Calcutta High Court (Appellete Side)
Amma Lines Private Ltd. & Ors vs State Of West Bengal & Ors on 14 July, 2015
Author: I.P. Mukerji
Bench: I.P. Mukerji
W.P. NO.6245 (W) OF 2015
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
Amma Lines Private Ltd. & Ors.
Vs.
State of West Bengal & Ors.
For the petitioners: - Mr. S.N. Mookerji, Sr. Advocate
Mr. D.N. Sharma
Mr. Nilay Sengupta
Mr. Pradeep Jewraika.
Mr. Kumarjit Banerjee
For the State: - Mr. Jayanta Kumar Mitra, Advocate General
Mr. Amitesh Banerjee
Mr. Tarak Karan
For Respondent No.6/
WBIDC: - Mr. Samrat Sen, Sr. Advocate
Mr. Sukrit Mukherjee
Mr. Paritosh Sinha
For the KOPT: - Mr. Abhrajit Mitra, Sr. Advocate
Mr. Ashok Kumar Jena
For Respondent No.8: - Mr. Jishnu Saha, Sr. Advocate
Judgement on: 14th July, 2015
I.P. MUKERJI, J.
The writ petitioner company is registered in Chennai. It has a place of business in Worli, Mumbai. It claims the distinction of having developed Rewas Port located in the Mumbai Harbour region. This contract was awarded to them by the Government of Maharashtra in 2002. It also claims to have set up two thirds of the new jetties and ports in Maharashtra and Tamil Nadu, as asserted by it in its letter dated 24th May 2007 to the Government of West Bengal. In this letter the company declared that it had identified the mouth of the river at Rasulpur to be the suitable site. Seventh generation container vessels and bulk cargo vessels could enter the port. The Managing director proposed to name it Tamralipta, as it was at this place that the ancient port by this name existed.
The other petitioners are associated with this company. They all possess engineering degrees and claim to have a vast experience in this field. Having gained some experience in developing the Rewas Port in Maharashtra, and other ports in Maharashtra and Tamil Nadu. The writ petitioner company became interested in setting up a deep water port in West Bengal. The site at which this port was to be established was identified by them considering all aspects of feasibility.
On 6th June, 2006 the Department of Shipping, Government of India issued a global tender for setting up deep water, all weather port in West Bengal. The department invited applications by 31st June, 2006 for this purpose. There was no response.
On 22nd May 2007, the directors of the petitioner company met some top officials of the Government of West Bengal, including its Principal Secretary, Department of Commerce and Industry with the proposal of setting up a deep water port in the mouth of the river at Rasulpur. This is recorded in a letter of the company to the government, dated 24th May, 2007. On 29th May, 2007 the writ petitioner company made an expression of interest to the Government of West Bengal for setting up a deep water minor port on the coastline of West Bengal.
At this stage, I may remark that the Central Government has the power of setting up major ports. Entry No. 27 of list I of the seventh schedule to the Constitution of India gives them this power. Parliament has the power to legislate in this field. Setting up of minor ports is within the domain of both the Central and the state governments under entry no. 31 of list III of the seventh schedule to the Constitution of India.
On 13th July, 2007 the writ petitioner company made a presentation of their project before the West Bengal government. It was seen by the then Hon'ble Chief Minister, Secretary of the Department of Shipping, Government of India, The Chairman, Kolkata Port Trust, Principal Secretary to the Government of West Bengal, Department of Commerce and Industry. In my opinion, the discussion which took place during this presentation, recounted by the letter of the writ petitioner dated 16th July, 2007 is of paramount importance to decide this writ. It was admitted in the letter that in setting up the deep sea water port, the writ petitioner company would be using the waters of the estuary of the river Hooghly at its confluence with the Bay of Bengal and that these waters were in the dominion of the Kolkata Port Trust. They had to be persuaded to "give part of the unused water". A model of the project was demonstrated to these dignitaries. The West Bengal government was invited to get into a Memorandum of Agreement (MOA) with the writ petitioner company, similar to that entered into by the Maharashtra Maritime Port (MMP) for Rewas Port. The port would be ready in 5 to 6 years. It would be designed and set up in such a way that there would be a reduced chance of erosion and siltation of the navigable channel. On 14th May, 2010 the Government of West Bengal issued a letter of intent to the writ petitioner company for building a multipurpose deep sea port at Rasulpur, District East Midnapore, West Bengal. They were asked to go ahead in obtaining permissions like environment clearance, preparation of a detailed plan and estimates to enable the government to sign the build, own, operate, share and transfer (BOOST) agreement.
On 20th May, 2010 the Principal Secretary, Commerce and Industry Department Government of West Bengal informed the Chairman of Kolkata Port Trust about issuance of this letter of intent and the terms thereof. On 19th August 2010,the government of West Bengal asked the writ petitioner to submit a draft agreement.
Thereafter, with regard to performance of the obligations of the writ petitioner company under the letter of intent, the writ petitioner company earned the displeasure of the Government of West Bengal. On 22nd August, 2013 it was issued a show cause notice by the Government. This show cause notice was replied to by them by their letter dated 10th September, 2013. On 5th November, 2014, the government cancelled this letter of intent, after fourteen months of receiving the reply to the show cause notice.
We are not at all concerned with this part of the dispute between the petitioner company and the Government of West Bengal with regard to the performance of obligations under and cancellation of the letter of intent. First of all it is not the subject matter of this writ application. Moreover, there is a prior writ application filed in this Court WP No. 1311 (W) of 2015 by the writ petitioner company regarding the subject matter and it is still pending.
What is very material is that the learned Advocate General took a stand in this Court on instruction that for all intent and purposes the letter of intent is to be taken as existing, at this point of time.
Now, it appears from the letter of the Ministry of Environment and Forest dated 4th March 2014 that the proposal for selection of the site in Rasulpur and the details of the project were considered in their 128th EAC meeting between 20th-23rd November, 2013. EAC after deliberations advised the petitioner company to submit a justification for the site selection. The proposal of the petitioner was again considered at the 129th EAC meeting between 26th - 28th December, 2013. There were three possible alternative sites, one north of the Rasulpur river, another immediately downstream of the river mouth in the shallow region of the coastline. The third option which was a horse shoe shaped area under Sea Island was found by the Ministry to be "most optimum" and hence setting up of the project there was approved. The following amongst other conditions were set:
"(i) Submit all the three alternatives sites on the same map showing the KOPT channel also on the same map.
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(iii) No portion of the port should fall with the KoPT channel limits.
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(vii) No Objection Certificate shall be obtained from KoPT as the proposed port appeared to be on the immediate vicinity of the KoPT channel." This horse shoe shaped area which the writ petitioner identified as the exact location for setting up the deep sea port, lay to the south-west of Sagar Island and south/south-east of a place called Bichunia, but very proximate to it. The area lay approximately between 21° 28´ and 21º 42 latitudes and 87º 40 and 87º 50 longitudes. Within it was a channel described in the map a "channel dredged to 18 metres."
On 16th February, 2015 the Kolkata Port Trust issued a second tender document for operating a Floating Storage and Regasification Unit (FSRU)/ Floating Storage Unit (FSU) for receiving, storing, regasifying (optional) and transporting LNG from mother vessels at sandheads to a suitable landfall point.
The following facts are very important. An earlier tender by the port for the same purpose issued on 5th December, 2014, was cancelled for want of bidders. There was a single bid.
The earnest money payable for the current tender was Rs. 10.52 crores. The pre- bid meeting or pre-application conference was fixed on 2nd March, 2015 at 1200 hrs; 16th March, 2015 at 1300 hrs was the last date and time for submission of tender and 16th March, 2015 at 1500 hrs was the date and time for opening it. These units were to be installed at Sandheads in the area enclosed by the following rectangle:
A. : Lat 20º 49.5 N Long 087º 41.7 E
B : Lat 20º 46.5 N Long 087º 41.7 E
C : Lat 20º 46.5 N Long 087º 51.6 E
D : Lat 20º 49.5 N Long 087º 51.6 E
A minimum distance of 3 miles had to be maintained by the storage units from one another, keeping a safe distance from the pipeline. The tender is worth millions of rupees. The bid of a company H-Energy Co. Pvt. Ltd., the eighth respondent was accepted by the port authorities. However, the work order has not been issued in their favour in obedience to an interim order passed by this Court on 16th March, 2015, in this writ. Now, I come to the root of the problem. The proposed pipelines emanating from the storage and regasification unit pass directly through this area enclosed by the horse shoe and proceeds towards Bichunia in coastal Bengal. The direction of this pipeline is shown in a design of the deep water port prepared by the petitioner company at page 36 of their affidavit-in- reply affirmed on 8th April, 2015 to the affidavit of the port dated 26th March, 2015.
This pipeline passes through points A,E,B,C & D, the path EBC cutting vertically through this horse shoe area of the waters of the estuary at the confluence of the Hooghly and Bay of Bengal.
Amongst other prayers made in this writ petition the writ petitioner company wants diversion of this proposed pipeline through a route passing through A,E,F & G, in diversion of the route from E to D through the horse shoe area.
Their contention is that if the pipeline is allowed to pass through the horse shoe shaped area they would not be able to set up the deep water port. Their whole project would become infructuous.
On 19th February, 2015 the writ petitioner company wrote to the Chairman of Kolkata Port Trust drawing his attention to the fact that the proposed pipeline in the tender announced by the port passed through the navigational channel of their proposed port at Bichunia near Rasulpur. They emphasised that the location was the only viable one, technically and even financially as it would cost Rs. 6000 crores at Bichunia as against Rs.15000 crores in Sagar Island. The depth of the water available at Bichunia would be 20m. has opposed to 13.5 m at Sagar Island, and that too without siltation. They requested Kolkata Port Trust to shift the direction of the proposed pipeline from ABCD to AEFG.
It also appears that the writ petitioner sought the approval of the Navy. The Eastern Naval Command Headquarters in Visakhapatnam by their letter dated 11th February, 2015 and 3rd March, 2015 asked the petitioner for several details regarding the proposed port.
Another fact which is most significant is that the Government of West Bengal was also ad idem with the writ petitioner company that the proposed port could be set up only at Bichunia in Rasulpur, i.e. the site selected by the petitioner.
On 2nd March, 2015 the respondent no. 6 WBIDC wrote to several organisations to submit bids as "transaction advisor for selection of private partners and independent engineer for deep sea port at Rasulpur". It was stated therein that the bids were due for submission on 31st March, 2015 at 3.00 pm. Moreover, the State Government was firm that a deep sea port would be set up at that site and it was looking for "a transaction advisor". In those circumstances no less an official of the government than the Principal Secretary, Commerce and Industry Department wrote to the Chairman of the Kolkata Port Trust on 26th March, 2015 to realign the proposed pipeline so that the "port project area may remain free".
The Port replied to this letter on 16th April, 2015. This letter is very important for this case. It stated that the port had decided on a letter of intent for the storage units and pipelines but had held it back because of the interim order passed by this court. It had learnt that the state had engaged a transaction adviser to setup a modern deep sea port at Rasulpur or a nearby location, depending on ''feasibility''. If the government decided to set up the port at Rasulpur or a neighbouring area, the pipelines would have to be "factored".
I am really unable to understand the connotation of the word ''factored''. Interestingly, the learned Advocate General for the State made an open statement upon instruction that the West Bengal Government was not committed to or had not taken a policy decision to set up a port at Bichunia and that the said port could be set up anywhere in the Rasulpur area. Thus, the Government of West Bengal was no longer interested to make any kind of request to Kolkata Port Trust to realign the proposed pipeline. Thus, the Government of West Bengal has now resiled from their earlier stand of setting up a deep water port at Bichunia, to be more specific the area enclosed by the horse shoe in the said map or project plan of the writ petitioner company.
Kolkata Port Trust made it very plain that they were not inclined to shift the alignment of the pipeline. In fact, they had accepted the tender of the added respondent.
Mr. Jishnu Saha, learned senior advocate appearing for the added respondent, respondent no. 9 was very firm in his submission of that the diversion of the proposed pipeline would cost heavily and that it, would not be possible.
As a result, the port as well as the respondent no.8 are unable to change the course of the proposed pipeline.
In fact, Mr. Abhrajit Mitra, learned senior counsel for the port stated that there were three alternative sites for the project, as pointed out in the letter dated 4th March, 2014 of Government of India Ministry of Environment and Forests to the writ petitioner company and that if they were so interested to develop a port they should do it in the other two alternatives. In any event, both the learned Advocate General and Mr. Abhrajit Mitra for the port submitted that no port could be constructed in that area without the permission of the Kolkata Port Trust.
This position was ultimately admitted by Mr. S.N. Mookerji, learned senior advocate for the petitioner company that setting up and development of the port depended upon a No Objection Certificate from the port authorities. The learned Advocate General maintained from the beginning till the end that the writ petitioner company had no locus standi to maintain this writ application. Its letter of intent had been revoked by the Government of West Bengal. After revocation of the letter of intent, that tender has not been granted to any person.
On the other hand, Mr. S.N. Mookerji, for the petitioner took considerable pain to show this Court the extent of operation of the Indian Ports Act, 1908. Sections 3(4), 3(8) are in the following terms:
"3 (4) "port" includes also any part of a river or channel in which this Act is for the time being in force;
3 (8) "major port" means any port which the Central Government may by notification in the Official Gazette declare, or may under any law for the time being in force have declared, to be a major port;"
He said that setting up of a major port in the territorial waters of India or along the river was within the powers of the Central Government under List I entry 27 of the Seventh schedule to the Constitution of India, whereas setting up of a minor port was in the domain of the State Government concurrently with the Central government under List III entry 31 of the said schedule. He also showed me the Major Port Trusts Act, 1963, in particular section 2(m) which defines a major port as defined by the Indian Ports Act. Section 2(q) and section 2 (r) also shown to me and as defined in the said Act are as follows:
"2 (q) "port means" any major port to which this Act applies within such limits as may, from time to time, be defined by the Central Government for the purposes of this Act by notification in the Official Gazette, and, until a notification is so issued, within such limits as may have been defined by the Central Government under provisions of the Indian Ports Act;
2 (r) " port approaches", in relation to a port, means those parts of the navigable rivers and channels leading to the port, in which the Indian Ports Act is in force;"
There is a central notification dated 19th June, 2001 made in exercise of powers conferred by section 5 of the Indian Ports Act, 1908 and section 1(q) of the Major Ports Trusts Act, 1963, defining the limits of the Kolkata Port and the jurisdiction exercised by the Board of Trustees. The permission of the Board may be required for the purpose of setting up the port in question, as conceded by Mr. Mookerji in as much as the notification stated that the jurisdiction of the trustees would be over all navigable rivers and channels leading to the port of Kolkata, over latitude 20° 45´ north and between longitudes 87 ° 45 ´and 88° 40´east.
Mr. Abhrajit Mitra, learned senior Counsel for the Kolkata Port Trust showed me Sections 35, 46 Sections 2 ( r ), 2 (p) 2 (f) and (g) of the Major Port Trusts Act, 1963 to show that the permission of the port was necessary to construct any kind of port wharf, pier, dock etc in the Kolkata Port area. Sections 35, 46 2(p) 2(f) 2 (g) are inserted below:
35. (2)(a) Wharves, quays, docks, stages, jetties piers and other works within the port or port approaches or on the foreshore of the port or port approaches, with all such convenient arches, drains, landing places, stairs, fences, roads, railways, bridges, tunnels and approaches and buildings required for the residence or the employees of the Board and the Board may consider necessary;
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(c) Moorings and cranes, scales and all other necessary means and appliances for loading and unloading vessels;
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(e) Such breakwaters and other works as may be expedient for the protection of the port;
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(f) dredgers and other machines for cleaning, deepening and improving any portion of the port or port approaches or of the foreshore of the port or port approaches;
(g) Lighthouses, lightships beacons, buoys, pilot boats and other appliances necessary for the safe navigation of the port and of the port approaches;
(l) Dry docks, slipways, boat basins and workshops to carry out repairs or overhauling of vessels, tugs, boats, machinery or other appliances.
(46) No person shall make, erect or fix within the limits of a port or port approaches any wharf, dock, quay, stage, jetty, pier, erection or mooring [or undertake any reclamation of foreshore within the said limits] except with the previous permission in writing of the Board and subject to such conditions, if any, as the Board may specify."
(2) if any person makes, erects or fixes any wharf, dock, quay, stage, jetty, pier, erection or mooring [or undertakes any reclamation of foreshore] in contravention of sub- section (1) the Board may, by notice, require such person to remove it within such time as may be specified in the notice and if the person fails so to remove it, the Board may cause it to be removed at the expense of that person.
2 (p) "pier" includes any stage, stairs, landing place, hard, jetty, floating barge (transhipper) or pontoon, and any bridges or other works connected therewith.
(f) "dock" includes all basis, locks, cuts, entrances, graving docks, graving blocks, inclined planes, slipways, gridirons, moorings, transit-sheds, warehouses, tramways, railways and other works and things appertaining to any dock, and also the portion of the sea enclosed or protected by the arms or groynes of a harbours;
(g) "foreshore", in relation to a port, means the area between the high-water mark and low-water mark relating to that port."
The Kolkata Port Trust is a creature of a Central statute, the Major Port Trusts Act, 1963. Section 4 of the Act empowers the central government to constitute, by notification in the official gazette, a Board Trustees for a major port. A Board of Trustees for the port of Kolkata is in existence. Under chapter IX of the Act the central government has the power of superintendence over this Board.
CONCLUSIONS When the writ petitioner company gave demonstration of its project before the top dignitaries and officials of the Government of West Bengal and the Chairman of Kolkata Port Trust on 13th July, 2007, it was reasonably certain that the place where the port was proposed would be the waters around Bichunia in Rasulpur. The horse shoe shaped area around a particular navigational channel seems to have been identified. Therefore, as early as 2007 the Kolkata Port Trust knew that this place was selected by the Government of West Bengal in exercise of their powers to set up minor ports along the coastline, for setting up a deep water port. It follows that the Chairman of the Kolkata Port Trust expressly or impliedly gave the State Government and the Central Government the impression that Kolkata Port would grant permission to the petitioner company to set up the port.
In fact, on 20th May, 2010, about six days after issuance of the letter of intent the Principal Secretary, Commerce and Industry Department Government of West Bengal wrote to the Chairman of Kolkata Port Trust that the writ petitioner company was setting up a port at Rasulpur, meaning thereby the horse shoe shaped area around Bichunia in Rasulpur. In my opinion the events so occurred, so as to make any reasonable person believe that as a policy decision, this area was chosen, by the Government of West Bengal to set up the proposed port. This is so because on 26th March, 2015 the Principal Secretary requested the Chairman of the Kolkata Port Trust to realign the proposed pipeline so that " the port project area may remain free."
The letter of intent in favour of the petitioner company may have been cancelled by the government. Still the government may have not departed from its policy of setting up a minor deep water port in the designated area. Now, it appeared from the stand of the government during the hearing of this matter that it was proceeding on the footing that the letter of intent in favour of writ petitioner company was treated to be alive. According to the ratio in Manoharlal Sharma Vs. Principal Secretary reported in (2014) 9 SCC 516 cited by Mr. Mookerji, a letter of intent creates a very "valuable right upon the allottee" and has "legal consequences" (see paragraphs 65 & 68). In such circumstances, I think it was imperative on the part of the port to ascertain from the Government of West Bengal, in writing, whether they were still, in principle contemplating setting up the port in that specific area, before issuing the tender in December 2014. The port did not do so and went ahead with finalising the tender.
Neither did the port, being a creature of the Central Government and amenable to its control consult the Central Government which had approved the petitioner company's project site, before finalising this decision. The Government of West Bengal now orally resiles from its decision to set up a port in that particular horse shoe shaped area.
The learned Advocate General also submitted that the government had committed itself to set up a minor deep water port in the Rasulpur area but that did not suggest, according to him, that the port would be set up at the location suggested by the petitioner company. It could be anywhere in the Rasulpur area, away from the pipelines proposed to be laid to effect the project of the Kolkata Port Trust. This is inconsistent with the government's letter dated 26th March, 2015 A policy of the government should at least for some significant period of time be unchanged, clear, uniform and consistent. Courts cannot allow the government to be erratic, changeable and arbitrary in policy matters that would disillusion or deceive persons acting on its basis. A government policy should be a considered decision having been thoroughly examined by experts to rule out any flaws inconsistencies or loopholes in it. The writ petitioner company had been able to convince both the state and the Central Government that the horse shoe shaped area in a particular navigational channel in the waters around Bichunia was the most viable site, technically and economically for the project. To my mind the government could be said to have taken a policy decision to set up the port at that point. It ought not to have so easily retracted from this policy decision and that too orally.
It appears that there has been no coordination between various organs of the state machinery. Neither the State government nor the Kolkata Port Trust has acted in an orderly manner. One department of the government or one creature of the government has trenched upon the area occupied by another without authority and without consent. The result is administrative anarchy and confusion and detriment for the writ petitioner company which has acted in terms of the particular policy decision.
It is also true that at this point of time the writ petitioner company has got no crystallised right. It is fighting in this Court against the revocation of the letter of intent by the Government of West Bengal. I agree with the learned Advocate General who cited Ram Pravesh Singh and Others Vs. State of Bihar and Others reported in ( 2006) 8 SCC 381 that the petitioner company could not invoke the principle of legitimate expectation. But nevertheless any person who has acted in terms of a government policy or promise, however, weak may be his right at a particular point of time, is entitled to know the exact stand of the government or a statutory body with regard to that policy or promise.
In my opinion, considering the inchoate rights of the petitioner company at this stage, it is entitled as the minimum remedy to know the policy decision of the government of West Bengal regarding location of a deep water port in the Rasulpur area. It is also entitled to know the decision of the Kolkata Port Trust with regard to its tender of February, 2015.
In those circumstances I direct the Principal Secretary Department of Commerce and Industry to take a decision as to whether the Government of West Bengal is still committed to setting up a deep water port in the horse shoe shaped area in the waters around Bichunia as identified by the writ petitioner company. Or is it the policy of the government to explore setting up of this kind of a port in any other area? Or whether the government has withdrawn its decision to set up a port in that region? This decision of the Principal Secretary shall be communicated to the petitioner and the Kolkata Port Trust within two weeks of communication of this order. The Chairman Kolkata Port Trust, in consultation with the Board of Trustees will take a decision on behalf of the Port whether to go ahead with the subject tender or modify any terms and conditions thereof, within a further period of two weeks and communicate the same to the petitioner company and the Principal Secretary. Neither the Principal Secretary department of Commerce and Industry nor the Chairman of Kolkata Port Trust is obliged to give any hearing to the writ petitioner company.
No steps with regard to the February 2015 tender of the Kolkata Port Trust will be taken by them till the Port Trust is able to communicate its decision in terms of this order to the petitioner company. The interim order is superseded by this order.
This writ application is accordingly disposed of.
Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(I.P. MUKERJI, J.)