated 27.6.2012.
24. Thus, it was in the light of the above facts that the third respondent - FSWAI had not removed the superstructures from the said land. Moreover, the superstructures have been put up at considerable expense and the tender is for liquid cargo terminal. Evidently, therefore, it would be a complete waste of natural resources and time and money, to call upon FSWAI to remove the superstructures and then put up new superstructures, which would unnecessarily consume time and expenditure and can certainly not be said to be in public interest.
25. Insofar as breach of the tender conditions in the tender process is concerned, reference may be made to the Land Policy of 2010. Paragraph 6.2.2 of the said policy makes provision for lease. Paragraph 6.2.2.1 makes provision for fresh Page 80 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT lease and paragraph 6.2.2.2 makes provision for renewal of existing leases. Clause (f) of paragraph 6.2.2.2 provides that for existing leases, at the time of expiry/ termination/ determination of lease the provisions relating to removal of structures will be applicable. If no such provisions exist, the lessee shall remove all structures at his own cost within three months of expiry/ termination/ determination failing which these will vest with the port free from encumbrances. If the port so decides for reasons to be recorded, it may also take over the structures on terms mutually agreed with the lease holder. Thus, the Land Policy of 2010 permitted the port to take over the structures on terms mutually agreed with the lease holder and it was not that in every case the lessee was required to remove the structures. On behalf of the petitioner, it has been contended that in the present case the tender was in respect of a fresh lease and not renewal of the existing lease, and hence, clause (f) of paragraph 6.2.2.2 of the Land Policy, 2010 would not be applicable, whereas on behalf of the second respondent, it has been submitted that a fresh lease is a lease of a green field viz. vacant land, which has not been leased earlier and that in the present case, the land had been leased earlier and there are superstructures thereon, and hence, it is a case of renewal of an existing lease.
26. The Land Policy Guidelines for Land Management by Major Ports 2014 came to be issued by the Ministry of Shipping and were adopted by the KPT on 23.1.2014.
27. Paragraph 16.2 of the Policy Guidelines, 2014 provides for "fresh leases" and paragraph 16.3 provides for "renewal of existing leases". Clause (c) of paragraph 16.3 inter alia Page 81 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT provides thus:
"... If any structures has been constructed by the earlier lessee on the leased land, it would be valued by a third party valuer to be agreed upon by the Port Trust and the earlier lessee and the successful bidder has to remit the value of the structures which would be passed on to the previous lessee."
28. On 17th July, 2015, the Policy Guidelines, 2014 came to be clarified whereby in paragraph 11.3(c) it was provided that the provision of first right will also apply to expired lease (possession has been taken by the Port) also in addition to existing leases.
29. Thus, considering the Land Policy Guidelines as referred to hereinabove, there is a dispute as to whether the present case relates to a fresh lease or renewal of the existing lease. Assuming for the sake of argument that this is a case of fresh lease and not renewal of an existing lease, it is equally true that the valuable assets of the third respondent - FSWAI were existing on the subject land and could not be removed as the third respondent was directed by KPT to maintain the cargo lying in the tanks.
30. At this stage, reference may be made to the following averments made in paragraph 8.4 to 8.6 of the affidavit-in- reply filed on behalf of the second respondent:-
"8.4 That, during the meeting held with the Secretary, Ministry of Shipping and the then Chairman, DPT on Page 82 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT 11.07.2012, it was directed that DPT may explore options & maintain huge tank farm facilities laying idle so that shortage of storage facility at Kandla could be reduced. During the meeting held with the Ministry of Shipping on 6.2.2012, DPT was directed to complete the valuation of existing structures on DPT land without further delay. In the meeting chaired by the Ministry of Shipping on 1.8.2013, DPT informed that the valuation of godown structures on 25 acres land and tank farm structures on 50 acres land was completed.
8.5 Repeated representations were received from the Gandhidham Chamber of Commerce & Industries (GCCI) and other references were forwarded by Ministry of Shipping to DPT for early operationalization of the 50 acres Liquid Storage facilities. The total storage capacity of 50 acres tank farm was about 3.84 lakh KL which was about 1/3rd of the total liquid storage capacity at Kandla. As this storage facility had remained closed and unutilized since DPT took over the possession in June 2012, there was a sudden decrease in liquid storage facility at Kandla resulting into exorbitant increase in monthly rentals charged by other Tank Farm owners who took the undue advantage of shortage of liquid storage capacity by charging 2 to 3 times higher monthly rentals compared to the rates prevailing prior to June, 2012, making liquid storage at Kandla more expensive compared to nearby ports. This forced importers of vegetable oil and chemicals to divert liquid cargo vessels from Kandla to nearby ports, adversely affecting liquid cargo traffic at DPT and considerable loss of revenue to Page 83 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT DPT.
8.6 The issue of decline and diversion of liquid cargo at Kandla was raised/discussed in the meetings of the Board of Trustees of DPT and also at the meetings of the Ministry of Shipping. Realizing that unless the above storage facility was made operational at the earliest, it would not be possible to attract more liquid cargo at DPT, DPT was directed to expedite auction process. In the light of the above facts and also due to ban on leasing of land, all possibilities were explored including operationalization of said tank farm facility by PSUs such IOCL, BPCL, HPCL etc., however such efforts could not materialize."
31. Moreover, considering the urgency of the matter, as borne out from the averments made in the affidavit-in-reply of the second respondent, as referred to hereinabove, it was necessary to commence the liquid cargo terminal at the earliest. Therefore, it certainly would not have been wise to call upon the third respondent - FSWAI to remove the superstructure, whereafter the new lessee would again have to establish the necessary infrastructure resulting in colossal waste of time and funds. If in these circumstances, the second respondent - DPT has taken a considered decision to require the successful bidder to pay the value of the superstructure to compensate the third respondent for its value, it cannot be said that such decision is in any manner arbitrary or unreasonable, more so, considering the fact that the conditions of lease as well as the amended policy permit such course of action. While the third respondent - FSWAI did not have an existing lease, it did have superstructures on the land which Page 84 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT could not be removed as the cargo contained in the tanks was required to be maintained. A bidder, who bids for the subject land would therefore, be getting the lands with the superstructure. Therefore, there is no infirmity in the action of second respondent in requiring the bidder to pay the value of such superstructures. Having regard to the fact that such superstructures belong to the third respondent - FSWAI, who could not have removed them in view of the position prevailing at the time of eviction and the directions issued by the second respondent to maintain the cargo, it was entitled to reimbursement of the value of such superstructures. The contention that the second respondent - DPT could not have recovered the value of the superstructures and reimbursed the third respondent - FSWAI, therefore, does not merit acceptance.
32. The next question that then arises for consideration is the valuation of the superstructures. The second respondent at the time of inviting tenders has got the valuation of the assets done by a Government approved valuer M/s K.M. Thacker and Associates who submitted a report on 10.7.2013, whereby the assets were valued at Rs.207,72,38,800/-. Accordingly, a condition was inserted in the price bid clarifying that the existing assets standing on the proposed land are valued at Rs.207,72,38,800/- and the bidder is required to give an undertaking that he would deposit such amount with the second respondent.
33. It is the case of the petitioner that the assets have been overvalued. For making such assertion, the petitioner has placed reliance on a report stated to have been submitted by Page 85 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT ISTAR at the instance of the second respondent - DPT whereby ISTAR has reviewed the valuation report prepared by M/s K.M. Thacker and Associates. On behalf of the second respondent - DPT, it has been stated on oath that no such documents calling for such report are found on its record. It is also stated that it does not hold any account with the bank from which payment has been made to ISTAR. The petitioner on the other hand has not disclosed the source from which it had obtained such report. Be that as it may.
34. From the documents produced by the petitioner, it is apparent that though it was in possession of the entire report of M/s K.M. Thacker and Associates, it has chosen to produce only the first page of such report before this court. Therefore, the manner in which the land has been valued and the method adopted for arriving at such valuation, has not been placed before this court. Consequently, it is not possible to ascertain whether the assets have been properly valued in the report or not. Besides, the report submitted by ISTAR also does not say as to what is the infirmity in the report submitted by M/s K.M. Thacker and Associates. Reference may be made to certain extracts of the report submitted by ISTAR. In paragraph 1.2, it has been stated that brief description of land development, storage tanks, their foundations, dyke walls, pipelines firefighting pumping station, electrification, etc. are properly given. In paragraph 2.0, it is recorded that description of the Kandla Port given in the report is reasonable for the purpose of valuation. In paragraph 4.0 which bears the heading, "The Valuation Process", it is stated that definition of 'market value' given is as per the International Valuation Standards (IVS). However, IVS is not followed in the process of valuation (any Page 86 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT way, it is not mandatory to follow). In paragraph 6.0, under the heading "Presumptions", it is recorded that presumptions mentioned are of the nature of assumptions and limiting conditions normally made by the valuers, and are appropriate. In paragraph 7.0 under the heading "Technical Details - Annexure-I for Phase I to V", it is stated that technical details of various structures and storage tanks are mentioned in brief but with reasonable clarity. In paragraphs 8.0 and 8.1 of the said report, it has been recorded thus:
"8.0 Part II Valuation- Method Valuation is carried out by depreciated reproduction cost method.
8.1 A. Value of land development Consideration of land development cost in valuation is justified in the following situations:
- when 'market value' of the land is estimated by comparing the subject land with sale instances of undeveloped low lying land in the vicinity,
- when lessee has incurred the expenses of land development and covenants of the lease deed provide for compensating him for the same at the time of expiry of the lease and reverting the possession to the lessor."
35. In paragraph 8.3, which relates to Valuation of Civil Construction (Phase I to V), it has been stated that rates adopted for various structures are reasonable looking to their descriptions. It is further stated that summary page of Phase I to V is not legible in the copy provided to them. Para 8.4 Page 87 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT relates to Valuation of Tank Farm Project (Phase I to V). In paragraph 9.0 under the heading "Method II Project Summary"
it is stated that the method adopted is prima facie beyond any accepted method of valuation. Adopting reproduction cost new of the assets, addition of capital value of ground rent into it, addition of 15% operation expenses into it and then applying 23% average depreciation - we are not of the opinion of approving this method of valuation. In paragraph 10.1.2 under the heading "Depreciated Reproduction Cost Basis", it is stated that as per the contract, lessee has to be reimbursed with the present depreciated reproduction cost, then the method adopted in this report (method - I) is justified. In paragraph 10.3, it has been recorded that they do not assume any responsibility for correctness of built-up area of various structures, land area and even arithmetical working and that they have not visited the site. Thus, the report does not say as to what according to ISTAR is the correct valuation of the assets. Moreover, report submitted by ISTAR does not say that the method adopted by the valuer is totally unjustified.
36. For the purpose of contending that the actual value of assets is less, the petitioner has placed reliance upon the balance sheet of the third respondent - FSWAI to submit that the cost of such assets to the petitioner was only Rs.48 crores. In this regard, the learned counsel for the third respondent has pointed out that even according to the balance sheet, the cost of assets was in the vicinity of Rs.150 crores and that Rs. 48 crores is the written down value of the assets. Moreover, the assets are not to be valued at costs, but at market value and what M/s. K.M. Thacker and Associates has done is valued the assets at market value.
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37. Thus, on a perusal of the report of ISTAR, it is apparent that it does not categorically say that the valuation done by M/s. K.M. Thacker and Associates is incorrect. Besides, ISTAR has not valued the assets stating as to what according to it is the correct value of the assets. Moreover, while it has been contended before this court that the valuation by M/s K.M. Thacker and Associates is incorrect, though the petitioner was in possession of a complete copy of the report submitted by M/s K.M. Thacker and Associates, it has not been placed the report on record, in the absence of which, it is not possible for this court to comment one way or the other as regards the correctness of the valuation done by the said valuer. Moreover, the fact that despite having a copy of the report, the petitioner has not thought it fit to place the same on record, leads the court to draw an adverse inference. Also in the light of what is stated in the report of ISTAR, the origin whereof is itself doubtful, it cannot be said that the said report says that the valuation made by M/s K.M. Thacker and Associates is incorrect. The contention that the assets have been overvalued, therefore, deserves to be rejected.
38. Next, it has been contended by the petitioner that the third respondent - FSWAI should be called upon to pay the amount of Rs.207 crores to the second respondent. Such contention on the face of it is absurd. When Rs.207 crores were to be paid by the successful bidder to the second respondent - DPT for the purpose of reimbursing the third respondent - FSWAI for the cost thereof, calling upon the third respondent to pay such amount which is to be reimbursed to it, is an exercise in futility and the proposition is on the face of it Page 89 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT absurd.
39. The relief prayed for vide paragraph 12(A) of the petition, therefore, does not deserve to be granted.
40. The next prayer in the petition is to direct the second respondent to cancel the old way-leave permission of laying pipelines from jetties to terminal granted in the name of FSWAI and to direct the third respondent - FSWAI to obtain fresh pipeline permission as per specific provisions in the tender and also cancel all the statutory permissions issued by various statutory authorities in the name of FSWAI, during the possession of leasehold rights of the land under the lease deed which expired in 2011 and to direct the third respondent to obtain all approvals, permissions and licences from different statutory and regulating authorities referred to therein.
41. In this regard it may be pertinent to refer to the following averments made in paragraph 4.22 of the petition:-
"4.22 Respondent No.2 has given permissions for laying and operating the pipelines from its 5 Oil Jetties, where the Ships/Vessels berth along to deliver imported liquid cargo and receive export cargo for foreign destinations. Copies of these permissions are annexed hereto and marked as Annexure M. These pipelines are connected with Tanks of FSWAI, in which the cargo is transferred from Ships/Vessels through these pipelines for storage. These pipelines, referred as Dock Pipelines, are the integral part of FSWAI Terminal. Without these pipelines the Terminal will be useless and redundant. For Page 90 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT operating the terminal, these pipelines are essentially required. Any investor, who plans to invest hundreds of crores of rupees to acquire the Terminal, shall be interest only if it is possible for him to operate the Terminal. Without Dock Pipelines, it would be almost not possible for the investor to operate the Terminal, hence he would lose the interest to acquire such a useless Asset. Port Authorities i.e. respondent No.2 did not cancel the pipeline permissions given to FSWAI along with taking over possession of land. Pipelines remained in the possession of the FSWAI. Port authorities did not include these pipelines in the tender with the intention to create an invincible roadblock that will automatically kill the competition against FSWAI.
Xxxxxxx Even if an investor applies for Fresh Way-Leave permission for laying new Dock Pipelines, the permission by ports it-self takes about a year to get sanctions of competent authority for such permissions, which is evident from the pipeline permissions given to new 17 plot allottees. The pipeline to these allottees were given after more than one year after allotment of plots for construction of liquid storage terminals. Moreover, the pipeline route passes through CRZ area and carry hazardous Chemical, therefore, getting permissions from other regulatory authorities, viz. CRZ/Environment Clearances from State and Central Government Authorities and Explosive Licenses from Petroleum & Explosive Safety Organization may take another year and Page 91 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT thereafter laying and construction of pipelines and licences for commissioning from concerned regulatory authorities may further take another year because the corridor reserved for these pipelines has existing petroleum pipelines adjacently, which always remain charged with Petroleum Products. Therefore, it is not possible to fabricate the pipelines unless the hot work for fabrication is permitted by DPT fire brigade on day to day basis.
This situation, created intentionally by the Port Authorities, puts commissioning of the whole project into uncertainty. An investor, who invests hundreds of crores in this project, will never put investments in a project which lack certainty.
In comparison to other participants, FSWAI had already available pipelines in its possession, which were not cancelled and hence FSWAI was capable of commissioning the Terminal on day one of getting possession. Thus, a level playing field was intentionally denied to other participants, which created such a negative situation that almost all the participants left the participation during final bidding."
42. Thus, the above relief is claimed on the basis that since the third respondent - FSWAI already has the necessary permissions which otherwise take a considerable time, to create a level playing field its permissions should be cancelled. One fails to comprehend as to why participants would leave the bidding on this ground. In every case where there was an Page 92 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT earlier lessee, it is quite probable that he may be having the requisite licences and permissions. When a tender is invited, such persons would be placed in a slightly favourable position; however, no mala fide or oblique intention can be attributed to the second respondent merely because on account of certain fortuitous circumstances the third respondent already had the necessary permissions. Besides, no weightage is given in the tender process to a party which already has the necessary permissions. Moreover, no details have been given about the various permissions, approvals and licences of which cancellation is sought and neither are the concerned authorities who have granted such permissions or licences been impleaded as the respondents. Under the circumstances, no case has been made out for grant of the said relief.
43. The last relief claimed is to set aside allotment of additional land to the third respondent without any lease deed and recover annual lease rent at the same rate that is being charged for 50 acres with retrospective effect from the date of actual occupation/encroachment.
44. In this regard, it is alleged in paragraph 4.57 of the petition that the second respondent had invited the tender for 50 acres of land but while inspection by the participants during the tendering system, it was found that the actual area of the land was 57.38 acres. That M/s. Adani and Ports and Economic Zone Limited raised query in respect of this issue vide query No.11 by its letter dated 11th August 2014. In response to which, it was stated that the proposed tender is invited for allotment of 50 acres of land only which will be allotted to successful bidders on actual survey of the land. It is stated that Page 93 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT it is, therefore, established that the third respondent was in possession of 7.38 acres of additional land illegally since the beginning which was not allotted to it and it had constructed the terminal in such a way as if it was part of the terminal legally, without which the entry to some of the enclosures were restricted. In this regard, the second respondent in paragraph 36 of its affidavit-in-reply has emphatically denied that any additional land of 7.5 acres has been allotted to or encroached upon by the third respondent as alleged or otherwise. It is stated that the third respondent is put to possession of the land put to auction only, which is also reflected in the measurement carried out at the time of handing over of the land admeasuring 50 acres, as per the tender. It is denied that the third respondent has been utilizing about 57.5 acres of land for its liquid cargo terminal as against allotted 50 acres, and it is categorically stated that it is grossly incorrect. It is stated that the measurement of the area allotted to the third respondent was carried out again in the year 2015 and that the green patch area around the tank terminal is in fact outside the boundary of the terminal.
45. Thus, the second respondent has categorically denied that any additional land admeasuring about 7.5 acres has been allotted to or has been encroached upon by the third respondent. A perusal of the plan/map at Annexure Z/G to the petition clearly shows that the additional area is a tree garden area which is outside the tank terminal area. Thus, on facts the petitioner has failed to establish that the third respondent - FSWAI has been allotted any additional land without any lease deed. The said prayer also therefore, deserves to be rejected.
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46. Thus, even on merits no case has been made out for grant of any reliefs as prayed for in the petition.
47. Apart from the above, it may be noted that it is not the case of the petitioner that the reserve price/market value of the land in question is not correct. Insofar as the fixing of reserve price/market value of the land is concerned, the Board had approved the rate structure and the resolution passed by the Board was sent for approval to TAMP which approved and notified the rates vide Notification No.350 dated 4.12.2014. Thus, the reserve price was duly approved by the appropriate authority, and as noted hereinabove, it is not even the case of the petitioner that the reserve price was not proper. The third respondent had initially bid Rs.905.31 per square metre at the first instance which was raised to Rs.1056.17 per square metre during the course of inter se bidding. It is not the case of the petitioner that the amount bid by the third respondent is inadequate. Therefore, there is no loss of revenue to the second respondent - DPT, so as to involve any public interest. Insofar as the amount of Rs.207 crores is concerned, such amount was to be reimbursed to the third respondent - FSWAI, therefore, since such amount was not going to come into the coffers of the second respondent, the valuation thereof would not involve any public interest.
48. It has been contended on behalf of the petitioner that the tender process was a sham. However, the record of the case, as produced by the petitioner itself, shows that pursuant to the tender notice several parties participated in the tender process. Three of the parties named in the petition are stated Page 95 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT to be reputed and well established players in the field. These parties have taken part in the tender process and during the course of the pre-bid meetings raised questions in relation to the issues raised by the petitioner, namely, valuation of the assets; whether the third respondent was required to pay such amount; and whether the oil jetties to the tank farm are also part of the assets under bidding, to which the second respondent has given a reply. Even after considering all these factors, three parties participated in the bidding process. One of the parties, namely, M/s IMC Limited even filed a writ petition challenging the tender process on some other ground, wherein this court, permitted inter se bidding between the parties, and as recorded in the order dated 14.7.2015, the highest offer of M/s. IMC Limited was Rs.1096 per acre, pursuant to which the third respondent - FSWAI showed willingness to raise its offer provided M/s. IMC complied with the condition of depositing the EMD of Rs.30.53 crore either by demand draft, bankers cheque or bank guarantee; however, M/s. IMC Limited declared that for specific reasons it is not in a position to furnish bank guarantee and sought permission to withdraw the petition and showed willingness to pay appropriate costs. Pursuant thereto, the petition was permitted to be withdrawn with costs of Rs.2 lakhs. In these circumstances, where parties have participated in the process and there is no allegation of any cartel having been formed, the contention that the tender process was sham is misconceived and has no foundation whatsoever. Under the circumstances, this court is of the opinion that no public interest is involved in the present case.
49. In the light of the above discussion, the petition fails and Page 96 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020 C/WPPIL/49/2019 JUDGMENT is, accordingly, dismissed. Notice is discharged with no order as to costs.
(HARSHA DEVANI, J) (SANGEETA K. VISHEN,J) Z.G. SHAIKH Page 97 of 97 Downloaded on : Sun Jun 14 17:37:33 IST 2020