Bombay High Court
Metallurgical Products (India) ... vs Government Of India Thru The ... on 11 April, 2023
Bench: K.R. Shriram, Rajesh S. Patil
2023:BHC-AS:10708-DB
1/34 WP-2093-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2093 OF 2021
Metallurgical Products (India) Pvt. Ltd. )
CIN : U28910MH2001PTC133767 )
A company incorporated under the Companies )
Act, 1956 and having its registered office at )
T-27, MIDC, Taloja, District Raigad - 410 208, )
Maharashtra ) ....Petitioner
V/s.
1. Government of India )
through the Secretary, Department of Atomic )
Energy, having its office at Anushakti Bhavan, )
Chhatrapati Shivaji Maharaj Marg, Mumbai - )
400 001 )
2. Atomic Energy Regulatory Board )
through the Head, Operating Plants Safety )
Division (OPSD), having its office at Niyamak )
Bhavan, Anushakti Nagar, Mumbai - 400 094 )
3. IREL (India) Ltd. )
(Formerly Indian Rare Earths Ltd.) )
A Government of India Undertaking Department )
of Atomic Energy having its registered address )
at ECIL Building, Plot No.1207, Veer Savarkar )
Marg, Off. Siddhivinayak Temple, Prabhadevi, )
Mumbai - 400 028 ) ....Respondents
----
Mr. Sharan Jagtiani, Senior Advocate a/w. Ms. Gulnar Mistry, Mr. Priyank
Kapadia, Ms. Anuja Jhunjhunwala, Ms. Rukshin Ghiara and Mr. Aditya
Marwal i/b. M. Mulla Associates for petitioner.
Mr. Anil C. Singh, ASG a/w. Mr. Aditya Thakker, Mr. Y.R. Mishra and Mr. Anil
D. Yadav for respondent nos.1 and 2.
Mr. Nitin Thakker, Senior Advocate a/w. Mr. Pratish P. and Mr. Sameer
Shaikh i/b. M/s. Consulta Juris for respondent no.3.
Mr. A.I. Patel, AGP a/w. Ms. Kavita N. Solunke, AGP for State.
----
CORAM : K. R. SHRIRAM & RAJESH S. PATIL, JJ.
RESERVED ON : 31st MARCH 2023
PRONOUNCED ON : 11th APRIL 2023
Gauri Gaekwad
::: Uploaded on - 11/04/2023 ::: Downloaded on - 13/04/2023 09:39:01 :::
2/34 WP-2093-2021.doc
JUDGMENT (PER K.R. SHRIRAM, J.) :
1 Petitioner is engaged in the production/conversion/ processing
of Columbite and Tantalite Ores into high quality Niobium and Tantalum
products. As a result of the said conversion process, a radioactive Leach
Residue/Slag (hereinafter referred to as "Leach Residue") in the nature of a
bi-product is generated. The import of the Columbite and Tantalite Ores is
regulated by respondent no.1 and respondent no.2 under the Atomic Energy
Act 1962 (hereinafter referred to as "the Act"). The Leach Residue generated
by petitioner containing Uranium and other Rare Earth Oxides (hereinafter
referred to as "REO") are required to be disposed in accordance with the
provisions of the Act, Rules and Guidelines framed thereunder by
respondent no.2. It is common knowledge that Uranium is a radioactive
metal and as Uranium decays, it releases radiation and forms decay
products thereby causing radiation in the environment.
2 The Leach Residue also contains Uranium and Thorium and
other radioactive material. Therefore, the Leach Residue should either be
handed over to facilities for further recovery of Uranium/Thorium values or
stored for 200 years as per the directions of respondent no.1.
3 The radioactive Leach Residue is disposed through Government
companies under the administrative control of respondent no.1.
Gauri Gaekwad
3/34 WP-2093-2021.doc
4 Way back in 2002, petitioner informed respondent no.1 about
its proposal of setting up a plant to generate Niobium and Tantalum by
processing/converting Columbite and Tantalite Ores. Petitioner also
informed respondent no.1 that it will generate Uranium bearing residue
which respondent no.1 could process for usable Uranium products. It is
petitioner's case that respondent no.1 assured petitioner that it will make
arrangements for the process and disposal of the Leach Residue as per the
Atomic Energy Regulatory Board (hereinafter referred to as "AERB")
Guidelines. By a letter dated 4th April 2003, respondent no.3 informed
petitioner that the responsibility of periodically recovering REO from Leach
Residue has been entrusted by respondent no.1 to respondent no.3. This
was followed by an Offtake Agreement dated 10 th August 2004 being
entered into between petitioner and respondent no.3 under which petitioner
agreed to supply the residue to Rare Earths Division of respondent no.3 at
Alwaye, Kerala and respondent no.3 agreed to purchase on the terms and
conditions agreed upon thereunder. The agreement provides for what kind
of residue will be generated, respondent no.3 shall pick up and transport the
same to Alwaye at the cost of petitioner and the cost which respondent no.3
would pay to petitioner. The agreement also provides, if REO contained is
less than 1% in the residue, then no charge and if it is between 1% to 5%,
then respondent no.3 will pay to petitioner Rs.1000/- per kg. The
Gauri Gaekwad
4/34 WP-2093-2021.doc
agreement was for a period of two years only to be renewed by mutual
consent. The price structure also was to be negotiated after one year. The
same agreement was renewed periodically by entering into fresh agreements
and the last such agreement was dated 8 th July 2015. This last agreement
was also valid only for two years upto 27 th March 2017. Clause 10 in the
first agreement dated 10th August 2004 and Clause 11 in the subsequent
agreements are identically worded and read as under :
"10. This agreement shall be intially valid for two years and
shall be renewed by mutual consent. The price structure
however may be negotiated after one year.
11. This agreement shall be initially valid for two years upto
[.......] and shall be renewed by mutual consent. The price
structure however may be negotiated after one year."
5 When petitioner sent the agreement for renewal for a further
period of two years from 2017 to 2019, respondent no.3, by a letter dated
12th January 2018, informed petitioner that respondent no.1 has directed
respondent no.3 not to renew the agreement with petitioner which has
already expired on 27th March 2017. This resulted in communication back
and forth including respondent no.1 calling upon petitioner to submit
purchase orders for Leach Residue while applying for renewal of the import
licenses but ultimately, after allegations and counter allegations and
exchange of various correspondences, this petition came to be filed. The
details of those correspondences need not be gone into for the purpose of
this petition. Therefore, there was no open ended agreement or any
Gauri Gaekwad
5/34 WP-2093-2021.doc
agreement was terminated before its expiry.
6 It is petitioner's case that petitioner set up Columbite and
Tantalite processing plant in 2002-2003 on the basis of assurances by
respondent no.1, otherwise it would not have been feasible in India. There
is no change in the Government policy pertaining to processing of Columbite
and Tantalite Ores in India in last 20 years despite which respondent no.1
has decided to prohibit respondent no.3 from entering into renewal of the
Offtake Agreement. It is petitioner's case that a non-speaking directive has
been issued by respondent no.1 to respondent no.3 (5 th January 2018)
pursuant to which respondent no.3, by a letter dated 12 th January 2018,
decided not to renew the agreement with petitioner for collection,
processing and safe disposal of the Leach Residue. It is petitioner's case that
the non issuance of license to petitioner to import Columbite and Tantalite
Ores amounts to imposing unreasonable conditions.
7 According to petitioner, since it set up the Columbite and
Tantalite processing plant on the basis of arrangements and assurances by
respondent no.1, if respondent no.3 is unable to pick up the Leach Residue,
respondent no.1 should appoint a suitable alternate to respondent no.3.
Even if respondent no.3 could not renew the Offtake Agreement, respondent
no.1 was nonetheless required to propose an alternate disposal plan and/or
an alternate agency to assist in the disposal of the said Leach Residue, as
Gauri Gaekwad
6/34 WP-2093-2021.doc
respondent no.1 retains a monopoly of the disposal of radioactive
substances under the Act and Guidelines. Any problem faced by respondent
no.3 cannot be sufficient reason for respondent no.1 to close petitioner's
plant. The stand of respondent no.1 or respondent no.3 that there exists no
environmentally sustainable method and/or disposal plan to extract the
Uranium and dispose of the said Leach Residue is an after thought because
in the earlier correspondence only shortage of space was cited. Respondent
no.3 has developed suitable processing technology with the approval of
respondent no.2 and, therefore, the Court should issue a writ of mandamus
directing respondents to renew the Offtake Agreement by either directing
respondent no.1 by itself or through any other public sector undertaking or
Government company under its control to provide a periodical disposal plan
to dispose the Leach Residue. Petitioner is also seeking the Court to issue a
writ of mandamus to direct respondents to consider issuance of import
licenses to petitioner for importing Columbite and Tantalite Ores in a time
bound manner without insisting on a disposal plan, etc. This prayer for
issuance of import licenses would arise only if petitioner succeeds in the first
relief.
8 Petitioner has sought the following final reliefs in the petition :
"(a) that this Court be pleased to issue a writ of mandamus
directing respondents to renew the Offtake Agreements on
same or similar terms as has been executed in the
preceding 15 years within such time as this Court deems fit;
Gauri Gaekwad
7/34 WP-2093-2021.doc
(a-1) that this Court be pleased to issue a writ of
mandamus or any other writ/order/direction in the nature
of mandamus directing respondent no.1 by itself or through
any other public sector undertaking, government company,
corporation, association of persons or any other
instrumentality under its control to provide for a disposal
plan to periodically collect and dispose of the Leach
Residue from petitioner's plant at Taloja;
(b) that this Court be pleased to issue a writ of mandamus
directing respondents to consider issuance of Import
Licenses to petitioner for importing Columbite and Tantalite
Ores in accordance with law in a time bound manner and
without insisting on a disposal plan;
(c) alternatively, that this Court be pleased to issue a writ of
mandamus directing respondent no.1 to designate any
authorized person to enter into an Offtake Agreement with
petitioner for processing and/or disposing of the Leach
Residue within such time and on such terms as this Court
deems fit;
(d) that this Court be pleased to issue a writ of certiorari
calling forth the records and proceedings from respondents
and quashing and setting aside the order dated 16 th May
2019 which directs petitioner to stop processing the said
Ores immediately till further orders."
Petitioner is seeking these reliefs, as we will note later, purely
on the ground of legitimate expectation, directly affecting its rights under
Article 14 of the Constitution of India.
9 The grounds raised in the petition are :
(a) the activity of disposal of radioactive substances is within
the exclusive domain of respondents, respondents refusal to dispose the
Leach Residue generated during the manufacturing process undertaken by
petitioner is arbitrary, unfair and violative of Article 14 of the Constitution
of India;
Gauri Gaekwad
8/34 WP-2093-2021.doc
(b) the refusal to renew the Offtake Agreement without
designating an alternate authority to substitute respondent no.3 is an
arbitrary and unreasonable exercise of discretion and abuse of respondents'
status as a monopoly in the field of radioactive substance disposal;
(c) respondents direction placing the onus upon petitioner to
formulate a disposal plan for disposal of radioactive substances is ex-facie
arbitrary given that only respondent no.1, government companies and
authorities and corporations established by it are empowered to undertake
such activity as expressly stated in respondents' affidavit dated
29th November 2019;
(d) the disposal plan does not contemplate petitioner taking
any steps either to set up any infrastructure or acquire any technology as
would normally be the case in any ordinary factory or effluent treatment
and disposal obligation under other laws. Under the strict regulatory regime
governing disposal of radioactive substances, it is only respondents who are
authorized to undertake disposal activities, for obvious reasons.
Respondents insistence that petitioner devise a disposal plan is entirely
untenable against the regulatory regime within which respondents and
petitioner operate, which fact is known to respondents as is evident from
their affidavit. The requirement imposed upon petitioner to formulate a
disposal plan is ultra vires the Atomic Energy Act and is, therefore, arbitrary,
Gauri Gaekwad
9/34 WP-2093-2021.doc
unreasonable and unconstitutional;
(e) in the event respondent no.1 is of the view that respondent
no.3 is not to undertake disposal activities for the Leach Residue generated
by petitioner, respondent no.1 is bound to designate any other authorized
entity that will undertake this task since petitioner has set up its factory and
plant on the basis of a solemn representation made by respondents that it
will periodically dispose of the Leach Residue;
(f) the conduct of respondents is discriminatory since petitioner
verily believes that other government facilities such as NFC are involved in
the same activity, i.e., processing the said Ores which results in the
generation of Leach Residue, which is disposed of by or under directions of
respondent no.1. Despite repeated requests, respondents refuse to disclose
the authorities who are empowered to dispose of Leach Residue generated
by petitioner. The combined effect is that petitioner is left with no practical
option to enter into discussions with any authorized person who con
undertake the process of radioactive substances disposal. The disparate
treatment of petitioner and other entities which are engaged in similar
activities is arbitrary, unreasonable and violative of Article 14 of the
Constitution of India;
(g) the insistence on having a disposal plan to be submitted by
petitioner is patently arbitrary, high handed and the refusal to issue Import
Gauri Gaekwad
10/34 WP-2093-2021.doc
Licenses for this reason is equally arbitrary, unreasonable and violative of
Article 14 of the Constitution of India. Additionally, it has the effect of
bringing the operations of petitioner to a virtual standstill;
(h) the order of closure of operations on the grounds that
petitioner does not have a disposal plan is arbitrary and unreasonable since
it is the effect of bringing the operations of petitioner to a virtual standstill
for no fault of petitioner purely as a result of the discontinuance of the
original disposal plan vide letter/direction of respondent no.1 dated
5th January 2018. Petitioner has always been a fully compliant organization
and the fact that there is presently no disposal plan is a circumstance
created entirely due to respondent no.1's failure to designate an authorized
person who may undertake the disposal of Leach Residue on same or similar
terms;
(i) respondent no.1's direction vide letter dated 16 th May 2019
to stop processing Columbite and Tantalite Ores is arbitrary, unjust and
highly discriminatory as restricting the processing of these Ores at
petitioner's plant leads to virtual monopoly of NFC. Not only has this grossly
hampered the operations of petitioner causing grave harm and loss to
petitioner but also made the Registration Certificate issued by respondent
no.2 on 27th April 2018 valid for a period of 5 years till 30 th April 2023
infructuous as petitioner was unable to conduct processing of the Columbine
Gauri Gaekwad
11/34 WP-2093-2021.doc
and Tantalite Ores".
10 Mr. Jagtiani for petitioner submitted :
(a) the decision to discontinue the disposal plan in the form of
an Offtake Agreement or otherwise is an administrative decision and
constitutes an exercise of discretion that is amenable to challenge on the
principles of legitimate expectations of petitioner.
The doctrine of legitimate expectation, as held by the Apex
Court in State of Jharkhand and Ors. V/s. Brahmputra Metallics Ltd., Ranchi
and Ors.1, is a facet of Article 14 of the Constitution of India and it emanates
from the principles of fairness and non-arbitrariness that must inform the
conduct of public authorities.
Article 14 of the Constitution of India mandates that in all its
actions, the State is bound to act fairly, reasonably and in a transparent
manner and even in contractual sphere it is applicable.
Where the circumstances of the case establish a valid basis of a
legitimate expectation before an adverse decision is taken, to satisfy this
requirement of non-arbitrariness in a State action, it is necessary to consider
and give due weight to the reasonable or legitimate expectations of the
persons likely to be affected by the decision or else that unfairness in the
exercise of the power may amount to an abuse or excess of power apart
from affecting the bonafides of the decision in a given case.
1. (2020) SCC Online SC 968
Gauri Gaekwad
12/34 WP-2093-2021.doc
(b) The Apex Court in Ganesh Bank of Kurundwad Ltd. V/s.
Union of India and Ors.2, has held that an administrative decision of the
present nature is liable to challenge on the principles of "Wednesbury
reasonableness". This would mean a person entrusted with a discretion must
direct himself properly in law. He must call his own attention to the matters
which he is bound to consider. He must exclude from his consideration
matters which are irrelevant to what he has to consider. He cannot take a
decision which no reasonable person could even dream of taking or consider
extraneous matters. The decision to discontinue collecting Leach Residue
was vitiated because it is entirely uninformed by any discernable reason and
is without any legitimate basis;
(c) No reason was given as to why the decision was taken not
to extend the agreement and reasons cannot be now supplanted in affidavits
in reply when the decision is challenged. When wide powers are given to the
State, then it is obligatory on the part of State to record clearly its reasons in
the order itself for exercising such power. Despite being called upon,
respondents have not produced anything on record to indicate the reason
for not extending the agreement;
(d) The Apex Court in State of Punjab V/s. Bandeep Singh and
Ors.3, has held that every decision of an administrative or executive nature
2. (2006) 10 SCC 645
3. (2016) 1 SCC 724
Gauri Gaekwad
13/34 WP-2093-2021.doc
must be a composite and self sustaining one, in that it should contain all the
reasons which prevailed on the official taking the decision to arrive at his
conclusion. It is beyond cavil that any authority cannot be permitted to
travel beyond the stand adopted and expressed by it in the impugned action.
For the fact that contemporaneous records have not been produced, the
Court should conclude that the decision to discontinue the agreement was
bad or was not justified;
(e) The Apex Court in Manohar Lal Sharma V/s. Union of India
and Ors.4, held that in a writ proceeding before the Court, free flow of
information from petitioners and State is an important step towards
Governmental transparency and openness, which are celebrated values
under our Constitution. Even though the Apex Court held that it is a settled
position of law that in matters pertaining to national security, the scope of
judicial review is limited, that does not mean that the State gets a free pass
every time the spectre of national security is raised. Although the Court
should be circumspect in encroaching upon the domain of national security,
no omnibus prohibition can be called for against judicial review.
Respondents' argument that this was a case of environmental issue or
international issue does not mean the Court should be circumspect.
There is no pleading or material which justifies that the disclosure of
reasons for not extending the contract would prejudicially affect the
4. 2021 SCC Online SC 985
Gauri Gaekwad
14/34 WP-2093-2021.doc
sovereignty and integrity of India, the security, strategic, scientific or
economic interests of the State. The fact that respondents have not
produced contemporaneous material for taking those decisions, the only
inference that can be drawn is that there is no discussion or material relied
upon in arriving at the decision to discontinue providing a disposal plan to
petitioner;
(f) Respondents have taken contradictory stand in as much as it
is the case of respondent no.3 that the facilities for processing Leach Residue
by respondent no.3 were dismantled and modified to suit production of high
purity rare earth generation in national interest. This is incorrect because
even after 2012, the agreement was renewed from 31 st January 2012 and
28th March 2015;
(g) The case of respondents that processing of miniscule Leach
Residue in a standalone facility was not economically viable or
environmentally benign should not be accepted because it has not been
demonstrated with reference to any objective material. If respondent no.3
could not pick up the Leach Residue, respondent no.1 should direct Nuclear
Fuel Complex (hereinafter referred to as "NFC") which is under respondent
no.1 to collect the residue. It is respondents' case that NFC has a small scale
experimental facility to carry out research and development and the small
amount of Leach Residue generated by NFC can be stored in near surface
Gauri Gaekwad
15/34 WP-2093-2021.doc
disposal facilities or recycled is an incorrect statement because the website
of NFC states that it has defined commercial operations and does not carry
out small scale experimental research;
(h) The primary challenge is to arbitrariness and lack of fairness
in State action and mere existence of a contractual element does not affect
this Court's powers under Article 226 of the Constitution of India. It is well
settled that a Court may interfere, in the exercise of its writ jurisdiction, in
matters which are commercial or contractual in nature but which otherwise
have a public law element. In the case at hand, there was a public law
element because :
(a) the Union was aware, from the outset, of petitioner's
inability to process the Leach Residue without assistance from the Union;
(b) petitioner was encouraged to set up its plant for processing
Columbite and Tantalite Ores on the representation by the Union that it
would provide a disposal plan for the processing of Leach Residue that
would be generated and petitioner, at a considerable cost, set up its plant on
the strength of this assurance;
(c) the State enjoys a monopolistic position when it comes to
the activity of providing a disposal plan for disposal of Leach Residue;
(d) the Union without any demonstrable cause and without
providing any opportunity to petitioner to be heard abruptly discontinued
Gauri Gaekwad
16/34 WP-2093-2021.doc
the disposal plan that had been in place for over ten years and the conduct
of the Union in arbitrarily discontinuing the disposal plan has affected
petitioner's business and brought it to a complete stand-still, directly
affecting its rights under Articles 14 and 19(1)(g).
Gas Authority of India Ltd. V/s. M/s. Indian Petrochemicals
Corporation Ltd.5, ABL International Ltd. V/s. Export Credit Guarantee
Corporation of India Ltd.6 and Shrilekha Vidyarthi (Kumari) V/s. State of
U.P.7 are the precedents;
(i) In Shimnit Utsch India (P) Ltd. V/s. W.B. Transport
Infrastructure Development Corporation Ltd.8 and Union of India V/s.
International Trading Co.9, the Apex Court has held that an executive or
administrative order termed as a policy decision is not beyond the pale of
judicial review. The Court may always exercise judicial review to ascertain
whether the decision is in fact a policy decision and whether the change in
policy on the basis of which licenses or permits are not renewed is founded
on Wednesbury reasonableness or is amenable to challenge being arbitrary,
irrational and perverse. Therefore, the Court should interfere and grant the
reliefs as prayed for.
5. 2023 SCC Online SC 116
6. (2004) 3 SCC 553
7. (1991) 1 SCC 212
8. (2010) 6 SCC 303
9. (2003) 5 SCC 437
Gauri Gaekwad
17/34 WP-2093-2021.doc
11 At the outset, the learned ASG submitted that the reliefs as
sought for cannot be granted as petitioner has not demonstrated any right
that he has against respondents. Therefore, the question of the Court
considering petitioner's case on the doctrine of legitimate expectation would
not arise. The learned ASG submitted as under :
(a) No factual foundation as to the alleged right and the nature
of right claimed by petitioner has been laid in the petition;
(b) The averments in the petition do not even set out any
material particulars as to who from respondents gave the representation or
what was the nature of the representation or the period for which the
representation was to continue. The documents produced do not establish
any right in favour of petitioner to claim the reliefs sought because it was
purely contractual matter between petitioner and respondent no.3;
(c) The agreements clearly provide that it is valid only for a
period of two years to be renewed thereafter by mutual consent which
means petitioner was always aware that respondents may not consent.
Petitioner never protested even during renewal when identical words were
used. In such situation, the question of any legitimate expectation or breach
of Article 14 does not arise. In such situation, how can there be any writ of
mandamus issued to direct respondent no.3 to renew the agreement or
direct respondent no.1 to engage another agency to collect the Leach
Gauri Gaekwad
18/34 WP-2093-2021.doc
Residue;
(d) Petitioner did not want to process the residue because he
did not have the necessary technology for that and petitioner had no plan
for processing the residue in terms of space, manpower and other related
resources. Therefore, petitioner asked respondents to help in picking up the
leach residue. At the relevant point of time, respondents decided to consider
and pick up the leach residue and since it was not sure how far it would be
commercially or otherwise viable, the agreement with respondent no.3 was
entered into only for two years at a time to be renewed by consent.
Respondent decided not to continue. How can respondent be faulted for
that?;
(e) In the petition, petitioner has made incorrect statements to
say that it was encouraged to establish a plant and factory at Taloja to
undertake processing of Columbite and Tantalite Ores because the Leach
Residue generated in the process would provide respondent no.1 an
indigenous and perpetual source of supply of Uranium and hence,
respondent no.1 assured petitioner of regular collection and disposal of
Leach Residue. These averments are contrary to the contents of letter dated
11th May 2002 from petitioner to respondent no.1 and the agreements
entered into between the parties where petitioner has agreed to supply
Leach Residue to respondent no.3. Recital 3 provides " MPIL has agreed to
Gauri Gaekwad
19/34 WP-2093-2021.doc
supply residue (A) at Rare Earths Division of IREL at Alwaye, and IREL have
agreed to purchase at the terms and conditions agreed upon hereunder ."
The agreement was a pure commercial contract and has nothing to do with
any rights under Article 14 or Article 19 or doctrine of legitimate
expectation;
(f) The department of Atomic Affairs as an expert in the field
has taken a policy decision that Leach Residue is to be treated as waste, as
the department does not foresee any further use of this Leach Residue.
When the Government has decided as a matter of national policy to
dismantle the disposal plant of respondent no.3 in national interest since it
was not economically viable and was environmentally harmful, how can
petitioner seek the reliefs as sought in the petition?;
(g) To Mr. Jagtiani's submissions that respondents' refusal to
place on record the details of what transpired for the decision not to extend
the contract, it was submitted that there is always a presumption that
Government acts reasonably and in a non-arbitrary manner and the burden
is on petitioner to dislodge the same by producing any material. In the case
at hand, there is no material to support such an allegation but the fact that
the processing of Leach Residue is not in public interest has not been
countered by petitioner. Petitioner's case that NFC carries out commercial
projects and respondent no.1 should pick up the Leach Residue through NFC
Gauri Gaekwad
20/34 WP-2093-2021.doc
is also misplaced because NFC only carries out a pilot project and does not
commercially produce the same. It is a unit within the Department of
Atomic Energy and cannot be compared to a private player. Petitioner and
NFC are not part of the same class. It is settled law that larger public
interest would always prevail over private interest and a Writ Court would
act in furtherance of the larger public interest and not against it;
(h) The Apex Court in Maharashtra State Board of Secondary
and High Secondary Education and Anr. V/s. Paritosh Bhupeshkumar Sheth
and Ors.10, has held that the Court cannot sit in judgment over the wisdom
of the policy evolved by the legislature and the subordinate regulation
making body. It may be a wise policy which will fully effectuate the purpose
of the enactment or it may be lacking in effectiveness and hence, calling for
revision and improvement but the Court cannot strike it down on the
ground that, in its opinion, it is not a wise or prudent policy. There is no
scope for interference by the Court unless the particular provision impugned
before it can be said to suffer from any legal infirmity, in the sense of it
being wholly beyond the scope of the regulation making power or it being
inconsistent with any of the provisions of the parent enactment or in
violation of any of the limitations imposed by the Constitution;
(i) The Division Bench of this Court in Gorakhnath Shankar
Nakhwa and Ors. V/s. Municipal Commissioner of Municipal Corporation of
10. (1984) 4 SCC 27
Gauri Gaekwad
21/34 WP-2093-2021.doc
Greater Mumbai and Ors.11, has held that the aspect of security threats has
to be considered day to day considering the prevailing situation and not on
the basis that no untoward incident took place since the time this agreement
with petitioner was entered into. This judgment also lays down that the
basic principle which must guide the Court in arriving at its determination is
that there is always a presumption that the Government action is reasonable
and in public interest and it is for the party challenging its validity to show
that it lacks in reasonableness or is not in conformity with public interest.
This burden on petitioner is a heavy one and it has to be discharged to the
satisfaction of the Court by proper and adequate material. The affidavits
filed on behalf of respondents do not indicate anywhere that the decisions
taken were not reasonable or were against public interest and in any case,
petitioner has not demonstrated that those decisions were unreasonable or
against public interest. It is common knowledge that Uranium is a very
radioactive metal and very harmful to the environment, plants, animals and
humans and if the Government once having satisfied the Court about this
concern, the Court cannot substitute the threat perceived by the
Government and substitute its perception by another view.
(j) The Apex Court in Yamuna Expressway Industrial
Development Authority etc. V/s. Shakuntla Education and Welfare Society
11. 2022 SCC Online Bom. 6703
Gauri Gaekwad
22/34 WP-2093-2021.doc
and Ors.12 has held that the law is settled that the doctrine of promissory
estoppel is applicable against the Government also particularly where it is
necessary to prevent fraud or manifest injustice. But this doctrine cannot be
pressed into aid to compel the Government or the public authority to carry
out a representation or promise which is contrary to law or which is outside
the authority or power of the officer of the Government or of the public
authority to make. To invoke the doctrine of promissory estoppel, clear
sound and positive foundation must be laid in the petition itself by the party
invoking the doctrine and bald expressions, without any supporting
material, to the effect that the doctrine is attracted because the party
invoking the doctrine has altered its position relying on the assurance of the
Government would not be sufficient to press into aid the doctrine. The
doctrine of promissory estoppel cannot be invoked in the abstract and the
Courts are bound to consider all aspects including the results sought to be
achieved and the public good at large, because while considering the
applicability of the doctrine, the Courts have to do equity and the
fundamental principles of equity must forever be present to the mind of the
Court, while considering the applicability of the doctrine. The doctrine must
yield when the equity so demands if it can be shown having regard to the
facts and circumstances of the case that it would be inequitable to hold the
Government or the public authority to its promise, assurance or
12. 2022 SCC Online SC 655
Gauri Gaekwad
23/34 WP-2093-2021.doc
representation.
First of all there was no promise made by the Government to
petitioner and in any case, as elaborated in the affidavits filed on behalf of
respondents, the Court should keep in mind the results sought to be
achieved and the public good at large. Uranium is a dangerous item. This
apart there is no clear, sound and positive foundation laid in the petition by
petitioner for invoking this doctrine. Only bald expressions without any
supporting material has been pressed in aid of this doctrine. In Yamuna
Expressway (Supra) the Apex Court has held that a policy decision could be
subject to judicial review only if it is unconstitutional or dehors the
provisions of any Act and Regulations or any delegatee has acted beyond its
power of delegation or the executive policy is contrary to the statutory or a
larger policy. None of this is even averred in the petition;
(k) Most importantly, the Apex Court, in State of Bihar and Anr.
V/s. Sachindra Narayan and Ors.13, has held that legitimate expectation is
one of the grounds for judicial review but unless a legal obligation exists,
there cannot be any legitimate expectation. The legitimate expectation is not
a wish or a desire or a hope, therefore, it cannot be claimed or demanded as
a right.
The learned ASG submitted that the petition, therefore,
deserves to be dismissed.
13. (2019) 3 SCC 803
Gauri Gaekwad
24/34 WP-2093-2021.doc
12 Mr. Thakker, appearing for respondent no.3 adopted the
submissions of the learned ASG. Mr. Thakker also submitted, relying on an
affidavit filed on behalf of respondent no.3, that between 2007 to 2011
petitioner did not generate any Leach Residue. The plant of respondent no.3
was dismantled in 2012, and no processing of Leach Residue was done
thereafter though they picked up some small quantities later. He also
submitted that admittedly, during the entire period, only about 43 Tonnes of
Leach Residue has been delivered by petitioner. So no case is made out by
petitioner to claim any relief.
13 First of all, what we have to consider is whether there was any
legal obligation on the part of respondents towards petitioner. If the answer
is negative, then there can be no legitimate expectation and therefore, the
other issues raised or submissions made by petitioner need not be even gone
into. In our view, there was absolutely no legal obligation on the part of
respondents because no clear, unambiguous and unqualified assurance was
given to petitioner by respondent no.1.
14 The fact that there was no legal obligation on the part of
respondents can be found from the first letter dated 19 th April 2002 annexed
to the petition. The letter is addressed to respondent no.1 in which
petitioner states as under :
xxxxxxxxxxxxxx We place on record our sincere appreciation
to you for evincing keen interest in our endeavors for setting
Gauri Gaekwad
25/34 WP-2093-2021.doc
up a Nb-Ta processing plant at Taloja with imported
columbite-tantalite concentrates. We had brought to your
kind attention the fact that these concentrates contain not an
insignificant amount of U3O8. Based on your advice we have
submitted a note to DAE and I am enclosing a copy of the
same for your kind perusal.
You may kindly note that the process will generate uranium
bearing residue. Needless to add that this uranium bearing
residue cannot remain accumulated in the plant. The plant
will eventually yield nearly 8 tones to 10 tones of U 3O8
content in the residue per annum. In the second phase, when
we increase the production capacity, U 3O8 production is also
expected to go up accordingly. Kindly bestow your best
consideration to take charge of this uranium bearing residue
and have it collected and processed to yield usable uranium
products for use in your programmes.
Therefore, this letter indicates that it was not respondent no.1
who encouraged or pushed petitioner to set up this plant but it was
petitioner who wanted to set up the plant and for that requested Director of
respondent no.1/2 to take charge of the Uranium bearing residue by having
it collected and processed to yield usable Uranium products for use in
programmes of respondent no.1.
15 The second letter is dated 11th May 2002 from petitioner to
respondent no.1, copy whereof is annexed to the petition, which reads as
under :
Subject : Niobium/Tantalum processing Plant
This is further to our letter No.MPIL/2002/4/01 dated
19th April 2002, wherein we approached your goodself for
getting necessary clearance from your Department so as to
enable us to go ahead with our project on Niobium and
Tantalum processing at MIDC, Taloja, Navi Mumbai. Since we
have already invested with Development Consultants Pvt.
Limited and purchased the land at MIDC, Taloja, we would
Gauri Gaekwad
26/34 WP-2093-2021.doc
be grateful if you can kindly issue the necessary clearances to
go ahead.
While on the subject, we would like to add for your kind
information that the proposed project at Taloja does not
involve any plan to process the radio-activity bearing residues
due to obvious reasons, which we are sure would be of great
interest to your Department. While we are prepared to sell
this residue at a negotiated price, we would place on record
that accordingly to our preliminary estimate the radioactive
material of your interest would be generated to the tune of
50 to 60 Tons per year to start with and may ultimately touch
to the figure 100 TPY. The reasons for not processing this
radioactive residue are two fold :
1. We do not have necessary technology to process this
residue and hence we will not get the necessary clearances
from AERB to begin the project.
2. We have not at all planned for this processing in terms of
space, manpower and other related resources.
We are looking forward to receiving your continued
cooperation and interest in this program, which are at an
advance stage of implementation following, of course,
necessary clearances. Through this program we are taking a
pride enabling ourselves to extend a small assistance to our
motherland.
By this letter, petitioner made it clear that it did not want to set
up a residue disposal process but would sell the residue at a negotiated price
to respondent no.1 and the reason for not processing the radioactive residue
was because it did not have necessary technology to process the residue and
it had also not at all planned for this processing in terms of space,
manpower and other related resources. Petitioner wanted respondent no.1
to assist petitioner. Again this does not indicate any promise or assurance by
respondent no.1 and it was actually petitioner who wanted the help of
respondent no.1.
Gauri Gaekwad
27/34 WP-2093-2021.doc
This would, in our view, demolish petitioner's case that on the
basis of any assurance given by respondent no.1 petitioner set up Columbite
and Tantalite processing plant in 2002-2003.
16 Reliance on an internal communication between respondent
no.3 and respondent no.2 that as directed by Secretary, DAE, respondent
no.3 will periodically remove the residue from the Taloja plant as and when
it becomes operational also is of no assistance to petitioner. This is because
it was petitioner, as noted earlier, who wanted respondent no.1 to pick up
the residue and respondent no.1 gave no assurance to petitioner. This is
further emphasized by the agreements itself between petitioner and
respondent no.3, which for better understanding and appreciation is entirely
reproduced hereinbelow :
1. Indian Rare Earths Limited, a Government of India
Undertaking and a Company incorporated under the Indian
Companies Act, 1956, having its Registered Office at Plot
No.1207, Veer Savarkar Marg, Prabhadevi, Mumbai 400 028
(hereinafter referred to as "IREL" for brevity), on the one part
and
2. Metallurgical Products (India) Pvt. Limited a Company
incorporated under the Indian Companies Act, 1956, having
its Registered office at T-27 MIDC, Taloja, Dist. Raigad,
Maharashtra (herein after referred to as "MPIL" for brevity),
on the other part.
WHEREAS
1. MPIL has set up a facility in the MIDC, Taloja for
processing of imported Columbite-Tantalite ore and
recovering there from pure oxide and salts of Niobium and
Tantalum during Phase-1 of its operation.
2. After recovery of Niobium and Tantalum values form the
ore during Phase-1 operation, considerable quantity of
Gauri Gaekwad
28/34 WP-2093-2021.doc
residue (A) is expected to be generated which would contain
more than 1% REO making it mandatory for disposal as per
AREB guidelines. IREL has agreed to process this residue at
its Rare Earths Division Plant at Alwaye, to recover REO
value before its disposal.
3. MPIL has agreed to supply residue (A) at Rare Earths
Division of IREL at Alwaye and IREL have agreed to purchase
at the terms and conditions agreed upon hereinunder.
NOW THEREFORE, THE PARTIES hereby agree as under :
1. MPIL has set up a facility in MIDC, Taloja for processing
imported Columbite-Tantalite ore and after recovery of
Niobium and Tantalum, shall arrange to supply the residue
(A) containing more than 1% (one percent) REO. This
residue (A) will be picked up by transport and escorts
arranged by IREL for delivery at the Rare Earths Division
Plant at IREL at Alwaye. The cost of such transportation
however will be borne by MPIL.
2. Quantity of supply : MPIL would supply every year from
2007 onwards residue (A) containing about 10t of REO. It
shall be responsibility of IREL to transport the material to
Rare Earths Division Plant of IREL at Alwaye but the cost of
handling & transport will be borne by MPIL. Though unlikely
there may be some variations in these quoted quantities.
3. IREL undertakes to make the following payments to MPIL.
Material REO Content % Unit rate/Rs./Kgs REO
delivered at Alwaye
A <1% No charge
B 1% to <5% 1000
All these processes are inclusive of customs duty, surcharge,
and excise duty, sales tax, and value added tax, octroi etc.
including packing, handling and transportation for delivery
at Rare Earths Division of IREL at Alwaye.
4. Quality of supply.
It is expressly agreed upon that MPIL shall not supply residue
(A) containing less than 1% REO. However, considering the
variation in processing Columbite/Tantalite ore the minimum
1% content REO shall be computed as an average over a year
of 12 months. If in a period of 12 months, the REO content
falls below 1% then MPIL shall compensate IREL for the
disposal at such cost to be mutually agreed upon.
Gauri Gaekwad
29/34 WP-2093-2021.doc
5. Payment : For residue (A) payment will be made by IREL
to MPIL on receipt of the material at Alwaye and on
determining the value based on the percentage of REO.
6. All payments shall be based on the analysis to be carried
out by IREL. Three representative samples shall be taken
from each consignment : one will be analyzed by IREL, one
will be kept as neutral sample and one will be analyzed by a
mutually agreed laboratory in case of dispute of the analysis
carried out by IREL. The composition and analytical
procedure shall be as agreed upon in writing.
7. IRE will provide wherever feasible, excise duty exemption
and relevant Sales tax forms.
8. All disputes arising shall be settled by arbitration by sole
arbitrator appointed by the Chairman & Managing Director of
IREL. In case MPIL disagree with the award of arbitrator,
such award can be referred to Secretary, DAE whose decision
shall be final and binding on both the parties.
9. This agreement shall be governed by the Indian Law with
courts having jurisdiction in Mumbai.
10. Notice : Any notice to be issued under this agreement
shall be sent by registered post to the registered office of the
Company herein above mentioned.
11. This agreement shall be initially valid for two years up to
09.08.2008 and shall be renewed by mutual consent. The
price structure however may be negotiated after one year.
12. This agreement recognizes force majeure conditions
beyond the reasonable control of both parties for due
performance of the contract and such force majeure
condition shall be notified within 15 days of onset of such
conditions for temporary suspension during pendency of such
conditions.
(emphasis supplied)
17 Clause 7 is not provided in the first agreement. Rest of the
clauses for all agreements, including the first one are identical. Clause 11
expressly provides that the validity of the agreement was only for two years
and to be renewed by mutual consent. If it was to be renewed by mutual
consent, that would mean that there is a possibility that the other party may
Gauri Gaekwad
30/34 WP-2093-2021.doc
not grant the consent to renew the agreement. Petitioner was always aware
and was happy with such an agreement. It never protested, which it would
have, if petitioner would have set up the plant relying on any assurance of
respondent no.1.
18 We should also note that by letter dated 11 th May 2002,
petitioner had informed respondent no.1 that they are ready to sell the
residue at a negotiated price and as per the preliminary estimate the
radioactive material for respondents' interest would be generated to the
tune of 50 to 60 Tonnes per year to start with and may ultimately touch to
the figure 100 Tonnes per year. This figure was never achieved. As against
this, as submitted by Mr. Thakker, petitioner did not even generate any leach
residue between 2007 to 2011.
Even in the affidavit in rejoinder filed by petitioner, affirmed on
15th December 2021, petitioner has averred that after 2012, respondent no.3
'had lifted radioactive leach residue from petitioner's plant to the extent of
approximately 29 Metric Tonnes, which is almost 67% of the total
radioactive leach residue lifted by respondent no.3.' If 29 Metric Tonnes
comprises of 67% of the total radioactive leach residue lifted by respondent
no.3, then 100% would amount to approximately 43 Metric Tonnes only. In
fact, petitioner in the affidavit has also stated that post 2012, the quantity of
radioactive leach residue lifted was 10.455 Tonnes on 2 nd April 2013, 10.080
Gauri Gaekwad
31/34 WP-2093-2021.doc
Tonnes on 24th February 2016 and 9.240 Tonnes on 22 nd March 2017. This
itself indicates that petitioner was unable to even achieve what it had
promised vide its letter dated 11th May 2002.
19 In such a situation to come and tell the Court that the decision
not to renew the agreement is amenable to challenge under the doctrine of
legitimate expectation of petitioner is utterly baseless. In our view, there was
no legal obligation that ever existed on the part of respondents requiring
this Court to review the decision taken by respondents not to renew the
agreement. We would rely on paragraph 23 of the judgment of the Apex
Court in State of Bihar and Anr. V/s. Sachindra Narayan and Ors. (Supra),
which reads as under :
23. In view of the above judgments, legitimate expectation is
one of the grounds of judicial review but unless a legal
obligation exists, there cannot be any legitimate expectation.
The legitimate expectation is not a wish or a desire or a hope,
therefore, it cannot be claimed or demanded as a right.
Xxxxxxxxxxxxxx
(emphasis supplied)
20 Therefore, in our view, we do not have to consider any other
submissions made by Mr. Jagtiani or response of the learned ASG as to why
respondent no.1 did not instruct respondent no.3 to renew the agreements.
In light of the above view expressed by us, the question of considering
whether there was any procedural impropriety or illegality or irrationality,
viz., Wednesbury reasonableness, does not even arise. The points as to
Gauri Gaekwad
32/34 WP-2093-2021.doc
whether to give consent to renew the agreement is for the decision maker
and not the Court. A party cannot make a claim based merely on legitimate
expectation without anything more. Such a claim ipso facto does not give
him a right. It will be apt in the circumstances to reproduce paragraphs 20
and 21 of Union of India V/s. International Trading Co. (Supra), which read
as under :
20. As was observed in Punjab Communications Ltd. v. Union
of India and Ors., the change in policy can defeat a
substantive legitimate expectation if it can be justified on
"Wednesbury reasonableness". The decision maker has the
choice in the balancing of the pros and cons relevant to the
change in policy. It is, therefore, clear that the choice of
policy is for the decision maker and not the Court. The
legitimate substantive expectation merely permits the Court
to find out if the change of policy which is the cause for
defeating the legitimate expectation is irrational or perverse
or one which no reasonable person could have made. A claim
based on merely legitimate extension without anything more
cannot ipso facto give a right. Its uniqueness lies in the fact
that it covers the entire span of time: present, past and
future. How significant is the statement that today is
tomorrows' yesterday. The present is an we experience it, the
past is a present memory and future is a present expectation.
For legal purposes, expectation is not same anticipation.
Legitimacy of an expectation can be inferred only if it is
founded on the sanction of law.
21. As observed in Attorney General for New Southwale v.
Quin [1990 (64) Australian LJR 327) 'to strike the exercise of
administrative power solely on the ground of avoiding the
disappointment of the legitimate expectations of an
individual would be to set the courts adrift on a featureless
sea of pragmatism. Moreover, the negotiation of a legitimate
expectation (falling short of a legal right) is too nebulous to
form a basis for invalidating the exercise of a power when its
exercise otherwise accords with law; 'If a denial of legitimate
expectation in a given case amounts to denial of right
guaranteed or is arbitrary, discriminatory, unfair or biased
gross abuse of power or violation of principles of natural
justice, the same can be questioned on the well known
grounds attracting Article 14 but a claim based on mere
legitimate expectation without anything more cannot ipso
Gauri Gaekwad
33/34 WP-2093-2021.doc
facto give a right to invoke these principles. It can be one of
the grounds to consider, but the court must lift the veil and
see whether the decision is violative of these principles
warranting interference. It depends very much on the facts
and the recognized general principles of administrative law
applicable to such facts and the concept of legitimate
expectation which is the latest recruit to a long list of
concepts fashioned by the courts for the review of
administrative action must be restricted to the general legal
limitations applicable and binding the manner of the future
exercise of administrative power in a particular case. It
follows that the concept of legitimate expectation is 'not the
key which unlocks the treasure of natural justice and it ought
not to unlock the gates which shuts the court out of review
on the merits', particularly, when the element of speculation
and uncertainty is inherent in that very concept. As cautioned
in Attorney General for New Southwale's case the Court
should restrain themselves and respect such claims duly to
the legal limitations. It is a well-meant caution. Otherwise, a
resourceful litigant having vested interest in contract,
licences, etc. can successfully indulge in getting welfare
activities mandated by directing principles thwarted to
further his own interest. The caution, particularly in the
changing scenario becomes all the more important.
(emphasis supplied)
The basic requirement of Article 14 is fairness in action by the
State, and non-arbitrariness in essence. Actions are amenable to judicial
review only to the extent that the State must act validly for a discernible
reason, not whimsically for any ulterior purpose. A question whether the
impugned action is arbitraory or not is to be ultimately answered on the
facts and circumstances of a given case. To apply the doctrine of legitimate
expectations, the decision taken by the authority must be found to be
arbitrary, unreasonable and not taken in public interest. In our view, since
there was no legal obligation existed, there is no ground for applying the
Gauri Gaekwad
34/34 WP-2093-2021.doc
doctrine of legitimate expectation.
21 In the circumstances, in our view, since there was no legal
obligation on the part of respondents to give consent under the contract, we
cannot grant the mandamus as prayed for in the petition.
22 Petition dismissed. No order as to costs.
(RAJESH S. PATIL, J.) (K. R. SHRIRAM, J.)
Gauri Gaekwad
