AI Structured Summary
Not yet generated for this judgment
Judgment
V. Dhanapalan, J.—This Writ Petition has been filed praying for issuance of a writ of mandamus, forbearing the respondents from applying
the policy ""Two-Terminal-per-Operator cap"" to the petitioner, in the matter of developing the 8th berth at the Tuticorin Port as a container terminal
and consequently directing the respondents to permit the petitioner to participate in the bidding process for the development of 8th berth at the
Tuticorin Port as a container terminal and its operation, management and maintenance on Build, Operate and Transfer (BOT) basis for 30 years in
terms of Clause 2.3 of the Licence Agreement, dated 15.07.1998.
The case of the petitioner is as under:
2.1. It is incorporated as a joint venture company between the Port of Singapore Authority, South India Corporation (Agencies) Limited,, and Nur
Investment And Trading PTE Ltd. It entered into the Build, Operate and Transfer License Agreement (Lease Agreement), dated 15.07.1998, with
the second respondent, to design, engineer, finance, erect, operate, replace container handling equipment and to maintain and repair the container
terminal at Tuticorin Port. Pursuant to the licence agreement, it commenced development of the 7th berth as a container terminal at Tuticorin and
has been operating and maintaining the same as on date.
2.2. As per Clause 2.3 of the Licence Agreement, the petitioner is permitted to bid for any other new additional facility or for operating any other
berth at the port.
2.3. The second respondent issued a notice inviting tender in No. E(M) P & M/AEE (M)/F.13/2005 for development of the second container
terminal at existing berth No. 8 at Tuticorin Port and its operation, management and maintenance on BOT basis for 30 years. The total value of the
work was approximately Rs. 150 crores. Eleven prospective bidders, including the petitioner, procured the RFQ documents for developing the 8th
berth as the second container terminal.
2.4. In the year 2002, a policy decision was taken by the first respondent to exclude existing operators from participating in the bid for new
container terminals. But, in view of Clause 2.3 of the Licence Agreement, the petitioner was permitted to participate in the bidding process. Apart
from the petitioner, four other bidders were also shortlisted.
2.5. In the newspaper ""Business Line"", dated 07.02.2005, it was reported that the first respondent had introduced the ""two terminal-per-operator
cap. The policy originally restricted the cap to one major port, but the first respondent sought to extend the said proposal to an adjacent major
port as well to foster competition.
2.6. The petitioner, apart from operating the container terminal at 7th berth at Tuticorin Port, is operating the second container terminal at the
Chennai Port in the name of Chennai International Terminal Pvt. Ltd. By not furnishing the revised RFP documents, the respondents have
effectively prevented the petitioner from participating in the bid for the 8th berth. Hence, this Writ Petition, for the relief stated supra.
First respondent has filed a counter affidavit, stating as follows:
3.1. Barring the petitioner having its office at Chennai, all other things concerning the petitioner and the respondents took place only at Tuticorin
and as such filing of this Writ Petition before this Hon''ble Court is totally devoid of jurisdiction. There is no guarantee of any future bids for the
petitioner. The petitioner, who has thoughtfully adduced Clause 2.3 of the Licence Agreement, had conveniently and deliberately lost sight of what
has been stated in Clause 14, dealing with Change in Law, with particular reference to Clauses 14.1 to 14.3.
3.2. Clauses 2.3 and 6.2.3 of the Licence Agreement entered into between the second respondent and the petitioner had been incorporated only
taking the agreement, dated 03.07.1997 (Clause 2.3) of JNPT with P&O Australia Ports Pvt.Ltd. as the model, which has subsequently been
frustrated in view of the Government policy framed with a view to prevent private monopoly in port sector and the same policy has been upheld
initially by the Hon''ble Bombay High Court and subsequently by the Hon''ble Supreme Court vide its judgment dated 05.05.2003 in SLP (C) No.
7488 of 2003. In view of the said development, Clauses 2.3 and 6.2.3 relied on by the petitioner lose their force and validity and can be of no
avail to the petitioner and the change in law came to be effected as a direct sequel.
3.3. If the petitioner is allowed to participate in the subject project, the policy decision consciously taken by the Government of India would be
whittled down, thereby leading to fresh litigations by various other companies, which were denied permission to participate in the tender process of
various such projects in the port sector in pursuance of the Government policy.
3.4. Only impelled by the policy decision taken by the Union of India, the second respondent could not allow the petitioner to further participate in
the tender in respect of 8th berth.
Second respondent has filed a counter, which reads as under:
Writ Petition is liable to be dismissed in limine for want of territorial jurisdiction. The first respondent had taken a policy decision and the said
policy decision is binding on every Board of Major Ports in discharge of its functions under the Major Port Trusts Act, 1963. The rejection of the
application of the petitioner had been made pursuant to the valid statutory policy which itself was put into effect for the purpose of preventing
private monopoly in the port sector and in public interest in the matter of administration of ports in general and the container terminal in ports in
particular. The petitioner was not provided with RFP document in view of the policy decision taken by the Ministry to debar the existing terminal
operator with a view to avoid private monopoly and promote competition in Port sector. The communication of the first respondent not to permit
the petitioner from bidding for RFP as per the extant policy of the Government of India has to be followed by the second respondent. The
respondent is well within its right as conferred by RFQ document to issue or not to issue the RFP document to any of the shortlisted bidders. As
such, the petitioner is not issued with the RFP document. Hence, there is no illegality or infirmity in the action of the second respondent.
The contentions of the learned Senior Counsel for the petitioner are three fold. They are : (i) the petitioner should be permitted to participate in
the bidding process for the development of 8th berth at the Tuticorin Port as a container terminal and its operation, management and maintenance
on Build, Operate and Transfer (BOT) basis for 30 years in terms of Clause 2.3 of the Licence Agreement, dated 15.07.1998; (ii) the so called
policy decision of the first respondent to exclude the existing operator from participating in the bid for the second container terminal has no force of
law and (iii) the written statutory contract between a government undertaking and a private party cannot be nullified by a policy decision. The
learned Senior Counsel has cited the following decisions:
(i) M/s. A-One Granites Vs. State of U.P. and Others, :
12.. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law
declared to have a binding effect as is contemplated by Article 141.
A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be
a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This
is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined.
(ii) Delhi Cloth and General Mills Co. Ltd. and Another Vs. Rajasthan State Electricity Board and Another, :
On a plain construction of the terms of the agreement, the appellants were no doubt guaranteed the supply of electricity for a period of 20
years but the right to get the supply at the concessional rate was subject to the power of the Board to effect a revision of the rate of supply every
fifth year starting from the date of first supply subject to the only restriction that such revision could not be effected before January 1, 1971. The
Board�s contention that the right of the appellants to the supply of electricity at a concessional rate under the agreement entered into by the
Board with them u/s 49 of the Act was defeasible, is clearly well-founded and must be given effect to. It follows that the rights derived by the
appellants under the contract were subject to the stipulation contained in Clause 34(b) which made the mutual rights and obligations of the parties
subject to any legislation relating to supply and consumption of electricity enacted during the period of the agreement.
On a fair construction of the terms of Clause 34(b) taken in conjunction with the conduct of the parties, the conclusion is irresistible that the
parties had contemplated that the mutual rights and obligations under the contract would be subject to alteration by future legislation. That being so,
Sections 49-A and 49-B of the Act have to be read into the contract and these provisions by virtue of Clause 34(b) became a contractual
stipulation.
Whether the raising of demand for payment of difference between the uniform tariffs and the agreed rate was in disregard of the guiding principles
contained in Section 49(3) contrary to the mandate of Section 49-A(2) of the Act
(iii) State of U.P. and Another Vs. Synthetics and Chemicals Ltd. and Another, :
�Incuria� literally means �carelessness�. In practice per incuriam appears to mean per ignoratium. English courts have developed this
principle in relaxation of the rule of stare decisis. The �quotable in law� is avoided and ignored if it is rendered, �in ignoratium of a statute or
other binding authority�. (Young v. Bristol Aeroplane Co. Ltd.). Same has been accepted, approved and adopted by this Court while
interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey this
Court while pointing out the procedure to be followed when conflicting decisions are placed before a bench extracted a passage from
Halsbury�s Laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.
Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can
such conclusions be considered as declaration of law? Here again the English courts and jurists have carved out an exception to the rule of
precedents. It has been explained as rule of sub-silentio. �A decision passes sub-silentio, in the technical sense that has come to be attached to
that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind.� (Salmond on
Jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as
it was rendered �without any argument, without reference to the crucial words of the rule and without any citation of the authority�. It was
approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur. The bench held that, �precedents sub-silentio and without argument
are of no moment�. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision
which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a
binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment
without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry it was observed, �it is trite to say that a decision
is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein�. Any declaration or conclusion arrived
without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as
a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth
of law.
Neither there was any occasion nor there is any constitutional inhibition or statutory restriction under the legislative entry nor does the taxing statute
make any distinction between luxuries and necessities for levying tax. In any case, the bench did not examine it nor did it base its conclusions on it.
In absence of any discussion or any argument the order was founded on a mistake of fact and, therefore, it could not be held to be law declared.
The bench further was not apprised of earlier Constitution Bench decisions in Hoechst Chemicals v. State of Bihar and Ganga Sugar Mill v. State
of U.P., which specifically dealt with the legislative competence of levying sales tax in respect of any industry which had been declared to be of
public importance. Therefore, the conclusion of law by the Constitution Bench that no sales or purchase tax could be levied on industrial alchohol
with utmost respect fell in both the exceptions, namely, rule of sub-silentio and being in per incuriam, to the binding authority of the precedents.
(iv) Municipal Corporation of Delhi Vs. Gurnam Kaur, :
A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the
decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of point A, which it
considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless
it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically
involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio.
(v) Arnit Das Vs. State of Bihar, :
A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be
a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This
is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined.
Conversely, learned Senior Counsel for the respondents would contend that the petitioner has no locus standi to file this Writ Petition and
therefore the same is not maintainable; the petitioner has not challenged the policy decision of the Government of India; Section 42 of the Act
merely confers powers on the Board to undertake the services described therein, but the actual contract to be entered into by the Port Trust with
any party including its terms has not been provided for under the Act or in framed thereunder; merely because statutory bodies have been given the
power to enter into contracts will not make such contracts statutory and Article 226 in respect of such contracts cannot be an appropriate remedy,
for which the remedy is only before the Civil Court or Arbitration, provided under the contract; the contract dated 15.07.1998 is only a non-
statutory contract and the contract itself provides the machinery for resolution of disputes; policy is a high public policy formulated by the
Government in public interest and there cannot be any question of principle of estoppel being involved in the application of such policy; the policy
can be executive as well as legislative and that the Government is free to decide upon its policy and the Courts will not interfere in such policy
matters; there can be no question of legitimate expectation with reference to the old policy after the old policy has been changed and the rights of
the parties have to be angulated with regard to the changed policy and that when the law itself is not challenged, such a law or policy is binding on
the parties and, therefore, no mandamus, as sought for by the petitioner can be given. The learned Senior Counsel has relied upon the following
authorities:
(i) Har Shankar and Others Vs. The Dy. Excise and Taxation Commr. and Others, :
On the preliminary objection it was finally urged by the appellants that the objection was misconceived because there was, in fact, no contract
between the parties and therefore they were not attempting to enforce any contractual rights or to wriggle out of contractual obligations. The short
answer to this contention is that the bids given by the appellants constitute offers and upon their acceptance by the Government a binding
agreement came into existence between the parties. The conditions of auction become the terms of the contract and it is on those terms that
licences are granted to the successful bidders in Form L. 14-A of the Rules. As stated in Cheshire and Fifoot�s Law of Contract (8th Edn.,
1972; p. 24):
In order to determine whether, in any given case, it is reasonable to infer the existence of an agreement, it has long been usual to employ the
language of offer and acceptance. In other words, the court examines all the circumstances to see if the one party may be assumed to have made a
firm �offer� and if the other may likewise be taken to have �accepted� that offer. These complementary ideas present a convenient
method of analysing a situation, provided that they are not applied too literally and that facts are not sacrificed to phrases.
Analysing the situation here, a concluded contract must be held to have come into existence between the parties. The appellants have displayed
ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations.
In Civil Appeals Nos. 485 and 2205 of 1969, filed respectively by Northern India Caterers (P) Ltd., and M/s Green Hotel, Bar and
Restaurant and Others, the appellants hold licences in Form Nos. L-3, L-4 and L-5 for the retail vend of foreign liquor in a hotel, restaurant and in
a bar attached to a restaurant. No auctions were held for granting these licences and therefore the reasoning that acceptance of bids brought into
existence a concluded contract between the successful bidders and the Government will not apply to the cases of these appellants. But they also
accepted the licences subject to the provisions of the Punjab Excise Act, 1914 and the Punjab Liquor Licence Rules, 1956. By Section 34 of the
Act a licence under the Act has to be granted, inter alia, on payment of such fees and subject to such restrictions and on such conditions as the
Financial Commissioner may direct. Section 59(d) of the Act confers power on the Financial Commissioner to make rules prescribing the scale of
fees in respect of any licence. Rule 24 provides that the fees payable in respect of licences shall be either (a) fixed fees or (b) assessed fees, or (c)
auction fees. By amendments made on February 22, 1968 and March 30, 1968, the fixed fees were substantially enhanced and the appellants
were called upon to pay those fees. Just as country liquor contractors offered bids voluntarily on terms and conditions governing the auctions, so in
these two appeals the appellants voluntarily applied for and accepted the licences knowing fully well that the Financial Commissioner had the
power to frame rules governing the licences. Whether the amendments made to the Rules after the appellants� licences were renewed are
applicable is another matter but the appellants cannot question the power of the Financial Commissioner to frame those rules. The licences, in a
large measure, owe their existence and validity to the rule-making power of the Financial Commissioner. One of the reliefs which the appellants ask
for is that Rules 27-A, 30 and 31 be declared ultra vires and unconstitutional and consequently the respondents be directed to refund the assessed
fees already recovered. By attempting to exploit the licences without the burden of assessed fees originally attaching to them under the Rules
framed by the Financial Commissioner, the appellants are seeking to work the licences on such terms as they find convenient. The writ jurisdiction
of High Courts under Article 226 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred. That, however, will
not estop the appellants from contending that the amended Rules are not applicable as their licences were renewed before the amendments were
made.
(ii) State of Haryana and Others Vs. Lal Chand and Others, :
It is well settled that Article 299(1) applies to a contract made in exercise of the executive power of the Union or the State, but not to a
contract made in exercise of statutory power. Article 299(1) has no application to a case where a particular statutory authority as distinguished
from the Union or the States enters into a contract which is statutory in nature. Such a contract, even though it is for securing the interests of the
Union or the States, is not a contract which has been entered into by or on behalf of the Union or the State in exercise of its executive powers. In
respect of forest contracts which were dealt with by this Court in K.P. Chowdhary, Mulamchand, Rattan Lal and Firm Gobardhan Dass cases,
there are provisions in the Indian Forest Act, 1927 and the Forest Contract Rules framed thereunder for entering into a formal deed between the
forest contractor and the State Government to be executed and expressed in the name of the Governor in conformity with the requirements of
Article 299(1), whereas under the Punjab Excise Act, 1914, like some other State Excise Acts, once the bid offered by a person at an auction sale
is accepted by the authority competent, a completed contract comes into existence and all that is required is the grant of a licence to the person
whose bid has been accepted. It is settled law that contracts made in exercise of statutory powers are not covered by Article 299(1) and once this
distinction is kept in view, it will be manifest that the principles laid down in K.P. Chowdhary, Mulamchand, Rattan Lal and Firm Gobardhan Dass
cases are not applicable to a statutory contract e.g. an excise contract. In such a case, the Collector acting as the Deputy Excise and Taxation
Commissioner conducting the auction under Rule 36(22) and the Excise Commissioner exercising the functions of the Financial Commissioner
accepting the bid under Rule 36(22-A) although they undoubtedly act for and on behalf of the State Government for raising public revenue, they
have the requisite authority to do so under the Act and the rules framed thereunder and therefore such a contract which comes into being on
acceptance of the bid, is a statutory contract falling outside the purview of Article 299(1) of the Constitution.
We are clearly of the opinion that in the case of a statutory contract like the one under the Excise Act, the requirements of Article 299(1)
cannot be invoked. In A. Damodaran v. State of Kerala the Court interpreting Section 28 of the Kerala Abkari Act, 1967 which was in pari
materia with Section 60 of the Punjab Excise Act, 1914 held that even if no formal deed had been executed as required under Article 299(1), still
the liability for payment of the balance of the licence amount due could be enforced by taking recourse to Section 28 of the Act. The Kerala High
Court rejected the contention of the appellants by holding that the liability to satisfy the dues arising out of a bid was enforceable u/s 28 quite apart
from any contractual liability and this view was upheld by this Court on the ground that the word �grantee� in Section 28 has a wide
connotation to mean a person who had been granted the privilege by acceptance of his bid. It was further held that the statutory duties and
liabilities arising on acceptance of the bid at a public auction of a liquor contract may be enforced in accordance with the statutory provisions and
that it was not a condition precedent for the recovery of an amount due u/s 28 of the Act, that the amount due and recoverable should be under a
formally drawn up and executed contract. This is in recognition of the principle that the provisions of Article 299(1) of the Constitution are not
attracted to the grant of such a privilege to vend liquor under the Act.
(iii) Delhi Cloth and General Mills Co. Ltd. and Another Vs. Rajasthan State Electricity Board and Another, :
On a plain construction of the terms of the agreement, the appellants were no doubt guaranteed the supply of electricity for a period of 20
years but the right to get the supply at the concessional rate was subject to the power of the Board to effect a revision of the rate of supply every
fifth year starting from the date of first supply subject to the only restriction that such revision could not be effected before January 1, 1971. The
Board�s contention that the right of the appellants to the supply of electricity at a concessional rate under the agreement entered into by the
Board with them u/s 49 of the Act was defeasible, is clearly well-founded and must be given effect to. It follows that the rights derived by the
appellants under the contract were subject to the stipulation contained in Clause 34(b) which made the mutual rights and obligations of the parties
subject to any legislation relating to supply and consumption of electricity enacted during the period of the agreement.
On a fair construction of the terms of Clause 34(b) taken in conjunction with the conduct of the parties, the conclusion is irresistible that the
parties had contemplated that the mutual rights and obligations under the contract would be subject to alteration by future legislation. That being so,
Sections 49-A and 49-B of the Act have to be read into the contract and these provisions by virtue of Clause 34(b) became a contractual
stipulation.
Whether the raising of demand for payment of difference between the uniform tariffs and the agreed rate was in disregard of the guiding principles
contained in Section 49(3) contrary to the mandate of Section 49-A(2) of the Act.
(iv) D. Navinchandra and Co. and Others Vs. Union of India (UOI) and Others, :
One of the points on which an argument was sought to be built up was that the Bench of two Judges of this Court in the subsequent decisions
had cut down the effect of the decision of this Court dated April 18, 1985 in the case of Union of India v. Rajnikant Bros. It has been stated that in
subsequent decisions referred to hereinbefore, this Court had deviated and indeed differed from the view expressed in that case. It was urged that
in Rajnikant Bros. case1 a Bench of three Judges categorically stated that the respondents would be entitled ""to import all other items whether
canalised or otherwise"" except those which were specifically banned under the prevalent import policy at the time of import, with the relevant rules.
In our opinion, the subsequent decisions referred to hereinbefore do not take any different or contrary view. Indeed it gives effect to the letter and
spirit of the said decision. It has to be borne in mind that the basic background under which Rajnikant�s decision was rendered, (sic) the Export
Houses had been refused Export House Certificates because it was insisted that they should have diversified their export and that was a condition
for the grant or entitlement of an Export House Certificate. It was found and it is common ground now that that was wrong. Therefore, the wrong
was undone. Those who had been denied Export House Certificates on that wrong ground were put back to the position as far as it could be if
that wrong had not been done. To do so, the Custom authorities and government authorities were directed to issue necessary Export House
Certificates for the year 1978-79 though the order was passed in April 1985. This was a measure of restitution, but the court, while doing so,
ensured that nothing illegal was done. It is a presumption of law that the courts act lawfully and will not ask any authority to do anything which is
illegal. Therefore, the court directed that except those which were specifically banned under the prevalent import policy at the time of import, the
respondents shall be entitled to import all other items whether canalised or not canalised in accordance with the relevant rules. Analysing the said
order, it is apparent, (1) that the importation that was permissible was of goods which were not specifically banned, (2) such banning must be
under the prevalent import policy at the time of import, and (3) whether items which were canalised or uncanalised would be imported in
accordance with the relevant rules. These conditions had to be fulfilled. The court never did and could not have said that canalised items could be
imported in any manner not permitted nor it could have given a go-by to canalisation policy.
It must be emphasised that in the order dated April 18, 1985, this Court did not do away with canalisation. That was not the issue before this
Court. The expression �whether canalised or not canalised� was to include both. This Court did not say that canalised items could be
imported directly by the importers ignoring the canalisation process. We are of the opinion that this Court did not say that canalisation could be
ignored. That was not the issue. High public policy, it must be emphasised, is involved in the scheme of canalisation. This purpose of canalisation
was examined by this Court in Daruka & Co. v. Union of India where the Constitution Bench of this Court observed that the policies of imports or
exports were fashioned not only with reference to internal or international trade, but also on monetary policy, the development of agriculture and
industries and even on the political policies of the country and rival theories and views may be held on such policies. If the Government decided an
economic policy that import or export should be by a selected channel or through selected agencies the court would proceed on the assumption
that the decision was in the interest of the general public unless the contrary was shown. Therefore it could not be collaterally altered in the manner
suggested. The policy of canalisation which is a matter of policy of the Government was not given a go-by by the observations referred to in the
order of April 18, 1985. Indeed it is possible to read the order in a manner consistent with canalisation scheme in the way we have indicated. If
that is so, then it should be so read. When this Court observed that the fact whether items were sought to be imported by diamond merchants were
canalised would not be an impediment to the import directly by them, the court meant to say that this could be imported directly by them through
the canalisation organisation. The need for canalisation stands on public policy and that need cannot be lightly or inferentially given a go-by. It
should not be presumed that collaterally the court had done away with the system of canalisation based on sound public policy. We have found
nothing in the different authorities on this subject, which militate against the above views. Therefore, the action taken by the Custom authorities in
issuing adjudication notice and proceeding in the manner they did, we are of the opinion that they have not acted illegally or without jurisdiction.
This must proceed in accordance with law as laid down by this Court which, in our opinion, is clear enough. The fact that in subsequent decisions,
the petitioner is not a party is not relevant. Generally legal positions laid down by the court would be binding on all concerned even though some of
them have not been made parties nor were served nor any notice of such proceedings given.
Before parting with this case, certain factors must be noted. The diamond exporters and dry fruit exporters have had their full round in this
Court. Speaking entirely for myself, my conscience protests to me that when thousands of remediless wrongs wait in the queue for this Court�s
intervention and solution for justice, the petitions at the behest of diamond exporters and dry fruit exporters where large sums are involved should
be admitted and disposed of by this Court at such a quick speed. Neither justice nor equity nor good conscience deserves these applications to be
filed or entertained. There is no equity of restitution against the law declared categorically and repeatedly by this Court and no principle of estoppel
involved in these applications.
(v) State of Gujarat and Others Vs. Meghji Pethraj Shah Charitable Trust and Others, :
We are unable to see any substance in the argument that the termination of arrangement without observing the principle of natural justice (audi
alteram partem) is void. The termination is not a quasi-judicial act by any stretch of imagination; hence it was not necessary to observe the
principles of natural justice. It is not also an executive or administrative act to attract the duty to act fairly. It was � as has been repeatedly urged
by Shri Ramaswamy � a matter governed by a contract/agreement between the parties. If the matter is governed by a contract, the writ petition
is not maintainable since it is a public law remedy and is not available in private law field, e.g., where the matter is governed by a non-statutory
contract. Be that as it may, in view of our opinion on the main question, it is not necessary to pursue this reasoning further.
(vi) Aligarh Muslim University v. Vinay Engineering Enterprises Ltd., (1994) 4 SCC 710 :
We are surprised, not a little, that the High Court of Calcutta should have exercised jurisdiction in a case where it had absolutely no jurisdiction.
The contracts in question were executed at Aligarh, the construction work was to be carried out at Aligarh, even the contracts provided that in the
event of dispute the Aligarh Court alone will have jurisdiction. The arbitrator was from Aligarh and was to function there. Merely because the
respondent was a Calcutta-based firm, the High Court of Calcutta seems to have exercised jurisdiction where it had none by adopting a queer line
of reasoning. We are constrained to say that this is a case of abuse of jurisdiction and we feel that the respondent deliberately moved the Calcutta
High Court ignoring the fact that no part of the cause of action had arisen within the jurisdiction of that Court. It clearly shows that the litigation filed
in the Calcutta High Court was thoroughly unsustainable.
In the result we allow these appeals, set aside the impugned orders of the High Court and direct that the proceedings initiated in the High Court
of Calcutta shall be returned to the respondent for presentation in proper court. The hearing cost is quantified at Rs 10,000 which Respondent 1
Vinay Engineering will pay, in any case before the application is presented to the Aligarh Court.
(vii) Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, :
From the facts pleaded in the writ petition, it is clear that NICCO invoked the jurisdiction of the Calcutta High Court on the plea that a part of
the cause of action had arisen within its territorial jurisdiction. According to NICCO, it became aware of the contract proposed to be given by
ONGC on reading the advertisement which appeared in the Times of India at Calcutta. In response thereto, it submitted its bid or tender from its
Calcutta office and revised the rates subsequently. When it learnt that it was considered ineligible it sent representations, including fax messages, to
EIL, ONGC, etc., at New Delhi, demanding justice. As stated earlier, the Steering Committee finally rejected the offer of NICCO and awarded
the contract to CIMMCO at New Delhi on 27-1-1993. Therefore, broadly speaking, NICCO claims that a part of the cause of action arose
within the jurisdiction of the Calcutta High Court because it became aware of the advertisement in Calcutta, it submitted its bid or tender from
Calcutta and made representations demanding justice from Calcutta on learning about the rejection of its offer. The advertisement itself mentioned
that the tenders should be submitted to EIL at New Delhi; that those would be scrutinised at New Delhi and that a final decision whether or not to
award the contract to the tenderer would be taken at New Delhi. Of course, the execution of the contract work was to be carried out at Hazira in
Gujarat. Therefore, merely because it read the advertisement at Calcutta and submitted the offer from Calcutta and made representations from
Calcutta would not, in our opinion, constitute facts forming an integral part of the cause of action. So also the mere fact that it sent fax messages
from Calcutta and received a reply thereto at Calcutta would not constitute an integral part of the cause of action. Besides the fax message of 15-
1-1993, cannot be construed as conveying rejection of the offer as that fact occurred on 27-1-1993. We are, therefore, of the opinion that even if
the averments in the writ petition are taken as true, it cannot be said that a part of the cause of action arose within the jurisdiction of the Calcutta
High Court.
Pointing out that after the issuance of the notification by the State Government u/s 52(1) of the Act, the notified land became vested in the State
Government free from all encumbrances and hence it was not necessary for the respondents to plead the service of notice u/s 52(2) for the grant of
an appropriate direction or order under Article 226 for quashing the notification acquiring the land. This Court, therefore, held that no part of the
cause of action arose within the jurisdiction of the Calcutta High Court. This Court deeply regretted and deprecated the practice prevalent in the
High Court of exercising jurisdiction and passing interlocutory orders in matters where it lacked territorial jurisdiction. Notwithstanding the strong
observations made by this Court in the aforesaid decision and in the earlier decisions referred to therein, we are distressed that the High Court of
Calcutta persists in exercising jurisdiction even in cases where no part of the cause of action arose within its territorial jurisdiction. It is indeed a
great pity that one of the premier High Courts of the country should appear to have developed a tendency to assume jurisdiction on the sole
ground that the petitioner before it resides in or carries on business from a registered office in the State of West Bengal. We feel all the more
pained that notwithstanding the observations of this Court made time and again, some of the learned Judges continue to betray that tendency. Only
recently while disposing of appeals arising out of SLP Nos. 10065-66 of 1993, Aligarh Muslim University v. Vinay Engineering Enterprises (P)
Ltd. this Court observed:
We are surprised, not a little, that the High Court of Calcutta should have exercised jurisdiction in a case where it had absolutely no jurisdiction.
In that case, the contract in question was executed at Aligarh, the construction work was to be carried out at Aligarh, the contracts provided that in
the event of dispute the Aligarh court alone will have jurisdiction, the arbitrator was appointed at Aligarh and was to function at Aligarh and yet
merely because the respondent was a Calcutta-based firm, it instituted proceedings in the Calcutta High Court and the High Court exercised
jurisdiction where it had none whatsoever. It must be remembered that the image and prestige of a court depends on how the members of that
institution conduct themselves. If an impression gains ground that even in cases which fall outside the territorial jurisdiction of the court, certain
members of the court would be willing to exercise jurisdiction on the plea that some event, however trivial and unconnected with the cause of
action had occurred within the jurisdiction of the said court, litigants would seek to abuse the process by carrying the cause before such members
giving rise to avoidable suspicion. That would lower the dignity of the institution and put the entire system to ridicule. We are greatly pained to say
so but if we do not strongly deprecate the growing tendency we will, we are afraid, be failing in our duty to the institution and the system of
administration of justice. We do hope that we will not have another occasion to deal with such a situation.
(viii) Chandigarh Administration and another Vs. Jagjit Singh and another, :
We are of the opinion that the basis or the principle, if it can be called one, on which the writ petition has been allowed by the High Court is
unsustainable in law and indefensible in principle. Since we have come across many such instances, we think it necessary to deal with such pleas at
a little length. Generally speaking, the mere fact that the respondent-authority has passed a particular order in the case of another person similarly
situated can never be the ground for issuing a writ in favour of the petitioner on the plea of discrimination. The order in favour of the other person
might be legal and valid or it might not be. That has to be investigated first before it can be directed to be followed in the case of the petitioner. If
the order in favour of the other person is found to be contrary to law or not warranted in the facts and circumstances of his case, it is obvious that
such illegal or unwarranted order cannot be made the basis of issuing a writ compelling the respondent-authority to repeat the illegality or to pass
another unwarranted order. The extraordinary and discretionary power of the High Court cannot be exercised for such a purpose. Merely because
the respondent-authority has passed one illegal/unwarranted order, it does not entitle the High Court to compel the authority to repeat that illegality
over again and again. The illegal/unwarranted action must be corrected, if it can be done according to law � indeed, wherever it is possible, the
Court should direct the appropriate authority to correct such wrong orders in accordance with law � but even if it cannot be corrected, it is
difficult to see how it can be made a basis for its repetition. By refusing to direct the respondent-authority to repeat the illegality, the Court is not
condoning the earlier illegal act/order nor can such illegal order constitute the basis for a legitimate complaint of discrimination. Giving effect to such
pleas would be prejudicial to the interests of law and will do incalculable mischief to public interest. It will be a negation of law and the rule of law.
Of course, if in case the order in favour of the other person is found to be a lawful and justified one it can be followed and a similar relief can be
given to the petitioner if it is found that the petitioners� case is similar to the other persons� case. But then why examine another person�s
case in his absence rather than examining the case of the petitioner who is present before the Court and seeking the relief. Is it not more
appropriate and convenient to examine the entitlement of the petitioner before the Court to the relief asked for in the facts and circumstances of his
case than to enquire into the correctness of the order made or action taken in another person�s case, which other person is not before the case
nor is his case. In our considered opinion, such a course �barring exceptional situations � would neither be advisable nor desirable. In other
words, the High Court cannot ignore the law and the well-accepted norms governing the writ jurisdiction and say that because in one case a
particular order has been passed or a particular action has been taken, the same must be repeated irrespective of the fact whether such an order or
action is contrary to law or otherwise. Each case must be decided on its own merits, factual and legal, in accordance with relevant legal principles.
The orders and actions of the authorities cannot be equated to the judgments of the Supreme Court and High Courts nor can they be elevated to
the level of the precedents, as understood in the judicial world. (What is the position in the case of orders passed by authorities in exercise of their
quasi-judicial power, we express no opinion. That can be dealt with when a proper case arises.)
(ix) State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., :
Firstly, the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions
of the Contract Act or, maybe, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and
conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as
provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant-Government
under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or
not, are all matters which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the
Government from deducting a particular amount from the writ petitioner�s bill(s) was not a prayer which could be granted by the High Court
under Article 226. Indeed, the High Court has not granted the said prayer.
There is yet another substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia for
settlement of disputes by reference to arbitration (clause 67 of the contract). The arbitrators can decide both questions of fact as well as questions
of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should
not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective
alternative remedy � in this case, provided in the contract itself � is a good ground for the court to decline to exercise its extraordinary
jurisdiction under Article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well-
recognised situations. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the
respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the appellants.
Indeed, the very resort to Article 226 � whether for issuance of mandamus or any other writ, order or direction � was misconceived for the
reasons mentioned supra.
(x) P.T.R. Exports (Madras) Pvt. Ltd. and others Vs. Union of India and others, :
2...It is seen that the change in the policy is as a result of GATT agreement with all contracting countries. The quota system was available to export
garments and clothing to European countries, viz., U.S.A., Canada, Norway etc. The Government took the policy that with a view to meet more
competitive quality in the foreign markets introduced FCFS system giving 20% of the export. PPE was provided with 80% of the export. The new
dynamism in the policy would make the trade more competitive and it will be in the best interest of the country and to boost in export potentiality
and foreign exchange, on account thereof MEE and NQE quotas were eliminated and large allocation was issued to PPE system and rest of 20%
was marked for FCFS system...... It was also pointed that the Government encountered that MEE system was beset with floods of false
declarations of the productive capacity by unscrupulous traders masquerading as exporters. Though action was being taken against persons who
committed fraud but it became difficult to stop misutilisation of the scheme completely. Consequently, MEE system was eliminated. Though
incentives were provided under NQE system, the growth of non-quota exports was not commensurate with the quantum of quota allocated to the
scheme to encourage such exports. The idea of permitting quotas obtained as incentives to be sold at premium is to cross-subsidy the non-quota
export and thus to lower the actual selling price of the item, as an indirect subsidisation to the NQE exporters. But the foreign buyers indirectly are
constrained to bear the subsidy. With the potential development of the developed and developing countries in the international garment and clothing
market, the foreign buyers preferred other countries, instead of purchasing from the Indian exporters to bear the indirect subsidy. Resultantly,
export of clothing has severely suffered from the 1994 end onwards. The Government, therefore, took policy to abolish NQE system so that the
genuine quota exporters could do business so as to stop the malady and to preserve PPE and FCFS system.
In the light of the above policy question emerges whether the Government is bound by the previous policy or whether it can revise its policy in
view of the changed potential foreign markets and the need for earning foreign exchange? It is true that in a given set of facts, the Government may
in the appropriate case be bound by the doctrine of promissory estoppel evolved in Union of India v. Indo-Afghan Agencies Ltd. But the question
revolves upon the validity of the withdrawal of the previous policy and introduction of the new policy. The doctrine of legitimate expectations again
requires to be angulated thus: whether it was revised by a policy in the public interest or the decision is based upon any abuse of the power? The
power to lay policy by executive decision or by legislation includes power to withdraw the same unless in the former case, it is by mala fide
exercise of power or the decision or action taken is in abuse of power. The doctrine of legitimate expectation plays no role when the appropriate
authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice
within the executive or legislative power. In matters of economic policy, it is a settled law that the court gives a large leeway to the executive and
the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating
the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the
country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies.
A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was
necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free
play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine
priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or
withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or
accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. .The High Court, therefore,
was right in its conclusion that the Government is not barred by the promises or legitimate expectations from evolving new policy in the impugned
notification.
(xi) Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and Others, :
A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions.
Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that
one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning
of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory
body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with
property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The
contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and
conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for
adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the
appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have
relegated to other remedies.
(xii) Kunhayammed and Others Vs. State of Kerala and Another, :
If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications.
Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the
Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which
would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the
Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has
stood merged in the order of the Supreme Court rejecting the SLP or that the order of the Supreme Court is the only order binding as res judicata
in subsequent proceedings between the parties.
(xiii) Narmada Bachao Andolan Vs. Union of India and Others, :
It is well settled that the Courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an
infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process
and the Courts are ill-equipped to adjudicate on a policy decision so undertaken. The Courts, no doubt, have a duty to see that in the undertaking
of a decision, no law is violated and people''s fundamental rights are not transgressed upon except to the extent permissible under the Constitution.
At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions.
The courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The essence of
judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to
defend the values of the Constitution and the rights of Indians. The courts must, therefore, act within their judicially permissible limitations to uphold
the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters
of policy the court will not interfere. When there is a valid law requiring the Government to act in a particular manner the court ought not to, without
striking down the law, give any direction which is not in accordance with law. In other words the court itself is not above the law.
(xiv) Union of India and Others Vs. Adani Exports Ltd. and Another, :
Mr Desai, however, placed reliance on a recent judgment of this Court in Navinchandra v. State of Maharashtra wherein this Court had held
that a part of the cause of action had arisen within the jurisdiction of the Bombay High Court. It is to be noted that in the said petition, among other
reliefs, the writ petitioner had prayed for a writ of mandamus to the State of Meghalaya to transfer the investigation to Mumbai Police as also
allegations of mala fides were made as to the filing of the complaint at Shillong. It was also averred in that case that the petitioner was primarily
aggrieved by the criminal complaint filed at Meghalaya because the bulk of the investigation was carried on at Bombay. The said writ petition was
dismissed by the Bombay High Court solely on the ground that since the complaint in question was filed in Shillong in the State of Meghalaya and
the petitioner had sought for quashing of the said complaint, such a writ petition was not maintainable before the High Court of Bombay. According
to this Court, that finding was given without taking into consideration the other alternative prayers in the writ petition to which we have made
reference hereinabove, which prayers according to this Court, gave rise to a cause of action to move the High Court at Bombay for relief.
Therefore, in our opinion, this judgment does not help the writ petitioner to justify its action in filing a writ petition before the Gujarat High Court.
That apart, we must notice that the said judgment is delivered in a matter involving criminal dispute and consequences of such dispute have a direct
bearing on the personal freedom of a citizen guaranteed under Article 21 of the Constitution. Therefore, the consideration that arises in deciding the
question of territorial jurisdiction in cases involving criminal offences may not always apply to cases involving civil disputes like the special civil
applications with which we are concerned. Mr Desai then urged that since the High Court has elaborately dealt with the merits of the case and
given a finding in favour of the respondents in the interest of justice, we should not interfere with the said finding and uphold the same. We are not
inclined to accept this argument of the learned Counsel because the appellants herein had taken objection to the entertainment of the special civil
applications by the Gujarat High Court on the ground of lack of territorial jurisdiction in the first instance itself and the same was rejected,
according to us, wholly on unsustainable grounds. As a matter of fact, the appellant on the entertainment of the civil application and grant of interim
order, had challenged the said order on the ground of want of jurisdiction by way of a civil appeal in this Court which appeal is pending
consideration by this Court, therefore, the objection having been taken at the first instance itself and the court having not proceeded to decide this
question of territorial jurisdiction as contemplated under Order 14 Rule 2 CPC, we think we cannot deny relief to the appellant solely on the
ground that the High Court has chosen to proceed to decide the case on merit. This being a judgment of a court having no territorial jurisdiction,
the judgment has to be set aside....
(xv) BALCO Employees Union (Regd.) Vs. Union of India and Others, :
In the case of policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must
be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in
the decision itself.
On the above pleadings, I have heard the learned Counsel for the parties; gone through the records, coupled with the authorities, and given my
thoughtful consideration to the rival submissions.
Before dealing with the issue involved in this Writ Petition, it is just and necessary to answer the preliminary point raised by the learned Senior
Counsel for the respondents, as regards the maintainability of the Writ Petition on territorial jurisdiction.
According to the learned Senior Counsel for the respondents, barring the petitioner having its registered office at Chennai, all other things
concerning the petitioner and the respondents took place only at Tuticorin and, as such, filing of the Writ Petition before this Court is totally devoid
of jurisdiction.
In this connection, it is to be stated that under Article 226(2) of the Constitution of India, a High Court can issue a writ to any authority, if
whole or any part of the cause of action arises, within the jurisdiction of the said High Court notwithstanding the fact that the seat of such authority
by whom the direction is issued is not within the jurisdiction of the said High Court.
In this case, a direction has been issued by the first respondent from New Delhi to debar the petitioner from participating in the bid for 8th
berth second container terminal, which direction, according to the learned Senior Counsel for the petitioner, has affected the business prospects of
the petitioner, which has its registered office at Chennai. Mandamus has been sought for in the matter of a policy decision of the Union of India,
who is the first respondent herein, and the second respondent is located within the State of Tamil Nadu. The policy in question has been issued by
the Union of India and it has got application to the Ports in Chennai as well as Tuticorin. Hence, the Principal Seat at Madras and the Bench at
Madurai have jurisdiction to deal with the matter in respect of a part of cause of action, which arose within the jurisdiction of the Principal Bench
and the Madurai Bench.
The object of amendment of Clause (1-A) of Article 226 of the Constitution and renumbering the same as Clause (2) is to confer jurisdiction
on a High Court to entertain a petition under Article 226 against the Union of India or any other body or authority located in the territory, if the
cause of action arises wholly or in part within its jurisdiction. The circumstance in which the policy has to be given effect to to the Ports situated in
the State of Tamil Nadu is a part of cause of action for this Court at Madras, based upon which the petitioner is seeking for a relief of mandamus.
Therefore, I am of the considered opinion that part of cause of action arose within the jurisdiction of this Court, as the Union of India is one of
the parties to the proceedings and the petitioner, having its registered office, filed Income Tax returns at Chennai and is also having a terminal
operation at Chennai Port. Besides, the petitioner has not challenged any of the proceedings, which emanated from the place of the respondent i.e.,
Tuticorin. Instead, what is sought for is only a mandamus. In the absence of any challenge to any of the proceedings of the second respondent, the
writ of mandamus, as sought for based on the policy decision of the Union of India, with no iota of doubt, can be maintained before this Court at
Chennai itself.
Adverting to the merits of the case, the very prayer in the Writ Petition is for a mandamus to forbear the respondents from applying the policy
Two-Terminal-per-Operator cap"" to the petitioner and consequently direct the respondents to permit the petitioner to participate in the bidding
process for the development of 8th berth at the Tuticorin Port as a container terminal and its operation, management and maintenance on Build,
Operate and Transfer (BOT) basis for 30 years in terms of Clause 2.3 of the Licence Agreement, dated 15.07.1998. Hence, it is necessary to
extract the said clause, which reads as under:
2.3. Licence Period
The Licence Period shall be for the period of 30 years (including the time taken for the erection of container handling equipments at the Container
Terminal) commencing from the Date of Award of Licence.
The Licence will not bar the Licensee from participating in any subsequent bids invited by the Licensor for development, designing, engineering,
constructing, equipping, maintaining and operating any berth or related facility at the Port.
At the same time, it is also useful to refer to Clause 14 of the Licence Agreement. The said Clause goes thus:
Change in Law 14.1.Definition of Law
For the purposes of this Agreement, ""Law"" means any valid act, ordinance, rule, regulation, notification, directive, order policy, bylaw,
administrative guideline, ruling or instruction having the force of law enacted or issued by a Government Authority.
14.2. Definition of Change in Law
For the purposes of this Agreement ""Change in Law"" means any amendment, alteration, modification or repeal of any existing law by Government
Authority or through any interpretation thereof by the court of law or enactment of any new law coming into effect after the date of this Agreement,
provision for which has not been made elsewhere in this Agreement.
14.3.Relief under Change in Law
If, after the date of this Agreement, there is a Change in the Law which substantially and adversely affects the rights of the Licensee under this
Agreement, so as to alter the commercial viability of the project, the Licensee may, by written notice, request amendments to the terms of this
Agreement.
Subject to provisions of Clause 14.3, the Licensee shall not be entitled to any compensation whatsoever from the Licensor as a result of Change in
Law.
In view of Clause 14, Clause 2.3 cannot be read in isolation. A conjoint reading of Clauses 14.1 and 14.2 would make it explicit that the
Licence Agreement is subject to change in law, which means, enactment of any new subsequent law by way of any valid act, ordinance, rule,
regulation, notification, directive, order policy, bylaw, administrative guideline, ruling or instruction having the force of law enacted or issued by a
Government Authority after the date of the agreement would invalidate the Licence Agreement. It was only for that purpose, Clause 14.3, ""Relief
under Change in Law"", was incorporated, which permits the licensee, if affected by the said change in law, to request by written notice for
amendments to the terms of the Agreement, but the licensee is not entitled to request the licensor or the Government of India to reverse the policy.
However, the said relief clause does not entitle the licensee to any compensation whatsoever from the licensor as a result of change in law. Further,
the policy change on the prevention of private monopoly in port sector does not have any adverse affect on 7th berth of 1st container terminal
operated by the petitioner at Tuticorin Port. So, in view of Clauses 14.1. and 14.2, Clauses 2.3 and 6.2.3 shall become defunct.
Subsequent to the Licence Agreement dated 15.07.1998, the first respondent, namely, Government of India, on 11.11.2002, in exercise of
powers conferred on it u/s 111 of the Major Port Trusts Act, 1963 (in short, ""the Act""), took a policy decision to prevent private monopoly in the
port sector. Consequent to the said decision, the first respondent, by proceedings dated 22.05.2009, debarred the petitioner, who is the operator
of the first container terminal, from the bidding process for the second container terminal i.e., conversion of 8th berth as a second container
terminal at Tuticorin Port, in line with the prevailing Government Policy on the subject.
As per Section 111 of the Act, the decision of the Central Government, whether a question is one of policy or not, shall be final. Admittedly,
the petitioner has not challenged the said policy decision and the subsequent proceedings thereof. In the absence of any challenge, the said
proceedings, dated 22.05.2009, have attained finality. It is not necessary for this Court to enter upon any exercise for finding out the wisdom of the
policy decision of the respondents. The decision to exclude the petitioner from participating in the bid for new container terminal was taken in
public interest. The respondents felt it not desirable to give control of the entire container handling to one single private party with a view to provide
competition to increase the efficiency in the service and avoid concentration of control in one single party. Unless it is demonstrated that the policy
decision is capricious or arbitrary and not informed by any reason whatsoever, it is not permissible for this Court to interfere with the same. Only
with a view to avert monopoly and encourage free and fair competition so as to benefit the Port''s users and the consumers, availing services of the
same, the petitioner could not be allowed to participate, which would be in the longer interest of trade, industry, general port users and the
consumers, who are the end users of the services. The petitioner, in his affidavit has also stated that apart from operating the container terminal at
7th berth at Tuticorin Port, is operating the second container terminal at the Chennai Port in the name of Chennai International Terminal Pvt.Ltd.
Therefore, applying the policy ""Two-Terminal-per-Operator cap"", the petitioner was rightly injuncted from participating in the subsequent bid.
Though Clause 2.3 contemplates not to bar the existing licensee from participating in any subsequent bids, it does not confer any unconditional
right for participating in the subsequent bids. Clause 3.8 of the RFQ document of the tender is categorical that ""notwithstanding anything contained
in this RFQ, the Port Trust reserves the right to accept or reject any or all application(s) and to annul the bidding process and reject all
applications/proposals, at any time, without any liability or any obligation for such rejection or annulment without assigning any reasons"". Hence, the
petitioner was not conferred with any right of claim for issue of RFP document. Though RFP document was issued to other bidders on
22.05.2009, since the petitioner was debarred from participating in the bid for 8th berth as per the policy decision taken by the Government, he
was not issued with the said document. Therefore, the second respondent was well within its right, as conferred by RFQ document, to issue or not
to issue the RFP document to any of the shortlisted bidders.The second respondent, though an autonomous body, is under the full control and
supervision of the first respondent and obliged to act in accordance with the policies and principles adopted by the first respondent from time to
time. In addition, the second respondent and all its actions, including the Licence Agreement, dated 15.07.1998, between the Port and the
petitioner company, are governed by the Act. The RFQ document, vide para 2.1, recognises that the Act is the governing statute for administration
of Major Ports. Therefore, the Licence Agreement is governed and regulated within the ambit of the Act and cannot override the provisions of the
Act.
Just because the petitioner was issued with the RFQ document, it does not mandate that the petitioner must be issued with RFP document as
well. It is for the respondents to issue or not to issue the RFP document and the same shall be issued, subject to the prevailing policy of the
Government on the subject. Since the first respondent has taken a policy decision to debar the petitioner from participating in the bidding process
for 8th berth and the same was communicated to the second respondent, the petitioner was not issued with the RFP document, which, in my
considered opinion, cannot be faulted with. It is a settled law that anything done in line with the policy decisions of Governments cannot be
subjected to litigations.
As held by the Supreme Court in P.T.R. Exports (Madras) Pvt. Ltd. and others Vs. Union of India and others, , the policy can be executive as
well as legislative and that the Government is free to decide upon its policy and the Courts will not interfere in such policy matters. It has been
further held therein that there can be no question of legitimate expectation with reference to the old policy after the old policy has been changed
and the rights of the parties will have to be angulated with regard to the changed policy. In matters of economic policy, the Courts give a large
leeway to the executive and the legislature. A prior decision would not bind the Government for all times to come. When the Government is
satisfied that change in the policy is necessary in public interest, it would be entitled to revise the policy and lay down a new policy.
The Apex Court, in Narmada Bachao Andolan Vs. Union of India and Others, , has also held that the Courts, in exercise of their jurisdiction,
will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be
undertaken and how it has to be executed, are part of policy-making process and the Courts are ill-equipped to adjudicate on a policy decision, so
undertaken. At the same time, in exercise of their enormous power, the Courts should not be called upon to undertake governmental duties or
functions. The Courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The
Courts must, therefore, act within their judicially permissible limitations to uphold the rule of law and harness their power in public interest. It is
precisely for this reason, in matters of policy, the Courts will not interfere. When there is a valid law, requiring the Government to act in a particular
manner, the Courts ought not to, without striking down the law, give any direction, which is not in accordance with law.
In BALCO Employees Union (Regd.) Vs. Union of India and Others, , it is held by the Supreme Court that in the case of policy decision on
economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the
judgment of the experts, who may have arrived at a conclusion, unless the Courts are satisfied that there is illegality in the decision itself.
In D. Navinchandra and Co. and Others Vs. Union of India (UOI) and Others, , the Apex Court has held that policies are high public policies
formulated by the Government in public interest and there can be no question of principle of estoppel being involved in the application of such
policies.
The policy in question had been upheld by a Division Bench of the Bombay High Court, so also subsequently by the Supreme Court by a
speaking order in S.L.P.(Civil) No. 7488/2003, dated 05.05.2003, it is for which reason the petitioner had not challenged the policy. Therefore,
under Article 141 of the Constitution, the law declared by the Supreme Court is binding on all Courts, including this Court in the present case.
A useful reference can be made in this behalf to the decision of the Supreme Court in Kunhayammed and Others Vs. State of Kerala and
Another, , wherein it has been held that if the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave,
then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the
meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by
the Supreme Court, which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of
judicial discipline.
With regard to rules of sub silentio and per incurium, the contention of the learned Senior Counsel for the petitioner is that a decision, which is
not express and is not founded on reasons, cannot be deemed to be a law declared to have a binding effect as is contemplated under Article 141
of the Constitution.
On this aspect, it is to be stated that a decision shall be construed to be sub silentio and per incurium, if, in that case, a statute or rule having
statutory effect was not brought to the attention of the Court, which means some applicable rule of law was missed by the Court and the Court
would have decided the case differently if the material had been argued before the Court. The significance of a judgment having been decided sub
silentio and per incurium is that it need not be followed as a precedent by a lower Court.
In the case before the Bombay High Court, the petitioner therein, namely, P & O Australia Ports Pty Limited challenged the decision of
Jawaharlal Nehru Port Trust in preventing it and its associates from participating in the tender for the conversion of bulk terminal to a container
terminal in the same port, where it was already an operator, whereupon, the policy decision had been upheld by a Division Bench of the Bombay
High Court and subsequently by the Supreme Court, by a speaking order, based on which, the said policy, though has not been challenged in this
case, has an application to the case of the petitioner and the relief sought for thereupon. Though the learned Senior Counsel for the petitioner has
cited many a decision on this point, I do not see the applicability of the same to the decisions of the Bombay High Court and also the Supreme
Court, as the said decisions were rendered in the cases, wherein exactly the similar issue, as in the present case, fell for consideration before the
said Courts, holding that the policy decision, which was taken by the Government in public interest, could not be interfered with by way of judicial
review.
As far as the contention of the learned Senior Counsel for the respondents that the petitioner should have invoked the arbitration under Clause
15 of the Licence Agreement is concerned, it is to be mentioned that the petitioner is only aggrieved by the decision of the Government of India to
debar him from the bid for 8th berth and the Government of India is not a party to the Licence Agreement. Therefore, the arbitration clause can be
invoked only between the parties to the Licence Agreement viz., the petitioner and the second respondent, but not the petitioner and the
Government of India.
In view of my elaborate discussions in the foregoing paragraphs and following the ratio laid down by the Apex Court in the judgments referred
to above, this Writ Petition is dismissed. No costs. Consequently, the connected M.P.Nos.1 to 3 of 2009 are closed.