Society For The Promotion Of vs M/S.Hotel & Allied Trades Private on 22 October, 2010

[Cites 42, Cited by 0]

Kerala High Court

Society For The Promotion Of vs M/S.Hotel & Allied Trades Private on 22 October, 2010

Bench: Thottathil B.Radhakrishnan, P.Bhavadasan

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WA.No. 1520 of 2010()


1. SOCIETY FOR THE PROMOTION OF
                      ...  Petitioner
2. THE ADMINISTRATOR,UTL,
3. UNION OF INDIA, REPRESENTED BY THE
4. UNION OF INDIA, REPRESENTED BY
5. THE PLANNING COMMISSION,

                        Vs



1. M/S.HOTEL & ALLIED TRADES PRIVATE
                       ...       Respondent

2. MR.JOSE DOMINIC, MANAGING DIRECTOR

3. SRI.VIJAYA MALLYA, MEMBER OF PARLIAMENT

                For Petitioner  :SRI.S.RADHAKRISHNAN,SC,LAKSHADWEEP ADMN

                For Respondent  :SRI.JOSEPH KODIANTHARA (SR.)

The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
The Hon'ble MR. Justice P.BHAVADASAN

 Dated :22/10/2010

 O R D E R
     THOTTATHIL B. RADHAKRISHNAN & P. BHAVADASAN, JJ.
        - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                    W.A. 1520/2010 in W.P.(C) 26030/2010,
                    W.A. 1517/2010 in W.P.(C) 25455/2010,
            W.P.(C) Nos.24593, 25455, 26030 & 26925/2010.
        - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                  Dated this the 22nd day of October, 2010.

                                         JUDGMENT

Bhavadasan, J, Bangaram Island, one among the group of 36 Islands constituting the Union Territory of Lakshadweep (UT), was lying unattended for a long time. It is now a well developed high value tourism centre. It has a wonderful beach, luscious coconut groves and is rich in blue lagoons, coral reefs and marine wealth. As on date, it is stated as one of the most attractive tourist spots for high profile tourists.

2. The UT Administration took over the lands of the inhabitants in 1973. Initially the Hotel Corporation of India set up a small resort to cater to the needs of the tourists. Later, it was taken over by ITDC, which developed a few facilities in the Island. However, they failed to work in W.A.1517/2010 & con.cases.

the way and manner in which the development was planned. Further efforts also did not yield any result. For want of professional approach to tourism, the Island suffered and therefore it was decided to hand over the development of the resort to professionally qualified persons so as to develop it into an attractive and lucrative Island Resort. In 1982, Society for Promotion of Recreational Tourism and Sports (SPORTS), a society registered under the Societies Registration Act came into existence. The Chairman of the Society is the Administrator of the Union Territory, Collector cum Commissioner is the Vice Chairman etc. The Society has a general body and a Board of Management (hereinafter referred to as BOM) to govern and manage its affairs. The Island Development Authority indicated that SPORTS should be the supportive agency for development of tourism. It was recommended that SPORTS expand its activities and fields of action. Soon thereafter SPORTS began to act as an W.A.1517/2010 & con.cases.

agency of the Tourism Department, taking over the management of tourism in the Island. That was in the year 1982. Though SPORTS took earnest efforts to develop tourism, it too failed to achieve it on an international level. SPORTS too suffered for want of professionals to develop the Island and make it an attractive resort for the foreigners.

3. Then it was decided to hand over Bangaram Island Resort (hereinafter referred to as BIR) to private entrepreneurs, who are well versed, well experienced and well equipped in the field of tourism. That resulted in going for global tenders in the year 1988. M/s.Hotel and Allied Trades Private Limited (hereinafter referred to as M/s.Casino) who is the first respondent in the writ appeals and the petitioner in the corresponding writ petitions, bid in the auction and turned out to be the successful bidder. The concern offered to run the resort for a proposed period of 25 years, i.e., till 2013.

W.A.1517/2010 & con.cases.

4. M/s. Casino obtained permission to utilize the facilities offered by SPORTS in the year 1988. That was extended under one circumstance or another till 2001. Then the Administration decided to terminate the arrangement with Casino and to go in for global tenders. M/s. Casino approached the District Court and obtained a stay. They then initiated arbitration proceedings. The arbitration proceedings culminated in an award dated 3.6.2004. It is in furtherance thereof, the arrangement was extended till 31.8.2010 in favour of M/s. Casino. Meanwhile, the Island was involved in several litigations. Ultimately, it was held that SPORTS was amenable to writ jurisdiction, as it was performing a public duty.

5. It is stated that on 25.2.2010, M/s. Casino sought renewal for a further period of five years. They received no reply for a while. On 1.7.2010, the first respondent in the writ petitions filed by M/s. Casino, issued W.A.1517/2010 & con.cases.

a notification calling for global tenders for running the resort, which is marked as Ext.P9 in W.P.(C) 26030 of 2010. M/s. Casino sent a communication dated 26.7.2010 reminding about the renewal application. The pre-bid notification meeting was held on 3.8.2010, in which M/s.Casino also participated. M/s. Casino would say that quite to their dismay and surprise, Ext.P9 notification was rescinded and a fresh notification proposing a two tire system of evaluation was issued, which is Ext.P10. M/s.Casino initiated arbitration proceedings and appointed an Arbitrator. They also moved the District Court, Kavarathi and sought for interim relief from the said court. Unfortunately for them, that court was not functioning at the relevant time and they were constrained to approach this court under Article 226 of the Constitution. In W.P.(C) 25455 of 2010, the relief sought for is to keep the proceedings as per Ext.P10 in abeyance till Exts.P1 to P3 are W.A.1517/2010 & con.cases.

disposed of by the District Court. Soon thereafter, they also filed W.P.(C) 26030 of 2010 seeking to have Ext.P10 quashed. They also sought for a relief directing the Administration not to proceed with Ext.P10.

6. In the above two writ petitions, M/s. Casino moved interlocutory applications for interim relief. By order dated 31.8.2010, interim relief was allowed and M/s. Casino was allowed to carry on their activities till 31.8.2010 on certain specified conditions. Aggrieved by those decisions, SPORTS, who is the first respondent in both the writ petitions, have come up in appeal. W.A. 1520 of 2010 is directed against the order in W.P.(C) 26030 of 2010 and W.A. 1517 of 2010 is directed against order in W.P.(C) 25455 of 2010.

7. When those writ appeals were taken up for consideration, it was brought to the notice of this court that two other writ petitions are pending before this court W.A.1517/2010 & con.cases.

regarding the same issue. The Bench felt that all the cases need to be considered together and disposed of by a common order. Hence, the writ petitions were called for and tagged along with the writ appeals. This is how the matters are before this court.

8. On consent of all parties, all the writ petitions were heard on merits.

9. It will be useful to refer to the allegations in each of the petitions and the contentions of the respondents therein.

10. W.P.(C) 26030 of 2010 and W.P.(C) 25455 of 2010 filed by M/s. Casino can be dealt with together, since the facts are the same and so also the respondents. The allegations in the petitions have already been stated, and it is unnecessary to repeat them. In W.P.(C) 26030 of 2010, they seek to have Ext.P10 notification quashed. Apart from the facts already mentioned, they say that in an earlier W.A.1517/2010 & con.cases.

litigation before this court, SPORTS had acknowledged the commendable efforts put in by M/S.Casino and the success achieved by them. In the counter affidavit filed by SPORTS, it was pointed out that it would be illegal if the arrangement is not extended and it was necessary to extend the arrangement in favour of M/S. Casino. In their petitions, they have detailed the developments made by them.

11. In their writ petitions, M/s. Casino would say that they had applied for renewal on 25.2.2010 and there was no reply till 7.8.2010. They were under the impression that the lease will be renewed. It was at that point of time that Ext.P9 came to be issued. Therefore, they had sent Ext.P8 letter to SPORTS reminding them of the renewal application. Thereafter, the Arbitration O.P. was filed and then this court was moved under Article 226 of the Constitution of India. They also mention about the issuance of Ext.P10 notification. Their main assertions are, i) renewal W.A.1517/2010 & con.cases.

ought to have been granted, ii) Ext.P9 provides for a low volume high eco-tourism. Ext.P9 contains various clauses, which are reasonable and fair, and iii) it gives various other relevant details and options, iv) Ext.P9 is given a complete go by and Ext.P10 is introduced to favour the sixth respondent in W.P.(C) 26030 of 2010, v) all the conditions in Ext.P9 have been altered and totally new clauses are introduced in Ext.P10, which are onerous and irrational,

vi) the attempt of SPORTS in introducing various clauses, regarding financial credibility, experience, facilities etc., which have no nexus to the project, is with ulterior motive and Ext.P10 is unreasonable, unfair, arbitrary, unjust and malafide.

12. In both the writ petitions, the first and the second respondents have filed their counter affidavits. They denied the allegations in the petitions and stated that they were baseless. According to them, the allegation regarding W.A.1517/2010 & con.cases.

malafides is mischievous and is intended only to prejudice and mislead this Court. Ext.P10 had been given effect to and the process had reached a final stage. The petitioner did not choose to offer their bid. The present offer made by the bidders are much more attractive than the one offered by M/s. Casino. M/s. Casino has set up Mr. P. Koya and others to file W.P.(C) 24593 of 2010 giving a spirited litigant picture finding that they have only a remote chance to succeed in their petitions. The said Mr. Koya had favoured M/s. Casino by filing W.P.(C) 25647 of 2001 earlier, and that was dismissed. An appeal was preferred and when the appeal came up for hearing, since the petitioner had succeeded in its efforts, the spirited litigant, Mr. Koya, chose not to pursue the matter further. Thereafter, Mr. Koya has again come up now to favour M/s. Casino based on imaginary and untenable claims. M/s. Casino has no vested right of renewal. The arrangement expires on 31.8.2010. W.A.1517/2010 & con.cases.

The decision to go in for global tender was in pursuance of the observations made by this court, while disposing of the earlier matters, and after taking into consideration the essential details, best interests for the land and the lessor. The agreement relied on by M/s. Casino does not envisage an automatic renewal, nor does it contemplate any reason to be given for going in for fresh global tenders. The files would disclose that the request for renewal was considered by the BOM of SPORTS and for cogent and convincing reasons they decided not to renew and to invite fresh tenders. Respondents 1 and 2 did not dispute the claim made by M/s. Casino regarding the development of the Resort. They however stress that M/s. Casino have been operating the Resort for the last 22 years. Considering the potential for development and the recent trends in tourism, the requirements for running a Resort had considerably changed and therefore, it became necessary to issue fresh W.A.1517/2010 & con.cases.

notification. The allegations made against Ext.P10 is incorrect and without foundation. The BOM of SPORTS, in the meetings held on 4.5.2010 and 21.5.2010, decided to go in for fresh global tenders to see if attractive offers could be obtained. It was in pursuance to the said decision that Ext.P9 was issued. After issuing Ext.P9, it was brought to the notice of these respondents that the guidelines issued by the Planning Commission had to be followed in order to ensure healthy competition and to get best results. Ext.R1

(c) is the communication from the Ministry and Ext.R1(d) is the guidelines published by the Finance Department. Exts.R1(c) and (d) read along with Ext.P10 will clearly reveal that SPORTS had only the best interests in mind and allegations to the contrary are unfounded. When SPORTS realized the mistake committed in issuing Ext.P9, they rectified the same by issuing Ext.P10. In fact the first petitioner had purchased bid document on 7.8.2010. It W.A.1517/2010 & con.cases.

shows that they were fully aware of the developments in the matter. There is no basis for the allegation that Ext.P10 was issued to favour the sixth respondent. Ext.P10 was issued so as to abide by PPP norms set by the Planning Commission and approved by the Ministry of Finance. They refer to the various clauses in Ext.P10 and say that the conditions in Ext.P10 were approved by the BOM and it was verified by a team of experts. The allegations of fraud, unreasonableness, unfair etc are without any basis. The respondents had no intention to exclude anybody from submitting his bid.

13. In the separate counter affidavit filed by the sixth respondent, he challenges the very maintainability of the petition. It is well settled that the Government have a right and discretion to prescribe terms for operating Governmental enterprises and issue tender notifications on that basis. The challenge to Ext.P10 based on the allegation W.A.1517/2010 & con.cases.

that it was intended to favour the sixth respondent is untrue and the sixth respondent has been unnecessarily dragged into this litigation. It is also contended that the sixth respondent is an unnecessary party in the proceedings.

14. In the reply filed by the petitioners, they make mention of various clauses in Ext.P10 and assert that these conditions are illogical, arbitrary, unreasonable, unfair and malafide. It was issued to favour the sixth respondent. They also pointed out that the first and second respondents cannot justify their action by contending that pursuant to Ext.P10, four persons have come into the arena of selection.

15. W.P.(C) 24593 of 2010 is filed by some of the residents of Bangaram Island, who are members of Scheduled Tribe. They own lands in Bangaram Island. They say that a good portion of their land had been taken on lease by the second respondent and leased out to the third respondent. According to them, transactions are hit by the W.A.1517/2010 & con.cases.

Laccadive, Minicoy and Amindivi Islands Land Revenue and Tenancy Regulation, 1965 and Laccadive, Minicoy and Amindivi Islands (Protection of Scheduled Tribes) Regulation, 1964 and Rules thereunder. For their livelihood, petitioners depend on the income derived from their land. They challenged the dubious and unfair method adopted by the second respondent in running the resort. Their acts cause considerable prejudice to the petitioners. The first respondent is the Administrator of the Union Territory as well as the Chairman of the second respondent. Even though several complaints were made against the second respondent, the first respondent paid no heed to them. It was pointed out by them that at the time of entering into the lease with the second respondent, the understanding was that the property will be leased out only to the third respondent in W.P.(C) 24593 of 2010. They have also filed a statement, which show that they derived only meagre W.A.1517/2010 & con.cases.

income. When disputes arose between respondents 2 and 3, two of the petitioners approached this court in W.P.(C) 25647 of 2001, wherein an interim order of status quo was passed. Since the third respondent continued to run the resort, the writ petition was not pursued further and that was dismissed. W.A. 3404 of 2001 filed against the said order of dismissal was later disposed of. The petitioners had sent Ext.P9 alleging that the acts of the second respondent violated the regulations. The prayers made in W.P.(C) 24593 of 2010 are i) to quash Ext.P8, ii) to declare Clauses 3(i) and 4 of the Regulation of 1964 as unconstitutional, and iii) not to enforce those provisions etc.

16. In the counter affidavit filed by the first respondent, they referred to the conduct of the petitioners. They say that amounts due to the petitioners have already been granted and no objections have been received so far. A reading of the petition makes it clear that the intention is W.A.1517/2010 & con.cases.

only to give strength and support to the writ petitions filed by M/s. Casino. The claim based on the provisions of the Regulations is as a result of the misunderstanding of those provisions. There is no total prohibition against alienation. The restriction is that such transfers shall be only with the approval of the Administrator. The Administrator is also the Chairman of SPORTS. He acts in dual capacity. There is nothing to believe that SPORTS will not protect the interests of the inhabitants. They therefore prayed for a dismissal of the writ petition.

17. In the reply affidavit filed by the petitioners, they have denied the allegation that they have been set up by the third respondent. They have also stated that they have not been paid any amount from 1971 till 1988.

18. W.P.(C) No. 26925 of 2010 is filed by an inhabitant of Amindivi Island, who operates 20 bed Agatti Island Beach Resort from 1996 onwards. He has experience W.A.1517/2010 & con.cases.

in the field of tourism and is a local man. He gives details about the Island and also the Regulations of 1964 and 1965. As per the petition filed by him, SPORTS is a Society registered under the Societies Registration Act. Petition also contains details of the office bearers. It is pointed out in the petition that in respect of another resort, a Society by name Pykla Society had opted for running a tourist resort. Ultimately, it ended up in a litigation and Pykla Society had come before this court. While disposing of the petition filed by Pykla society, certain observations were made by this court. However, the administration did not formulate a tourism policy as observed by this court. According to the petitioner, SPORTS has only the same status as that of Pykla Society, which was held to be not an instrumentality of the State. According to him, as per Ext.P5 notification issued by SPORTS on 1.7.2010, preference was suggested for local persons to bid. SPORTS has no authority to issue W.A.1517/2010 & con.cases.

notification on behalf of the President of India and also cannot lease the land to an outsider. However, the conditions stipulated in Ext.P5 being reasonable and fair, he opted to bid in pursuance thereof. However, to his utter shock and surprise, Ext.P5 was rescinded and Ext.P6 notification was issued. Ext.P6 notification issued on 7.8.2010 takes away most of the advantages mentioned in Ext.P5 and the bid conditions are made very stringent. Attack is made on Ext.P6 on the same lines as done by M/s. Casino. It is pointed out that SPORTS cannot take the aid of Article 299 of the Constitution of India. The reliefs sought for are i) to quash Exts.P5 and P6, to quash Clauses 1.5.2(A) (i),

(ii) and 1.5.3(i) and (ii) of Ext.P6, ii) issue a writ of mandamus to respondents 1 to 5 to invite tenders for running the resort at Bangaram confining it to members of Scheduled Tribes of the Lakshadweep, iii) to prohibit further proceedings being taken in pursuance of Ext.P6. W.A.1517/2010 & con.cases.

19. In the counter affidavit filed by respondents 4, 5 and 6, they point out that the petition is a frivolous one. According to them, it is nothing but an attempt to come to the rescue of M/s. Casino. There was no response from the part of the petitioner to the notification, Ext.P5 dated 1.7.2010. The counter affidavit mentions in detail the conduct of the petitioner with reference to the lease in his favour of another resort.

20. SPORTS falls within the ambit of Article 12 of the Constitution of India. Status of SPORTS have been determined as per Ext.R4(a) judgment in W.A. 3404 of 2001 and connected matters. The respondents gave reasons for not renewing the lease in favour of the petitioner in respect of the resort run by him. The Society went in for a global tender as per the observations in the the judgment of this court. The position of Pykla society is totally different. That is purely a private society. That is not the case of SPORTS. W.A.1517/2010 & con.cases.

SPORTS is recognized as an agency of the Union Territory and a look at its constitution will reveal that it is entirely different from Pykla Society. They contend that by the activities of SPORTS, the land owners have benefited considerably and it is also concerned with the interest and welfare of the people of the Island. In fact the conditions in Ext.P6 will be beneficial to the inhabitants of the Island and the land owners, who leased out their lands to SPORTS. The counter affidavit also narrates in detail the context under which Ext.P6 came to be issued. According to SPORTS, they do not lease out the property to operators. They only give them permission to make use of the infrastructure provided by SPORTS. They thus tried to justify Exts.P5 and P6.

21. In the reply affidavit filed by the petitioner, he attacked the authority of SPORTS to call for tenders. It is also pointed out that the lease in favour of the SPORTS is totally invalid and confers no right on them. Even though an W.A.1517/2010 & con.cases.

enquiry was demanded in that regard, nothing transpired, because the Administrator was one of the officers of SPORTS. It is also contended that whatever be the position, the lease can only be for a period of five years and no further.

22. It may be noticed here that the petitioners in almost all the petitions attacked Ext.P10 produced in the writ petitions filed by M/s.Casino referring to the RFQ issued by SPORTS. There is also a challenge to the authority of SPORTS to invite tenders, since, according to the petitioner in W.P.(C) 26925 of 2010, they are not covered by Article 229 of the Constitution of India. Again, the question that arises is whether there is any violation of the relevant regulations as alleged by some of the petitioners.

23. The main issue infact is whether there was any justification in rescinding Ext.P9 in the writ petitions filed by M/s.Casino, and issuing Ext.P10 notification. Again, it has to be considered whether there is any justification for W.A.1517/2010 & con.cases.

SPORTS in bringing about drastic changes with regard to the bid conditions while issuing Ext.P10 notification. Can it be said that it was ill-motivated and that Ext.P10 is arbitrary, unreasonable, unfair and unjust etc.? Does the claim of SPORTS that Ext.P10 was issued to comply with PPP guidelines as directed by the Planning Commission stand scrutiny? Is SPORTS justified in issuing Ext.P10 and do the conditions suffer from any of the infirmities pointed out by the petitioners?

24. Before going further into the matter, one aspect may be noticed. At the time of hearing, the petitioners in W.P.(C) 24593 of 2010 gave up their challenge to the vires of the provisions of 1964 Regulation. Their only grievance appears to be that they do not get adequate returns for the lands leased out to SPORTS and the same may be ensured.

W.A.1517/2010 & con.cases.

25. Again, on going through the various writ petitions filed and the writ petitions filed by M/s. Casino, the contentions of respondents in these writ petitions that the other writ petitions have been filed to strengthen and support M/s. Casino in their petitions cannot be said to be without basis. A reading of W.P.(C) 24593 of 2010 leaves one in no doubt regarding that aspect. Though disguised, the interest of the petitioner in W.P.(C) 24593 of 2010 is also the same.

26. The first question that arises for consideration is regarding the status of SPORTS. It is very vehemently contended by the petitioner in W.P.(C) 26925 of 2010 that SPORTS has no authority to issue a notification like Ext.P5, since they cannot take the aid of Article 299 and they have no delegatory authority to do so. They cannot enter into a contract for and on behalf of the State. However, the petitioners in other cases have no such contention. W.A.1517/2010 & con.cases.

27. Regarding the status of SPORTS, that need not detain this court for long. It was elaborately considered in the judgment dated 18.8.1994 in W.A. 538 of 1994. The decision went on to hold that though SPORTS cannot be said to an instrumentality of the State, they are not purely a private body. In the decision in W.A. 538 of 1994 it was held as follows:

"It is a body legally bound to act in accordance with the requirements of the Societies Registration Act, 1860, Rules framed thereunder, the Bye-laws and the policies laid down and the directions issued by the Administrator. We have already found that it is a body subject to the control and supervision of the Administrator though it cannot be considered as an instrumentality of the State. The various statutory, constitutional and fundamental limitations of the Society takes the Society out of the category of purely private bodies and confers on it the status of a public body so to say W.A.1517/2010 & con.cases.

approved or recognised by the State as in the case of a private management running a school subject to the Rules framed by the Government and receiving aid from it or a Society or Trust running a private affiliated college like the Trust in Anadi Mukta Case (AIR 1989 SC 1607). We would accordingly hold that the Society is a body performing public duties and as such an authority for the purpose of Article 226 of the Constitution of India and amenable to the jurisdiction of this Court under that Article."

28. The said finding was followed in the judgment in W.A. 3404 of 2001 and connected cases, wherein it was held as follows:

".........The Division Bench therein was of the view that, though the SPORTS could not be said to be an agency of the Government, nor could the Government Union or State, be said to have a deep or pervasive control over the SPORTS, yet SPORTS is a Society performing public duties, and, as such, an authority for the purpose of Article 12 W.A.1517/2010 & con.cases.

of the Constitution of India amenable to the writ jurisdiction of this Court."

29. It cannot be said that SPORTS is purely a private body. It may not strictly fall within the definition of State, but it has the status of a body discharging public functions under the directions of Union Territory Administration. Observations in paragraph 29 of the judgment in W.A. 3404 of 2001 and connected cases are clear in that regard. SPORTS have been carrying out various functions for a long time. No one ever doubted their authority to do so.

30. Further, the notification, namely, Ext.P5 in W.P.(C) 26925 of 2010 was issued by the President of India represented by the Managing Director of SPORTS for promotion of nature tourism and Sports and Administrator of Union Territory of Lakshadweep. It is seen issued by the Managing Director of SPORTS. One should at once note that W.A.1517/2010 & con.cases.

the Managing Director of SPORTS is the Director of Tourism of the UT Administration. He therefore plays a dual role. He acts on behalf of the UT Administration also. The routine practice has been followed in issuing Ext.P5 also. It will be interesting to note paragraph 10 of W.P.(C) 26925 of 2010. It is specifically averred therein that global tenders were invited by Lakshadweep Administration and SPORTS in respect of 20 bed resort in Agatti Island. The petitioner bid for the same and had come out successful. He is still running the resort. Having taken advantage of such a notification and secured the benefit, which he continues to enjoy, it comes with little grace from him now to say that the notification involved in these proceedings is invalid and cannot be acted upon. He cannot be allowed to approbate and reprobate.

W.A.1517/2010 & con.cases.

31. Further, the petitioner came to court only after the second notification, namely, Ext.P6 was issued calling for global tenders on the basis of different sets of conditions than in Ext.P5. Till then, he had no grievance with Ext.P5 notification and he was willing to go ahead with the same. All of a sudden, after Ext.P6 notification dated 7.8.2010 is issued, the petitioner springs to life and challenges Exts.P5 and P6. One has to say that there is absolutely no merit in the contentions now taken by the petitioner in W.P.(C) 26925 of 2010 and they are only to be rejected. Moreover, the applicability of Article 299 of the Constitution does not arise for consideration, as that stage has not yet reached. That aspect will have to be considered only at the time of entering into a contract.

32. One may now come to the allegation regarding the violation of Regulations and Rules. In order to curtail the benefits, which the SPORTS enjoy, the petitioners W.A.1517/2010 & con.cases.

in W.P(C) 24593 of 2010 and W.P.(C) 26925 of 2010 take the aid of two Regulations, they are i) The Laccadive, Minicoy and Amindivi Islands Land Revenue and Tenancy Regulation, 1965 (hereinafter referred to as 1965 Regulation) and

ii) The Laccadive, Minicoy and Amindivi Islands (Protection of Scheduled Tribes) Regulation, 1964 (hereinafter referred to as 1964 Regulation and Rules therein). Specific mention is made of Regulations 3 and 4 of 1964 Regulation and Regulation 98 of 1965 Regulation. They read as follows:

Regulation 3 and 4 of 1964 Regulation.

"3.(1) No member of the Scheduled Tribes shall, except with the previous sanction of the Administrator, transfer by way of sale, mortgage, lease, exchange, gift or otherwise, any land to any person other than any such member.

(2) No land hold or occupied by a member of the Scheduled Tribes shall be liable to attachment or sale in execution of any decree or order of a civil or revenue court.

W.A.1517/2010 & con.cases.

(3) Any transfer, attachment or sale of any land made in contravention of this section shall be void.

4. No person other than a member of the Scheduled Tribes shall, except with the previous sanction of the Administrator, acquire any interest in any land situated in the Union territory of the Laccadive, Minicoy and Amindivi Islands or in any product of, or crop raised on such land."

Regulation 98 of 1965 Regulation.

"98.(1) Subject to the provisions of this Regulation, a land-owner may lease out his land to another person on such rent not exceeding the maximum rent specified in section 104, as may be agreed upon between him and such person. (2) Every lease of land made after the commencement of this Regulation shall be for a period of five years and at the end of the said period, and thereafter at the end of every such period of five years, the tenancy shall subject to the provisions of sub-section (3) be deemed to be renewed for a further period of five years on the same terms and conditions except to the extent W.A.1517/2010 & con.cases.

that a modification thereof consistent with this Regulation is agreed to by both parties.

(3) In respect of any lease made after the commencement of this Regulation, a land-owner who is a member of the Armed Forced of the Union, on his discharge from service or posting to the reserve, may by giving the tenant three months' notice in writing before the expiry of any year, and any other land-owner may by giving the tenant one year's notice in writing before the expiry of any term of five years, terminate the tenancy if the land-owner requires the land bona fide for personal cultivation by him."

33. Rules also have been framed under the 1965 Regulation known as Rules of 1966. There can be no doubt that the Regulations have been issued in order to protect the interests of the Scheduled Tribes in the Island. It was intended to ensure that they are not deprived of their lands and that the lands are not transferred to non-tribals. W.A.1517/2010 & con.cases.

34. A reading of Regulations 3 and 4 of 1964 Regulation does not indicate that the bar contained therein is absolute. When Regulation 3 is read along with Regulation 4, it would be clear that non-tribal persons can acquire interest in the land subject to the permission granted by the Administrator. There is also a penal provision to take care of violation of the provision, apart from treating the transfer as invalid.

35. One may recall here that there is a challenge to the vires of Regulations 3 and 4 of 1964 Regulation in W.P.(C) 24593 of 2010 as unconstitutional and to strike them down. At the same time, the petitioners in that writ petition complain that the transfers effected are in violation of Regulations 3 and 4. However, as already noticed, the challenge to the regulations has been given up by the petitioners.

W.A.1517/2010 & con.cases.

36. Coming back to the violation of the above Regulations, the specific contention taken by the petitioners in W.P.(C) 26925 of 2010 is that SPORTS had not made any application as per rules while getting leases in their favour and the procedure laid down under the relevant rules have not been followed. If that be so, according to the petitioner, all the leases in favour of the SPORTS is bad in law. SPORTS falls under non-tribal category. The petitioner says that even assuming that the BOM takes in officials of the administration also, that does not improve the position of SPORTS. There is nothing to indicate, according to learned counsel for the petitioner, that the Administrator had either granted sanction or that the relevant procedures have been followed while leases were obtained by SPORTS.

37. Though the argument may look attractive at the first blush, on a close scrutiny, it can be seen to be without any basis. It is interesting to note that if the said W.A.1517/2010 & con.cases.

contention is accepted, even the petitioner's position is in peril, for, he has obtained the lease from SPORTS for running the resort except probably for the fact that he is a member of Scheduled Tribe.

38. When one looks at the organizational set up of SPORTS, the above contention can be seen to be hollow. The Administrator is the Chairman of SPORTS and some other office bearers are the officials of UT Administration. One must not forget and must infact recall the purpose and object for which SPORTS had been constituted. One should also remember the activities carried on by them. In fact it has been recognized that they are the agency of UT Administration functioning under the control of UT Administration.

39. One may now go back to the Regulations. Referring to Regulation 98 of 1965 Regulation, it was contended that the lease can only for a period of 5 years and W.A.1517/2010 & con.cases.

not beyond that. The lease in favour of SPORTS for a period of 30 years cannot have the sanction of law, so that lease is invalid.

40. A reading of Regulation 98 does not show that the claims of the petitioners are true. It only means that even if the lease is for a longer period, it will be treated, that at a stretch the lease can be only for a period of five years and thereafter it had to be renewed. Of course, if no renewal is effected, consequences will follow. But that is different from saying that there cannot be a lease for more than five years. In fact, what is stated is that the lease shall be for a period of five years and thereafter at the end of each period of five years, the tenancy shall be deemed to be renewed. Of course, it is true that the lease cannot be for more than five years at a stretch. It is therefore clear that the contention based on Regulation 98 cannot succeed. W.A.1517/2010 & con.cases.

41. A reading of Regulations 3 and 4 of Regulation of 1964 and Regulation 98 of Regulation of 1965 would show that the intention of the legislature is to ensure that transfer of lands to non-tribals take place only with the consent and knowledge of the Administrator and does not sacrifice the welfare of the tribals and also that lease at a stretch shall be only for a period of five years.

42. One may here remember that the Chairman of SPORTS is none other than the Administrator of the UT Administration. In the case on hand, therefore, it must be presumed that the lease arrangement entered into by SPORTS with the respective land owners was with the knowledge and consent of the Administrator, since he is the Chairman of SPORTS also. He therefore plays a dual role. In such circumstances, to say that the lease in favour of SPORTS is invalid for violation of Regulations and Rules cannot carry any conviction. It will be presumed that while W.A.1517/2010 & con.cases.

acting as the Chairman of SPORTS, the Administrator would have taken note of the relevant regulations and would have also acted for the welfare of the tribals. Therefore, this contention also falls to the ground.

43. Now, one may come to the principal challenge in the three writ petitions, i.e., two writ petitions filed by M/s.Casino and one filed by the private entrepreneur. The allegation is against Ext. P10 notification in the writ petitions filed by Casino and Exts.P5 and P6 in W.P.(C) 26925 of 2010. Several grounds are urged in support of the contention that Ext.P10 corresponding to Ext.P6 is bad in law. According to the petitioners, there was no justification for rescinding Exts.P9 and P5 and issuing Exts.P10 and P6. Ext.P9 is dated 1.7.2010 and Ext.P10 is dated 7.8.2010. A comparison of the two notifications will clearly show the patent illegality, irregularity and unreasonableness in the terms imposed as per Ext.P10. There is no similarity W.A.1517/2010 & con.cases.

between the two notifications at all. Giving a complete go by to Ext.P9 notification, SPORTS has come forward with totally different set of terms and conditions for bidding without any justification and with the sole intention of favouring the sixth respondent in the writ petitions filed by M/s. Casino, who is the eighth respondent in the writ petition filed by Muthukoya Thoopiyakal. Severe attacks are made and criticisms are levelled against the stipulations in Ext.P10 regarding the financial capacity of the bidder, which specifies that the bidder should have a minimum annual turn over of Rs.100 Crores etc. It is pointed out that this stipulation has no nexus to the project involved. It is intended to weed out certain persons. Experience and technical knowledge mentioned in Ext.P10 are nothing but a mockery. The royalty is fixed as Rs.10,00,000/-. Many of the concessions and benefits available under Ext.P9 have been given a go by in Ext.P10 and it introduces very onerous, W.A.1517/2010 & con.cases.

irrelevant and arbitrary conditions with ulterior motive. Therefore, it is said that Ext.P10 corresponding to Ext.P6 in W.P.(C) 26925 of 2010 is bad in law, arbitrary, unreasonable, unjust, unfair and is malafide, and cannot survive in law.

44. Petitioners rely on the decisions reported in Directorate of Education v. Educomp Datamatics Ltd. ((2004) 4 SCC 19), Air India Ltd. v. Cochin International Airport Ltd. (AIR 2000 SC 801) and Association of Registration Plates v. Union of India ((2004) 5 SCC 364).

45. Relying on the decision reported in Directorate of Education v. Educomp Datamatics Ltd. (supra), it is contended that the stipulation of minimum turnover of Rs.100 Crores as financial capacity of the bidder is irrational and had no nexus to the project involved in the case. It is vehemently contended that the said stipulation is irrational and illogical. It is contended that the principles laid down in the said decision ought to have been followed. W.A.1517/2010 & con.cases.

46. Relying on the other decisions, it is contended that creation of onerous monetary conditions and so also imposition of such conditions, which result in weeding out local people with the intention of favouring others is also bad in law. It is also contended that the result would be foreign involvement to the detriment of Indian entrepreneurs.

47. In support of their contention, the petitioner has relied on the decision reported in Association of Registration Plates v. Union of India (supra) for the proposition that normally the preference should have been given to the local contractors. They rely on the following passage in the said judgment:

"Members of the European Economic Community adopt a policy of favouring local contractors. But, in the present case, the conditions mentioned in NIT by different State Governments are just the reverse and have been W.A.1517/2010 & con.cases.

purposely designed so as to completely oust Indian manufactures and to ensure that the contract is awarded to such a company which must have a joint venture with a foreign company already dealing in such kind of business. The award of contract for a period of 15 years would mean that not only the doors for Indian companies or the Government would be shut for such a long period but even if a better or cheaper technology is developed, either here or abroad, the same cannot be implemented."

48. They also rely on the decision reported in Air India Ltd. v. Cochin International Airport Ltd. (supra) and contend for the position that it is not the financial status alone that should be considered. Various other factors like technical experience etc., also will have to be take note of.

49. True, there is considerable variation between the terms in Ext.P9 and P10 produced in the writ petitions filed by M/s. Casino. SPORTS have come up with an W.A.1517/2010 & con.cases.

explanation. According to them, after the issuance of Ext.P9 notification, it was brought to their notice that in the case of global tenders, the procedure, i.e., PPP laid down by the Planning Commission is to be followed. That information was received only on 31.7.2010. Then, the BOM of SPORTS has to meet and to decide about the details of the same, apart from deciding to adopt PPP procedure. The Board meeting was convened and it was decided to take recourse to PPP procedure. They had also decided to issue fresh notification as per the guidelines of the Planning Commission. The stipulation in Ext.P10, to which objections have been taken by the petitioners, are the terms and conditions, which have been incorporated after due deliberations. The stipulations in Ext. P10 have received the attention of an expert committee and allegations of malafides and favouritism are without any basis. W.A.1517/2010 & con.cases.

50. It is also contended on behalf of SPORTS that judicial review in such matters is restricted. The person who issues such notification has considerable liberty to stipulate and impose such conditions as he deems fit and necessary in relation to the project, for which notification is effected. He may impose various conditions, and unless it is shown that those conditions are vitiated by unreasonableness or are unnatural or motivated, no interference is called for. Further, the matter falls within the realm of policy and interference in policy decisions is very rare and is done only in exceptional circumstances. In support of their contention, they relied on the decisions reported in Sivamurthy v. State of Andhra Pradesh (2008(3) KLT 911(SC)), M/s. Kusumam Hotels (P) Ltd. v. Kerala State Electricity Board (AIR 2008 SC 2796), Association of Registration Plates v. Union of India ((2005) 1 SCC 679), All India Railway Recruitment Board v. K. ShyamKumar ((2010) W.A.1517/2010 & con.cases.

6 SCC 614), Siemons Public Communiciation Ltd. v. Union of India (AIR 2009 SC 1204), M/s.B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. (AIR 2007 SC 437) and BALCO Employees Union (Regd.) v. Union of India (AIR 2002 SC 350).

51. As regards the allegation of malafides attributed to SPORTS, it was contended that no details whatsoever have been furnished by the petitioner and there is absolutely no proof regarding the same. Learned counsel appearing for the SPORTS pointed out that the burden was entirely on the person, who alleged malafides to establish the same. Reliance was placed on the decisions reported in Jasbir Singh Chhabra v.State of Punjab((2010) 4 SCC

192) and Somesh Tiwari v. Union of India((2009) 2 SCC 592).

52. This court directed the SPORTS to produce the relevant files to ascertain the true facts. They produced the files for the perusal of this court. i.e., the note file, BOM W.A.1517/2010 & con.cases.

meeting file and the minutes file of the BOM meeting of SPORTS.

53. It is seen therefrom that BOM meeting was held on 4.5.2001 and 25.1.2010. The issue regarding BIR came up for consideration. From the minutes note dated 24.5.2010, it is seen that the BOM proposed to go in for global tenders. It is also stated that on an earlier occasion in 2004 the draft tender document prepared was got vetted by Government of India. The entries in the file dated 28.5.2010 and 29.5.2010 show that the matter was being pursued. The file refers to a letter dated 31.5.2010 from the Ministry of Tourism addressed to all States and Union territories. The file also shows that on 25.5.2010 the draft was forwarded to the Ministry of Tourism. On going through the file, as per communication received from the Ministry of Tourism, it is seen that prior sanction of the Ministry is not required for initiating tender proceedings. W.A.1517/2010 & con.cases.

54. The entries in the file show certain amendments suggested to the draft notification for global tender. Certain amendments were approved. In pursuance to the decision taken by BOM, Ext.P9 in W.P.(C) 26030 of 2010 was issued. What is then seen from the files is that, they make mention of a meeting between the Administrator and the Advisor to the Department of Planning Commission on 24.7.2010. It is then seen that the Administrator was informed that guidelines for pre-qualification notification for bidding, appraisal and approval of such projects as are envisaged in the case of BIR, the PPP project guidelines had to be followed. A copy of the same was handed over to the Administrator. Realising that SPORTS had committed a folly, steps to follow the guidelines were taken thereafter. The entries in the files show that in the light of subsequent developments, it became necessary to convene the meeting of the BOM, and it was to be convened on 3.8.2010. The W.A.1517/2010 & con.cases.

meeting is seen to have taken place on 3.8.2010. They found that the earlier notification issued on 1.7.2010 was not in tune with the guidelines, that had to be followed. It had to be corrected, and it was decided that the same be withdrawn and a new notification be issued. They also felt that the Union Territory was bound to follow RFQ, copy of which was given to the Administrator.

55. These factors are available from the files and entries therein. Further entries in the file show the subsequent steps taken in the matter. It also shows that a three member expert committee to evaluate RFQ was also constituted. The proposed RFQ was prepared, vetted and sent to the Finance Department. The subsequent developments are also available from the file.

56. The files so produced show the details of the meeting held on 4.5.2010 and 21.5.2010. It also disclose the agenda for the various Board Meetings and the decisions W.A.1517/2010 & con.cases.

taken therein. It can be seen from the agenda of the meeting on 4.5.2010 that item No.4 was 'Operation of BIR'. Attention of the members was drawn to the application of M/s.Casino for renewal. The BOM considered three options available to them. They are i) renew the lease for a further term with existing terms and conditions, ii) renew the lease with enhanced turn over, and iii) call for fresh tenders for operation of resort in an open and transparent manner providing equal opportunities to all. After deliberations, the decision, that seems to have been taken in the meeting, is that SPORTS is to go in for fresh tenders and the details were directed to be prepared. In the meeting held on 21.5.2010 it was again discussed and it was decided to incorporate certain conditions in the notification calling for global tender and the same was finalized. In the meeting held on 2.8.2010 the BOM had to consider i) letter from M/s. Casino dated 26.7.2010, ii) letter of the land owners dated 21.7.2010, W.A.1517/2010 & con.cases.

and iii) consideration of the adoption of two tire system of invitation of global tenders. The notings also mention about the instructions received from the Planning Commission.

57. In the said meeting, all the three issues were considered. Decisions are available from the minutes. It also mentions the fact that the members considered the advise of the Planning Commission and decided to follow the same and draft was prepared and submitted. The file indicates that the BOM decided to seek the opinion of the Company Secretary for the financial particulars to be fixed for qualification.

58. The files produced show the reply dated 5.8.2010 from Company Secretary. The BOM meeting was convened on 6.8.2010. The minutes of the meeting reveal the consideration of RFQ. It can be seen from the minutes of the meeting that the financial criterion was arrived at after due deliberations.

W.A.1517/2010 & con.cases.

59. There is nothing available in the files to show that the decision was taken with any ill-motive or malafides. It is clear from the files as to what necessitated the SPORTS to go in for Ext.P10 notification. In the meanwhile, it may also be noticed that the Board of Management had directed to inform M/s. Casino that arrangement with them is not intended to be renewed. It was so done.

60. From the files, it is seen that SPORTS has been very cautious and had taken advice at various stages on various aspects. The allegation that stipulation of turnover as Rs.100 Crores is without any rhyme or reason may not be quite true. They might not have possibly given too much thought to their assessment, but that is far from saying that the onerous terms and conditions were deliberately imposed so as to favour the sixth respondent and to weed out persons like the petitioners. They might have simply followed the opinion given to them.

W.A.1517/2010 & con.cases.

61. One may now refer to the decisions cited by both sides. In the decision reported in Directorate of Education v. Educomp Datamatics Ltd. ((2004) 4 SCC

19) relied on by the petitioners, the issue considered was regarding the fixation of financial criterion for inviting tenders for computerization of various schools. It appears from a reading of the decision that on three occasions the tenders had to be called. On two occasions the persons who submitted tenders could not meet the requirements. Ultimately, for an investment of nearly Rs.100 Crores, the turnover was fixed as Rs. 20 Crores.

62. Relying on the above decision, it is contended that in the case on hand, going by the available materials, at best, the turnover in the case of BIR is about 10 to 15 Crores and the stipulation of Rs.100 Crores as turnover is unreasonable, unjust and unfair. It is contended that the attempt is to weed out the local bidders and to go in for W.A.1517/2010 & con.cases.

outsiders, which according to the petitioners is not a commendable act. In support of their contention, they placed reliance on the decision reported in Association of Registration of Plates v. Union of India ((2004) 5 SCC

364)

63. They relied on the decision reported in Air India Ltd.'s case (supra) and pointed out that the apex court had occasion to consider whether financial status alone was the consideration in opting for a particular tender. They relied on the following passage from the above decision:

"What is significant to note is that even the High Level Committee had in its minutes noted that financial rating cannot be the sole criterion for taking the final decision. Moreover, in a commercial transaction of such a complex nature a lot of balancing work has to be done while weighing all the relevant factors and the final decision has to be taken after taking an overall view of the transaction. It is true that even though W.A.1517/2010 & con.cases.

Cambatta had called upon CIAL to produce the minutes of the meeting of the Board of Directors held on 27.1.1998 the same was not made available to Combatta."

64. SPORTS on the other hand relied on the decision reported in M/s. Kusumam Hotels (P) Ltd. v. Kerala State Electricity Board (AIR 2008 SC 2796), wherein it was held as follows:

"The State would be entitled to alter, amend, or rescind its policy decision. Such a policy decision, if taken in public interest, should be given effect to. In certain situation, it may have an impact from a retrospective effect but the same by itself would not be sufficient to be struck down on the ground of unreasonableness if the source of power is referable to a statute or statutory provisions."

W.A.1517/2010 & con.cases.

65. The decision reported in Association of Registration of Plates v. Union of India ((2004) 5 SCC

364) was the subject matter of a decision reported in Association of Registration of Plates v. Union of India ((2005) 1 SCC 679), wherein it was held as follows:

"Article 14 of the Constitution prohibits the Government from arbitrarily choosing a contractor at its will and pleasure. It has to act reasonably, fairly and in public interest in awarding contact. At the same time, no person can claim a fundamental right to carry on business with the Government. All that he can claim is that in competing for the contract, he should not be unfairly treated and discriminated against, to the detriment of public interest. Undisputedly, the legal position which has been firmly established from various decisions of the Supreme Court is that government contracts are highly valuable assets and the court should be prepared to enforce standards of fairness on the Government in its dealings with tenderers and contractors. W.A.1517/2010 & con.cases.

In the matter of formulating conditions of a tender document and awarding a contract of the nature of ensuring supply of high security registration plates, greater latitude is required to be conceded to the State authorities. 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. Unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, tender conditions are unassailable."

66. In the decision reported in M/s. B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. (AIR 2007 SC 437) it was held as follows:

"The new principles of judicial review in contractual matters which are being developed can be summarized as under:

(i) If there are essential conditions, the same must be adhered to;

W.A.1517/2010 & con.cases.

(ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;

(iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;

(v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the W.A.1517/2010 & con.cases.

tenderers on their own merits and if it is ultimately found that successful bidders had infact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;

(vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest, would be given priority.

(vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint."

67. In the decision reported in BALCO Employees Union (Regd.) v. Union of India (AIR 2002 SC

350) it was held as follows:

"The polices of the Government ought not to remain static. With the change in economic climate, the wisdom and the manner for the Government to run commercial ventures may W.A.1517/2010 & con.cases.

require reconsideration. What may have been in the public interest at a point of time may no longer be so. The Government has taken a policy decision that it is in public interest to disinvest in BALCO. An elaborate process has been undergone and majority shares sold. It cannot be said that public funds have been frittered away. In this process, the change in the character of the company cannot be validly impugned. While it was a policy decision to start BALCO as a company owned by the Government, it is as a change of policy that disinvestment has now taken place. If the initial decision could not be validly challenged on the same parity of reasoning, the decision to disinvest also cannot be impugned without showing that it is against any law or male fide.

.......... ............

To say that there has been lack of transparency, under these circumstances, is uncharitable and without any basis. Transparency does not mean conducting of the Govt. business while sitting on the cross roads in public. Transparency would W.A.1517/2010 & con.cases.

require that the manner in which decision is taken is made known."

68. In the decision reported in CSIR v. Ramesh Chandra Agarwal ((2009) 3 SCCC 35) it was held as follows:

"A policy decision is not beyond the pale of judicial review but the Court must invalidate a policy on some legal principles. It can do so, inter alia, on the premise that it is wholly irrational and not otherwise. The Scheme being a one-time measure, even one opportunity could have been granted."

69. In the decision reported in Sivamurthy v. State of Andhra Pradesh (2008(3) K.L.T. 911), it was held as follows:

"The issue is not what is most advantageous to the government servant, but what is the actual term of the scheme. The question is not whether an interpretation which is more advantageous or benefit to the Government servant should be W.A.1517/2010 & con.cases.

adopted. The question is whether the policy as it stands which is clear and unambiguous, is so unreasonable or arbitrary or absurd as to invite an interpretation other than the normal usual meaning. Matters of policy are within the domain of the executive. A policy is not open to interference merely because the court feels that it is not practical or less advantageous for government servants for whose benefit the policy is made or because it considers that a more fairer alternative is possible."

70. Law of contract on tender is thus well settled. It may not always be possible for the court to determine whether a particular policy or a particular decision in relation to the object,which is sought to be achieved is proper. The grounds on which courts can interfere are restricted. The current trend seems to be to exercise restrain in interfering with administrative actions. One should remember that the courts do not have the expertise to review policy decisions W.A.1517/2010 & con.cases.

which are taken after evaluating the pros and cons of the matter. It may be quite improper for the court, in certain circumstances, to substitute its views in the realm of contract. One should remember that process of public auction and the tender process has to run through several phases. If at every point of time the courts were to interfere, that would make administration extremely difficult.

71. However, certain parameters are well settled. If it is found that the decision taken is illegal, irrational, improper, then interference may be justified. The test of probability has already been well accepted. The decision taken by a public authority will be quashed or dealt with appropriately, when the court finds that the decision is such that no prudent person adverting to the relevant facts would have come to a such a conclusion.

W.A.1517/2010 & con.cases.

72. One shall not forget that the contract of the present nature is a commercial transaction. In such a case, principle of natural justice, equity etc may not be very relevant. If it is shown that the action taken was a bonafide one, and was made after taking into consideration the relevant facts and circumstances, even assuming that the decision may not be wholly acceptable, that by itself may not be a reason to interfere, or in other words, the function of the court is to see whether there is any error in the decision making process and not in the decision itself.

73. Viewed from the above angle, it can be seen that the action of the SPORTS cannot be said to be irrational or irregular. True, they did shift from Ext.P9 to P10. But the reasons for the same have already been mentioned. There is nothing to show that the reasons for which they had to adopt PPP guidelines and to publish Ext.P10 notification was unjustified and uncalled for. It was brought to their W.A.1517/2010 & con.cases.

notice that in PPP projects and other later projects, they had to follow the guidelines issued by the Planning Commission. There was nothing wrong in them following the same. As far as the various stipulations in Ext.P10 are concerned, it can be seen that it was after obtaining expert opinion that they were finalized. In fact the files relating to the meetings of the BOM will clearly show that the decision to stipulate Rs.100 Crores as annual turn over of the person, who prefers a tender was taken after due deliberations. The criticism levelled against the experience and other matters specified in Ext.P10 is also without any basis. It must be remembered that it was not the decision of the BOM to stipulate such conditions. A three member committee was constituted and it was on their recommendation that the conditions were stipulated. There is nothing to hold that those conditions were stipulated without any basis whatsoever and were with ulterior motive.

W.A.1517/2010 & con.cases.

74. On going through the files, it is extremely difficult to come to the conclusion that the action taken by the SPORTS in issuing Ext.P10 notification was irrational, illogical, arbitrary, unreasonable and unfair. One must notice that SPORTS had decided to go in for global tenders. They had necessarily to take note of the international scenario. It was considering the potential for the growth and the possible necessities, as could be seen from the files, that might have compelled them to impose such conditions in Ext.P10. The technical expertise and such matters are also mentioned. May be that the capital investment is minimum, as the infrastructure is already available, but to say that merely because of that, the stipulation of turnover of Rs.100 Crores is illogical, irrational etc. will not be proper. Apart from the capital investment, there are several other factors also to be taken into consideration. It will be quite illogical to adopt the criterion of one project for a different W.A.1517/2010 & con.cases.

project, which has no similarity with the former.

75. It will not be out of place to refer to the decision reported in All India Railway Recruitment Board v. K. Shyam Kumar ((2010) 6 SCC 614) regarding the true scope of judicial review. In the said decision, it was held as follows:

"Wednesbury principle of unreasonableness as such has not been replaced by the doctrine of proportionality though that test is being applied more and more when violation of human rights is alleged. H.W.R. Wade & C.F. Forsyth in the 10th Edn. of Administrative Law (2009) has omitted the passage quoted by this Court in Jitender Kumar case and stated as follows:

"Nothwithstanding the apparent persuasiveness of these views the coup de grace has not yet fallen on Wednesbury unreasonableness. Where a matter falls outside the ambit of the 1998 Act, the doctrine is regularly relied upon by the courts. Reports of its imminent demise are perhaps exaggerated."

Wednesbury and Proportionality W.A.1517/2010 & con.cases.

Wednesbury applies to a decision which is so reprehensible in its defiance of logic or of accepted moral or ethical standard that no sensible person who had applied his mind to the issue to be decided could have arrived at it. Proportionality as a legal test is capable of being more precise and fastidious than a reasonableness test as well as requiring a more intrusive review of a decision made by a public authority which requires the courts to "assess the balance or equation" struck by the decision- maker. Proportionality test in some jurisdictions is also described as the "least injuries means" or "minimal impairment" test so as to safeguard the rights and public interest. Suffice it to say that there has been an overlapping of all these tests in its content and structure, it is difficult to comparmentalise or lay down a straitjacket formula and to say that Wednesbury has met with its death knell is too tall a statement. Let us, however, recognize the fact that the current trend seems to favour proportionality test but W.A.1517/2010 & con.cases.

Wednesbury has not met with its judicial burial and a State burial, with full honours is surely not to happen in the near future.

Proportionality requires the court to judge whether action taken was really needed as well as whether it was within the range of courses of action which could reasonably be followed. Proportionality is more concerned with the aims and intention of the decision-maker and whether the decision-maker has achieved more or less the correct balance or equilibrium. The court entrusted with the task of judicial review has to examine whether decision taken by the authority is proportionate i.e. well balanced and harmonious, to this extent the court may indulge in a merit review and if the court finds that the decision is proportionate, it seldom interferes with the decision taken and if it finds that the decision is disproportionate i.e. if the court feels that it is not well balanced or harmonious and does not stand to reason it may tend to interfere.

.......... ...........

W.A.1517/2010 & con.cases.

The courts have to develop an indefeasible and principled approach to proportionality, till that is done there will always be an overlapping between the traditional grounds of review and the principle of proportionality and the cases would continue to be decided in the same manner whichever principle is adopted. Proportionality as the word indicates has reference to variables or comparison, it enables the court to apply the principle with various degrees of intensity and offers a potentially deeper inquiry into the reasons, projected by the decision-maker."

76. In the decision reported in Siemons Public Communication Pvt. Ltd. v. Union of India (AIR 2009 SC 1204), it was held as follows:

"In Master Marine Services (P) Ltd. v. Hodgkinson (P) Ltd., and another (2005) 3 SCC 138, it was observed as follows:

W.A.1517/2010 & con.cases.

"The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three Judge Bench in Tata Cellular v. Union of India (1994) 6 SCC 651. It was observed that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State the right to refuse the lower or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised of that power will be struck down.

After an exhaustive consideration of a large number of decisions and standard books on Administrative Law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews W.A.1517/2010 & con.cases.

the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision. without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.

In Steriling Computers Ltd. v.M.N. Publications Ltd. ((\1993) 1 SCC 445 it was held as under:

"18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the "decision making process:. By way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Court have inherent limitations on the scope of any such enquiry. But at the same time the Courts can certainly examine whether W.A.1517/2010 & con.cases.

"decision making process" was reasonable rational, not arbitrary and violative of Article 14 of the Constitution.

19. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then Court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract."

In M/s. B.S.N. Joshi and Sons Ltd. v. Nair Coal Services Ltd.. AIR 2007 SC 437, while summarizing the scope of judicial review and the interference of superior courts in the award of contracts, it was observed as under :

"67. We are not oblivious of the expansive role of the superior courts on judicial review.

68. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regarding to the principles laid down in the aforementioned decisions may be summarized as under:

i) If there are essential conditions, the same must be adhered to;

W.A.1517/2010 & con.cases.

ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;

iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction.

v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with.

vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority. W.A.1517/2010 & con.cases.

vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint."

77. Learned counsel for the petitioners in W.P.(C) Nos. 25455 and 26030 of 2010 and 26925 of 2010 relied on the decision reported in Directorate of Education v. Educom Datamatics Ltd. (supra). As already stated, that was a case, in which tenders in respect of supply of computers to Schools were involved. What is interesting is that the court after an exhaustive analysis of the law on the point held as follows:

"It is well settled now that the courts can scrutinise the award of the contracts by the Government or its agencies in exercise of their powers of judicial review to prevent arbitrariness or favouritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters. The point as to the extent of judicial review permissible in contractual matters while inviting bids by issuing tenders has W.A.1517/2010 & con.cases.

been examined in depth by this Court in Tata Cellular v. Union of India. After examining the entire case-law the following principles have been deduced:

"94. The principles from the above are: (1) The modern trend points to judicial restraint in administrative action.

(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.

(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.

(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.

(5) The Government must have freedom of contract.

In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. W.A.1517/2010 & con.cases.

However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.

(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

The principle was again restated by this Court in Monarch Infrastructure (P) Ltd. v. Commr., Ulhasnagar Municipal Corpn.. It was held that the terms and conditions in the tender are prescribed by the Government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the ones prescribed in the earlier tender invitation."

W.A.1517/2010 & con.cases.

78. From the above decisions, it follows that the scope of judicial intervention in such matters is considerably limited. As could be seen from the decisions acid test is the Wednesbury principle. There are bound to be conflicting interests involved. But that is not the criterion for interference. If as a matter of fact, it is seen that the relevant materials have been taken into consideration and that a conscious decision was taken after application of mind, then, it will be improper on the part of the court to interfere in such matters. At the risk of repetition, one may say that unless it is found that the decision is so perverse or arbitrary, interference may not be justified, even if it is harsh. Viewed in the light of these principles, it is difficult to say that there was any unreasonableness or arbitrariness or illegality in SPORTS issuing Ext.P10 notification. W.A.1517/2010 & con.cases.

79. The switch over from Ext.P9 to Ext.P10 may raise some doubts about the conduct of SPORTS. On the facts and materials furnished and discussed above, it can be seen that the action was without any oblique motive, though it would appear that the decision to issue Ext.P10 notification may seen to have been taken in a hasty manner. But one should remember that the arrangement with M/s. Casino was to terminate on 31.8.2010 and therefore immediate steps had to be taken. Once it is shown that there is nothing to indicate that the act of SPORTS is mala fide or ill-motivated, mere fact that certain conditions stipulated may not be to the liking of the petitioners or to their advantage and others similarly situated, cannot lead to an inference that they were unacceptable. It must be due to the reason that SPORTS too felt that individuals may not be able to satisfy the conditions, they thought that consortium could be allowed to bid in the tender. It was a large project W.A.1517/2010 & con.cases.

involving huge investment and therefore cannot be confined to the local inhabitants. One should remember that the activities of the operator should be such that it attains international standards.

80. In the decision reported in M/s. B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. (AIR 2007 SC 437) it was observed that the employer is the best judge in respect of conditions to be laid down in tenders, that normally being within its domain, the court's interference in such matters should be minimal. In the decision reported in S.S. & Company v. Orissa Mining Corpn. ((2008) 5 SCC

772) it was held that amendments to tender or issuance of new tender can be challenged only by someone, whose position has been adversely affected by the issuance of the fresh notification.

W.A.1517/2010 & con.cases.

81. Thus, it follows that it remains in the discretion of the concerned person in prescribing the necessary conditions in the tender and unless it is shown that they are arbitrary, unreasonable, discriminatory or with malice, it may not be proper for the courts to substitute its views. The State, its Corporations, instrumentalities and agencies are bound to adhere to the norms and procedures laid down and they cannot arbitrarily depart from the same. They have a public duty to perform and they should be fair to all. Whatever that be, unless it is shown that either the policy or the decision taken to implement the policy is unfair, arbitrary and unreasonable, the courts may not be justified in interfering with them.

82. In W.P.(C) 26925 of 2010 as well there is an allegation of malafides against SPORTS. According to them, the stipulations in Ext.P10 were tailor made to favour the sixth respondent. They say that after the pre-bid meeting on W.A.1517/2010 & con.cases.

3.8.2010 when SPORTS knew about the possible tenders, in order to eliminate them, Ext.P10 notification was brought out imposing onerous and irrational conditions.

83. There seems to be no basis for the above allegation. It has already been noticed that the conditions imposed in Ext.P10 was after due deliberation and after taking expert advice. The subsequent events will also show that the allegation is false. While these petitions were pending before this court, the tender proceedings were allowed to be carried on and it was seen that tenders were opened. Respondent No.6 in W.P.(C) 26030 of 2010 had nothing to do with the issue.

84. In the decision reported in Jasbir Singh Chhabra v. State of Punjab ((2010) 4 SCC 192) it has been held as follows:

W.A.1517/2010 & con.cases.

"It is trite to say that while exercising power of judicial review, the superior courts should not readily accept the charge of malus animus laid against the State and its functionaries. The burden to prov the charge of mala fides is always on the person who moves the court for invalidation of the action of the State and/or its agencies and instrumentalities on the ground that the same is vitiated due to mala fides and the courts should resist the temptation of drawing dubious inferences of mala fides or bad faith on the basis of vague and bald allegations or inchoate pleadings. In such cases, wisdom would demand that the court should insist upon furnishing of some tangible evidence by the petitioner in support of his/her allegations."

85. In the decision reported in First Land Acquisition Collector v. Nirodhi Prakash Gangoli ((2002) 4 SCC 160) it was held as follows:

"The burden of establishing mala fides is very heavy on the person who alleges it."

W.A.1517/2010 & con.cases.

86. Allegations of malafides in the case on hand do not satisfy the requirements as propounded in the above decisions. It is also interesting to note that respondent No.6 in W.P.(C) 26030 of 2010 was no where in the picture at the relevant time.

87. It is then contended that this is a ploy adopted ultimately to give the project to the sixth respondent in W.P. (C) 26030 of 2010. Learned Senior Counsel appearing for M/s. Casino pointed out that those persons, who are being considered for selection, did not have the necessary qualifications and ultimately what would happen is that an unqualified person would be selected. That action would be assailed and the benefit will ultimately go to the sixth respondent. It is also pointed out that the infrastructure and other facilities provided by SPORTS and further developments made and maintained by M/s. Casino, are W.A.1517/2010 & con.cases.

readily available. It is further stated that the person, who is ultimately chosen will exploit the conditions, since, he will have to ensure a good return for the huge investment he is likely to make. He will pay little heed to environmental aspects and manipulate accounts in such a way that the percentage of earnings to be given to SPORTS will be kept at a minimum and that will affect the land owners and the development of the Island.

88. Well, all the above allegations are in the realm of speculation and imagination. It is unnecessary to go into those aspects, as they are neither the subject matter of controversy in these proceedings, nor they are under challenge. It is also difficult to believe that the successful bidder will resort to activities detrimental to the land owners and the authorities concerned will not react. We do not think that the ground alleged needs further discussion. W.A.1517/2010 & con.cases.

89. Learned counsel appearing for M/s. Casino also projected the principle of promissory estoppel and principle of legitimate expectation for contending that M/s. Casino is entitled to an automatic renewal. The claim is based on the fact that in 1988, when global tenders were accepted they had mentioned therein that they would continue for a period of 25 years. Therefore, it is pointed out that they hoped that even though the initial lease was only for a period of five years, they will be able to continue atleast till 2013. They also say that they sought renewal on 25.2.2010 and since no reply was received till 7.8.2010, they expected that the lease would be renewed.

90. There is no merit in the above contention at all. From the arrangement entered into between SPORTS and M/s. Casino, it is clear that it was only for a period of five years. It is true that M/s. Casino were able to continue till 2010. However, from 2001 to 2010 their continuance was on W.A.1517/2010 & con.cases.

the basis of an arbitration award. There is nothing to show that at any point of time they were given the impression that they will be allowed to continue beyond 2010. It is claimed by SPORTS that M/s. Casino was duly informed that SPORTS intended to go in for global tenders. Merely because there is some delay in communicating the rejection of renewal, that does not lead to the conclusion that M/s. Casino could have expected that the lease would be renewed. One must remember that the issue had to be considered by the BOM of SPORTS and as already noticed, the issue was deliberated upon and ultimately after considering the three options available, SPORTS decided to go in for global tenders.

91. In the decision reported in State of Arunachal Pradesh v. Nezone Law House (2008(2) KLT SN 59), it was held as follows:

W.A.1517/2010 & con.cases.

"Choice of policy is for the decision-maker and not the Court. The legitimate substantive expectation merely permits the Court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. A claim based on merely legitimate expectation without anything more cannot ipso facto give a right. Its uniqueness lies in the fact that it covers the entire span of time, present, past and future. How significant is the statement that today is tomorrow's yesterday. The present is as we experience it, the past is a present memory and future is a present expectation. For legal purposes, expectation is not same as anticipation. Legitimacy of an expectation can be inferred only if it is founded on the sanction of law. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of W.A.1517/2010 & con.cases.

reasonableness the policy decision comes out unscathed. In order to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and bald expressions without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must forever be present in the mind of the Court."

92. In the decision reported in CSIR v. Ramesh Chandra Agrwal ((2009) 3 SCC 35) it was held as follows:

W.A.1517/2010 & con.cases.

"Legitimate expectation is based on the principles of natural justice. There has to be a basis for giving effect to the doctrine of legitimate expectation. It must not be based on mere anticipation."

93. The existence of a policy does not carry with it an entitlement to prevent policy makers or the persons concerned from modifying or changing the policy when there is existence of a relevant and justifiable basis for doing so, more so, certain public interest is involved. The principle has not been applied to hold that the discretion must be exercised in an impartial manner but what is to be seen is that if there has been a fair dealing.

94. At no point of time SPORTS indicated to M/s. Casino nor was there any conduct from their part to lead M/s. Casino to expect that the arrangement will be W.A.1517/2010 & con.cases.

renewed. At any rate, we are not prima facie impressed with the claim that they are entitled to a renewal based on the application dated 25.2.2010 or otherwise. The reasons which prompted SPORTS to go in for a global tender with stringent conditions have already been referred to. Whatever that be, the issue of renewal, we are told, is an issue in Arbitration proceedings and therefore we leave it there.

95. However, it must be said to the credit of SPORTS that they do not cast any aspersions on M/s. Casino. SPORTS have no complaint about the operation or of deficiency in their services. The decision to go in for global tenders seems to have been taken after due deliberations and discussions and for cogent and convincing reasons. It would also appear that it was in the interests of the land owners as well as the Island as well as in public interest. W.A.1517/2010 & con.cases.

96. What now remains to be considered is the grievance of the inhabitants of the Island. Though there was a challenge to Regulations 3 and 4 of 1964 Regulation, that has been given up and their claim remains confined to the demand that they be given adequate returns for the land that have been taken from them on lease.

97. It must be said that while dealing with these cases, certain disturbing facts have come to our notice. This court had occasion to consider the role of SPORTS. It was observed that SPORTS has not been formed as a body of purely private individuals, but as an agency to help the land owners in Lakshadweep Island, most of whom are members of Scheduled Tribes, to advance their interests and seek betterment of their status in life. It is further observed that the objective behind the Presidential Regulation is carried W.A.1517/2010 & con.cases.

forward by the mechanism of floating a Society, by which the individual land owners are enabled to benefit and obtain sufficient returns from their lands. The purpose and object for which the Society has been formulated has been considered in detail by this court. The question is whether they have been able to meet the aspirations of the people of the Island.

98. Constitution of India provides an elaborate framework for the amelioration of Scheduled Tribes and to curtail and prevent atrocities against them. Articles 15(4), 16(4A), 19(5), 46 , 275 , 243T , 244 , 330 , 335 and the 5th and 6th Schedules deal with the political, social and economic development of those people apart from the other Articles applicable to all. The Union Territory of Lakshshadweep is being administered by an Administrator appointed as per Article 239 of the Constitution of India. Articles 239 to 241 deal with the various aspects relating to the UT. Even W.A.1517/2010 & con.cases.

though the Constitution provides adequate care for these unfortunate persons, it seems that the progress is very slow.

99. One cannot omit to note that the Administrator is the supreme authority in the UT and he looks after the affairs of the UT. Considering the nature of the post he holds, he is indeed a trustee of the public wealth and is bound to act for the welfare of the people of the Island and for its development. There is an obligation cast on him to ensure that the land owners get adequate returns and also to ensure that the funds so earned from the letting out of the resort is utilized for the development of the Island. The concept of 'distributive justice' was propounded in the decision reported in Lingappa Pochanna v. State of Maharashtra (AIR 1985 SC 389). In the said decision, it was held as follows:

W.A.1517/2010 & con.cases.

"Under the scheme of the Constitution, the Scheduled Tribes as a class require special protection against exploitation. The very existence of Scheduled Tribes as a distinctive class and the preservation of their culture and way of life based as it is upon agriculture which is inextricably linked with ownership of land, requires preventing an invasion upon their lands. .................. Art.46 of the Constitution which enjoins that "The State shall promote with special care the educational and economic interests of the weaker sections of the people and in particular of the Scheduled Castes and Tribes and shall protect them from social injustice and all forms of exploitation." One has only to look at the carelessness, the total lack of guile, the ignorance and the innocence, the helplessness, the economic and the educational backwardness of the tribals pitted against the artful, usurious, greedy land grabber and exploiter invading the tribal area from outside to realize the urgency of W.A.1517/2010 & con.cases.

the need for special protection for the tribals if they are to survive and to enjoy the benefits of belonging to the 'Sovereign, Socialist, Secular, Democratic Republic' which has vowed to secure to its citizens 'justice, social, economic and political' 'assuring the dignity of the individual.' The great importance which the Founding Fathers of the Constitution attached to the protection, advancement and prevention of exploitation of tribal people may be gathered from the several provisions of the Constitution. Apart from Art.14 which, interpreted positively, must promote legislation to protect and further the aspirations of the weak and the oppressed, including the tribals, there are Arts.15(4) and 16(4) which make special provision for reservation in Government posts and admissions to educational institutions. Even the Fundamental Rights guaranteed by Art.19(1)(d) and (3), that is, the right to move freely throughout the territory of India and the right to reside and settle in any part of the territory of India are made expressly subject to reasonable W.A.1517/2010 & con.cases.

restrictions for the protection of the interests of any Scheduled Tribe.

............... .............

The present legislation is a typical illustration of the concept of distributive justice, as modern jurisprudents know it. Legislators, Judges and administrators are now familiar with the concept of distributive justice. Our Constitution permits and even directs the State to administer what may be termed 'distributive justice'. the concept of distributive justice in the sphere of law-making connotes, inter alia, the removal of economic inequalities and rectifying the injustice resulting from dealings or transactions between unequals in society. Law should be used as an instrument of distributive justice to achieve a fair division of wealth among the members of society based upon the principle : 'From each according his capacity, to each according to his needs'. Distributive justice comprehends more than achieving lessening of inequalities by differential taxation, giving debt relief or distribution of W.A.1517/2010 & con.cases.

property owned by one to many who have none by imposing ceiling on holdings, both agricultural and urban, or by direct regulation of contractual transactions by forbidding certain transactions and, perhaps, by requiring others. It also means that those who have been deprived of their properties by unconscionable bargaining should be restored their property. All such laws may take the form of forced redistribution of wealth as a means of achieving a fair division of material resources among the members of society or there may be legislative control of unfair agreements.

................. ...................

D. Bandyopadhyaya, Joint Secretary, Ministry of Labour, Government of India, and B.N. Yugandhar, Special Assistant to the Deputy Chairman, Planning Commission in their Report submitted to the Government in 1975 brought out the reasons for the justified sense of grievance felt by so many tribal populations in these words:

"The Girijans came in touch with the administration only in a state of confrontation when they were tackled for infringement or infraction of one or the W.A.1517/2010 & con.cases.

other regulation which in fact abridged,annulled or tinkered with their customary rights and privileges. Thus the Girijans of the Parvathipuram agency tract found themselves totally alienated from the administrative machinery and newly set up self-governing institutions and were denied opportunities of gainful economic activities. They suffered not only from poverty by also from a deep sense of insecurity. They found themselves deprived at each point and at each front. A deep sense of grievance and injustice enveloped the entire tribal population through decades of neglect by the logical administrator."

(Emphasis supplied)

100. In the decision reported in Samatha v. State of A.P. ((1997) 8 SCC 91), it was held as follows:

"In the absence of any total prohibition, Article 298 empowers the Governor being the head of the Executive to sanction transfer of its lands. Since the Executive is enjoined to protect social, economic and educational interests of th tribals and when the State leases out the lands in the Scheduled Areas to the non-tribals for exploitation of mineral resources, it transmits the W.A.1517/2010 & con.cases.

correlative constitutional duties and obligation to those whose undertake to exploit the natural resources that they should also improve social, economic and educational empowerment of the tribals. As a part of the administration of the project, the licensee or lessee should incur the expenditure for:

(a) reforestation and maintenance of ecology in the Scheduled Areas;

(b) maintenance of roads and communication facilities in the Scheduled Areas where operation of the industry has th impact;

) supply of potable water to the tribals;

(d) establishment of schools for imparting free education at primary and secondary level and providing vocational training to the tribals to enable them to the qualified, competent and confident in pursuit of employment;

(e) providing employment to the tribals according to their qualifications in their establishment/factory;

W.A.1517/2010 & con.cases.

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(f) establishment of hospitals and camps for providing free medical aid and treatment to the tribals in the Scheduled Areas;

(g) maintenance of sanitation;

(h) construction of houses for tribals in the Scheduled Areas as enclosures.

The expenditure for the above projects should be part of his/its Annual Budget of the industry establishment or business avocation/venture."

101. The concern for the Scheduled Caste and Scheduled Tribe was again expressed by the apex court in the decision reported in State of Kerala v. Peoples Union for Civil Liberties ((2009) 8 SCC 46).

102. During the hearing of these cases, it came to light that the land owners are not being adequately compensated for the lands, of which lease has been taken by SPORTS nor is much concern shown regarding the development of the Island. It is indeed sad to note that the W.A.1517/2010 & con.cases.

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Island lacks even the minimum basic facilities, to which they are constitutionally entitled to. Sincere and sustained efforts are necessary. It is a pity that even now an islander has to come to the main land to avail of medical care for even minor ailments. Basic infrastructure for education, health and sanitary facilities etc have to be ensured to enable the islander to lead a healthy, dignified and decent life.

103. As far as most of the islanders are concerned, their main source of income is from marine wealth and tourism. One may recollect that this court had occasion to commend about the laudable activities carried on by SPORTS. But, much more remains to be done. The land owners must be ensured of adequate, reasonable and consistent income for the land, which they have given on lease to SPORTS.

W.A.1517/2010 & con.cases.

102

104. We are aware that the role of this court in this sphere is rather limited. But we hope and believe that the authorities concerned will take adequate measures to improve the deplorable condition of the inhabitants of the Island. We are conscious that it is a matter of policy having financial and other implications.

105. In the decision reported in Mohd. Abdul Kadir v. Director General of Police ((2009) 6 SCC 611) it was observed as follows:

"We are conscious of the fact that the issue is a matter of policy having financial and other implications. But where an issue involving public interest has not engaged the attention of those concerned with policy, or where the failure to take prompt decision on a pending issue is likely to be detrimental to public interest, courts will be failing in their duty if they do not draw attention of the authorities concerned to the issue involved in appropriate cases. While courts W.A.1517/2010 & con.cases.

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cannot be and should not be makers of policy, they can certainly be catalysts, when there is a need for a policy or a change in policy."

106. We are constrained therefore to observe that more serious attention needs to be paid to the above aspects and remedial steps be immediately resorted to. It must be the object and purpose of U.T. administration and SPORTS to ensure that Constitutional guarantees assured to the Islanders are available to them. The present situation appears to be that while the BIR provides an arena for high profile litigations in the corporate sector, the inhabitants of the Island continue to bleed.

107. We are of the opinion that the petitioners are not entitled to any relief in any of these writ petitions. We however leave open the right of M/s. Casino to agitate questions raised by them before the Arbitrator in the arbitration proceedings. However, we think that we will not W.A.1517/2010 & con.cases.

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be justified in issuing any interim order in favour of the petitioners in W.P.(C) Nos. 25455 of 2010.

In the result, the writ appeals are allowed and the four writ petitions shall stand dismissed.

Thottathil B. Radhakrishnan, Judge P. Bhavadasan, Judge sb.

After the pronouncement of judgment in these matters, the learned senior counsel for M/s.Casino made a submission that there are, as of now, 26 guests including W.A.1517/2010 & con.cases.

105

foreigners in the Bangaram Island Resort and though permits were being issued by the U.T.Administration on day- to-day basis, those guests may be permitted to utilise the facilities with M/s.Casino, the last among the batch of them having prepared to leave the Resort on 29.10.2010. The learned standing counsel for the U.T.of Lakshadweep strongly opposes this submission by stating that permits were issued on day-to-day basis subject to the litigation that was pending in this Court and clarifying that everything would depend upon the outcome of the writ appeal and the judgment having been delivered against the interest of M/s.Casino, the SPORTS is entitled to immediately take over the Resort.

Having bestowed our anxious consideration, we are of the view that the larger interest of the country being that it is recommended globally as one with abundant tourist W.A.1517/2010 & con.cases.

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potential, the public authorities, like SPORTS and U.T.of Lakshadweep, should necessarily dissuade themselves from immediately interfering with the fact situation, as of now, having regard to the occupancy by the guests, including foreigners. Therefore, without any equity working in favour of M/s.Casino, we order that the U.T.of Lakshadweep or SPORTS would not, in any manner, impair the possession and running of the Bangaram Island Resort by M/s.Casino till 4 p.m. on 30th October, 2010. This will be on condition that the competent representative of M/s.Casino will file an affidavit before the Administrator of the U.T.of Lakshadweep undertaking to surrender vacant possession to the Administrator by 4 p.m. on 30.10.2010. Such affidavit to be filed within a period of four days from now. It is also ordered that no new guests will be brought in except those who have already landed today and the amounts equivalent to royalty W.A.1517/2010 & con.cases.

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charges till the 30th October, 2010 would also be paid as occupation charges.

Thottathil B. Radhakrishnan, Judge P. Bhavadasan, Judge

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Kerala High Court

Society For The Promotion Of vs M/S.Hotel & Allied Trades Private on 22 October, 2010

Bench: Thottathil B.Radhakrishnan, P.Bhavadasan