Gujarat High Court
Adani Ports And Special Economic Zone ... vs Deendayal Port Trust (Formerly Known As ... on 5 April, 2022
Author: Aravind Kumar
Bench: Aravind Kumar, Ashutosh J. Shastri
C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 20161 of 2021
With
CIVIL APPLICATION (FOR VACATING INTERIM RELIEF) NO. 1 of 2022
In
R/SPECIAL CIVIL APPLICATION NO. 20161 of 2021
=============================================
ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED
Versus
DEENDAYAL PORT TRUST (FORMERLY KNOWN AS KANDLA PORT
TRUST)
=============================================
Appearance:
MR MIHIR THAKORE SR. ADVOCATE with SANDEEP SINGHI & MR
SHAMIK BHATT for SINGHI & CO(2725) for the Petitioner(s) No. 1,2
MR MIHIR JOSHI SR ADVOCATE with AISHVARYA(8018) for the
Respondent(s) No. 1
=============================================
CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR
and
HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 05/04/2022
CAV ORDER
(PER : HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI)
1. By way of present petition under Article 226 of the
Constitution of India, petitioners have prayed for quashing and
for setting aside the decision of respondent Deen Dayal Port
Trust (hereinafter referred to as "Port Trust" for sake of brevity)
dated 24.12.2021, conveyed to petitioners vide communication
letter No. MS/WK/4030-V-PPP (PT.1)/GIM-546 (Annexure-A ).
2. By the aforesaid decision, the respondent Port Trust
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authority has disqualified the petitioner No.1 from participating
as bidder in the second stage of bidding process for
development of Mechanized Fertilizer and other Clean Cargo
Handling Facilities at Berth No.14 on Design, Build, Operate
and Transfer Basis (hereinafter referred to as 'the said Project').
3. The main ground amongst others on which the decision is
assailed in the present proceedings is that respondent has not
assigned any reason for disqualifying the petitioner No.1 and as
such, the impugned decision is illegal, arbitrary, unfair, violative
of principles of natural justice and violative of Articles 14 and
19(1)(g) of the Constitution of India.
The averments made in the Special Civil Application by the
writ petitioners are as under:
4. Petitioner No.1 is Adani Ports and Special Economic Zone
Limited, a company incorporated under the provisions of the
Companies Act, 2013 and is the largest commercial port
operator in India and has presence across 13 domestic ports in
seven maritime States of Gujarat, Maharashtra, Goa, Kerala,
Andhra Pradesh, Tamil Nadu and Odisha. Petitioner No.2 is a
shareholder of petitioner No.1 and is a citizen of India, hence
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has got fundamental rights enshrined under the Constitution of
India.
5. The respondent is a Port Trust (previously known as
''Kandla Port Trust') and is a Board within the meaning of
Section 2(b) of the Major Port Trusts Act, 1963. The Board of
Trustees of the respondent has been constituted by the Central
Government as per the provisions of the said Statute and as
such, is a 'State' within the ambit of Article 12 of the
Constitution of India.
6. In July 2021, the respondent issued a notice inviting
tender for the said project and by way of a Request for
Qualification (in short, 'RFQ'), applications were invited from
interested parties in order to pre-qualify the competent
applicants who can subsequently bid for the said project.
Request for Proposal ('RFP') documents to be made available
only to pre-qualified applicants and as such, according to the
petitioner, the tender process initiated by the respondent is in
two stages, namely:
(a)Qualifications stage (RFQ Stage) and
(b)Bidding stage (RFP Stage).
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Pursuant to the said process, steps are prescribed as
under:-
(a) Queries to be raised on or before 25.8.2021,
(b) Pre-application Conference held on 1.9.2021, and
(c) Response to the queries given by the respondent on
4.9.2021.
7. Petitioner No.1 submitted its application for pre-
qualification on 13.9.2021 as per the requirement of RFQ. The
same was within the last date prescribed under RFQ for pre-
qualification, which was 14.9.2021. The said application was
accompanied by all necessary particulars/documents. The
respondent addressed a letter to the petitioner No.1 informing
that it was in the process of evaluating the petitioner No.1's
application, some particulars/ clarifications as required, are
requested to be submitted vide letter dated 8.10.2021 and
simultaneously, the respondent instructed the petitioner No.1 to
submit such clarification on or before 16.10.2021 at 5.00 p.m.
Pursuant to the said letter, petitioner No.1 provided
clarifications on each and every issue and submitted proper
clarification vide letter dated 14.10.2021.
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8. It is the say of the petitioners that during this time,
petitioner No.1 also participated in pre-qualification process for
three other projects, namely;
(a) Development of Western Dock on BOT basis to
handle cape size vessels at Paradip Port;
(b) Conversion of 9th Berth as Container Terminal
through Public Private Partnership DBFOT basis at
V.O. Chidambaranar Port (formerly known as
'Tuticorin Port') and
(c) Upgradation Operation, Maintenance and Transfer of
Jahawarlal Nehru Port Container Terminal (JNPCT)
through Public Private Partnership (PPP).
9. According to the petitioners, the terms of respective RFQ
of the aforesaid three other projects are similar to the one
invited for "Port Trust". In fact, the criteria for meeting the
required technical capacity and financial capacity under the
aforesaid three other projects, is much higher than the said
project (present one). Petitioner No.1 has been adjudged as pre-
qualified in all of the aforesaid three other projects, recently, i.e.
on 8.12.2021, 15.12.2021 and 24.12.2021 respectively. Copies
of such letters of the respective Port Trusts have been furnished
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as Annexure-I, Annexure-J and Annexure-K respectively. To the
utter surprise of petitioner No.1, without assigning any reason,
a decision was communicated on 24.12.2021, declaring
petitioners as disqualified for which no reasons are assigned.
10. It is the case of the petitioners that petitioner No.1 has
neither made any misrepresentation, material in nature nor
failed to provide any supplemental information as demanded
within the specified time nor failed to meet with any of the pre-
qualification conditions under RFQ. Despite applications, the
respondent has disqualified the petitioner No.1 from
participating in RFQ stage arbitrarily and in contravention of
the terms of the RFQ. It is the say of the petitioners that
following the steps of 'Announcement of Pre-qualification', the
RPF stage has commenced and the pre-qualified applicants are
being offered to purchase the RFP documents and the said pre-
qualified applicants are also being granted an opportunity to
undertake site visit.
11. Immediate next step in the RFP stage would be raising of
queries and a pre-bid meeting. RFQ does not disclose the time
lines of steps in RFP stage. However, timelines are expected to
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be short especially in view of the respondent's statement in
RFQ, which reads as under:-
"The authority is likely to provide a comparatively short
time span for submission of the bid for the project. The
applicants are therefore, advised to visit the site and
familiarize themselves with the project."
12. RFP Schedule generally observed by the authorities
provides a period of around 15 days only to raise queries and as
such, unless the decision is immediately stayed or the bidding
process of the respondent is immediately stayed, petitioner No.1
would be deprived of proper opportunity to participate in the
further bidding process in spite of meeting with the requirement
of pre-qualifications. Thus, feeling aggrieved by the said
impugned decision dated 24.12.2021, the petitioners have
approached this Court by way of present petition under Article
226 of the Constitution of India.
13. Upon initial hearing of the petitioners, the Coordinate
Bench was pleased to pass the following order on 28.12.2021:-
1. We have heard Mr. Mihir Thakor, the learned senior
counsel appearing for Singhi and Company for the writ
applicants.
2. It appears from the materials on record that the writ
applicant No.1 herein is a Company incorporated under
the provisions of Companies Act, 2013. The writ
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applicant No.1 claims to be one of the largest
Commercial ports operators in India. The writ applicant
No.2 appears to be one of the shareholders of the
applicant No.1 Company. The respondent is a Port
Trust and is a "Board" within the meaning of Section
2(b) of the Major Port Trusts Act, 1963.
3. The respondent issued a notice inviting tender for
the "Development of Mechanized Fertilizer and other
clean cargo handling facilities at the Berth No.14 on
Design, Build Operate and Transfer basis".
4. The writ Applicant No.1 Company submitted its pre-
qualification application pursuant to the tender notice
issued by the respondents referred to above.
5. The writ applicant No.1 received a communication in
writing dated 23.12.2021 informing that the
respondent has thought fit to dis-qualify the writ
applicant No.1 Company from participating as a bidder
in the second stage of the bidding process in
accordance with the provisions of the RFQ.
6. The writ applicant No.1 Company has no idea
as to what has gone wrong and why the
respondent has thought fit to dis-qualify the
Company.
7. Let NOTICE be issued to the respondent returnable
on 25th January, 2022. Subject to the final out-come of
the present writ application, the respondent shall
permit the writ applicant No.1 to participate in the RFP
stage of the tender process. Direct service is permitted.
14. By virtue of the said order and subject to the final outcome
of the present writ application, the respondent was directed to
permit the writ applicant No.1 to participate in RFP stage of
tender process and this is more so in view of the fact which is
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mentioned in para 6 of the aforesaid order.
15. The petition was then adjourned from time to time and in
view of the interim relief having been granted, the respondent,
i.e. Port Trust, has filed an application under Article 226(3) of
the Constitution of India for vacating of ex-parte ad-interim
order dated 28.12.2021. On 15.2.2021, application was listed for
hearing, but for want of time, same could not be heard and as
such, was re-listed on 22.2.2022 and interim relief granted
earlier is continued.
16. Since hearing of the Civil Application for vacating interim
relief stated to consume almost similar time, which may take
place for hearing of the main matter, learned counsels
appearing on both the sides have requested the Court to take up
the main matter itself along with this Civil Application for
hearing. Hence, we have considered their request and heard
learned senior counsel Mr. Mihir Thakore who has represented
the petitioner Nos.1 and 2, assisted by Singhi & Company,
whereas Shri Mihir Joshi, learned senior counsel assisted by Ms.
Aishwarya for the respondent Deendayal Port Trust who have
addressed their arguments.
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17. Mr. Mihir Thakore, learned senior counsel appearing for
the petitioners has submitted that impugned decision is
arbitrary, unfair, without reasons, hence, same deserves to be
quashed and set aside.
18. Mr. Thakore has elaborated his submissions by contending
that respondent has failed to assign any reason whatsoever in
its decision communicated to the petitioner dated 24.12.2021
(Annexure-A) for disqualifying the petitioners from participating
in the second stage of bidding. It is further submitted that
respondent being an instrumentality of State is required to
carry out the tender process in absolutely fair and transparent
manner and its decision should not be arbitrary, discriminatory
or irrational or irrelevant and it is also under an obligation not
only to maintain the greater degree of transparency and fair
dealing, but is also expected to maintain sanctity and
transparency in the bid process.
19. Learned senior counsel Mr. Thakore has submitted that
no-doubt, respondent authority has got power to reject the
tender, yet such power to reject cannot be exercised arbitrarily
and it must depend upon existence of the cogent reasons.
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20. Public Sector undertakings grow, the stake or public
exchequer also increases justifying larger social audit, judicial
control, review by opening of public gaze and as such, they
should ensure credibility of their action which in turn discipline
public conduct and improves the culture of accountability.
21. Mr. Thakore has further submitted that clause 2.7 of the
RFQ provides the respondent 'right to accept or reject any or all
applications/ bids. While the said clause 2.7 further states that
the respondent may accept or reject any application, without
assigning any reason as per the settled legal position, such
powers can only be exercised within four corners of clause 2.7
and for justifiable grounds.
22. A perusal of clause 2.7 of RFQ makes it clear that the
respondent has right to reject any application, if
(i) the Applicant does not provide within the time
specified by the respondent, the supplemental
information sought by the respondent, or
(ii) One or more of the pre-qualification conditions have
not been met by the applicant; or
(iii) a material misrepresentation is made or uncovered.
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23. However, clause 2.7 does not empower the respondent to
reject application on the grounds other than which are
mentioned in it and according to Mr. Thakore, learned senior
counsel, petitioner No.1 has not given any such circumstance
which may permit the respondent to resort for such clause
being invoked to disqualify the petitioner.
24. In any case, following the pre-qualification application
dated 13.9.2021, the respondent sought certain clarifications
vide its communication dated 8.10.2021, instructing the
petitioner No.1 to submit such clarification on or before
16.10.2021 at 5.00 p.m. Same was forwarded well in time, vide
letter dated 14.10.2021, and as such also, it cannot be said that
the petitioner No.1 has failed to provide supplemental
information in any way.
25. Learned senior advocate Mr. Thakore has pointed out that
petitioner No.1 has fulfilled all the pre-qualification conditions
as per RFQ and on a similar situation, petitioner No.1 even
fulfilled more stringent criteria in other three projects, namely;
the project floated by Paradip Public Trust, Tuticorin Port, and
Jahawarlal Nehru Port Trust respectively, wherein petitioner
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No.1 is declared as pre-qualified on 8.12.2021, 15.12.2021 and
24.12.2021 respectively, and as such, when the petitioner is
meeting with the larger qualificatory criteria for the aforesaid
three other projects, is obviously fulfilling pre-qualification
conditions of present project in RFQ and for that, a tabular form
is mentioned in ground (ii) on page 12.
26. Mr. Mihir Thakore, learned senior counsel has reiterated
the grounds urged and has contended that petitioner No.1 has
neither made any material misrepresentation nor given any
incorrect or false information nor has intimated anything which
may permit the respondent to disqualify the petitioner even
under the terms of RFQ, particularly clause 2.7 of the present
project. The clarifications as sought for have already been
furnished vide detailed communication dated 14.10.2021.
27. For substantiating the submissions, learned senior counsel
has drawn the attention of this Court to the terms of RFQ,
reflecting on page 20 onwards and to clarify that respondent
has submitted none of the terms would permit the respondent to
disqualify the petitioner No.1 in the present project.
28. A reference is made to clause 2.2.8 on page 40 and has
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submitted that none of contingencies attract in the case of the
petitioner No.1 to justify the arbitrary action of disqualifying the
petitioner as is sought to be justified by respondent in its
statement of objections.
29. Our attention is also drawn to Appendix-IX, which relates
to the policy for preventing private sector monopoly in major
ports framed by the Government of India, circulated to
authorities of all Port Trusts and by referring to clause (2) of the
said policy, a contention is raised that same will not be
applicable to the case of the petitioner.
30. Mr. Thakore, learned senior counsel has drawn our
attention to clause (2), which prescribes 'policy' and has
submitted that if there is only one private terminal/ berth
operator in a part of specific Cargo, the operators of that project
or their associates shall not be allowed to bid for next terminal/
berth for handling the same cargo in the same port. While
referring to this, Mr. Thakore has also pointed out sub-clause
(3) and (4), which specify berths and specific cargo. By referring
to this, Mr. Thakore has submitted that this policy will not be
applicable in view of the fact that same will be applicable in
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case where there is only one private terminal/berth operator.
Whereas, here, according to Mr. Thakore, IFFCO has been
granted Barge JT pursuant upon its application and that too for
captive use and also handling other cargoes. Hence, the policy
clause is not getting violated. Hence, decision to disqualify
petitioner is bad in law.
31. Learned senior counsel Mr. Thakore has further submitted
that in view of the policy, if there is only one private terminal/
berth operator in a Port, for a specific cargo, operator of that
berth or his associates shall not be allowed to bid for the next
terminal/ berth for handling the same cargo in the same port.
Whereas, the specific cargo word defines in (iv) of Clause 2,
means (i) containers, (ii) liquid bulk, (iii) dry bulk, (iv)
multipurpose other general cargo. So, in view of this, it is not
open for the respondent authority to disqualify the petitioner
No.1 as this eventuality is not visible. Since there is another
operator IFFCO already being there.
32. Furthermore, IFFCO is very much operating in the area,
i.e. in the same port at Barge Jetty for dry bulk cargo and as
such, to disqualify the petitioner No.1, in the name of policy
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stated herein-before is nothing but an arbitrary act. It has been
contended that there is a distinction between dry bulk and
bagged cargo. Combination of bagged cargo with break bulk
cargo reflects a multipurpose cargo. Hence, just to eliminate the
petitioner No.1, policy is being erroneously interpreted by Port
Trust.
33. It has been submitted that project is for developing the
mechanized facilities for handling fertilizer and other clean
cargo as the cargoes which are non-polluting in nature, such as
sugar, salt, food-grains, silica sand/ china clay in dry bulk form
and bagged/ jumbo bagged cargo in break bulk form (to be
handled through mechanized way). Considering this project,
according to Mr. Thakore, it contemplates handling of bagged/
jumbo bagged cargo in break bulk form and as such, practically
the project is for handling multipurpose cargo and not merely
dry bulk cargo and hence, by giving such impression, learned
senior advocate has submitted that the policy appears to have
been misinterpreted by the respondent.
34. Learned senior advocate Mr. Thakore has contended that
the respondent claims to have received a letter dated 1.8.20211
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from Vishakhapatnam Port Trust (VPT) allegedly intimating the
respondent that VPT had terminated the concession agreement
entered into with Adani Vizag Coal Terminal Private Limited
('Adani Vizag'), a subsidiary of the petitioner No.1, and as such,
the respondent treated this termination by VPT and on that
basis, resorted to clause 2.2.8 of RFQ and for consequent
disqualification of the petitioner No.1 from the present tender
process.
35. Learned senior advocate Mr. Thakore has submitted that
in fact, had the opportunity been extended to petitioner, this
aspect would have been clarified. The minutes of the meeting of
the tender committee held on 4.12.2021, in which the tender
committee has made a reference to the alleged evaluation and
opinion dated 3.12.2021 for its transaction advisers M/s. iDeck
and then treated this communication dated 1.11.2021 that
contract with Adani Vizag was terminated by VPT for alleged
event of default and that petitioner No.1 had breached clause
2.2.8 of RFQ. In fact, it is not so.
36. While arriving at the conclusion, the tender committee,
though had complete information disclosed in communication
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dated 1.11.2021, it has not taken into consideration the contents
of it in entirety and on close perusal of same, it would disclose,
as to how it was Adani Vizag which had terminated the
concession Agreement with VPT on 21.10.2020 in view of the
occurrence of the force majeure event and termination was not
at the instance of VPT initially and the termination by VPT is
denied; Adani Vizag had initiated arbitration proceedings and it
is only thereafter, on 26.12.2020, VPT terminated its concession
agreement as if the occurrence of default by Adani Vizag. The
said arbitration proceedings are at present pending. This could
have been well examined and deliberated by the Tender
Committee in its meeting and even in decision making process,
had an opportunity been given to the petitioners, these aspects
could have been clarified.
37. Learned senior advocate Mr. Thakore has submitted that
clause contained in RFQ namely clause 2.2.8 which has been
invoked by Port Trust to disqualify petitioner could not have
been resorted to as the eventualities/ conditions and situations
which are mentioned therein were not attracted to facts on hand
by virtue of which, petitioner No.1 could have been declared as
disqualified.
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38. Be that as it may. Even assuming without admitting that
such a situation as per the say of the respondent had occasioned
in that case, also this very clause 2.2.8 of RFQ is arbitrary, not
on touchstone of Article 14 of the Constitution of India and as
such, same deserves to be quashed and set aside. The
interpretation which is sought to be canvassed by the
respondent on this clause 2.2.8 is in no way possible to be read
and understood in said fashion.
39. Learned senior advocate Mr. Thakore has submitted that
the clauses identical to the aforesaid clause 2.2.8 of RFQ issued
by Paradip Port Trust, Tuticorin Port Trust and Jawaharlal
Nehru Port Trust, wherein petitioner No.1/ its associates have
participated in the process and have been declared as qualified
to bid for the said authorities, in spite of alleged termination by
VPT, which is now sought to be invoked by present Port Trust
against the petitioner and as such, impugned decision is not just
and proper rather invalid. By referring to this, learned senior
counsel Mr. Thakore has submitted that all these things could
have been properly considered if opportunity could have been
extended to by the Committee before impugned decision being
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taken, since action is entailing civil consequences and as such,
principles of natural justice could have been observed by
respondent which is not done. However, it is liable to be set
aside.
40. To strengthen his submission, learned senior counsel has
made a reference to the following decisions:-
(1) In the case of JSW Infrastructure Limited and
Another Vs. Kakinada Seaports Limited and
Others reported in (2017)4 SCC 170 (para 7
and 12)
(2) In the case of APM Terminals B.V. Vs. Union of
India and Another reported in (2011) 6 SCC
756 (Para 36 and 37)
(3) In the case of Atlanta Limited Vs. Union of India
and Another reported in 2018 SCC OnLine
Delhi 8269 (para 19,20,21, 24, 25 & 26)
41. By referring to Delhi High Court decision, learned senior
advocate Mr. Thakore has submitted that this very same nature
of clause has been the subject matter of scrutiny by Delhi High
Court which has declared the same as bad, arbitrary and
unreasonable to the extent that in the matter of a case falling
under the said clause, it amounts to automatic debarring of a
party from participating in any other tender bid for a period of
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two years thereto, without hearing and as such, considering the
observations which have been made in the relevant paragraphs
of said decision, as indicated by Mr. Thakore, a request is made
to grant the reliefs as prayed for in the petition by declaring the
clause as invalid here also.
42. Though learned senior advocate Mr. Thakore has tendered
few more decisions, but after referring to the above three
decisions, he has submitted categorically that since those
decisions are of general proposition, he is not pressing the same
any further and has reiterated that the petition be allowed.
43. Per contra, learned senior advocate Mr. Mihir Joshi has
submitted that respondent Deendayal Port Trust is a major Port
Trust, set up and established by virtue of the provisions
contained under the Major port Trust Act, 1963, which was
formerly known as 'Kandla Port Trust.
43.1. It is submitted that tender was floated by virtue of the
tender notice, in which stages have been stipulated and the
work for which the applications were invited from interested
parties is in the form of Global Invitation for qualification for
'Development of Mechanized Fertilizer and Other Clean Cargo
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Handling Facilities at Berth No.14 on DBOT basis under PPP
mode' for a concession period of 30 years. For this purpose,
qualificatory criteria have been framed on the basis of the
Central Government's direction and for giving brief idea about
this tender, Mr. Joshi has briefly given a bird's eye view to the
few documents. By referring to page 29, it has been contended
that while Kandla Port already handles fertilizers and
multipurpose clean cargo to a substantial extent, off-late
Mundra Port located very close to Kandla has developed
capabilities to handle fertilizer imports with better facilities by
way of mechanization of bulk imports, bagging and evacuation
and as such, Deendayal Port is also willing to develop full scale
mechanized handling facility at Kandla Port for handling of
import fertilizer (Urea, MOP, DAP) and other clean cargo viz.
food grains, sugar, salt, etc. inside the port premises for the
objectives which are mentioned in the policy.
43.2. Learned senior advocate Mr. Joshi has given a brief idea
of proposed project by making reference to RFQ clauses and has
submitted that this proposed project is a huge project and
estimated cost of it is approximately Rs.300.28 crores. A brief
description of bidding process is also mentioned by drawing the
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attention to clause 1.2.1, then 2.2.8 and has submitted that the
petitioner is at a qualificatory stage. The process of bid is also
referred to and evaluation process is also referred to by virtue
of clause 2.20.1, Qualification and Bidding, reference is also
given by referring to clauses 2.21, 2.26 etc. from page 53
onwards and he has submitted that pre-qualification and
notification chapter is contained in clause 2.21 (on page 53),
which indicates that after the evaluation of applications and
receipt of security clearance, the authority would announce a
list of pre-qualified and shortlisted applicants (bidders) who will
be eligible for participation in the bid stage.
43.3. At the same time, the authority would notify the other
applicants that they have not been pre-qualified and shortlisted.
The authority will not entertain any query or clarification from
applicants who fail to qualify. Mr. Joshi has submitted that we
are at this stage.
43.4. It has been submitted that the RFQ and the policy is
framed with a view to prevent monopoly of private sector in the
major ports and this has been done in view of the letter dated
2.8.2010 issued by the Ministry of Shipping - Government of
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India, which has issued the policy guidelines (at Appendix-IX), to
be observed by all major ports while awarding projects to
private parties through Public Private Partnership (PPP) route
so as to avoid private sector monopoly in the Major Ports.
43.5. The aforesaid policy or any other applicable policy shall
apply mutatis mutandis to the bidding process and the authority
shall be entitled to disqualify any bidder in accordance with the
aforesaid policy.
43.6 At this juncture, learned senior advocate Mr. Joshi has
specifically drawn the attention to the guidelines of the Ministry
of Finance dated 18.5.2009 in the form of Office Memorandum,
which relates to revised RFQ for pre-qualification of bidders for
PPP projects and he has drawn the attention of this Court to the
similar clause, namely 2.2.8 (page 342), prescribed in a model
RFQ format for qualification for PPP project published by the
Government of India and he has submitted that on the very
same line, as per the model clauses, this clause of current
policy, i.e. clause 2.2.8 of RFQ is also prescribed to which the
petitioner is already aware about the same even while taking
first step in participation.
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43.7. Learned senior advocate Mr. Joshi has also submitted that
there are no allegations of either malafides or favourtism of any
nature. It is only the interpretation which is sought to be
canvassed and is made the subject matter of challenge in this
petition.
43.8. Learned senior advocate Mr. Joshi has submitted that a
decision has been taken on due deliberation and with proper
justification which can be seen from the detailed minutes of the
tender committee meeting held on 4.12.2021 for ascertaining
provisional qualification of respective applicants (page 325).
43.9. He woulds submit specific discussions took place with
regard to the case of petitioner No.1, and he draws our attention
to the proceedings of said meeting reflecting on page 326 and
has briefly submitted that it was apprised to the Committee that
the applicant M/s. APSEZL is already handling dry bulk cargo at
Tuna-tekra which includes fertilizer as well and other clean
cargo, namely salt, sugar, clay, food-grains, such as barley,
soyabean, lentils, etc. as per the traffic record and as such, the
facts and figures based on monopoly policy, the applicant was
found not eligible to participate further in the bid with respect to
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berth No.14.
43.10. It has also been mentioned in its decision making
process that in a similar case of preventing monopoly at DPT in
RFQ bidding stage for the project of 'Developing Dry Bulk
Terminal of Tekra Tuna at Port of Kandla on BOT basis', the
selected bidder for PPP project of berth No.16 was also
debarred from bidding the project as clarified by Ministry of
Shipping to the Department of Economic Affairs dated
21.1.2011.
43.11. It has further been considered that similarly, in the
instant case, subject project is for handling of dry bulk cargo at
berth No.14 and the selected bidder for PPP project of Tuna-
tekra, i.e. petitioner No.1 is to be debarred from participation
and it was further noticed from the communication of M/s.
AMPTPL dated 25.10.2021, it is understood that the applicant
has not paid even royalty on storage charges since beginning of
the project, i.e. from 6.6.2014 till 31.3.2019 and had invoked the
arbitration proceedings against SPV M/s. AMPTPL for non-
payment of royalty on storage charges and as such, in the
discussion which took place, the tender committee took a
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conscious decision that the petitioner No.1 is not qualified.
43.12. He would contend from the aforesaid minutes, it is quite
visible that the impartial decision is taken in public interest to
maintain object of policy and to avoid monopoly, which cannot
be said to be an arbitrary nor irrational.
43.12. It has further been contended by Shri Joshi, learned
Senior Advocate that in this tender process a specific power is
available with the authority to discard any claim if found to be
not eligible and in view of said specific clause, petitioner is
found to be not eligible or qualified and, a decision is taken as
such. In this process of contractual issue, no interference be
made especially when no mala fides are alleged. If any
interpretation to the policy clause to be assigned, as contended
by the petitioner, the same tantamounts to be altering the
conditions and the terms of the tender agreement which is not
to be undertaken generally in exercise of extra ordinary
jurisdiction. For the purpose of substantiating this submission,
Shri Joshi, learned Senior Advocate has drawn the attention of
this Court to clause 2.21 reflecting on page 53 of the petition
compilation and has submitted that after Scrutiny Clearance,
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the authority will announce the list of pre-qualified and
shortlisted bidders those who are eligible for participating in
further stage of bid and at the same time, the authority would
notify the other applicants that they have not been pre-qualified
or shortlisted and the authority will not entertain any query or
clarification from the applicants who failed to qualify and as
such, in the process of this exercise, the petitioner has been
found not pre-qualified and the decision taken is well within the
scope of the authority. That being the situation, no case is made
out by the petitioner which may call for any interference. Mr.
Joshi, learned Senior Advocate with emphasis submitted that
there are total 18 Berths in the respondent - Port where 'Dry
Bulk' is being handled and 14 out of such 18 are being handled
by the respondent - Port and remaining 4 by a Special Purpose
Company namely, Adani Kandla Bulk Terminal Private Limited
(AKBTL) at Tuna-Tekra, Kutch. AKBTL (a 100% owned
subsidiary of petitioner no. 1) is a special purpose company
formed by petitioner no. 1 and is the only private terminal
operating, handling Dry Bulk in the Port and PPP operator of
the proposed 14th berth i.e. present project, will also be
handling the same dry-bulk cargo i.e., fertilizer and other clear
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cargo such as salt, sugar an food-grains clay etc. It is because of
this special project being the next terminal/berth for handing
the same cargo in the same Port, petitioner no. 1 has incurred
disqualification from participation as Bidder in the second stage
of the Bidding process.
43.13. At this stage, to stave off the contention raised by the
petitioner about IFFCO, Mr. Joshi, learned Senior Advocate has
contended that IFFCO is having its own Barge Jetty, and it
cannot be equated with the present process of tender and by
virtue of Concession Agreement dated 17.02.2011 entered into
with IFFCO for setting up of Barge Jetty under the captive use
policy of Government of India and the said permission is under
the policy framed by the Government of India and since Barge
Jetty accompanied with Oil Jetty No.5 for captive use only, it
cannot be said that there is one another private person/ entity
operating and as such, the policy may not apply to the
petitioner. In fact, the said IFFCO is operating from Barge Jetty
only for its own production and thereto, not on the basis of any
Public Private partnership route. Mr. Joshi, learned Senior
Advocate has submitted that since IFFCO is handling the
activity for captive use only, hence, it is not open for the
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petitioner to equate its case with IFFCO to contend that in view
of the existence of IFFCO, the policy will not apply to the
petitioner.
43.14. Mr. Joshi, learned Senior Advocate has submitted that
project basically is for development of next berth as
contemplated and based upon Anti-Monopoly Policy and as
such, clauses relevant contained in such policy are kept in mind
closely by the authority to disqualify the petitioner. The said act
cannot be said to be arbitrary, irrational or violative of the
Constitution of India in any case, on the contrary keeping in
mind the object envisaged under the policy, a decision is taken
against the petitioner and as such, hardly any case is made out
for judicial review.
43.15. Mr. Joshi, learned Senior Advocate has submitted that
even if assuming the stand of the petitioner then their
endeavour is to interpret the policy and not the tender the
documents, and once having participated in the bidding process,
in connection with this very policy which they were aware
about, the petitioner cannot assail the said process simply
because it could not find place in further stage of the process.
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Looking to the submission of the petitioner, it clearly transpires
that an attempt is made to interpret the tender documents
clauses since they are relying upon the definition of "Other
Clean Cargo" from Draft Concession Agreement and also
seeking interpretation of clause 2.2.8 as mentioned in RFQ. That
being so, the stand taken by the petitioner is not entertainable.
So long as the decision making process is clearly in consonance
with the terms of the policy and there are no mala fides
attributed, there is hardly any scope for interference in such
kind of contractual decisions. Hence, he contends no
interference is called for. It has also been contended that
respondent - Trust being an authority which has floated the
tender is the best decision maker as to how the tender
documents and the terms thereof have to be interpreted and
even if two interpretations are possible, then according to Mr.
Joshi learned Senior Advocate, the interpretation canvassed by
the respondent - Trust must be accepted and for that purpose,
Mr. Joshi, learned Senior Advocate has placed reliance upon few
decisions which are referred to hereunder :-
(1) In the case of Agmatel India Pvt. Ltd. v. Resoursys
Telecom & Ors., reported in (2022) SCC Online SC
113 (Paragraphs 38 and 39).
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(2) In the case of Uflex Limited v. Government of Tamil
Nadu & Ors., reported in (2022) 1 SCC 165
(Paragraphs 1 to 7).
(3) In the case of Michigan Rubber (India) Limited v.
State of Karnataka & Ors., reported in (2012) 8SCC
216 (Paragraphs 12, 13, 19 to 23).
(4) In the case of National High Speed Rail
Corporation Limited v. Montecarlo Limited & Anr.,
reported in 2022 SCC Online SC 111 (Paragraphs 71
to 79).
After referring to the aforesaid decisions, Mr. Joshi,
learned Senior Advocate has reiterated the prayer for
dismissal of the petition/application.
43.16. So far as compliance of the principles of natural justice
is concerned, Mr. Joshi, learned Advocate has submitted that as
such, said principle may not always be available especially when
the issue relates to contractual matters. Here, in the instant
case, when there is a specific power available to disqualify the
person if found not within the realm of policy, then simply
because hearing is not provided or reasons are not supplied at
length, the same may not be a ground for setting aside the
decision. Here, in this case, further, it has been pointed out that
right from the beginning petitioner is aware about the clauses
since it has participated in the tender process and after due
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deliberations and after scrutiny it has been found by Port Trust
that petitioner is not qualified. Keeping in view the object or the
policy, a decision is communicated and as such, it is not the
case that without applying any mind in complete violation of the
principles of natural justice, a decision is taken. That being so,
according to Mr. Joshi, learned Senior Advocate, no contentions
are appealable which may warrant this Court to exercise judicial
review administrative action of Port Trust. To reiterate and
assist the Court, written submissions have also been placed on
record by both the sides and have summed up their
submissions.
44. In re-joinder, Mr. Thakore, learned Senior Advocate has
reiterated his plea about interpretation of clauses contained in
policy and of 'Issue of Acceptance of IFFCO and based his
submission on definition of 'Dry Bulk Cargo' and the definition
of 'specific cargo' as defined under clause 2 and has also
submitted that apparently the policy term taken in aid reflecting
on page 98 is erroneously applied to disqualify the petitioner.
Hence, impugned decision taken is absolutely arbitrary,
irrational deserves to be quashed. No further submissions have
been made.
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DISCUSSION AND FINDINGS OF COURT :
45. Having heard the learned advocates appearing for the
parties and having gone through the record on hand, we have
noticed that respondent Port Trust has invited a tender which is
a global invitation for development of Mechanized Fertilizer and
other Clean Cargo Handling Facilities at Berth No.14 on Design
Build, Operate and Transfer (DBOT basis for July 2021). This
notice inviting tender appears to have been published, pursuant
to which, the petitioner along with several others have applied.
Rational of the project is to undertake development of
Mechanized Fertilizer and other Clean Cargo Handling
Facilities for a period of 30 years and this is in view of the fact
that Kandla already handles fertilizer and multipurpose clean
cargo to a substantial extent of off-late and Mundra Port located
very close to Kandla has developed capabilities to handle
fertilizer imports with better facilities by way of mechanization
of bulk imports, bagging and evacuation and as such Deendayal
Port i.e. respondent at Kandla is also willing to develop full-scale
mechanized handling facility at Kandla Port for handling import
of fertilizer (urea, MOP DAP) and other clean cargo namely
food-grains, sugar, salt, etc. inside the port premises and project
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involves installation of shipside fertilizer handling equipment
system (Ship unloader) along with necessary hopper, conveyor
for shifting of fertilizer and other clean cargo.
46. It is also noticed that complete mechanized handling
facility from ship unloading to storage and wagon loading
facility would be constructed by BOT operator at a estimated
cost of approximately Rs.300.28 crores and as such, it is a
sizable amount of contract which is being considered in
response to the tender notice issued by respondent Deendayal
Port Trust.
47. Respondent Deendayal Port Trust (formerly known as
Kandla Port Trust) is a Board/ Trust within the meaning of
Section 2(b) of the Major Port Trusts Act, 1963 and the Board of
Trustees of the respondent has been constituted by Central
Government as per the provisions of the said Statute, hence
akin to a 'State' within meaning of Article 12 of the Constitution
of India and this authority has floated afore-mentioned tender.
48. Challenge in the present proceedings is the brief order/
communication dated 23.12.2021 whereby the petitioner though
was qualified in the first stage has been declared as disqualified
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for participation as bidder in the second stage of bidding
process as per the provisions of RFQ (Request for Qualification).
This communication impugned in the petition is reflecting no
reason nor reflecting as to why the petitioner is said to have
been disqualified for participation in the second stage and as
such, petition when was brought before the Court, on first
hearing, vide order date 28.12.2021, Coordinate Bench was
pleased to call upon the respondent by way of issuing notice
since petitioner No.1 company had no idea as to what has gone
wrong and why the respondent thought it fit to disqualify the
company and while issuing notice, subject to final outcome of
present writ application, it was ordered that respondent should
permit the writ applicant No.1 to participate in RFP stage of the
tender process and it is in this response, after completion of the
pleadings, the petition came to be heard as per the requests of
both learned counsels appearing for respective sides along with
the Civil Application for vacating interim relief.
49. Having further heard learned advocates at length on
various issues, but before dealing with those submissions, we
are of the opinion that no-doubt, Court's scope of interference
under Article 226 is circumscribed on few issues only. Judicial
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interference not possible to be avoided by the respondent under
the garb of contractual dispute and as such, being conscious of
the scope of judicial review and keeping in mind the salutary
principles propounded by catena of decisions, we first
undertake an exercise of testing the decision in the context of
touchstone of Article 14 of the Constitution of India and well
recognized principles of natural justice.
50. Hon'ble the Apex Court has time and again propounded
that traditional limitations have been vanishing and the sphere
of judicial scrutiny is being expanded since the State entity too
is becoming fast pervasive as the State has descended into
commercial field and giant public sector undertakings have
grown up, the stake of public exchequer is also justifying larger
social audit, judicial contract and review by opening to the
public gaze and these aspects necessitate recording of reasons
for executive actions including cases of rejection of highest
offers and looking for reasons in support of such action provides
an opportunity for an objective review in appropriate cases both
by administrative superior and by the judicial process. Keeping
these observations, which are already made in the decision
reported in (1990)3 SCC 280, precisely the observation
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contained in paragraph 10, which has dealt with necessity of
judicial review, even in respect of commercial transaction
undertaken by the State.
51. We are also conscious about the fact that the
Government or instrumentality of it must have freedom of
contract and a fair-play in the joints is a necessary concomitant
for an administrative body functioning in an administrative
sphere or quasi-administrative sphere. However, the decision
must not only be tested by application of Wednesbury principle
of reasonableness, but must be free from arbitrariness, not
affected by bias or actuated by mala-fides. We are also of the
opinion on the basis of the catena of decisions that natural
Justice is an important aspect while reviewing administrative
orders and natural justice is a sworn enemy of intolerant
authority. Any attempt by any authority to circumvent the
requirement providing effective hearing before reaching a
conclusion, is not just and proper and it is a settled position of
law that validity of action must be judged by reasons so
mentioned in the decision impugned and it cannot be
supplemented by fresh reasons in the form of an affidavit or
otherwise.
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52. Now, keeping the aforesaid analysis in mind, a perusal of
the impugned order dated 23.12.2021 would disclose,
apparently no reasons at all are assigned and it cannot stand on
the touchstone of afore-mentioned principles enunciated by
catena of decisions. It may be that the respondent authority is
discharging its contractual functioning while dealing with bid
process and has power to reject the bid. However, respondent
being an instrumentality under Article 12 cannot act in such a
cavalier manner by virtue of which, even Courts are not in a
position to unfold the decision making process as to whether it
is just, reasonable or on the touchstone of Article 14 of the
Constitution of India. Hence, apparently, the impugned order/
communication is a complete unreasoned order and we reiterate
that the reasons being now a part and parcel of principles of
natural justice must be reflected in the decision making process.
53. We are conscious about the right of the respondent
authority to reject or disqualify any party from bidding process
but such right is always coupled with a conscious duty to act
reasonably and in consonance with well-established principles
of law. The necessity of compliance of principles of natural
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nature is expedient particularly in view of peculiar background
of this case, since at a second stage of bid process
disqualification has been inflicted on petitioner, without any
reasons being reflecting in the impugned decision.
54. Here, respondent authority has made an attempt to justify
its brief impugned communication for disqualifying the
petitioner from second stage of bid process by indicating few
clauses contained in RFQ that too by filing an affidavit and
thereby attempt is made to justify the disqualification of
petitioner by supplementing the reasons which are absolutely
not reflecting in the impugned communication and as such, we
are of the opinion that impugned communication is per-se not
only un-reasoned but violates principles of natural justice and
not satisfying the test of Article 14 of the Constitution of India.
55. On the issue of efficacy of reasons, time and again,
Hon'ble the Apex Court has with emphasis propounded that
even in respect of exercise of administrative and executive
function, the authority is expected to assign some proper
reasons. Significance of such issue is clearly spelt out in
paragraph 25 of the decision in the case of Nareshbhai
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Bhagubhai and others Vs. Union of India and others,
reported in (2019)15 SCC 1, which analysis of Hon'ble Apex
Court we deem it proper to reproduce hereunder :-
"25. In Kranti Associates (P) Ltd. v. Masood Ahmed
Khan,8 this Court held that:
12. The necessity of giving reason by a body or authority
in support of its decision came up for consideration
before this Court in several cases. Initially this Court
recognised a sort of demarcation between
administrative orders and quasi−judicial orders but
with the passage of time the distinction between the
two got blurred and thinned out and virtually reached
a vanishing point in the judgment of this Court in A.K.
Kraipak v. Union of India.
47. Summarising the above discussion, this Court
holds:
(a) In India the judicial trend has always been to
record reasons, even in administrative decisions, if
such decisions affect anyone prejudicially.
(b) A quasi−judicial authority must record reasons in
support of its conclusions.
(c) Insistence on recording of reasons is meant to
serve the wider principle of justice that justice
must not only be done it must also appear to be
done as well.
(d) Recording of reasons also operates as a valid
restraint on any possible arbitrary exercise of
judicial and quasi−judicial or even administrative
power.
(e) Reasons reassure that discretion has been exercised
by the decision−maker on relevant grounds and by
disregarding extraneous considerations.
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(f) Reasons have virtually become as indispensable a
component of a decision−making process as
observing principles of natural justice by judicial,
quasi−judicial and even by administrative bodies.
(g) Reasons facilitate the process of judicial review by
superior courts.
(h) The ongoing judicial trend in all countries
committed to rule of law and constitutional
governance is in favour of reasoned decisions
based on relevant facts. This is virtually the
lifeblood of judicial decision−making justifying the
principle that reason is the soul of justice.
(i) Judicial or even quasi−judicial opinions these days
can be as different as the judges and authorities
who deliver them. All these decisions serve one
common purpose which is to demonstrate by
reason that the relevant factors have been
objectively considered. This is important for
sustaining the litigants' faith in the justice delivery
system.
(j) Insistence on reason is a requirement for both
judicial accountability and transparency.
(k) If a judge or a quasi−judicial authority is not
candid enough about his/her decision−making
process then it is impossible to know whether the
person deciding is faithful to the doctrine of
precedent or to principles of incrementalism.
(l) Reasons in support of decisions must be cogent,
clear and succinct. A pretence of reasons or
rubber−stamp reasons is not to be equated with a
valid decision−making process.
(m) It cannot be doubted that transparency is the sine
qua non of restraint on abuse of judicial powers.
Transparency in decision−making not only makes
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the judges and decision−makers less prone to
errors but also makes them subject to broader
scrutiny. (See David Shapiro in Defence of Judicial
Candor [(1987) 100 Harvard Law Review
731−37] .)
(n) Since the requirement to record reasons emanates
from the broad doctrine of fairness in
decision−making, the said requirement is now
virtually a component of human rights and was
considered part of Strasbourg Jurisprudence. See
Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR,
at 562 para 29 and Anya v. University of Oxford
[2001 EWCA Civ 405 (CA)] , wherein the Court
referred to Article 6 of the European Convention of
Human Rights which requires, adequate and
intelligent reasons must be given for judicial
decisions.
(o) In all common law jurisdictions judgments play a
vital role in setting up precedents for the future.
Therefore, for development of law, requirement of
giving reasons for the decision is of the essence
and is virtually a part of due process. (emphasis
supplied)
In paragraph 26 of the above said decision, it has been
propounded that it is the settled legal law that a valid order
must be a reasoned order which is duly communicated to the
parties. The file noting contained in an internal office file or in
the report submitted by the competent authority would not
constitute a valid order in the eye of law and as such, from the
aforesaid observations of Hon'ble Apex Court if we see the
present order under challenge, it reflects no reasons and as
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such, this decision making process and communication therein
is ill founded in view of the aforesaid observations. Hence, we
deem it proper to consider this issue while arriving at ultimate
conclusion in the present order.
56. While arriving at this conclusion we are supported by
authoritative pronouncement of Hon'ble the Apex Court
reported in the case of Vice Chairman & Managing Director,
City and Industrial Development Corporation of
Maharashtra Ltd. And Another Vs. Shishir Realty Private
Limited and others reported in 2021 SCC OnLine SC-1141
and in addition to the other decisions which are cited before us
and since this decision is last in line, we deem it proper to quote
few observations hereunder:-
30. This court in the case of M/s Star Enterprises v. City
and Industrial Development Corporation of
Maharashtra Ltd., (1990) 3 SCC 280 reiterated the
aforesaid concerns and stated the necessity of judicial
review even with respect to the commercial
transactions undertaken by the State. This court held
as follows:
"10. In recent times, judicial review of
administrative action has become expansive and is
becoming wider day by day. The traditional limitations
have been Municipal Corporation, Ujjain v. BVG India
Ltd., (2018) 5 SCC 462 vanishing and the sphere of
judicial scrutiny is being expanded. State activity too is
becoming fast pervasive. As the State has descended
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into the commercial field and giant public sector
undertakings have grown up, the stake of the public
exchequer is also large justifying larger social audit,
judicial control and review by opening of the public
gaze; these necessitate recording of reasons for
executive actions including cases of rejection of highest
offers. That very often involves large stakes and
availability of reasons for actions on the record assures
credibility to the action; disciplines public conduct and
improves the culture of accountability. Looking for
reasons in support of such action provides an
opportunity for an objective review in appropriate
cases both by the administrative superior and by the
judicial process."
(emphasis supplied)
40. Natural justice is an important aspect while reviewing
the administrative orders. Providing effective natural
justice to affected parties, before a decision is taken, it
is necessary to maintain rule of law. Natural justice is
the sworn enemy of intolerant authority. Any attempt
by authority to circumvent the requirement of
providing effective hearing before reaching a
conclusion, cannot pass the muster. Coming to the
facts herein, the post−decisional hearing given to the
respondent−lessee is reduced to a lip−service, which
cannot be upheld in the eyes of law.
41. As a first step of judicial review, we need to note that
when statutory functionaries such as CIDCO render an
order based on certain grounds, its validity must be
judged by the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of an
affidavit or otherwise. 3 To this extent, we agree with
the submission of Dr. Abhishek Manu Singhvi, that the
scope of this Court is limited. Hence, we will only
consider the impugned order of CIDCO dated
16.03.2011 and the reasoning supplied therein.
47. In our considered opinion, the aforesaid paragraph
does not indicate sufficient reasons. There is no reason
provided as to what provision of law such bids violate.
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Further, there is no concrete allegation or adjudication
on the suggested cartelization. There is no reasoning
considered as to why such a practice was harmful to
public interest. We may note that such considerations
are important elements of party autonomy and
commercial freedoms while framing the contract,
which is not within the purview of judicial review. As
there is no such law or contract provision which bars
such conduct, the considerations undertaken by the
order of CIDCO are extraneous and the same cannot be
accepted.
72. Before we state the conclusions, this Court would like
to reiterate certain well−established tenets of law
pertaining to Government contracts. When we speak of
Government contracts, constitutional factors are also in
play. Governmental bodies being public authorities are
expected to uphold fairness, equality and rule of law
even while dealing with contractual matters. It is a
settled principle that right to equality under Article 14
abhors arbitrariness. Public authorities have to ensure
that no bias, favouritism or arbitrariness are shown
during the bidding process. A transparent bidding
process is much favoured by this Court to ensure that
constitutional requirements are satisfied.
74. The constitutional guarantee against arbitrariness as
provided under Article 14, demands the State to act in
a fair and reasonable manner unless public interest
demands otherwise. However, the degree of
compromise of any private legitimate interest must
correspond proportionately to the public interest, so
claimed.
75. At this juncture, it is pertinent to remember that, by
merely using grounds of public interest or loss to the
treasury, the successor public authority cannot undo
the work undertaken by the previous authority. Such a
claim must be proven using material facts, evidence
and figures. If it were otherwise, then there will remain
no sanctity in the words and undertaking of the
Government. Businessmen will be hesitant to enter
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Government contract or make any investment in
furtherance of the same. Such a practice is
counter−productive to the economy and the business
environment in general.
From the aforesaid observations, we are satisfied that the
impugned decision/ communication is not possible to be
sustained in the eye of law on account of lack of reasons
and in conflict with the principles of natural justice.
57. Yet another decision rendered by the Hon'ble Apex Court,
which we think it proper would be relevant for the purposes of
considering the facts on hand would in the matter of D.N.
Jeevaraj Vs. Chief Secretary, Government of Karnataka
and others reported in (2016) 2 SCC 653, whereunder, while
dealing with the issue related to exercise of discretion in context
of issuance of writ of mandamus, Hon'ble Apex Court has held
that normally Court should enable the authorities to exercise its
discretion independently and impartially. Relevant observations
are reproduced hereunder :-
"41. This Court has repeatedly held that where discretion
is required to be exercised by a statutory authority, it
must be permitted to do so. It is not for the courts to
take over the discretion available to a statutory
authority and render a decision. In the present case,
the High Court has virtually taken over the function
of the BDA by requiring it to take action against
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Sadananda Gowda and Jeevaraj. Clause 10 of the
lease-cum-sale agreement gives discretion to the
BDA to take action against the lessee in the event of
a default in payment of rent or committing breach of
the conditions of the lease-cum-sale agreement or
the provisions of law.[8] This will, of course, require
a notice being given to the alleged defaulter followed
by a hearing and then a decision in the matter. By
taking over the functions of the BDA in this regard,
the High Court has given a complete go-bye to the
procedural requirements and has mandated a
particular course of action to be taken by the BDA. It
is quite possible that if the BDA is allowed to exercise
its discretion it may not necessarily direct forfeiture
of the lease but that was sought to be pre- empted by
the direction given by the High Court which, in our
opinion, acted beyond its jurisdiction in this regard.
42. In Mansukhlal Vithaldas Chauhan v. State of
Gujarat[9] this Court held that it is primarily the
responsibility and duty of a statutory authority to
take a decision and it should be enabled to exercise
its discretion independently. If the authority does not
exercise its mind independently, the decision taken
by the statutory authority can be quashed and a
direction given to take an independent decision. It
was said:
"22. Mandamus which is a discretionary remedy
under Article 226 of the Constitution is requested to
be issued, inter alia, to compel performance of public
duties which may be administrative, ministerial or
statutory in nature. Statutory duty may be either
directory or mandatory. Statutory duties, if they are
intended to be mandatory in character, are indicated
by the use of the words shall or must. But this is not
conclusive as shall and must have, sometimes, been
interpreted as may. What is determinative of the
nature of duty, whether it is obligatory, mandatory or
directory, is the scheme of the statute in which the
duty has been set out. Even if the duty is not set out
clearly and specifically in the statute, it may be
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implied as correlative to a right.
From the above said decision as well, we are of the opinion
that it is primary responsibility of the statutory authority
to take independent decision and thereto as indicated
above with the support of proper and cogent reasons.
58. We have heard learned counsels of both the sides on all
other issues. Whether the clause contained in the policy
reflecting on page 98 is tried to be taken in aid while
disqualifying the petitioner is justified or not, we are not finally
opining on this issue about applicability of policy clause, since
the decision per-se violates principles of natural justice and we
are inclined to remit back the controversy to be decided afresh
after affording opportunity to the petitioner. We are also not
expressing our views on any other issues as it may influence the
fresh decision making process.
59. From the other submissions which are made by both the
sides, prima facie, it appears that the decision is taken by the
respondent Port Trust to disqualify with a view to avoid
generation or creation of monopoly of any private terminal /
berth operator in the port. The main object of the policy is to
see that no monopoly over berths of the Port be made by any
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private berth operator and to obviate that apprehension, it
appears that decision is taken, but again said decision does not
reflect any reasons. We in exercise of extraordinary jurisdiction
do not deem it proper to conclude finally and as such, we are
inclined to leave it open to be re-examined by the respondent
authority after due compliance of the principles of natural
justice.
60. During the course of submissions, two issues mainly
remained a center of controversy. (1) that by virtue of clause
2.2.8 reflecting on page 40, which deals with disqualification
issue. Respondent Port Trust has assigned a reason to justify its
action since the petitioner is allegedly not entitled to participate
any further since Adani Vizag Coal Terminal (A 100% subsidiary
of petitioner No.1) has been terminated by Vishakhapatnam
Port Trust due to events of default of concessionaire. As against
this, petitioners' case is that it is not that Vishakhapatnam Port
Trust has terminated first but it is termination by the petitioner
and in turn, VPT has taken a measure of termination but this
controversy is pending before arbitral tribunal and as such,
without entering into such controversy, on breach of clause
2.2.8 of RFQ, we are of the view that reasonable opportunity
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ought to have been given or the decision making process is
followed. The reasons for rejection must have been reflecting in
the final outcome, i.e. impugned communication itself, upon
which, this Court would have had an opportunity to examine the
decision considering the sphere of judicial review. Yet, another
circumstance appears to have been not considered by the
respondent authority is that IFFCO is having Barge JT and stand
of the authority is that IFFCO is only for captive use and it
cannot be placed on the same footing as private terminal/ berth
operator. Hence, petitioner cannot sideline the clause of the
policy which is reflecting on page 98, i.e. clause 2. Now, this
stand countered by the petitioner on the ground that IFFCO is
no-doubt having Barge JT but it also handling multi-purpose
cargoes and therefore, respondent authority cannot justify the
said issue. In fact, according to the petitioner, IFFCO is another
private berth operator for dry bulk cargo in respondent Port and
as such, policy clause cannot be resorted to for disqualifying the
petitioner. Now, these issues which are tried to be canvassed by
the respondent Trust to justify their unilateral unreasoned
decision for arriving at rejection of petitioner's claim to further
participate in the tender or to disqualify has been arrived at
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without even hearing the petitioner. Hence, this Court is of the
considered opinion that the impugned communication
forwarded to petitioner under the aforesaid circumstances since
is not fulfilling the test of arbitrariness, reasonableness nor can
it be said to be on the touchstone of Article 14 of the
Constitution of India and in due compliance of principles of
natural justice. Hence, since we are prima facie satisfied that
impugned decision is not sustainable in the eye of law, on
aforesaid ground alone impugned communication is liable to be
set aside. Hence, we are inclined not to discuss or express our
views on other issues which have been canvassed before us,
since we are inclined to set aside the impugned order or
communication by directing the respondent authority to take a
fresh decision after assigning proper reasons and after
examining the issues at length.
61. Hence, we proceed to pass following order:
ORDER
(1) Impugned decision dated 23/24.12.2021 at Annexure-A is quashed and set aside and we direct the respondent authority to re-examine the issue with regard to qualification or disqualification of the petitioner as a Page 52 of 54 Downloaded on : Wed Apr 06 21:18:03 IST 2022 C/SCA/20161/2021 CAV ORDER DATED: 05/04/2022 bidder in second stage of bidding process as per the provisions of RFQ and shall pass a fresh order in accordance with law after assigning proper reasons and due compliance of principles of natural justice namely after affording petitioner a personal hearing.
(2) We make it clear that we have not expressed any opinion on merits with regard to any of the contentions raised on merit by both the sides. It is open for the respondent authority to independently take a fresh decision in accordance with the terms of policy and in accordance with law within a period SIX WEEKS from date of receipt of the writ of this Court.
(3) Interim protection granted to the petitioner vide order dated 28.12.2021 shall continue to operate till fresh decision is taken by the respondent authority subject to a condition that petitioner shall cooperate with fresh decision making process.
62. It is needless to state that if any adverse order is passed against the petitioner, it would be open for the petitioner to challenge the same in the manner known to law.
63. Accordingly, present petition stands DISPOSED OF.
64. No order as to costs.
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65. Since the main petition is disposed, Civil Application No.1 of 2022 stands DISPOSED OF as it would not survive for consideration.
(ARAVIND KUMAR,CJ) (ASHUTOSH J. SHASTRI, J) (OMKAR)/phalguni Page 54 of 54 Downloaded on : Wed Apr 06 21:18:03 IST 2022